Organic baby food business

How to Start a Baby Food Business | Small Business

By Shanika Chapman

Parents interested in organic living or concerned about preservatives are very selective in choosing the best brand of baby food for their child. Capitalize on this growing market by offering a natural alternative to run of the mill baby food options. This industry affords you the opportunity to start small using your own savings and expand only when you have established your business or developed a repeat client base.

Research the local market. Visit local grocers and farmers' markets to learn of other baby food competitors in your area. Visit mainstream grocers, all-natural grocers, and specialty grocers to find more unconventional baby food options. Take note of the ingredients, company visions, charities or causes affiliated with each brand and logo. Use this data when developing your own logo, vision and brand.
Contact your health department to obtain a food handler's permit or manufacturing permit and to learn the rules governing the homemade food industry. Review the U.S. Food and Drug Administration’s information on labeling and nutrition requirements.
Develop your logo, vision and brand. Some ideas include teaming up with a local or national charity, targeting “shop local” proponents by purchasing all of your fruits and vegetables from local organic farmers, or purchasing recycled glass containers and packaging materials for your food. Create a clever name for your business that represents your commitment to natural living. Then, register your business at your county clerk's office.
Develop healthy, natural baby food recipes free of preservatives, sugars, salt, fillers and artificial colors through a combination of steaming, roasting and pureeing. Think outside of the box. Combine fruits, spices, pastas and vegetables to create unique flavors. While babies make excellent test subjects, so do parents. Test your recipes on friends with children to gain feedback. Remember that appearance is everything. Bright, vivid baby food that looks fresh will be much more appealing. Consider taking a class in baby food making.
Rent space in a licensed kitchen in order to prepare and package your food. Most states prohibit or highly regulate food made within the home for commercial use. Contact local caterers, churches and community centers about renting space. Submit finished products to a shelf life-testing facility.
Purchase your packaging materials. Select your baby food jars and create your baby labels, which will include any charities you associate with or donate to, your vision and all of the food's ingredients.
Develop nutritional analysis sheets that show the ingredients in branded baby food products and how they compare to yours. Point out that while your product is more expensive, babies consume less homemade food since it lacks artificial fillers. This will be a major selling point. You’ll want to hand these out every chance you get, such as at farmers' markets, local grocers, community centers, baby-friendly gyms, yoga and Pilates studios, and baby stores.

References

Center for Science in the Public Interest: Nutritional Quality and Cost of Commercial Baby Food
Virginia Tech: Starting a Food Business

Resources

My Own Labels: Create Your Labels
Commercial Kitchen for Rent: Find a Licensed Kitchen in Your Area
FDA Labeling Guide

Tips

Consider offering classes to moms on how to make homemade baby food. This won’t conflict with your business. Many of these moms won’t always have the time to make the food and will remember you when selecting store-bought food to supplement any homemade food.
Parenting magazines are an excellent source for feedback on homemade baby food.
Advertise with local doulas, pediatricians and midwifes.
Purchase a liability insurance policy.

Writer Bio

Shanika Chapman has been writing business-related articles since 2009. She holds a Bachelor of Science in social science from the University of Maryland University College. Chapman also served for four years in the Air Force and has run a successful business since 2008.

How to Start a Baby Food Business

Start a baby food business by following these 10 steps:

Plan your Baby Food Business
Form your Baby Food Business into a Legal Entity
Register your Baby Food Business for Taxes
Open a Business Bank Account & Credit Card
Set up Accounting for your Baby Food Business
Get the Necessary Permits & Licenses for your Baby Food Business
Get Baby Food Business Insurance
Define your Baby Food Business Brand
Create your Baby Food Business Website
Set up your Business Phone System

There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your baby food business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What are the startup and ongoing costs?
Who is your target market?
How much can you charge customers?
What will you name your business?

Luckily we have done a lot of this research for you.

What are the costs involved in opening a baby food business?

A baby food business can be started for fairly little money.

Business owners need a commercial kitchen to prepare food in and a retail space to sell food at. The cost of a kitchen can be kept low by renting a commercial kitchen at a church, VFW or other nonprofit organization. At first, an inexpensive booth at a farmer’s market can be used to sell in-person to customers.

Other initial expenses include the price of ingredients and packaging supplies. These can be purchased in small quantities at first to keep upfront expenses down, though. As a business grows, more supplies can be bought with the revenue that’s brought in from sales.

What are the ongoing expenses for a baby food business?

The ongoing expenses for a baby food business include rental costs for a commercial kitchen and the cost of purchasing more supplies. These costs are minimal.

Who is the target market?

A baby food business’ ideal client is a new parent who wants to give their baby high-quality food and has discretionary income. Such a parent will likely be willing to pay a premium for good baby food, and they have the income required to buy premium baby food on a regular basis. Once hooked on a brand, a new parent will likely get baby food for several months or years. They’ll need baby food until their child can eat solid food.

How does a baby food business make money?

A baby food business makes money by selling packaged baby food. Businesses may sell baby food to customers in-person or online. Or, they may sell through other retailers.

How much can you charge customers?

Most baby food comes in a small package that lasts a few meals, at most. These packages generally sell for a few dollars, and sometimes even less than $1.00. Organic and premium baby foods command higher prices than non-organic foods.

While businesses can’t charge a lot for individual packages of baby food, parents usually buy several packages at once. Additionally, parents buy baby food for several months after their baby begins eating food. Investopedia places the amount parents spend on baby food each month at about $60.

How much profit can a baby food business make?

Baby food businesses can be highly profitable. When she was selling baby food only at a local farmer’s market, Carlson brought in $30,000 a month. Businesses that get their foods into national retailers can bring in millions each year.

How can you make your business more profitable?

Baby food businesses can increase profitability by shipping baby food to customers. Little Spoon is a baby food business that does this.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Baby Food Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

Your state's business records
Federal and state trademark records
Social media platforms
Web domain availability.

It's very important to secure your domain name before someone else does.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your baby food business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

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Have a Professional Service Form your LLC for You

Two such reliable services:

Northwest ($29 + State Fees)
LegalZoom ($79 + State Fees)

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

LLC Taxes
Sole Proprietorship vs LLC
LLC vs Corporation
LLC vs S Corp
How to Start an S Corp
S Corp vs C Corp

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

Separates your personal assets from your company's assets, which is necessary for personal asset protection.
Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Open net 30 accounts

Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.

NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

Recommended: Read our best net 30 vendors, guide and start building business credit.

Get a business credit card

Getting a business credit card helps you:

Separate personal and business expenses by putting your business' expenses all in one place.
Build your company's credit history, which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a baby food business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

For more information about local licenses and permits:

Check with your town, city or county clerk’s office
Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.

Food Regulations

When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections

There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Learn more about General Liability Insurance.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Recommended: Learn what business insurance for your Baby Food Business will cost.

Business Insurance for
Baby Food Business

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a baby food business

One of the best ways to market a new baby food business is to directly connect with customers. Parents will recommend a business to other parents if they're pleased with the product. New parents are always asking each other about different things they need.

Connecting with customers directly lets business owners get feedback on their foods and make adjustments. This ensures that business owners develop a product parents like.

How to keep customers coming back

A baby food business can set itself apart from other businesses in the industry by specializing in a particular type of baby food. For example, a business might offer only organic foods, or it might focus on locally sourced foods.

Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

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A balanced combination of business and eco-thinking in the production of Rūdolfs products

A combination of environmentally oriented and business thinking

The company is also currently exploring options to significantly reduce gas consumption in production by increasing the use of electricity, as well as is considering installing solar panels to further reduce electricity consumption.

If we talk about sustainable development goals, here, according to Martinsone, every decision, as in any business, is always analyzed in terms of costs - savings from some improvements can come instantly, while others can be associated with significant investments, which means that pay off they can only in the distant future.

“Cost optimization is, of course, the main motivator of any entrepreneur. Moving along the path of sustainable development, we are already experiencing real benefits in terms of the consumption of water, gas and electricity. However, there are areas in which we are investing for the future, and the real cost/benefit curve can only be analyzed in the long term. One such example is the transition we have begun to a new kind of environmentally friendly packaging that will be fully recyclable. It's no secret that environmentally friendly packaging is now much more expensive. Perhaps in the future, with the development of technology for the manufacture of such packaging, the cost will decrease.

But we are doing it now, because we consider it an important and responsible step,” comments Egija Martinsone.

Concern for the environment and the level of economic development

The head of the company notes that while working in the international market, she noticed a significant difference in how consumers relate to environmental responsibility in different countries of the world. For example, in the Scandinavian countries of Sweden, Denmark, Finland and Norway, there is an increased interest in organic certified products, where consumers are more likely to choose products in packaging that is recyclable and does not cause environmental pollution. “In Latvia, they still pay little attention to such things and look more at the price of the goods. Of course, this depends on the group of society - there are those, especially the younger generation, for whom this is important. In general, I would like Latvia to think more about such things. While, of course, the relationship with the level of economic development of the country is a decisive factor here, trends across Europe are now changing rapidly - also due to new requirements, including the Green Deal and climate change.

For entrepreneurs, as well as for consumers, sustainability issues are closely intertwined with economic factors, and in the future it is important to increase support (both from the state and at the EU level) for those entrepreneurs who implement projects aimed at reducing the impact on the environment.

“Entrepreneurs' interest in various Green Deal programs and other types of support is very high. This is evidenced by the huge competition in applying for almost any European Union support program. These programs are clearly not enough for everyone, so it is necessary to consider other mechanisms to motivate entrepreneurs at the state level, for example, to reduce the tax burden on companies that have already introduced environmentally friendly technologies,” suggests Egija Martinsone.

Baby food manufacturer from Germany is interested in organic products from Kazakhstan — Forbes Kazakhstan and the Union of Organic Producers in Bavaria. The trip program included a visit to the world's largest exhibition of organic food Biofach-2019, organic farm and agricultural university.

Benefits of localization

One of the exhibitors at Biofach-2019, Dr. Martin Bohn , said that he founded Freiland Puten 22 years ago, which today is a major supplier of organic chicken and turkey meat. Production started on with 200 birds. Today, 1 million chickens and 250 thousand turkeys are grown here a year. The enterprise has a full cycle - from fodder procurement to sale. This guarantees the purity of the biochain.

Meat is the most expensive organic product. This is due to the need to comply with a lot of requirements for the conditions of keeping and feeding animals. Therefore, the price for it is high: a kilogram of chicken - 10 euros , a kilogram of turkey fillet - 25 euros .

- For 20 years we have been growing by 5-10% depending on the needs of the market, - said Martin Bohn. – We supply products both to retail chains and processors. In addition to the EU countries, exports go to the United Arab Emirates.

One of Freiland Puten's meat buyers is Hipp, an organic baby food company. She also participated in the exhibition. The head of the company , Stefan Hipp , said that after the devaluation of the ruble, followed by the tenge, the company's products became uncompetitive in the EAEU market. Then it was decided to localize production in Kaliningrad. The launch of this plant made it possible to reduce the cost, but there is still a resource for further reduction. After all, the company still imports raw materials for production from the European Union.

Photo: archive of the press service

Martin Bohn

- It would be very interesting for us to cover our need for organic products with raw materials from Kazakhstan, - said Stefan Hipp. - The exchange rate difference in the currencies of our countries is large, and this makes Kazakhstani organics attractive. If we could use local raw materials, we would be able to reduce costs even more. In addition to grains and oilseeds, we are especially interested in fruits and vegetables. If the quality meets the requirements, we are ready to purchase wheat and rapeseed per year for 20-30 thousand tons. If we talk about the price, then last year we paid 350-400 euros per ton of organic wheat.

400 euros per hectare

Farmer Hermann Zeller leads the regional Association of Organic Milk Producers in Bavaria, which includes 60 farms . The association solves current issues. For example, he sets the selling price of milk for every two or three months and is looking for buyers for stable sales.

Photo: press office archive

The Zellers and their power plant

The farm of Hermann Zeller and his wife Tanya is located in Ipsheim. Like most organic farms, the Zeller farm combines livestock and crop production in order to be able to improve soil fertility with manure. Straw bedding from cowsheds is used for its manufacture. The straw is also our own, which is much cheaper than if you had to buy it.

- Our climate is warm, - told Hermann Zeller . But the soil is heavy, clayey. So we grow those vegetables that grow above the ground, and not in the ground. That is, we do not deal with potatoes. Our specialty is zucchini and pumpkins.

On the farm 90 ha land. Of these, 50 ha are arable land, and 40 ha are pastures and hay meadows. All areas are certified organic. Most of the neighbors are also organics. This is an advantage since no one in the county uses agrochemicals and does not pose a risk of accidental contamination to clean lands.

The arable crop rotation includes alfalfa, which serves as fodder for cows. Wheat is also cultivated. Spring barley is grown, which is suitable for the production of beer due to its lower protein content. Winter barley is also available, it serves as animal feed. Peas and triticale, a hybrid of wheat and rye, are grown.

Vegetables occupy 5 ha . Of these, zucchini - 2 ha , and pumpkin - 3 ha . And pumpkins - 15 varieties. Vegetables go to a large retail chain specializing in the sale of organic products in Germany and neighboring countries - Austria and Denmark. The merchants themselves take the harvest twice a week.

Photo: archive of the press service

Last year, deliveries of vegetables from the farm amounted to 100 tons. The price of organic products is 50% higher than for conventional products. So, if a pumpkin costs 0.8 euros per kilogram , then organic - 0.4 euros more expensive. At the same time, the yield of organic plots, in comparison with traditional plots, is lower than percent by 20 . But there are also savings - there is no need to spend money on agricultural chemistry.

Milk is collected by the same trade network. Total on the farm 50 head cattle. Half of them are dairy cows. Each of them annually produces 7000 kg milk with a fat content of 4.2%. Simmentals - meat and dairy breed. Bulls at the age of from 4 to 6 weeks are also handed over for further cultivation to an organic meat farm. This is a good additional income, in addition to milk. The price of organic milk, by the way, is 0.48 euros per liter . This is twice as expensive as the regular .

Requirements for organic production of livestock products - mandatory grazing on pasture during the summer. Plus top dressing with grain meal with the addition of vegetable oil. Owls living in the attic allow farmers to fight mice - it is impossible to use poisons on an organic farm.

Photo: archive of the press service

Near the house, farmers built a small solar power plant – the use of renewable energy sources fits well into the philosophy of organics. Panels per year produce 2000 kilowatts energy and allow you to get a good additional income.

In addition, Bavaria has serious state support for farmers, and especially for organic farmers. There are no subsidies for products, they are paid only for the area. Each hectare of traditional arable land is subsidized in the amount of about 190 euros per year. In addition, organic arable land receives another at 230 euros per hectare . These funds allow you to pay for certification, which is carried out annually and costs the farm at 3300 euros. Thus, the organic farm receives in the year more than 400 euros subsidies per hectare. Moreover, the area under vegetables and vineyards is a little more.

As for the certification procedure itself, everything is checked - from accounting papers and a list of purchases to the condition of the land and the conditions for keeping animals.

Technology of Goodness

The Zellers have three sons. One of them, still a schoolboy, plans to continue his education at an agricultural university and work on a family farm. Among the largest universities in Germany with an organic specialization is the University of Weihenstephan-Triesdorf in the town of Freising.

Photo: press archive

Stefan Hipp

Professor Wilhelm Pflanz specializes in organic poultry farming. He talks about the philosophy of this approach - treats animals kindly. Including to provide living conditions as close as possible to those that they have in nature. This is where the mandatory requirement for free grazing comes from. And indoors, certain areas are prescribed for different types of farm animals, much more spacious than in traditional livestock and poultry farming. The goal is to make the content comfortable.

One of the current developments of the scientist, on which he is working together with students, is the use of cockerels in the production of chicken meat.