The food industry, marketing and trade, is constantly evolving to meet the demands and needs of both local and global markets. Every year, new products emerge strongly in the market, gaining impressive popularity, while new names in the food industry can also take the market by storm. If you aspire to be one of those names in the future, you are truly lucky to have found this article. It serves as the ultimate reference, containing all the information you need and answers to every question you may have thought of—or even those you haven’t considered yet. Whether you are new and want to share your experience making something like strawberry jam, or you’re an expert looking to grow your online restaurant business by entering the world of e-commerce, this is indeed the right place for you.
As you know, starting any new business comes with its tough lessons. Each industry has its unique complexities and legal considerations, especially the food industry. This sector is constantly evolving, with the World Food Programme (WFP) documenting significant global growth. In fact, advanced food sectors have seen a remarkable increase of 20% in just one year.
It’s important to keep in mind that any specialization in industry and trade is generally easier to navigate and less risky than the food industry, where you are dealing not just with taste but with people’s health. Safety is always a major concern for food products, which is why national and regional government organizations closely regulate and monitor the food industry to ensure public safety.
If you have a great business idea and are ready to face the challenge as a bold entrepreneur, we’re here to help you succeed in your online restaurant business. Get ready to start, but first, here’s an important note:
You must follow the local laws that pertain to the type you will be producing. Although we are in the twenty-first century, reservations about foods and related laws are increasing and changing constantly due to the constant change in the world of food industry. If you want to contract with an external e-commerce platform and export your product abroad, you should know that each country differs in terms of food laws and licensing requirements, and some industries may be subject to additional laws, so be sure to consult a lawyer to know the conditions of your local government regarding your work. Now let’s move on to the heart of the matter:
First – Food Trends:
If you haven’t decided on the product you’ll start your online restaurant business with yet, research people’s current food trends and desires for getting ideas, and look at the search volume for it on Google, which will be very helpful. Check for competition, because even if you’re an experienced trader, the world of food trading is vast and has its own foundations. If you’re a beginner, look for food industries that are easy to use for the first time, require low investment, little equipment, and fewer shipping challenges and legal restrictions (to start with). Here are some other product ideas to expand your options, dear reader:
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- Sweets
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- Packaged snacks
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- Canned and pickled products
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- Dried herbs
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- A variety of baked goods with quality ingredients
Now that you’ve decided what you will produce, it’s essential to research the costs associated with this project:
How much does it cost to start a food business?
The costs of starting a food business can vary significantly. If you plan to open a restaurant or a store, your initial costs could exceed $200,000, depending on your location. However, there are many ways to start with much lower operating costs, especially for small producers who begin their businesses from home with minimal overhead and can expand into commercial spaces later as their business grows. Without expensive lease contracts or hiring costs, you can start small with just a few hundred dollars to cover ingredients, website expenses, marketing, and packaging. If managing your business from home isn’t feasible, consider the monthly costs of a commercial facility, which can be quite high. Many licensed cooperative kitchens offer shared kitchen spaces for entrepreneurs at a fraction of the cost compared to renting a large space
Here are some key points to consider when establishing a food production business:
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- Have a unique and reliable recipe, whether it’s a family recipe or something special you’ve developed. It’s helpful to have dedicated tasters around you who can provide feedback on whether your product is distinctive enough to present to the public.
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- Consider dietary restrictions: such as being free from allergens, gluten-free, alcohol-free, etc.
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- organic, natural, and certified products in your country.
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- Ensure ethical and religious compliance: vegetarian, according to specifications, halal, or adhering to medical conditions. For example, there are specialized stores catering to people with conditions like colitis, producing healthy snacks that are free from irritants for the gut.
This brings us to a crucial point:
Ingredient Sourcing: You should be aware of the importance of doing your duty when selecting your ingredients, and you should also follow the supply series , ensure that the packaging and advertising on the product matches what is inside, and work with trustworthy companies. If you plan to produce a product with an organic label, make sure that your raw ingredient supplier has the appropriate certification to give the product a product that matches the advertising you are giving to customers before making claims in the desired form on your packaging. Paying attention to this aspect improves customer confidence and makes them feel a great interest in your business. Next comes
Food production, and the need for a place to start your business:
In the past, Halwani Brothers Saudi Joint Stock Company started as a small family project for making sweets by “Hajj Muhammad Munir Halwani”. In 1952, the private family project turned into an official company. In 1988, it was able to establish a new integrated factory in the Arab Republic of Egypt, and the company was later listed on the Saudi Stock Market. This gives you the greatest example that everything you want to succeed must start small and grow step by step. So, a professional kitchen may be out of reach at first, but on the other hand, there are many options available to start your business, depending on your budget and your desire to start.
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- Sell food from home:
Some food products can be produced and sold freely from your home kitchen directly and in partnership with family members, but do not forget the conditions of the product you have chosen. This type of activity is still somewhat free in the Arab world, as long as it does not exceed food safety conditions.
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- Shared commercial kitchens:
Many facilities offer shared or licensed kitchen space that you can rent by the hour or for a monthly fee, depending on your production needs. The benefits for you include reduced costs and less paperwork.
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- Finding Your Own Commercial Space:
Start from scratch and gain complete independence if you have the resources to do so. However, be sure to check with your local food regulatory agency to ensure your facility is properly registered. This may not be the best option for new entrepreneurs, but it can be a future goal. Many established food business owners in the Arab world say they started very modestly and, after achieving success, expanded into larger facilities and global e-commerce platforms, like Al-Durra Global Food Industries.
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- You also have the option to work with an established manufacturing company as a partner:
This option is great for entrepreneurs who are more interested in production than dealing with paperwork and transactions. It’s also a good choice for beginners in the industry, as manufacturers should already be knowledgeable about food safety and regulations. Look for a food manufacturing company through your country’s manufacturing directory. Leveraging a facility that is regulated and inspected will alleviate some of the legal and costly burdens. Additionally, here are some points to consider
Tips for Meeting the Needs of Your Food Business:
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- When you’re just starting to produce small batches, it can be effective to calculate the shopping costs for purchasing ingredients from stores, warehouses, wholesale markets, and other sources.
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- Build your connections. In some industries, finding suppliers may rely on word-of-mouth referrals and personal introductions. Also, consider looking for a distributor or intermediary who works directly with farmers.
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- Collaborate with other small-batch producers to purchase ingredients wholesale, as this will save you many expenses and challenges. Now, let’s move on to a more important topic:
Expiration Dates and Inventory:
Producers in cheese, dairy, and milk derivative companies prioritize offering products as fresh as possible and maintain low inventory levels due to the specific health regulations associated with dairy production. In contrast, some products from other companies, like pickles or dried apricots, have a longer shelf life, allowing for somewhat larger production processes.
As a tip, I would say to you use batch numbering or barcode to keep the inventory organized, and make sure to educate your team on your inventory management practices, to avoid spoilage and waste of products due to their expiration before they are released to the market, monitor the market needs and then produce accordingly. Now comes the turn to talk about:
Fines, the Importance of Complying with Food Safety Laws, and Obtaining the Necessary Licenses:
As a food producer, you are subject to civil and regulatory liability. The government can imprison you, seize or destroy all your products, close your business, or impose hefty fines if you fail to fulfil your obligations and comply with food safety laws and obtain the necessary licenses. If your product falls into categories requiring additional licensing (such as meat, fish, and certain agricultural products), you should consult a lawyer experienced in food industry regulations. Although the initial cost may be high for a new business owner, it can help you avoid more costly consequences down the line.
In this context, major companies like Al-Aqwat Food Industries, affiliated with Al-Baik and certified for food manufacturing, stand out for implementing the highest global food safety standards across all their products. Their facility has achieved ISO 2005 certification for food safety systems, making it the first national Saudi factory to complete this accomplishment. They emphasize that this achievement is crucial as it builds public trust.
Here are some valuable tips on this matter:
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- Don’t make people sick, and learn how to handle and store food properly.
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- Trace the supply chain of your ingredients, ask questions of your suppliers, and seek referrals.
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- Work with a laboratory to test your products if you have any doubts about the orders.
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- Keep accurate records and track everything that comes in and out of your facility.
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- Build relationships with food inspectors; they are there to identify any issues and can provide you with valuable, free advice on ensuring that you produce a flawless product.
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- Obtain liability insurance to ensure you are covered in case someone becomes ill. Here are some sources that may help you understand food regulations:
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- Saudi Food and Drug Authority.
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- Guide to Violations of Food Laws and Regulations in Qatar.
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- Jordan Food and Drug Administration website.
The topic of packaging, branding, and the product’s exterior:
You must comply with labeling laws in your country and in every region where you market your product online, as customers cannot taste your product before purchasing. This is where branding comes into play. The product design, photography, website, and product page should work together to tell your story and help customers imagine how your product might taste. As one store owner shared from their experience, “Before tasting the product, it should be something that attracts you.”
Given the importance of packaging in this industry, consider hiring a designer to help you understand labeling laws and design principles. In addition to the visual appeal of your packaging, each country has specific labeling requirements, which may include best-before dates, nutritional information, allergen warnings, and country of origin. If you plan to ship your product across borders, especially to retailers, ensure you review the destination country’s labeling rules. Here are some useful resources to look into:
The Impact of Packaging on Consumer Behavior (The Comprehensive Guide) — Online Advertising: Contemporary Concepts and Strategies.
Now, let’s discuss how to price food products:
In interviews with traders over the past year, one thing is clear: regardless of the product, pricing is difficult. In the end, there is no one-size-fits-all pricing formula that will work for everyone. So, know your costs and keep adjusting until you find the right price. It’s suggested to forgo profit initially to highlight your product to as many customers as possible. Over time, these cost savings will come. If you believe in the value of your product, price it accordingly.
Ihsan and Rami Abu Ghazaleh, owners of the massive Al Baik restaurant chain, say: ‘Don’t think about short-term profit; anything that comes quickly goes quickly. We have been selling at a price of 10 riyals for over 25 years. We could have raised the price, but our commitment to long-term profit is what helped us succeed.’
You should also know that profit margins for food companies depend on various factors, such as what you sell, how, and where you sell it. For example, restaurant margins are typically less than 10%, while meal kit services can reach up to 40%.
Product Growth and Development:
This topic is no less important than the previous ones, as Al Baik relies on several key pillars; if one is lost, balance is disrupted: customers and employees. They say, “Before making any decision, we must consider what benefits the customer and the employee will gain. In addition to food quality, service quality is a priority. To satisfy customers and continually capture their attention, we evolve by introducing new recipes, flavors, and varieties in the fried chicken industry.”
Moving forward in the food industry is establishing a good market position for your product, maintaining that position, and advancing in product development by finding new flavors or desirable varieties, breaking the routine, and experimenting with bolder recipes that attract and satisfy customers while meeting market demands for new offerings. I follow this saying: “Many of our product ideas come from customers.”
This is made by many food brands, both Arab and global, including the Al Baik chain. When its owner returned, he developed the secret spice recipe consisting of 18 ingredients. The brothers worked tirelessly for three years to prepare and refine this secret recipe, transferring it to the central kitchen for further preparation. Customers played a significant role in the success of their restaurant chain, as they had the final say on every dish served. Even after raising the meal price by one riyal, they reversed that decision to satisfy customers.
Therefore, do not underestimate the opinions of your customers; continually monitor their suggestions and develop your product according to their feedback to ensure greater success in the future.
Now, let’s talk about another important matter:
Shipping and Delivery Mechanism:
Consider the local receipt or delivery of food items that cannot be sent by mail. At (Cartley), we have spent a lot of time gathering information to help e-commerce entrepreneurs streamline their shipping processes, which is one of the most common challenges for business owners.
It’s not surprising that shipping food carries additional challenges, especially when shipping internationally. When you export food, there is a range of items regulated under commodity legislation, such as the Meat Inspection, Agricultural Products, and Fish Inspection, for example, each with its own rules. Therefore, products that require refrigeration are not ideal for cross-border shipping, especially when starting or expanding your business.
Also, consider potential restrictions on your product in the destination country. Once products are in the shipping flow, they become the buyer’s problem. However, a poor customer experience can be detrimental to your business and market reputation. Therefore, alleviate customer frustration regarding your product by clarifying its status according to the shipping laws, or alternatively, consider working with a third-party warehouse if you are doing a lot of cross-border business by establishing e-stores with them.
It is said that the cost of shipping individual orders is high; that’s why some traders ship orders in bulk to these external warehouses, where they are stored and shipped directly to customers by your representatives after they place orders through your online store.
This leads us to the local order receipt and delivery mechanism:
If you are selling an item that cannot simply be shipped by mail (for example, chocolate-covered cakes), consider alternatives such as selling online by offering customers options to pre-order your product, like picking it up from your location or local delivery.
During the lockdowns imposed to curb the spread of COVID-19, many retail stores pivoted to an online sales strategy, most of which adopted a contactless policy instead of in-store shopping in response to these challenges. Now, moving on to our main topic:
Building an Online Store:
Whether starting fresh or expanding an existing project, having an online store has become an urgent necessity in response to the convenience of ordering food from home and the demands of the times, such as the spread of COVID-19. You should know that the design of your site significantly influences a customer’s decision to buy a food product without tasting it first. This includes photography; you can choose to take the photos yourself or hire a professional experienced in food styling and lighting. Capture images of the product packaging and its fine details to showcase the realistic texture and color. Consider lifestyle photography, which provides a more realistic representation of the product specifications you want to highlight.
The importance of attractive food photography and design lies in conveying a lot about your product when the customer cannot taste it. Use the product page to describe the taste and texture in detail, and include complete information about ingredients and allergens. To keep the product page uncluttered, create a FAQ page to answer additional questions about ingredients, nutritional information, and production methods to strengthen your connections with customers and enhance their trust.
The owners of Americana Group stated on their website as one of their recommendations: “We must have a deep understanding of our customers and their needs, and continually reinvent ourselves and our products to stay connected with them.”
Importantly, even if your website does not generate the majority of your sales, it is vital to enhance it as a tool for communicating with customers and telling your story. If web design is not your strength, you can choose from the features of Manasti.com for delivery and operations to build something custom and access excellent services and attractive designs… and much more…
The Importance of Marketing and Utilizing All Possible Marketing Methods:
Retail and Wholesale:
Retailers can become more than just distribution channels for your products. The success of this channel depends on truly making retailers a part of the business and inviting them, along with distributors, to take an active interest in selling and promoting your product widely (note the importance of this), even before you start your online store.
Content Marketing:
Marketing your online store is another topic we have covered extensively. The same rules apply to food in the absence of taste testing. Connecting your customers with your story and successes is crucial. Social media is very important for branding, as it is where the primary consumer goes. We want you to engage with your community because they are the real influencers.
Offline Marketing:
Although your business plan may not accommodate an actual retail sales strategy, it is still important to take your product to the streets and into the mouths of potential customers by:
· Generating buzz for your product locally through your contacts, relatives, and friends.
· Running a pop-up window in free apps featuring an advertisement for your product.
· Partnering with restaurants, stores, malls, or shopping centers to host a tasting event (a simple form of promotion).
· Hosting a special dinner for influencers regarding your product.
· Launching your brand at a food and beverage consumer expo.
In Conclusion:
Dear food startup founder, starting a food business is a broad topic to cover, but we will continue to keep our information up-to-date on our site as much as possible. Although the food industry is challenging, it is also an exciting field that can lead to success if you are passionate and ready to navigate it legally. However, poor decisions regarding ethics and transparency can destroy a brand, and this applies to any business. Maintain the smiles of your customers and employees in your dealings with them.
Some challenges may be significant enough to break your spirit, but how you use them as learning experiences for the future is what truly creates an ongoing success story. At (cartley), we will be with you every step of the way, providing you with the best—from great pricing for your store to stunning and attractive designs, backed by a team full of creativity that ensures your project’s – online restaurant business – success and growth. So hurry to get started with us and take advantage of our offers!
