Do your friends rave about your apple pie, or chicken cacciatore? Do they tell you that if you bottled and sold that fabulous spaghetti sauce you could make a fortune? Would you love to forsake your boring desk job and open a coffee house or bake shop? You can learn what it takes to turn your great recipe or unique food idea into a commercial success at a new program, the FoodPreneur Boot Camp.
The half-day program, cosponsored by the NJAWBO Women’s Business Center and Fairleigh Dickenson University’s Rothman Institute, focuses on “that 15 percent of knowledge that is unique to the food business and is not easily found by someone who is new to it,” says Dominick Celentano, one of the two developers of the boot camp curriculum. The program begins on Thursday, October 16, at 8 a.m., at Fairleigh-Dickenson’s Rothman Institute of Entrepreneurial Studies, in Florham. Cost: $35. For registration information call Kim Dennison at 973-443-8880.
Celentano and his partner, Esther Psarakis, began work on the FoodPreneur program a year ago following more than 30 years of combined experience in the food industry. Celentano’s experience began with Celentano Bros. Inc., a family business that he helped turn into the second-largest national brand in the Italian prepared food category. The company is best known for Celentano brand of Italian frozen pastas and prepared meals.
As a vice president and later president of the company, Celentano developed and managed a national sales force and a national network of more than 30 brokers. After the sale of Celentano Bros. he founded Celentano & Company, where as a family business expert, he mentors and coaches members of family businesses on a wide range of topics.
Celentano also teaches entrepreneurial studies at Fairleigh Dickenson and is a counselor at the Raritan Valley Community College Small Business Center. He is currently a candidate for his MBA at St. Joseph’s University in Philadelphia.
Psarakis ventured into the food business about five years ago, importing specialty foods from Greece. Her company has expanded and now also produces ready-to-cook meals based on Greek recipes.
Psarakis had no experience in the food industry when she started her food import business, Taste of Crete. She did, however, have a long-standing interest in the industry. She began her college career as a food science major at Rutgers, but she changed majors and graduated in 1982 with a bachelor’s degree in communications and Italian. Her degree took her into the field of finance, where she worked in global marketing for Citicorp and American Express.
She credits 9/11 with her new career. “I worked in mid-town Manhattan at the time and I was laid off shortly after 9/11,” she explains. She spent about a year “just playing and traveling,” and it was a visit to her husband’s family, in Greece, that reawakened her interested in the food business.
“I’ve always been enamored with Greece, ever since my first visit there with my husband,” she says. In 2004 her company, Taste of Crete, began importing foods from Greece. The “latest rendition” of her business, is Demeter’s Pantry, a partnership with friend Maria Kardamaki Robertson. The company also sells a mixture of foods imported from Greece and Greek-inspired products made in the U.S. A second brand, The Greek Table, features ready-to-cook meals based on Greek recipes, including vegan, vegetarian, and gluten-free dishes.
While most people would find these projects enough to keep themselves busy, Psarakis cofounded FoodPreneur with Celentano, plus helped develop a website and educational programs designed to help other budding food entrepreneurs.
“There are so many ways to waste money when you are starting any business, but particularly a food-related business. I made a lot of dumb mistakes,” she admits. “I’m a living example of what not to do, and I’d like to help keep others from making those mistakes.”
Working backwards. One of the most important things for a start-up food entrepreneur to understand is the importance of pricing, and understanding the different pricing in different areas of the food industry.
“You can make a fabulous vodka rigatoni, and everyone you know will tell you that you should market it,” Celentano says. “Now if you open a restaurant and offer that vodka rigatoni as a dish for $9.99 your customers will think they have just gotten a great bargain. If you offer it as a frozen meal through a retail grocery chain for that same $9.99, no one will buy it. It is too expensive.”
The best way to come up with your price, and the cost of the products you make is to “work backward” from the price that you can sell the product for, through the cost of the ingredients, and into production and distribution. If the price to make the product is too high, you must either find a way to decrease the price or come up with a new idea, he says.
Producing the product. You might want to open a kitchen and produce the product yourself. This is feasible if your business involves onsite meals such as a restaurant, or producing small quantities of specialty foods, such as a bakery or candy store. However, if you plan to sell your product in wholesale quantities you will probably need a co-packer, a third party contract manufacturer that produces and packs items for a variety of customers.
Using a co-packer is the most cost-effective way to produce the quantities needed for the wholesale market, explains Psakaris. The equipment is already in place, and the food entrepreneur need only rent the facility for the time needed to produce the product. In addition the co-packer’s kitchens must already meet local and FDA standards for product safety.
Brokers vs. distributors. It’s the catch-22 of the food business, says Psarakis. You need a proven distribution system to obtain your customers, but without a customer base, many food distributors don’t want to talk to a start-up. A food broker, a sales representative for food products, can help, she says, but who you should look for first depends on the type of product you are selling and its target market.
For example, someone whose product can be labeled “natural” may want to discuss their product with UNFI (United Natural Food Distributors) one of the largest wholesale distributors of natural and organic foods. In addition, she mentioned, Whole Foods also has a reputation for carrying local products, so another good place to start might be the regional office for the Whole Foods chain. Finding a small, independent broker to represent a specialty food is another option.
Go directly to the customer. If finding a broker, a distributor, and a retailer seem too complicated, you might want to bypass these traditional ways of getting your product to the market and go directly to the customer with Internet marketing, suggests Celentano. Many products, particularly those aimed at niche markets, can do well with this strategy. Celentano mentions a company that has been through the FoodPreneur program which produces vegan products.
“They are doing well on the Internet because their client base knows that it is difficult to find products and are likely to search the Internet for vegan items,” he says. “The Internet can be a good way for a start-up company to establish credibility.”
Importing foods. Other food entrepreneurs may be more interested in importing an existing product from another country, rather than producing a new product, but this type of business involves a host of regulations in both the United States and the country of origin, says Psarakis. “It is easier if you work with a producer who is already savvy to the U.S. market, rather than someone who doesn’t understand many of the things that are involved,” she says.
Knowledge is the key to making any business a success, says Celentano, particularly in a cost and regulation-intensive industry such as food. “Almost 90 percent of food business fail, and those statistics just include the products that actually make it to market, not the products that fail before they ever get there” he adds. Through the FoodPreneur program he hopes to make the odds for would-be food entrepreneurs just a little bit better.