From restaurant to wholesale: Part 1
Learn about product selection, regulations and packaging that will enable you to turn your restaurant food into a wholesale product.
February 7, 2014 - Author: Diane L. Smith, Michigan State University Extension
Selling wholesale can increase your sales beyond your restaurant, deli or farmers market traffic. Before you take the leap, there are several important steps to consider. This is the first article in this series addressing steps along the way.
First, understand that wholesale products fall under the authority of the Michigan Department of Agriculture and Rural Development (MDARD) or the US Department of Agriculture (USDA), depending on the product. Although your restaurant and the food it serves on site will still be regulated by your local Health Department, all wholesale food preparation and sales will fall under the regulations of MDARD or the USDA. Before making that call to your local MDARD or USDA Inspector, determine the answers to the following questions:
- Which products you want to wholesale?
- What market form to sell them in?
- When you will be able to produce?
- What wholesale avenue would you like to take?
Product selection will involve what you believe you can produce, package, store and keep as a quality product until it is sold and consumed by the consumer. This leads to the question: what market form do you believe you need to sell the food product in to make it safe to consume? In other words, will it be a shelf-stable product that is good at room temperature, or will it need to be refrigerated or frozen? Products with meat in them, juice, beverages and dairy products, and acidic may be out of the question or require more steps due to their strict regulations, but check that out with your MDARD and USDA Inspector when the time comes.
After choosing the product(s), consider when you will be able to produce, package and store the product based on your restaurant business. Selling wholesale will require you to have space to store your product in before it is sold, such as rack or cooler and freezer space. Finally, determine what wholesale route to take. Since selling wholesale means selling to someone who resells your food product, examples could be other grocery stores, restaurants, delis or bakeries, as well as institutions such as a school or hospital. Non-profits that need fundraising items, cooperatives and door-to-door delivery companies that take orders for your products and take the money from consumers before paying you are all considered wholesale outlets. As you decide what route to take, weigh the target market for your product, the time commitment each avenue will take and the amount of sales that avenue will likely generate.
Once you have made these decisions, it is time to pick up that phone and contact your local Health Department Inspector to talk about your ideas as well as contact your MDARD Inspector to determine food safety and processing rules and regulations for the products you have chosen. Based on what you learn, you can then decide to make some changes in your product selection or move on to the next step of preparation.
The MSU Product Center, in partnership with Michigan State University Extension, provides free business counseling for product development and marketing strategies 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.
Other articles in this series: