provides coverage if someone gets hurt using your product. It should be held by each person who makes contact with your product. Hoskins, who carries $5 million worth for her syrups, says sales determine the amount of insurance you should carry. Steven Goldstein, vice president of the Insurance Information Institute, a New York-based trade group, says the type of product is also a factor. Consult your insurance agent for more details.
TAKING YOUR PRODUCT TO MARKET
Before going retail, you may want to see how the average consumer will respond to your product. Keep in
mind that you’re not just gauging how consumers like the taste, but also such things as its coloring, packaging and labeling. You don’t want to turn potential customers away with a product that is offensive or one that does not capture the eye. “I had some marketing research done by graduate students at the Washington University Business School,” says Gibson, whose product was chosen for research in a class project. Gibson says the yellow color of her hot sauce was a barrier for some people initially. “They were accustomed to red hot sauce and had not seen a yellow or a green hot sauce, so people were wondering about the color and it didn’t appear hot to them.” That’s when she decided to come up with an ad campaign–“What Color is Hot? It’s Not Always Red.”
You can test-market your product through various ways including trade shows or focus groups. Hoskins, who carried her syrups to the twice- yearly International Fancy Food and Confection Show in Atlanta in 1984, says focus groups are great barometers. If the findings are good, they can be used to persuade buyers to purchase your item. While you can hire a consultant to form a focus group–at $30-$100 per person–you can create your own for much less using family, friends and people from your community.
When pricing your product, determine what your costs are, what profit margin you would like (Hoskins suggests 17%-20%) and where you want to sell it. Then price competitively with similar products. Once you’ve done that, you’re ready to hit the shelves.
Getting a store to buy your product is perhaps the most difficult part of turning a recipe into a business. Supermarkets and grocery stores are bombarded with products, but have limited shelf space that commands slotting fees ranging from $1,000$30,000 per item. You can market your products through direct sale or by using a food broker. Through direct sale, you present your product directly to the store owner (if a small shop) or a buyer in the corporate office (of a large chain). Hoskins sold her honey creme syrup to 20 local independent mom-and-pop stores in Chicago before going national with all three products in 1994. Today, her syrups, which each retail for $2.79-$2.99, are sold in 3,000 stores including Win Dixie, Walmart, Food Lion and Kroger.
If you’re uncomfortable selling the product yourself, you can hire a food broker. “They represent the manufacturer of the product and they sell