Kitchen to Market Tom Bruce Founder/President Central Coast Food & Beverage

Why is this bill important to you? Reduced startup costs Allows you to begin a small business from home

Producer Liabilities for Food Safety Liability insurance options Establishing a reasonable care defense

Calculating Product Selling Prices Prime Cost Formula Product Cost Labor Cost Packaging Distribution Vendor Incentives

When do I transition to an industrial facility? Efficiency of production and economy of scale Finding the right facility

Preparing for Future Growth Creating and Tracking Batch Numbers Packaging Concerns Bar Codes Financial Evalutions Inventory Costs Turnover Ratios Cash Flow Calculations

Are You Ready to Grow Your Business? The key to manufacturer health and longevity lies in the correct groundwork in early stage growth. Are you at a turning point in your company? Brand new company, need to get word-of-mouth, build momentum and customer base Entry level company, need to secure shelf space in local community specialty stores Saturated local market, need to move regional Saturated regional market, need to move national Received award, press, etc & can leverage to build sales Help narrow down the type of food show that is right for you (consumer vs. trade) Create personal show related goals that tie into your business plan; no two shows are the same

Develop Your Success Story Visit the marketplace Understand your category within the marketplace Profile the competitors and how your product compares Identify key potential customers – and affiliates Build a compelling story about why your product belongs in the market

What Channel of Trade are You Targeting? Manufacturer Supermarket Foodservice Distributor Specialty Food Store Broker Direct to Consumer Research the industry. There is no perfect one-size-all plan that fits the growth of all companies. Many companies start at farmers markets, selling online, selling at local specialty stores and then moving into supermarkets. When to add a distributor and brokers into the mix is complex. Foodservice is a complex channel of trade but can be a very successful channel for some specialty foods

Do You Have Manufacturing Capacity? Are you ready to make a deal? Take a step back. One of the biggest mistakes you can make is accepting a deal with a buyer that you are NOT ready to fulfill properly. Before you sign on the dotted line, make sure Your pricing is right and margins have taken into account future growth of your company to include a distributor and broker . You can lock in a price when a young manufacturer that won’t make sense as you grow. Your factory or co-packer can continue to support this level of production

Questions? Specialty Food Association 136 Madison Avenue New York, NY 10016 www.specialtyfood.com Ron Tanner Vice President, Philanthropy, Government and Industry Relations rtanner@specialtyfood.com

Co-Packers: What to Watch For Vetting Co-Packers H.A.C.C.P. Programs

Resources Small Batch Co-Packers Paradigm Foodworks, Inc. 5875 Lakeview Blvd., #102 Lake Oswaga, OR 97035 Ph: (503) 595-4360 Fax: (503) 595-4234 www.paradigmfoodworks.com Purveyor’s Kitchen 2403 Airpark Ct. Auburn, CA. 95602 Ph. 530.823.8627, fax 530.823.1756, toll free 888.823.9455 https://purveyorskitchen.com/contact

Resources, cont’d Bar Codes: Labels: www.buyabarcode.com Westmark Industries 6701 McEwan Road Lake Oswega, OR 97035 Ph: (503) 620-0945 Rebecca Sawyer rsawyer@westmarkind.com

To view this presentation, or others from the series, go to: http://www.santacruzpl.org/brownbags

For Free Follow-up 1-on-1 Counseling Contact: The Santa Cruz Small Business Development Center at Cabrillo College (831) 479-6136 www.SantaCruzSBDC.org

THANK YOU to our SPONSORS Please fill out the golden evaluation form inside your packet

Santa Cruz County Environmental Health Division Phil McCauley REHS Santa Cruz County Environmental Health Division 701 Ocean Street, Room 312 (831)454-2732 phil.mccauley@santacruzcounty.us

Cottage Food Operations (CFO’s)

California Cottage Food Law (AB 1616) Signed into law January 2013 Allows individuals to prepare and/or package certain non-potentially hazardous foods in private-home kitchens referred to as “cottage food operations” (CFOs)

Traditional permits Wholesale permits Retail permits -Handled by the State Processed Food Registration (PFR) Retail permits -Handled by County Environmental Health Division “Permit to Operate”

CDPH – “The State” California Department of Public Health CFO: FAQ’s http://www.cdph.ca.gov/programs/Pages/fdbCottageFood.aspx CFO: FAQ’s Approved foods Labeling Guidelines

Santa Cruz County Environmental Health Division CFO Applications are available Permits have been issued Inspections may be conducted scceh.com

CFO Class A/Class B Class A – “direct sales” No inspection conducted $62 initial / $32 annual Class B – “indirect sales” Inspection conducted $217 annual

Self-Certification Checklist Facilities/Equipment Procedures Illness prevention Prevention of Contamination Water/Waste water

Approved foods Baked goods, without cream, custard, or meat fillings, such as breads, biscuits, churros, cookies, pastries, and tortillas. Candy, such as brittle and toffee. Chocolate-covered nonperishable foods, such as nuts and dried fruits. Dried fruit. Dried pasta. Dry baking mixes. Fruit pies, fruit empanadas, and fruit tamales. Granola, cereals, and trail mixes. Herb blends and dried mole paste. Honey and sweet sorghum syrup. Jams, jellies, preserves, and fruit butter that comply with the standard described in Part 150 of Title 21 of the Code of Federal Regulations. * See Below Nut mixes and nut butters.

Approved foods Popcorn. Vinegar and mustard. Roasted coffee and dried tea. Waffle cones and pizelles. Cotton candy. Candied apples. Confections such as salted caramel, fudge, marshmallow bars, chocolate covered marshmallow, nuts, and hard candy, or any combination thereof. Buttercream frosting, buttercream icing, buttercream fondant, and gum paste that do not contain eggs, cream, or cream cheese. Dried or Dehydrated vegetables. Dried vegetarian-based soup mixes. Vegetable and potato chips.

Approved Foods Ground chocolate. Seasoning salt. Flat icing. Marshmallows that do not contain eggs. Popcorn balls. Dried grain mixes. Fried or baked donuts and waffles. Dried hot chocolate (dried powdered mixes or molded hardened cocoa pieces). Fruit infused balsamic vinegar (containing only high-acid fruits such as apple,crabapple, nectarine, peach, plum, quince, blackberry, blueberry, cherry, cranberry, grape, huckleberry, gooseberry, loganberry, pomegranate, pineapple, raspberry, strawberry, tomatillo, youngberry, grapefruit, kumquat, lemon, lime, orange).

CFO Sales Limitations $50,000 or less in gross sales annually

Retail Food Permit Categories Food Vending Food Service Mobile Food Temporary Food Booth Caterer

Shared Kitchen Retail permits – “County” Wholesale permits – “State”

Santa Cruz County Environmental Health Division Contact Phil McCauley REHS Santa Cruz County Environmental Health Division 701 Ocean Street, Room 312 (831)454-2732 phil.mccauley@santacruzcounty.us

Santa Cruz County Environmental Health http://scceh.com/Home/Programs/ConsumerProtectionProgram s/FoodFacilityInformation.aspx Cottage Food Operation Registration Form http://scceh.com/Portals/6/Env_Health/consumer_protection/f ood/Cottage%20Food%20Operation%20Registration%20- %20EHS-480.pdf