How to Start a Food Business

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Sari Kimball – Food Biz Success

Podcast Overview:

[00:03:39] Transitioning from hobby to profitable business.

Podcast Transcription:

James [00:00:00]:

You have found Authentic Business Adventures, the business program that brings you the struggles, worries and triumphs successes of business owners across the land. We are locally underwritten by the bank of sun prairie. We have downloadable audio episodes found at the podcast link found at Drawincustomerscom. And today we are welcoming, preparing to learn from Sari Kimball, founder and coach of Food Business Success, which are three things that I’m pretty sure almost every listener here loves. So Sari, how are you doing today?

Sari Kimball [00:00:30]:

I am amazing. So excited to be here today.

James [00:00:33]:

Yeah, thanks for being on the show. And it looks like you have all the ingredients for success behind you there.

Sari Kimball [00:00:39]:

Yes, many people have gone in this direction to start a food business.

James [00:00:44]:

Nice. So tell us, what is food business success?

Sari Kimball [00:00:48]:

So, Food Business Success is a program I created back in 2019 where I wanted to I’m a course creator in addition to a business coach and many other things. So I saw a need for people wide eyed, excited to start a food business, specifically a packaged food business. So I created an online program, online course. And anybody who tells you, oh, just create an online program, it’ll be so easy, just believe them. But over the years, here we are four or five years later in year five and still going strong. So we have a membership where we do group coaching. And then there’s also the videos, the tools, the tutorials, things to really help people create a business that’s actually going to be profitable, that is going to be safe and legal, hopefully. And also be fun. Right, because it’s food.

James [00:01:52]:

Yeah, very cool. You touched on a lot of stuff there. And for your typical just so I know, for the people that are listening that are like, hey, I’m kind of interested in this. Is this geared towards people that already have a business in the food industry? Or is this someone that’s kind of either kicking the tires or trying to figure out if this is what they have, if their option is even a viable if it’s a viable class for them to take to go and make whatever food creation they have in mind.

Sari Kimball [00:02:21]:

Well, it’s probably mostly geared towards the I call them just an idea people. Like I make the most delicious fill in the blank.

James [00:02:31]:

All right, sure.

Sari Kimball [00:02:34]:

Cookies, all the things right? And I make these things in my home kitchen. I also work with Body care, pet Treats, things like that too. So anything that comes out of your home kitchen and everybody tells you you should start a business, this would know millions of dollars, I would totally buy this. So that’s where I really start is just an idea, people. But I also do attract a lot of people who already have a business in the United States. We have something called cottage Food or some similar terminology that allows people for certain products to start in their home kitchen. And so a lot of times people will start there, but then when they get really serious and they want to go into grocery stores or go on Amazon or something like that, then they’ll come and work with me on that kind it I got it going, and now I don’t know what I’m doing.

James [00:03:28]:

Nice. So tell me, what are the common mistakes that you see people make that go from, hey, this is an awesome idea, my grandma’s recipe for lasagna or whatever, to trying to get it into a viable business?

Sari Kimball [00:03:39]:

Oh my gosh, so many. I wish it was just one, but I think some of the top ones are just understanding that just because it’s an amazing product in your home kitchen doesn’t always translate into a great profitable business plan. And a lot of times there has to be some. We call it value engineering, but sacrifice a little bit along the way of the artisan, the homemade quality in order for you to actually make money. Because we need efficiencies, right. We have to scale up the product itself and the making of it for it to be profitable. So that’s really the first thing, is just like I go from a hobby where it’s fun and I give this product to friends and family to like, oh, I need to actually set this up to be profitable. Certainly legal food safety issues, right. We were chatting before we started recording, and I think that food is one of those really democratic things that we all eat. And many of us make something that’s sort of our signature thing, and we think, well, it should just be easy, right. I couldn’t just go start a tech company. Right. That would be a lot of investment. But it’s fairly easy for me to get. The barrier to entry is pretty low to start a food business. So everybody kind of thinks, yeah, this should just be easy. But the reality is it’s highly regulated by the FDA, and we have a responsibility if we’re making food, for people to make sure that it’s safe.

James [00:05:23]:

Which is a good thing, I would say it’s one of those things that you want to know when you’re buying food that you won’t.

Sari Kimball [00:05:28]:

Yeah. There’s a trust there, right?

James [00:05:31]:

Yeah. So I’m glad there’s people looking over that shoulder. Yeah. When I have talked to other people in the food industry, you mentioned the scalability. And one of the things that I commonly hear with a lot of business owners, regardless of if it’s food or not, but especially in food, is when I talk to them about having somebody else. Oh, my gosh, I can’t think of what the kitchens are named. Were they a contract kitchen?

Sari Kimball [00:05:57]:

So there’s a commissary kitchen where you rent out space and you make it yourself, or there’s like a Copacker comanufacturer copacker.

James [00:06:05]:

That’s what I was thinking of. Yeah. And the pushback that I get is, oh my gosh. I could never train someone to make whatever magical creation that they’re making. I could never train that. It’s just I have to be the one. And I try to tell them that you can’t scale, that you’re only one person. And then they come to me and say, I want to grow my business. So can you tell us a little bit about any of your success or failures or anything with working with a Copacker?

Sari Kimball [00:06:34]:

Well, one came to mind as you were talking. I worked with a couple who was wanting to do cookies. And I said, I really think the product you’re telling me about and your time right. I always take into account oftentimes these are side hustles to get started. I actually work with a lot of doctors, engineers, lawyers. It’s really interesting scientists, it’s like they have this very logical left brain career, and then they find a lot of creativity in the kitchen. Right. There’s a lot of people who do creative things in the kitchen, and they have zero desire to start a business, to be an entrepreneur, but some people do, and there’s that like, what if I could? Right. So when they come to if we want to do a copacking situation where they have to give up some control and we’re doing it in a lot larger quantities, right. It’s much more equipment driven, machine driven, and it’s all about fast, fast. So she really wanted it was something like, I want seven chocolate chips in each cookie.

James [00:07:48]:

Oh, wow.

Sari Kimball [00:07:49]:

They all need to be, like, facing a certain way. And it was just like, we can’t do that. We can’t do it profitably. Right. Like the amount of time and labor associated with placing.

James [00:08:03]:

Sure we can. But every cookie is $50, right?

Sari Kimball [00:08:08]:

Exactly. So I have learned over the years that I really have to try to manage expectations when I work with clients, helping them to that next level. To say, we’re going for 90%. Here you have your, we call it gold standard in the industry. So you have your gold standard cookie. That is like, how you would do it at home and how you wish every cookie looked like this. And then there’s the kind of the 90%, the A minus, B plus that we were shooting for in a Copacking situation. And I worked with a client once who did bars and one of the runs, like the date paste, just for whatever reason, they ended up a little bit wetter than we would have liked. And it’s like you can’t just throw all of that away. That’s a big investment. Really. The mentality. What she took is like, how do we sell through these quickly so we can get to the next run? And from package to package, things are going to be a little bit different. It’s just part of the game, part of the way it works.

James [00:09:17]:

Yeah. It’s so interesting you say that because when I buy food, snacks, whatever, it’s so interesting, especially stuff that’s made with fruits or vegetables or something, where it’s a plant and variables in temperature and weather and all that jazz, where that plant is going to show up different, whatever.

Sari Kimball [00:09:35]:

Yeah. That jalapeno is spicier from batch to batch, right? Yeah.

James [00:09:39]:

So you see these packaged foods and you’re like, how did they get the exact size tomato or whatever over the course of months or years for this thing? Then you start to understand why the manufacturers, I suppose, add a bunch of salt or sugar or whatever, because it may not necessarily be for flavor, it’s for consistency.

Sari Kimball [00:09:59]:

Yeah. And like I said, we call it value engineering.

James [00:10:03]:

Right. I’ve never heard that.

Sari Kimball [00:10:04]:

I love that. I mean, it’s in architecture. That’s where it comes from. But it’s the idea of, like, well, maybe at home you’re using Madagascar vanilla and premium chocolate chips to use our cookie example, but maybe it’s just as good with some other lower quality vanilla, and we’re going to use some different chocolate chips. So we’re trying to figure out how do we still get that 90% quality and lower the cost. And man, when you pull back the curtain on our food system, it’s a little bit I think some people are like, whoa, I don’t know if I’m in for this know? Because in America, we have expectations of very inexpensive food. And when you’re a small know, you have to tell a different story. You have to tell a story about organic or sustainably made or premium quality, and there has to be something else because you can’t compete on price with the big at all.

James [00:11:13]:

Yeah. Not a chance. Not a chance. Let’s talk about packaging. All the stuff that you have behind you reminds me of just about every client that ever dealt with that was in the food business of some kind. Packaging turned into almost a bigger headache, even for some. Definitely a bigger headache than the actual product itself.

Sari Kimball [00:11:33]:

Yeah.

James [00:11:34]:

So can you talk about just the pathway people deal with when it comes to creating and even having manufactured or dealing with the packaging for their product?

Sari Kimball [00:11:44]:

Well, I think it’s always surprising to a lot of people as they get their food costs in. So I have this wonderful spreadsheet that my members get, and it takes in, so it costs a good sold is how we’re going to figure out if we’re profitable. But it’s our ingredients and our packaging, and then the labor involved, and oftentimes they get their ingredients in and then they do their packaging, and they’re like, my packaging is as much or more than the actual food. Yeah, oftentimes it is. So it’s kind of wild, the things that we need something to wrap around this food. But the smaller if you think about when you buy something in a grocery store, the smaller the package, the more expensive it probably is. Per ounce or by some measure of weight because of that packaging. But if you’re starting at home or just you’re starting, I always recommend if you can start with a farmer’s market, start with small ecommerce, kind of work your way up and get out that minimum viable product just like we talk about in any business. Get that MVP out, start testing it, get feedback. I think the hardest thing where people really get into trouble with packaging is they want to go from zero to 10,000 going straight to a copacker. And they haven’t tested it, they haven’t gotten feedback. You also have to invest a lot more. Now you need a graphic designer. Now you really need to make sure this is the formula, this is the product. And I do a lot of reviews for FDA compliance. And that’s a big thing. Just if we were just making know electronics or something, we would just slap on any old label and it could have all the marketing and not tell all the things. But because of the know, we need certain things on there. We need our nutrition facts, information in a certain way and a certain size. We need all the ingredients listed in a certain way. We need manufacturing information. And then there’s so many things that we can and can’t say. You can’t just say it’s healthier, it cures cancer.

James [00:14:09]:

Sure.

Sari Kimball [00:14:10]:

Like that. And you would be surprised what people try to put on. Tell people that these things do. So definitely, if you’re going to go from zero to 10,000, get help. Get a graphic designer who knows packaging. I have an amazing one. I do compliance reviews. Sometimes I turn them over to attorneys if they’re really wanting to make a lot of health claims. And just know that it’s going to be a much bigger investment up front. Right. Anytime you’re going for really nice preprinted, beautiful packaging, you’re going to have to get 50,000. Let me go get 500. Right.

James [00:14:51]:

I remember working with a woman that was doing hot sauce, and I remember just the label itself. Forget about the jar and the lid and all that kind of stuff. The label itself and trying to come up with the most efficient or most profitable way, I should say, to design the label so that it didn’t. Have too many colors. It only had one or two colors or whatever, and she could essentially duplicate them to use for the different types of hot sauces.

Sari Kimball [00:15:17]:

Oh, sure.

James [00:15:18]:

She was really hours, maybe even days that she was thinking around with that and finding a printer that would print on a relatively lower scale for what she was looking for.

Sari Kimball [00:15:30]:

Right.

James [00:15:31]:

Oh my gosh.

Sari Kimball [00:15:32]:

And I’ve put together a lot of resources, but for people just starting out where it’s like, here’s a printer who they can print 100 labels, it’s no big deal. And they don’t limit you on colors and things like that. But I think we were talking about mistakes earlier. I think just going in and treating it like a business, recognizing that there is going to be an investment made. And because I think a lot of people are kind of coming from this hobby mindset, they’re like, I don’t think this will be a big investment, but I always recommend set aside a certain amount of money and come. Talk to somebody like myself who can tell you a pretty close I’ve gotten really good over the years. Where I’m like, that’s going to be a $5,000 project to get it launched, or that’s going to be a $50,000.

James [00:16:18]:

All right.

Sari Kimball [00:16:20]:

Or I hope you have 150K in the bank.

James [00:16:24]:

Right.

Sari Kimball [00:16:24]:

There are certain projects, and depending on the actual food, it gets more complicated. So I’ve actually created a scale. I think it’s one to 30, but it’s like 30 being I have a meat product, it’s frozen.

James [00:16:41]:

Sure.

Sari Kimball [00:16:41]:

Something like that, right. So now it falls under USDA. Now I need a certain kind of copacker. I need certain inspections, I need frozen, and now I want to ship it across the country, right?

James [00:16:56]:

Yeah.

Sari Kimball [00:16:58]:

And then I make granola in my home kitchen, and I can launch for $1,500. But understand, treat it like a business. There’s going to be expenses, there’s going to be investment, and it is a risk, right? All businesses are a risk.

James [00:17:16]:

Yeah, every business. Well, every job, too, right? You know, it’s interesting. This reminds me of my kid with a Choco Taco. So I don’t know if you know or remember what a Choco Taco is. Choco tacos ice cream novelty.

Sari Kimball [00:17:31]:

Okay.

James [00:17:31]:

They don’t make them anymore.

Sari Kimball [00:17:33]:

I’m not familiar with that.

James [00:17:34]:

Choco Taco was sold by Klondike to whomever, and whomever decided, yeah, we don’t want to make it anymore. So anyways, I didn’t know this until my kid was like, hey, I want a chocolate taco. And I was like, oh, that can’t be hard to find. Just go to any gas station, look in the freezer, and turns out you can’t. So I looked on ebay, and there was somebody selling the Choco Taco for, I think, like $650. This is a frozen ice cream treat, right? Nostalgia person getting this to me for $650. Not that I’m going to pay $650 for a chunk of ice cream, but anyways, it had this whole thing about being packaged in dry ice and all this to do, and that just got me thinking, man, if you wanted to distribute ice cream novelties sold from the Internet, yes. Big of a deal would that be?

Sari Kimball [00:18:21]:

Well, I have a client. I’ll give a shout out, if you don’t mind. Brian with Magic Chunk, he just launched allergen friendly, like chock full of fun. But it’s all for kids and allergen friendly. So no gluten, no nuts, all that stuff. And yeah, we’re doing a lot of it’s going to be e commerce, and we have a great fulfillment partner based in denver, where I’m at. And they have all know the dry ice and the special packaging and the cooler. Yeah. Oh my gosh, it’s amazing what we can do. You can order ice cream online.

James [00:19:00]:

Wow, that is impressive. Freaky and impressive. Tell me, when it comes to packaging, I’m certain that there’s some things you’re like, hey, that has to be in a glass jar or that has to be in a tin can or that has to be in a foil pack or whatever. But there’s got to be some things that are like, you know what, we could do a plastic bag. We could do paper bag that’s lined or whatever. How do people decide what type of packaging they’re going to use with their food product?

Sari Kimball [00:19:26]:

Yeah, I mean, to your point exactly, there are going to be a lot of products that just the type of product mandates a certain kind of packaging. But I have a hot sauce client who normally hot sauce is in glass. They call them glass woozies as that little tabasco looking thing. And he decided he wanted something different. Right. Because packaging is a way that you can differentiate yourself absolutely from other things. Right. And so that can be a tool in and of itself. It’s like all the great sauce and all the great ingredients, but it’s also in this really different cool package. And so he wanted to put it in this plastic bottle, shout out to Ryan with pup and the and but we had to go through a lot of experimentation trying to find the right bottle, because hot sauce, you also have to bottle hot, like temperature hot for FDA compliance. So it has to be bottled at a certain temperature. And so I said, you got to practice like boil water, get it to 180 degrees, and then pour it in there. And sure enough, a lot of them would compress and shrink a little bit.

James [00:20:34]:

Sure.

Sari Kimball [00:20:35]:

So it took a lot of experimentation to find the right one. And we had to get a special dispensation from what’s called a process authority to say we could bottle it at a little bit lower temperature. But it does stand out as something really unique and different because of that shape. So first you got to think about, is it something that’s oily or does it need to be filled hot for food safety purposes? And then also, is it going to hold like, if it’s chips or something, right? Is it going to hold the integrity of that product as well? And then if it’s shelf stable like a bar or cookie, is it going to provide that shelf life, keeping the things in that we want in and not allowing outside air, things like that? So it’s a little bit of an art and science where you can play and where you have to say, no, it needs to be in this package.

James [00:21:34]:

All right. And I suppose finances profit comes in there as well?

Sari Kimball [00:21:39]:

Yes, 100%.

James [00:21:41]:

And how do people figure out what size they’re going to offer? Whether it’s six ounce? Because you see stuff that’s like 6.54oz, and I was like, Why not 6.5, even? Why is it that weird? Fraction of a metric or fraction of whatever weight?

Sari Kimball [00:21:59]:

Well, it’s really interesting. This is another little for just general fun tidbit of knowledge. When you go into grocery stores, for anyone listening, you’ll start to notice again it’s a form of value engineering where prices, because of inflation and things like that have been going up. And so people are kind of maybe they did a 14 ounce and now they’re changing it to a twelve ounce, but they’re still charging the same, right? Like, let’s just shave off 2oz. The customer probably won’t notice. We’re still going to charge the same, so we’re not having to go from 799 to 999. Right. So some of it is definitely you look at costs of what is this product, what do we think we can charge for it? And are people going to really care if it’s 16oz versus 15? Some of that so there’s some of that nuance in there. I mean, sometimes the bottle is the size to do it that size, but a lot of it, you kind of nuance the price per ounce and what we think customers will pay for it. And sometimes when there’s those wonky numbers, it’s because they’ve decided to go with milliliters. And then when it translates over into our grams, and then when it translates into ounces, it’s like a weird number. I will say, after looking at thousands and thousands of labels, even the big guys don’t always get it right. From a compliance standpoint.

James [00:23:39]:

Totally fair. It’s interesting. You talk about the inflation thing. I had bought a four pack of toilet bowl cleaner for our office, and when I opened the box, it was from Costco, right, where you have to buy stuff by the pallet or whatever.

Sari Kimball [00:23:51]:

Yeah.

James [00:23:51]:

So I opened this box and there’s a cardboard spacer in there because the toilet bowl cleaner bottles were smaller. So I don’t know if they just printed a bunch of boxes or if they said, hey, we want it to look like it’s bigger. I’m like, Man, I got jipped. Because it wasn’t just a little tiny spacer, it’s like a healthy spacer.

Sari Kimball [00:24:12]:

Yeah. Or they’re like, it’s concentrate, you don’t need as much.

James [00:24:15]:

Yeah.

Sari Kimball [00:24:16]:

Who knows, right?

James [00:24:17]:

Yeah, it was kind of funny. I’m like, oh man, I got taken here, so that’s great. So anyways, yeah, I understand. That’s the thing when it comes to packaging, let’s just say, like bars, how do they figure out what a serving is? Is there a standard? Like, hey, a typical 150 pound person eats whatever calories, and if it’s an energy bar, they should probably eat this because you don’t rarely see five pound energy bars or something like that. And you rarely see half ounce energy bars. So they just look what everybody else is doing and try to match or what’s the magic bullet there.

Sari Kimball [00:24:56]:

Bars are one of those. It’s kind of a unique thing because it’s a single serving generally. Although you got to pay attention because sometimes there’ll be like two servings per container and it’s a bar and no one’s eating just one of those or not eating the whole thing. Right? Yeah. Or cookies are the same way to a lot of single serving. Might be multiple servings in there. But the FDA does regulate, they do say so, for instance, a hot sauce or a syrup or anything like that, they’re going to say it’s one tablespoon or know butter is two tablespoons, or whatever it is. Right. So there are FDA guidelines, but when it comes to bars, you can kind of make it as big or as little as you want and then you just say, this is the serving size. Now from people who are eating bars are probably also looking at the nutrition on there and the calories and stuff. So it’s kind of trying to find that right. Balance of I don’t want to be 1000 calorie bar. People probably don’t want that. And so you’re trying to get those macros. Maybe you want to say you have a lot of protein in there or something, but a lot of it has to do with it. Is that value engineering, right? Maybe if we shave an ounce off of here or half an ounce or something that it’ll be a better price. But it still looks like a bar comparable in the marketplace.

James [00:26:34]:

All right.

Sari Kimball [00:26:35]:

Some of it’s value engineering, some of it’s like they want to get to a certain macros, a certain amount of protein or fat or something.

James [00:26:42]:

13 grams of protein or whatever. Okay, got it. Yeah, it’s interesting.

Sari Kimball [00:26:48]:

It’s fascinating what goes on right behind.

James [00:26:51]:

Yeah. The packaging is really one of those things that you walk through the store and I just constantly am thinking, why do they choose that? Right? Like a loaf of bread is more or less the standard size. And I wonder, when did we decide that a loaf of bread is this size? Until you get in some fancy loaf of bread with nuts and beads or whatever they put in whatever, and then it’s short and fat, whatever. Who knows?

Sari Kimball [00:27:19]:

Form of differentiation, right? Like our standard. And then, oh, I’m going to make a square loaf of bread, make it stand out.

James [00:27:27]:

Right. One of the other things that I’ve learned that I guess I never even thought about, but after talking with people that are starting food businesses or attempting to start food businesses is they have their, let’s just say this lasagna. Right? It’s best lasagna in the world. Right. World famous, of course. And then they try to sell it in a store where that thing has to hang out on the shelf for days or weeks, whatever, and still be good when whoever gets it home and works their magic, I don’t know, heats it up or whatever. What are some of the tricks that people have to do that may or may not take away from quality to keep stuff either moist or shelf stable or just, I suppose, a presentation, even semi close to what they’re showing on the package.

Sari Kimball [00:28:11]:

Yeah, it’s a tricky thing. And that’s another one of those kind of bubble bursters for a lot of people because in their home kitchen, they’re making things without preservatives because we eat things pretty quickly or freeze them or whatnot. So it can be a challenging thing, especially sauces are probably one of the biggest things that I end up. I have a couple of food scientists, R and D folks that depending on the product, I’m like, oh, this is your person, this is your person. Because every product is a little bit different. A bar is going to be very different than a sauce. But I do tend to work with I get a lot of people who make sauces, like a mustard based sauce or a mayonnaise kind of sauce, and they want to at home, they just combine. They combine the premade mustard and the premade mayonnaise and the premade Worcestershire, and they make their unique combination of things. But that’s all refrigerated. And then they want a shelf stable sauce. Yeah, that’s a whole other thing, right. Because it’s hard when it’s refrigerated. You have a short shelf life. There’s less space at a grocery store for that. It’s harder to ship if you’re going to ship it right. So they want to go shelf stable. And that’s where you really do need to bring in a food scientist like the folks I work with. And what we have to do is there’s PH or there’s water activity, things that we have to follow per the FDA. And so a sauce, sometimes we end up taking out a lot of the liquids by adding powders instead. So instead of adding like fresh garlic or Worcestershire or something, we might actually end up adding powders that are the garlic powder or the things that are in Worcestershire. So it gets really interesting because we’re trying to achieve this certain PH or the certain water activity and there are a lot of terrible preservatives out there. And to your point, I mean, you mentioned it, and I won’t name names, but we call it kind of more the conventional grocery it’s what’s going to be at your conventional stores, your Walmarts, your just regular grocery stores. And if you read on the back, you’re going to see a lot of names you probably can’t pronounce, right?

James [00:30:41]:

Yeah, a, yeah, a lot of things.

Sari Kimball [00:30:43]:

In there for shelf stability and for getting the right these things will last the twinkie that will last for hundreds of years. So you have to ask, do I really want to be putting that. In my body. Which is why a lot of better for you brands get started. They’re solving problems in their home kitchen. They’re like, I love my Twinkie, but I don’t want to put all that. So I’m going to go and create my own Twinkie or whatever it is without all of that stuff. But then you hit that. Now I want to go on store shelves. It’s not just for my home consumption. Now, how do I make it last, but with better preservatives, the less toxic ones. So there’s things like rosemary oil or there’s lots of very interesting, more natural preservatives. And stores like Whole Foods and Natural grocers. And some of those more the better for you natural grocery stores, they actually ban a lot of those preservatives, so.

James [00:31:51]:

They won’t even have them on their shelves. Interesting twinkies there.

Sari Kimball [00:31:56]:

No, you won’t find those there. So just by choosing your store, if that’s important to you, then you’re going to eliminate a lot of those things because they don’t even allow them in. And so you have to find a more natural way to preserve things. Things might have a little bit shorter shelf life, but that’s where you really need to bring in a food site.

James [00:32:20]:

All right with all that. Yeah. You have a perfect segue to my next question here is about the expiration dates on food.

Sari Kimball [00:32:27]:

Okay?

James [00:32:28]:

How do they figure that out? All I can picture is just some guy having a bunch of bars or whatever. And then one day he’s like, no, this is no good. And they’re like, OK, two weeks, five days, stamp it on the package, move on with your life. But I feel a more scientific way of doing here’s.

Sari Kimball [00:32:46]:

What’s wild is that the FDA Food and Drug Administration does not actually require any expiration dates except for infant formula. I feel like there’s one other category, but it’s not food. Like, not our kind of normal mainstream food. So we actually don’t have to put anything on there. USDA does require it for meat.

James [00:33:10]:

Okay.

Sari Kimball [00:33:12]:

Regular packaged food. But I think customers there is that sense of like, I want to know.

James [00:33:20]:

Yeah, I see a box of cereal and it expires, whatever, three years from today.

Sari Kimball [00:33:25]:

Yeah.

James [00:33:26]:

And I always think, like, how do they know that? How do they know that on March 20 eigth of 2028, this box of Rice Krispies is just going to turn?

Sari Kimball [00:33:34]:

The 27th is still good, but the 20 eigth is no longer good. Well, you will notice that the phrase and I like the phrase personally, best Buy. So what I tell people when they come to me because they don’t have the resources of giant companies with lots of testing and things, I always have people do a couple of things depending on their product. I mean, some products are going to last much longer. Some have short shelf lives. But let’s just take a refrigerated salsa. Because I actually do have a good story about this. It’s refrigerated salsa. What I have people do is create do their own shelf life study. So say you make a batch, pour it into the same exact containers, probably get some fresh things off of Amazon or some store so they’re all the same. Label them, date them, put them in the fridge, and then for something that you think like, my salsa probably lasts a month, go ahead. And every couple of days, take it out, try it, and just not necessarily from a safety standpoint, but from a quality standpoint. At what point are you like, this just doesn’t taste as fresh or what?

James [00:34:54]:

I far off from a guy just sitting there with a bunch of bars.

Sari Kimball [00:34:57]:

Okay, exactly. Well, that’s why I tell people to start. And I had a client once who was doing refrigerated salsa, and he was so proud, he brought me a sample. It was right around Christmas, and I put it in my fridge and it was just like in a tupperware. And I don’t know, a week and a half later, the whole thing exploded in my fridge.

James [00:35:19]:

Oh no.

Sari Kimball [00:35:20]:

Popped off. And it makes a huge difference when you’re in your home kitchen. I don’t know if you know this, but our home kitchens are very filthy. They do studies where they run blacklights over home kitchens and they’re pretty nasty. And so he just kind of did it like he would normally in a home kitchen, and it had formed all this mold, or it wasn’t even like visible mold, but the gases from it.

James [00:35:52]:

Yeah, apparently it was enough.

Sari Kimball [00:35:54]:

So what we did, as I kind of investigated with some of my food scientists, is that it was probably because he was in a home kitchen, he wasn’t using fully sanitized things properly. So once he got into a commercial kitchen, he made a batch. Then we did that shelf life study, and it lasted six weeks or something. Obviously you want to look for like visible mold, anything like that. You can also send certain products will send off to be tested for PH. You can also test for E. Coli and Staph and all sorts of things. So that’s always really wise. For bars especially, we want to make sure that we don’t mold inside right. Because of maybe we need to dial down some of the moisture, things like that. Each product is a little bit different how you approach it. There are shelf life studies that there’s an accelerated one where they’re going to heat it up and try to mimic kind of over time what would happen. It only works with some products or you literally do you send off let’s say you want your product to have a year shelf life, hopefully. So you can send it to a lab and you send twelve samples. And then every month they pull it out and they test it for certain things, and then they can say, here’s where we think here’s the point. Like, oh, it’s actually only a nine month shelf life.

James [00:37:22]:

All right, interesting. But I imagine the worst part about that is that it takes so much time to actually do that. So you want your product to hit the market, like, put a month stamp on there and just hope for the best. Yeah. Labels a bit of a guessing game too, I suppose. Tell me about the nutrition labels and things like that, how people figure out I mean, ingredients, I imagine, are simple enough, but the whole calories, protein, all the vitamin A, B, all that jazz. Can you tell us about that?

Sari Kimball [00:37:55]:

So there’s programs that you can just go ahead and put your recipe into. They’re a little bit more savvy than maybe like, MyFitness pal or something like that, but they’re specifically for nutrition labeling. But you put your recipe in, and then what’s really important we talked about earlier is you need to know what your actual amount should be, because sometimes people are like, oh, I don’t know, take a pint of ice cream, right? We know we probably eat more than the know it has three servings in it for the FDA, but you might be like, well, it’s two servings, right? That’s what normal people eat. But that’s not the way it works. So you want to be sure you have the right amount per the FDA. Sometimes people really underestimate and they think, oh, you only need a teaspoon of this, and the FDA says it’s two tablespoons, or vice versa. So you need to know that, and then it spits it out for you, so it gives you all the things that you need.

James [00:38:56]:

All right, so does a program like that keep in mind baking or freezing or anything? I don’t know if that changes stuff or the interaction of the chemical, I imagine, may or may not do something.

Sari Kimball [00:39:07]:

What I tell people is if it’s a pretty straightforward recipe, baking is okay. Baking bread or granola or something. You can go ahead and use a program like that if you have a lot of times fermentation, if you have a lot of heat loss where you’re maybe boiling down a sauce or something, so you’re taking away a lot of the liquid. That’s when I do recommend that you go ahead and send it off to a lab to get more complete testing. Got. You work with somebody? Yeah.

James [00:39:39]:

Okay, interesting. Tell me about another thing with the food safety stuff. Tell me about the insurance that a typical food producer should have to prevent any fallout from, let’s say, food poisoning or refrigerator cleaning or whatever.

Sari Kimball [00:39:57]:

All right. And I’m sure there’s some crazy stats on how much food poisoning we get, but oftentimes it’s usually from our own kitchen kitchens, not from eating out or anything. But there is just a real basic policy because I work with a lot of early stage people, so it’s actually not very much a year. It’s like $300 a year for a million dollars in coverage. So you can start that way. I love starting that way with farmers markets or some ecommerce. But when you are going onto grocery store shelves, they usually need larger policies, and it is recommended to I have a couple of other referrals of people who do more comprehensive policies. A great example, kind of one of those people that everybody in my industry looks up to is Justin’s Peanut Butter. Have you heard of his product?

James [00:40:55]:

I have to apologize. I have not nope.

Sari Kimball [00:40:57]:

To look for in your grocery store. Yeah. So I used to work for Whole Foods Market. That’s kind of how I got into this area.

James [00:41:06]:

All right.

Sari Kimball [00:41:06]:

And I worked for them for four and a half years. And he started with just peanut butter and almond butter and things like that, and then transitioned into candies as well. So, like, peanut butter cups and things like that. And he does those squeeze packs as well, which was a very innovative packaging at the time. Nobody was putting nut butters in those little rip off single serves.

James [00:41:33]:

You’re talking like little like what they have applesauce in now for kids.

Sari Kimball [00:41:36]:

Yeah, exactly. So he actually started that. He was the first one to do those kind of things wow. And ended up selling for $286,000,000. So he did all right.

James [00:41:48]:

That’s awesome.

Sari Kimball [00:41:51]:

But he got into a lot of major stores. He was really cranking, and there was a recall on peanuts that had been used in some of his peanut butter, and it was just the peanuts. But when you have to, recalls are very expensive, and because his name was all over in the peanuts, nobody was buying any of the products. Right.

James [00:42:20]:

Oh, no.

Sari Kimball [00:42:20]:

Almonds, all that. And stores were just taking it all down. So it ended up being, I think it was $2 million. It was an insane huge recall to get through that and to process all of that. So having good insurance that covers you for recalls, that covers you for lost inventory, a frozen product, and your whole freezer goes down, or the refrigerated truck that’s moving pallets of it goes down, you want to be sure you have some good insurance.

James [00:42:55]:

Got it. Fair. Totally fair. Tell me you’re so good at this whole segue thing. Tell me about sales getting into the grocery stores and all that jazz, because that has to be a whole nother nut that people often don’t think about. Right. A lot of people, I suppose, think if I build it or bake it, they will come.

Sari Kimball [00:43:12]:

Yeah, exactly.

James [00:43:13]:

But they have to be aware. So do they knock on doors? Are they writing letters? How are they getting into all these grocery stores?

Sari Kimball [00:43:21]:

Well, again, I always recommend if you can start out at a farmers market, and some people just are like, that’s not for me. I don’t want to give up my weekends or whatever, right? And that’s fine, but start small. I always say start with your circle of influence. Like, who do you know? Start wherever you live. And if you want to go into stores right away, that’s fine, but for one, your profit margins go down, right? Because when you’re selling direct to consumer, you make more money. But now there’s a middle person. Now you sell for less to a store, which can be shocking to some people, because they’ve never been an entrepreneur before, and they’re like, Wait, what?

James [00:44:00]:

The store has to make money, right?

Sari Kimball [00:44:03]:

You can’t charge $10 for your granola to the customer and then turn around and charge the same thing to a store. That’s not how it works. So you got to get your pricing all dialed in. There’s some things you need to start that process. You need a sell sheet, and you really need to understand, what are those margins and how do I deliver and be able to answer questions that a buyer might have. And then I always recommend just starting with the independents, right? Those are going to be the people, those smaller stores, they’re probably going to have higher price points anyway, so it won’t be sticker shock for your customers. They’re going to be more flexible and just be able to bring in gone are the days when I was at Whole Foods Market, we could have at that time, like, you brought in a cool product to my one store, and I’d be like, can make some room on the shelf here for you.

James [00:44:58]:

Oh, funny. A little bit different.

Sari Kimball [00:45:00]:

Not how it works.

James [00:45:02]:

All right?

Sari Kimball [00:45:03]:

So I always tell people, you got to go with a two pronged process. You got to start where you live. You got to start in the independence. You need to really be a great partner and baby those stores. You need to show that product moves off the shelf, right? People are like, I got my product on a shelf. Oh, my gosh. I’m like, no, that’s great. You just started. Now you have to get your product off the shelf, right, people, to actually buy it. And so it’s called Velocity, where we want to prove we want to have some numbers that I sell ten units a week or five units or 20 units a week, so they know that.

James [00:45:42]:

On the shelf, ten are going in, ten are going out every week because.

Sari Kimball [00:45:45]:

They want one of my grocery store people says, I don’t run a food museum.

James [00:45:50]:

That’s awesome. I don’t want us to dust any jars here.

Sari Kimball [00:45:55]:

Exactly. Like, no dusting, no, this is not a relic to pasta sauce. These things need to move off the shelf, or they won’t keep you, all right? And so I think one of the big mistakes people make is they just try to go for quantity, and they’re like, Let me get into all these stores, but then they don’t spend any time helping product move. You need to go into a store and demo the product. Right. Get it into people’s mouths. People are very slow to change. They have their one pasta sauce that they like. Why would they try yours instead? Especially if it’s more expensive. So you need to be there getting it into their mouths. You need to put it on sale. You need to drive your customer base in there, social media and things like that. So start proving that your product actually sells and then keep growing that circle of influence. And at the same time, if you want to apply to stores like Whole Foods Market or Natural Grocers or even just your big a lot of big box stores do have a spot. They’ll have like an end cap maybe look for it of local products where they know, made in Texas or Florida made or you know, I had a client who actually just walked into their Albertsons and the store manager was like, yeah, great, I’ll take a couple know. That’s not the norm, but you never.

James [00:47:22]:

Know it’s a know until you ask.

Sari Kimball [00:47:24]:

Right? Exactly. But a lot of grocery stores have a very long lead time, so it could be a nine month to twelve month process from the time you apply. So for instance, we might not actually like coffee. Take the coffee set. We’re going to only review that once a year. And so if you miss the deadline, then you have to wait a whole year anyway. And then we’re going to taste the coffee. We’re going to evaluate what’s working. What are the SKUs that have to go because they’re not selling? We have to pull product off the shelf to make room for new product, too. So it can be a very long process. So don’t put all your eggs in one basket there. And it works so nicely to be able to go to a Whole Foods and say, here’s my ten stores that I’m in, and I’m moving this amount of velocity and I’m a great partner. And we went from one case a month to two cases to four cases. Right. And they’re going to be more likely to bring you on if you can show a great what we call a data story.

James [00:48:32]:

All right, very cool.

Sari Kimball [00:48:34]:

Yeah.

James [00:48:35]:

Tell me about the waste that a typical food producer should factor into their calculations when they’re figuring out what does it cost me to make it, what does it cost me to sell it, distribute it, market it?

Sari Kimball [00:48:49]:

All that jazz, right? Well, this industry, I love working in this industry because it’s filled with passionate, passionate people, because it’s food. And more than just like an electronic or something, people are very passionate about this. And I really think you should only do a food product if you have a lot of passion behind it because margins are very small in this industry. You have to have a love for it. And a lot of times people, they want to change the world in some way, whether it’s more sustainable food, locally grown, better packaging, better for you, the gluten free alternatives and things like that. Because the margins are really small. I would say you’re pretty lucky at the end of the day if you’re walking away in profit with three to 15% profit.

James [00:49:47]:

Three to 15. Oh, wow, okay, that hurts.

Sari Kimball [00:49:50]:

Pretty small margins. Yeah. So I’m like, you can have a lifestyle business, but 10% on $150,000 in sales, is that worth it to you to be walking?

James [00:50:03]:

That is 15K funny. It reminds me of when I delivered beer because I was getting paid nothing to deliver beer. But everybody in the world loves you when you’re a beer delivery driver.

Sari Kimball [00:50:14]:

Yeah, exactly. Everybody loves yourself.

James [00:50:17]:

So if you’re the, I don’t know, a hot sauce woman or whatever, everybody loves you. Or cookie woman, who cares? Whatever. But you’re still making nothing for cash until you I suppose volume is the name of the game because if you’re selling a billion dollars, 3% of a billion still are, right?

Sari Kimball [00:50:32]:

Yeah, exactly. So that’s why you got to scale up. You got to get the numbers up there and you got to find that balance of, like, I’m still an artisan, I’m still passionate about the food. I don’t want to be just a nabisco or some huge craft or whatever. So there’s that balance there.

James [00:50:51]:

Right.

Sari Kimball [00:50:51]:

And you got to manage your I always say you got to start with your values first. You really have to have like, what are your clear values and build a business out of that. But yeah, the scale is really important. And so to your question about waste, this is a business where we call it’s the business of 1000 cuts. The reason why the profits are so low is because everybody takes their cut. So obviously the Copacker is going to have theirs and then the grocery store is going to have theirs. And then when you get big enough, you’re going to have a distributor. So you’re not just dropping the product off anymore, now somebody else is dropping the product off. You might have a broker. So they’re kind of your salespeople that are on the ground. So everybody takes their cut and then whatever is left over is what you have left. So there’s obviously food waste which you want to minimize as much as possible, but then it is one of those businesses where you have to be really careful and mindful about the expenses that you take on. And that’s why getting to very large volume is definitely the name of the game for the big exit. Right. For the 286,000,000.

James [00:52:09]:

Sure.

Sari Kimball [00:52:10]:

I think people can start a life, so I don’t want to scare people if they’re thinking like, yeah, right, it’s.

James [00:52:16]:

Still cool, it’s still great.

Sari Kimball [00:52:18]:

Here’s the thing is that you get to define success. Do you define success by the $286,000,000 buyout. That takes a whole lot of risk and a whole lot of effort. And believe me, he did not get all of that right. He had a lot of investors that also got a lot of that money. So it’s a very different game. But you can definitely have a lifestyle and I talk about this in the book, right? You can have a lifestyle business where maybe you’re paying yourself a modest salary, you’re making fifty K a year, plus you’re making that 3% to 15% profit on top. And it’s a fun business, but it’s not like this giant behemoth national brand, right? And then there’s also still more of a hobby business, right, where people are doing shows and farmers markets and some ecommerce and they’re making that extra it’s that side hustle, but they’re having fun and they’re being creative and they’re getting to share their food and their passion with others. So I do think it’s really important that I don’t think everybody should go into it for the big payout because that is a little bit of a unicorn. It happens. But there’s a lot of people in this space and there’s a lot of competition. But can you define what success is for you ahead of time?

James [00:53:50]:

Very true. Yeah, I think I guess from my point of view, food seems to be somewhat like art, where there’s a lot of creativity going on in there and there’s a few people that make a lot of money doing it. Fair amount of people that do okay at it, and then others that are just doing it for the love of doing it. Yeah, and that’s just you got to figure out where you want to be and where you’re willing to be and go from there.

Sari Kimball [00:54:14]:

And there’s so many paths for success. I’ve had clients who go on to that. They don’t do the grocery store thing because that’s where it’s very expensive right.

James [00:54:27]:

To do.

Sari Kimball [00:54:29]:

So maybe they go on Amazon and they do that a lot of people buy, especially buy those kind of tribal diets or niche products that you couldn’t find that are certain allergen free or certain lifestyle or ethnic foods, things like that. So I’ve had people be very successful on Amazon. Also food, like, I’ve had people get onto cruise ships. You never we all eat all the time and there’s lots and lots of places or like amusement parks or things like that. You have to get kind of creative. Don’t just think Kroger or the Piggly Wiggly or whatever is my only path. Where else do people eat? People get into Ballparks with their vegan nacho cheese. So there’s just so many different ways you can go. And being open to maybe I don’t need to be on the store shelves. Right? That’s one measure of success. But I could actually do it a little differently.

James [00:55:33]:

Oh, I hadn’t even thought about that. There’s millions of places you can go.

Sari Kimball [00:55:36]:

Interesting.

James [00:55:36]:

Yeah.

Sari Kimball [00:55:37]:

Where do people eat? All over the place. Airlines is another one, actually. That’s a really big.

James [00:55:48]:

Beyond just little biscotti cookie, kind of.

Sari Kimball [00:55:51]:

Yeah.

James [00:55:51]:

Funny. So, Sari, tell me I forgot to ask you. I mean, we’re running out of time here, but how did you end up in this space?

Sari Kimball [00:56:01]:

I’ve been in the food industry a good portion of my life. Started in restaurants, back of house, front of house, and then I was actually working in real estate development. I got laid off in 2008 during.

James [00:56:15]:

The oh, nice crisis.

Sari Kimball [00:56:17]:

Yeah. Good time to be in real estate. But I ended up on a farm, an organic farm in northern Colorado. And I was asked to create a wholesale program where I was selling our meat, chicken, and produce meat, eggs, and produce to grocery stores and restaurants. So I started this wholesale program. Had no idea what I was doing. I don’t know why you can figure this out. So I did and was doing that program. So I was the sales. Then I transitioned over to Whole Foods Market, and I was a buyer. I was in charge of I did a couple of roles there, but I also helped onboard and find local producers for our stores and just help people be more successful. And then I was also the marketing director for one of our stores in Colorado.

James [00:57:09]:

Did you have a marketing background when that farm asked you, hey, let’s do grocery stores, they just said, hey, I.

Sari Kimball [00:57:14]:

Have a secondary education. I’m a history teacher.

James [00:57:17]:

Oh, funny. You can fog a mirror, go knock on grocery stores doors.

Sari Kimball [00:57:22]:

Seems crappy. And then I got laid off from Whole Foods in 2015, pre Amazon. And then that’s where I just took some time to I was a reluctant entrepreneur.

James [00:57:38]:

Entrepreneur. That’s rare. That’s really rare.

Sari Kimball [00:57:42]:

So I never thought I would be an entrepreneur. It wasn’t really in my family. I wouldn’t say it was in my blood. I always came from like, you should have a job that pays you benefits and all of that stuff. So I took some time off. I was also in the middle of a big life transitions and so took some time off for that and ended up managing a commissary kitchen for a friend just as one of the little things I was doing and was meeting all of these want to be entrepreneurs. And I was asking them all these questions, and they just would look at me like I was crazy. Why are you asking me? I just want to make my salsa. And I was asking business questions, and I just thought, I want to help these people. I really value local food. I think when we buy local, we keep money in our local economies. We’re supporting other entrepreneurs. We’re generally supporting local growing practices and just better food. So, yeah, that’s where it all started and decided, okay, I might try this. And here we are. That was 2016 when I started my business.

James [00:58:55]:

Wow. It’s interesting. I talk to a lot of business owners and it blows my mind. The number of people that have gone through either divorces, had kids, whatever, moved across the country and started a business all within a six month or one year period. They’re just like, it’s a little bit of a brutal change.

Sari Kimball [00:59:16]:

Yeah, it was divorce and also turning 40, and I was just like, yeah, why not? We’re doing all this other stuff, we might as well try this, too.

James [00:59:28]:

Well, 40 minutes away, it’s all grasp reinvention.

Sari Kimball [00:59:30]:

Right?

James [00:59:31]:

That’s cool, that’s cool. Congrats on the awesome business. Let’s talk about your book really quick.

Sari Kimball [00:59:37]:

Where can people find that? So, yes, I just published a book in June. It’s called Key Ingredients, and it’s on Amazon in either ebook form or paperback. So you can just go search on Amazon for that. It’s been fun. I took five years of really doing this with a lot of clients and tried to distill it down into one handy reference guide.

James [01:00:01]:

That is super cool. Very cool. And then how can people find you online?

Sari Kimball [01:00:05]:

Yeah. So everything’s under food business or foodbizsuccess.com. So all the social media. I have a YouTube channel, I have a podcast called Food Business Success. So try to make it really easy.

James [01:00:20]:

Nice. Well, Sarah, thank you so much for being on the show. You have offered a tremendous amount of help or just information for people, I guess, looking to get into the food industry. That is impressive.

Sari Kimball [01:00:34]:

Great. It was helpful, at least. If anything, we all learned a little bit more about our food, where it comes from.

James [01:00:41]:

It doesn’t hurt to know. Sometimes it scares you when you look at the ingredients list and you think, that is a lot of syllables for one.

Sari Kimball [01:00:47]:

Right?

James [01:00:48]:

Right. I didn’t know a word could have that many Z’s in it. So, at any rate, thank you so much for being on the show.

Sari Kimball [01:00:55]:

My pleasure. Thanks for having me.

James [01:00:57]:

This has been Authentic Business Adventures, the business program that brings you the struggle, stories and triumphant successes of business owners across the land. We’re locally underwritten by the bank of sun prairie. If you’re listening or watching this on the web, if you could do us a huge favor, give us a big ol thumbs up subscribe and, of course, comment below and let Sari and myself know what kind of food business you’re thinking of starting, what kind of food questions you may have for your business, as well as, and most importantly, sharing this with your entrepreneurial friends. My name is James Kademan and Authentic Business Adventures is brought to you by Calls on Call, offering call answering and receptionist services for service businesses across the country on the web, at callsoncallcom, as well as Bold Business Book, a book for the entrepreneurs and all of us available wherever find books are sold. We’d. Like to thank you, our wonderful listeners, as well as our guest, Sari Kimball, founder and coach of food business success. So Sarah, can you tell us one more time the website?

Sari Kimball [01:01:53]:

Sure, it’s foodbizsuccess.com awesome.

James [01:01:58]:

I love it. Past episodes can be found morning, noon and night. Podcast link found at drawincustomerscom. Thanks for listening. We will see you next week. I want you to stay awesome. And if you do nothing else, enjoy your business.