There's nothing like Grandma's sauce, so why not share that recipe with the rest of the world? Starting a sauce business – whether it's hot sauce, pasta sauce or some chocolaty mole – can be a really lucrative endeavor. It also comes with a lot of legal headaches. Luckily, some states make launching a home food business easier than others. If you're looking to get your family's special recipe out into the world to customers at farmers markets and grocery stores alike, there are a few necessary steps you need to follow.
Test Your Recipe
To have a solid sauce business, you need a solid recipe. This recipe should never change and taste the same regardless of whether you make 10 gallons or a single pot. It also has to be cost effective. You could have the greatest mango chutney recipe in the world, but if it costs $10 to make a single jar, when your competitors typically charge $10 for their product, it's not going to be very profitable. To get a good idea of how to price your sauce, test it with your friends and family. Ask how much they'd pay and compare that price with the competitors' price. Calculate your costs, and if things aren't adding up, head back to the drawing board. The bigger the margin between what it costs to make the product and what you sell it for, the better.
Curate Your Brand Image
Never underestimate brand recognition. People absolutely judge a book by its cover – or label, if that book happens to be a sauce. This is why your image is important. Carefully name your sauce and design an eye-catching label that shows who you are. Maybe you're locally sourced and handmade. Maybe you're all organic and vegan. Maybe you're a hot-sauce-loving single mother. Any angle is a good angle. Just be yourself and stick to it. You're building more than sauce – you're building a brand. The taste may speak for itself, but some careful marketing never hurts.
Get the Proper Permit
Even if you adore your sauce and eat it regularly, it still has to meet certain health and safety standards in order to be legally sold to the public. This varies from state to state, but most often requires use of a commercial kitchen, a permit and insurance. In states like California, you can take a food processor course online and obtain a permit to sell direct-to-customer or through third-party retailers like delis and grocery stores. In other states, like New York, you may be able to get a Home Processor Exemption. This lets you prepare the food in your home kitchen for sale at farmers markets. Those who don't qualify for an exemption in New York must get a Food Service Establishment permit from the health department and use an inspected commercial kitchen. This kitchen can be located in your home, but it cannot be the home's primary kitchen. Check with your local health department to find out your county's specific regulations.
Meet FDA Requirements
FDA certification is an important step in manufacturing sauce. Most likely you'll be applying for FDA certification for Processing and Packing Acidified Foods, but there are plenty of exemptions. Generally, food products have to be labeled with ingredients and nutritional values, unless you make less than $50,000 gross annual sales. If you make more than $50,000, but sell less than 10,000 units or have fewer than 100 employees, you can file for an exemption. To get your product certified, it may need to be lab-tested for shelf life and nutritional value. FDA requirements are highly specialized, and you may opt to hire an attorney or consult with your local Small Business Administration to see which requirements your particular sauce must meet.
In many states, insurance is required for any food-related business. You never know what can happen, but if someone has a bad allergic reaction and wants you to shell out for their medical bills, do you really want it to affect your business' finances? Since you're making your sauce at home, you probably want to purchase cottage food law insurance, but it's best to check with your local health department to figure out exactly what best suits your needs.
Get Your Sauce Out There
After the legal stuff is handled, it's time to get your product out there. Some sauce brands opt for selling their products online, while others pitch grocery stores or set up booths at local farmers markets. You can advertise by contributing to other blogs, reaching out to customers on social media or sending out press releases to various media outlets. The sky is the limit!
- Forbes: California Legalized Selling Food Made at Home and Created Over a Thousand Local Businesses
- Mother Earth News: How to Bottle and Sell Your Own Sauce
- Entrepreneur: What Permits and Patents Do I Need to Sell My BBQ Sauce?
- Food Liability Insurance Program: Cottage Food Law Insurance
- The Food and Drug Administration: Establishment Registration & Process Filing for Acidified and Low-Acid Canned Foods (LACF)
- The Food And Drug Administration: Small Business Nutrition Labeling Exemption Guidance
- Give your sauce as a gift to friends and family. Donate jars of your sauce to charity auctions to generate interest. Consider creating a website where consumers can purchase your sauces. Posting testimonials, recipes and beautiful food pictures can be an effective way to promote your product.
- Depending on regulations, you might not be able to make the sauce at home, even if the rest of your business is conducted from home. In that case, consider borrowing a professional kitchen at a restaurant. Ask permission to use it during a slow time or on a day when they're closed. Some churches also have professional quality kitchens.
Mariel Loveland is a small business owner, content strategist and writer from New Jersey. Throughout her career, she's worked with numerous startups creating content to help small business owners bridge the gap between technology and sales. Her work has been featured in publications like Business Insider and Vice.