How to Start a Food Business: Defining Your Fit

Ingredients Shared Kitchens
5 min readMar 22, 2021

For those following along with our recipe to success, you are in the process of turning your passion into a sustainable food business. It’s a product or service that you have extensive knowledge of and it allows you to best use your skills. However, if you really want to bear the fruits of your labor, it is critical that you know what market you are in and where exactly you fit.

The most obvious questions are necessary if you really want to create a profitable food business. Who are your closest competitors and how do you compare? Who are your customers and where can you find them? Use this exercise as an opportunity to expand your knowledge while finding a unique place in the market for your business.

The good news? You can perform extensive market research from home without spending a penny. Start at the top. How big is your overall market and will it continue to grow? It sounds like a tough task but let’s say you are starting a meal prep business. If you Google “meal prep market size”, you see this…

That’s everything you need to know. Meal prep has become a multi-billion dollar market that is expected to grow by 5.5% each year over the next 6 years. All it took was a simple search to confirm that meal prep is a huge (and growing) segment of the food industry.

Now the question is…where do you fit in?

On one hand, the great thing about starting a food business is that everyone eats — it is a universal market that has many segments within it. On the other hand, that also means many segments are saturated with repetitive and unproductive competition. This is why it is so important to find the right fit.

Take a few minutes to pick out the unique qualities of your products or services. When you compare your food business to the overall market, do you fall into any of these niche areas?

  • Custom, novelty
  • Gourmet, artisanal, small batch
  • Dietary restrictions: allergen free, gluten free, nut free, etc.
  • Certified organic, natural, fair trade
  • Ethical and religious: vegan, vegetarian, kosher, halal

Taking a closer look at your market, are there any trends that you can get in front of? The impact of COVID-19 on the food and beverage industry has rapidly changed how consumers think and act. Does your business help satisfy any new consumer habits?

Use your competition as inspiration. Find the best of the best and identify what they are doing well. Where are they lacking? What are the things you can do better?

Take note of their pricing. Does it align with how you value your product or service? If you plan to price lower, is your goal to be seen as the “value” brand? If you plan to price higher, can you justify the price tag versus your competition?

When it comes to doing market research for food businesses, Facebook Groups might be the best resource there is. Whether you are a private chef, CPG producer, or a cottage food business, it is easy to find large groups of your competition, customers, and potential resources. Strike up conversations around your business idea with the goal of obtaining constructive feedback. Search far and wide for the no. Have the mindset of proving yourself wrong, rather than simply confirming your beliefs.

If you know who your customers are…how are you going to reach them?

Regardless of which social media outlets you prefer, they all provide a great opportunity to reach out directly to customers. If you think you’ve identified who your customers are…talk to them! Don’t just make assumptions based on your research — confirm them. Whether it is your price point or the product itself, make sure you really have identified who your paying customers will be.

Who are the big social media influencers in your market? Look closely at how they promote their products, as well as their overall brand. What are they doing that has created such a strong influence? Can you learn from their tactics and strategies? How can you make them your own and implement them in a way that is consistent with the vision of your business?

You will be amazed by the things you learn through this process. These steps will help you refine your products and services while proving the validity of prior assumptions. If you go through the process and find that you were wrong with important assumptions, it may be time to go back to the drawing board with your new insight in hand. This is by no means a failure! This is the process of building a successful business.

Many tough lessons will be learned along the way. Some will be free and others could come with financial implications. Always welcome the free lessons!

Taking these steps early on will not only save you time and money but they will let you hit the ground running. This is a well you should return to on a regular basis. It is important to stay connected to your customers and keep a close eye on new competition. After gaining an understanding of your market, you can position your business to meet unfulfilled needs, provide unique products or services, and thrive where your competition is weak.

NEXT UP: Up to this point, it has been all about ideation and exploration. Now, it is time for action. Equipped with a business concept that you are passionate about and a strong understanding of your market, it’s time to start thinking like a business owner.

We are passionate about providing food entrepreneurs and culinary professionals the ingredients they need to start and expand their food businesses. In addition to offering commercial kitchens across the United States, Ingredients works with food business owners to acquire the proper business licensing, insurance, and certifications required by city, county, and state regulations.

If you’re interested in finding a commercial kitchen or need guidance in starting your own food business, visit Ingredients.Kitchen to learn more!

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