Wholesaling options to grow your food business: Part 2

Learn how to wholesale to restaurants to increase your food product sales.

How can you increase your food product sales beyond selling directly to the consumer? Wholesaling, which is selling large quantities of your food product to someone who resells it, may be your next step.

Carefully consider which wholesale avenue will work for you since each avenue varies in who it serves, how much time you will need to dedicate to it and how much capital it requires. Regardless of what product you sell and where you wholesale it, you will need to produce your product in a licensed kitchen and you will need wholesale licensing through the Michigan Department of Agriculture Rural Development (MDARD) or USDA.

Wholesaling to restaurants is one avenue your business may want to consider. This avenue is more time-consuming than wholesaling to co-ops, food hubs and door-to-door businesses. Wholesaling to restaurants involves more marketing, taking orders, delivering your product to several locations and managing your own financial transactions.

Restaurants, compared to household consumers, will want your product in a commercial-sized package or quantity. For example, if you are selling soup, instead of selling your product in a 23 ounce small container, you would most likely need a tub that holds 384 ounces for restaurant sales. If you are selling croissants, the restaurant will surely want more than a half dozen croissants.

Because of this, you will need a different package, a different nutrition facts label, and a new label overall for your product when selling to restaurants. Restaurants may even want a longer shelf life for your product since they will probably want to store your product longer than a consumer. For some food products like sauce, this is not an issue as they have a long shelf life anyway. However, for some fresh products or refrigerated products, this may be an issue that you must deal with before you try to sell your product to the restaurant.

The MSU Product Center, in partnership with Michigan State University Extension, provides free business counseling for product development as well as nutrition facts labels at a reasonable cost that will help Michigan entrepreneurs commercialize high-value, consumer–responsive food products. For more information, visit the MSU Product Center website or call 517-432-8750.

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