Private label is all the rage. Unlike several years ago when store brands or small company brands didn’t always carry the prestige of national brands, today’s consumers are seeking out a more personal connection to the products they buy. This is where starting a private label food company or adding private label products to your line can be very successful.
What is Private Label?
Private label (PL) is when a product is manufactured by one company so another company can put their brand name or label on the finished product. PL products are also known as private label branding, store brands and private-label goods. For example, the next time you are in the breakfast cereal aisle of your favorite grocery store read all of the names on the cereal boxes. You’ll probably find several different types of cereal with the name of the grocery store on the outside of the box. The finished product you are seeing on the shelf is usually manufactured by another company but the grocery store has “private labeled” the product.
So What are the Benefits to Starting a Private Label Food Company?
You see, I come from a family of food entrepreneurs. Several of my uncles were among the first franchisees of the one of the nation’s largest pizza chain. In fact, I started working for one of my uncles pizza stores when I was 14 years old. In addition, a number of my cousins also own a number of restaurants. So I have been around food all my life and I still remember a story my uncle told me about my grandmother. When he told me that a food business will always be in demand and you’ll always have money in your pocket. Of course, he went on to say you must offer good food at a fair price, but his advice is very sound.
Here are some of the benefits of starting a private label food company:
– Low start up cost – You don’t need to invest in a kitchen to cook or make the final product.
– Add Products Fast – Since you are not making the product you don’t have to worry about source the raw material or retooling your production line.
– Start with an idea – You can find countless number of PL kitchens offering a number products in almost any niche you desire.
– Start with only a recipe – If you only have a recipe, you can hire a PL kitchen to produce the final product for you. This allows you to focus on marketing your brand and growing your business.
Now that you know some of the benefits of starting a PL company, the next step is to determine what type of products you want to offer. While there is a number of different niches you can select from, here are some of the most promising and profitable niches. These include weight-loss, healthy food, gourmet foods, ethnic foods, low-glycemic and low-sodium.
One area that is extremely popular is salsa. In fact, salsa and Mexican foods are one of the hottest niches. So if you are looking to PL salsa consider Traverse Bay Farms. The company offers a complete line of PL fruit and gourmet salsas. In fact, their recipes have won national awards for best salsas two years in a year.