Creating Food Startups: What Is the Recipe for Success?
If there’s one thing that’s certain, it’s that everyone likes to get a tasty bite to eat. Cooking your food at home is always a good and cost-effective idea, but sometimes, you don’t have the time or the willingness to stand in front of the stove for hours. Whenever that happens, you can turn to your local restaurants or food delivery services to get you some delicious food in no time!
But have you ever thought about what separates one restaurant or food business from another? What makes them stand out? Is it the food, or something entirely different?
More often than not, the entrepreneurs and their creative and innovative ideas make some food startups stand out compared to others. There’s a whole science when it comes to creating a successful food business, and with so many such businesses opening nowadays, it’s essential to know how to make yours stand out.
That’s exactly what we’ll discuss in today’s article! We’ll introduce you to the idea of food startups and what this phrase means, then tell you more about some of the most successful food startups in the world.
Saving the best for last, we’ll also give you a step-by-step, fool-proof plan you can follow to create your own food startup. So, if you want to learn more about these topics, stay tuned!
What Is a Food Startup Exactly?
Of course, you can’t decide whether you want to create a startup without knowing what exactly a startup is. By definition, a startup business is a business that focuses on a single product or service. That product or service is their unique selling point, separating them from the rest of the competition.
In some industries, there’s a ton of competition, so it takes a while to figure out what the unique selling point could be. Take the food industry, for example. You could start so many different startups in that industry, as the possibilities are endless.
You can start a fast or healthy food place, you can focus on fresh food or cook a single type of food, you can have a physical location to sell your food, or you can offer it online and deliver it to the customer’s doorstep.
We can go on and on about the different food businesses you can look into. But to open a food startup, you need to think about something that would make it innovative and stand out. You can decide whether the products, the distribution process, or the marketing campaign will be the thing that makes your startup unique. So, start thinking today, as the competition will only get fiercer.
All-Time Greatest Food Startups
Food startups are nothing new. We’ve seen many successful ideas over the years, especially with food having such an important spot in people’s lives.
Some have focused on healthy alternatives to regular meals, while others took chances with daring foods. Some opened actual restaurants that grew into global sensations, while others decided to build online platforms and sell the meals from there.
There’s no better time than the present to explore the food market, and we genuinely believe in this statement. Looking into some of the most successful food startups throughout the years, you can see exactly how they created transcending businesses based on delicious and nutritious food. Let’s look into the all-time most incredible food startups to explore the topic more closely:
DoorDash is a delivery company started in 2013. The company’s platform allows people to register and sign up for deliveries. You can either request a delivery or make one—depending on what you want to do. The platform has grown tremendously over the years and now includes not only the delivery of food but also of beverages, pet essentials, flowers, etc. You can even order groceries from a local grocery store and have someone bring them to your doorstep in no time!
This might not be a business focused on making food, but it’s an interesting example to review. Just last year, this company managed to support$78 billion in U.S. GDP while allowing over 6 million people to make extra money working on their platform. Nowadays, it’s one of the most widely recognizable names in the world of deliveries, and it’s also available in Australia, Canada, Germany, New Zealand, Japan, and the United States.
Daily Harvest is a company started in 2015 by a former marketing executive who hated the fact that she would exchange healthy food for convenient meals. In hopes of making healthy food more accessible to everyone, she decided to start this brand.
True to its name, the company harvests all kinds of fruits and vegetables daily and freezes them to make them stay suitable for longer. The frozen or other products they sell can be found at various physical locations across the U.S. and ordered online.
The thing that separates this brand from other healthy food brands is that they use only sustainably sourced foods from regenerative farming locations. Nowadays, they offer a variety of extremely delicious foods, including flatbread, smoothies, grains, soups, harvest bowls, and bites. They also have a great selection of healthy lattes, along with almond, oat, and other types of milk.
Beyond Meat is a company started in 2009, but its first products came out in 2012. It was a unique company from the very beginning, as it pioneered in the world of plant-based meat.
Today, it’s one of the best-selling companies of its kind, with all its products sold in the largest store chains across the U.S. You have to admit that there’s something impressive about eating non-GMO, cholesterol-free, and protein-rich food.
Currently, Beyond Meat offers quite a few meal alternatives. There are plant-based beef, steak, sausage, chicken, jerky, meatballs, and alternatives to each one of these meats. All of them are plant-based, frozen, and highly delicious in all meals.
If you’re willing to try any of these meats, don’t forget to look at the company’s recipe recommendations featured on the official website. There’s something for everyone, so you should explore to find great ideas for your next lunch, dinner, or cookout.
Deliveroo is a company similar to DoorDash but available in different countries. Since 2013, the company has grown exponentially.
It’s now available in several countries, including the United Kingdom, Belgium, Ireland, Singapore, France, Italy, Hong Kong, Kuwait, the United Arab Emirates, and Qatar. Its origins come from the U.K., where its founder got the idea to create a platform that would connect customers with restaurants and grocers.
So, a great delivery platform was born. The owner did the deliveries for the first year but added the option for other riders to join. Nowadays, after you make a delivery request, you can follow your rider as they make their way to your home, which will be in less than 30 minutes—a standard set by the company.
You can order from some of the 160,000 restaurants and grocers collaborating with Deliveroo, but ensure they’re available in your country before making the request.
UPSIDE Foods is another fantastic example of a food startup, as it’s one of the few companies that creates meat in a lab. You might not know how that is achievable, but the company has actually found a way to use animal cells to create meat. That eliminates the need to breed so many animals only to slaughter them, meaning you get to eat meat and not feel guilty about it.
This company was initially started in 2015 as Memphis Meats but has since been rebranded and has grown tremendously. In 2016, they created their first meatball and successfully created chicken and duck the following year.
In 2022, they received the green light from the USFDA, so their meats are currently used in several San Francisco restaurants, but more are to be added to the list soon. You can learn more about them from the company’s official website.
How to Start Your Own Food Startup
Now that you know more about the most successful food startups in the world, you might be thinking about starting your own sometime soon.
There are a ton of great examples you can follow, including that of Solar Foods, Hedgehog, Mezli, baby food startup Impress Foods, and others.
Considering that these are quite popular, you can find a lot of information regarding their beginnings, unique selling points, the food science they followed, the business models they used, and everything else that went into creating their successful businesses.
Even then, there will be a few steps you have to follow to create a successful food startup that will eventually grow into an even bigger company. To give yourself the best chance to succeed, we offer a ten-step program for you to follow. Check it out below to learn about everything that goes into starting a food business:
Step 1 – Come Up With a Business Plan
The first and most important thing is to develop a good business plan. You can’t make an entire business based on a single idea. There will be many things you have to think about, all of which you can usually find mentioned in business plan mockups. So, look for such plans online, find one focusing on a food business, and explore its structure.
From what we were able to learn about these plans, there are a few things you have to focus on.
The first and most important thing is to create a good concept about your business—will it be a restaurant, what kind of a restaurant will it be, will it be entirely online, will you have physical locations? You also have the option to create a delivery service or some hybrid between the two.
Then, think about the competition. If you plan on creating a San Francisco-based company, think about all other similar companies you’ll have to go up against. See their unique selling points and find a way you can be different. Simply put, find the gap in the market you and your company could fill—a pain point for customers that you can solve so that they’ll come and use your products and services more.
Apart from that, you’ll also have to think about the type of business entity you’re interested in, the insurance you need to start a food business, the licenses and acknowledgments you need for customers to trust you, the process of registrations you have to pass for your company, and everything else that goes into opening a business. More on this in the following steps!
Step 2 – Consider Your Financial Situation
Another essential part of starting a business is the finances. If you plan on building the business yourself, you must decide on a budget or how much you’re willing to spend toward the business to get it from the ground up. This could require a significant investment, especially if you plan to open a physical restaurant that customers can visit.
A smaller investment is needed to start an online marketplace for ingredients or meals, but much money will go toward getting those ingredients and meals. So, if you’re not prepared to invest in everything yourself, you’ll have to look into a few other options.
A valid option is to look into bank loans that you can take out to start the business. There are special loans for young entrepreneurs that will give you enough breathing room while still allowing you to fulfill your dreams.
However, you need to be mindful of loans, as it could take a long time to return them. You should be positive your business will succeed if you want to take out a bigger loan.
Then, there’s another option you can explore—getting investments from others. For example, UPSIDE Foods had two rounds of investments that helped them grow into the company they are today. Even Bill Gates decided to invest in them, which is a big deal.
If you want that to be the case with your company, you’ll have to truly come up with an idea that Bill Gates or Shark Tank‘s Mark Cuban would back up.
If you’re not that good with finances, you can always fire a financial advisor to guide you through this process and help you succeed.
Step 3 – Choose a Location/Domain
Every startup has to eventually decide where they are going to plant their flag and set up shop. For many years California has been the easy choice, with a lucrative funding scene and like-minded talent. But now many food startups may want to consider going to Las Vegas, as it has been deemed the top city in the United States for early-stage startups.
This part is geared toward those looking to open a physical restaurant, as that kind of business would undoubtedly involve a physical location where people can come and try out your food. It could be any kind of restaurant you want to open, but you must be mindful of the space and location.
For starters, you don’t want to open a restaurant near another popular restaurant, which might affect your launch. Instead, try to keep it in a trendy neighborhood, but somewhere where it’ll be unique. Keep it in a location that’s easily accessible to people—near a bus stop, a parking lot, or a big establishment such as a hospital, a school, etc.
Then, think about the space the location offers—do you have enough space for a dedicated kitchen with all the needed appliances? Will you have only indoor seating, or do you want to have an outdoor terrace as well? What options does the space offer, and how many tables can you have there? These are all valid questions you should think about.
This is not a thing you’ll have to think about with an online business, although finding a good domain is similar to finding a good location. It can also affect the number of people visiting your website, but with a good marketing plan, finding your footing on the market should not be a problem.
Step 4 – Design the Space/Website
Now, for one of the most fun parts of opening a food business—the interior design or the website design. It’s no secret that people are attracted to some things just because they look good.
Think about it—if you can choose between a dull and dated website and one that is hip and trendy, you would probably go for the latter in a heartbeat but wouldn’t ask about the type of food they offer.
So, when starting a food business, you need to stay within trends and create a business that attracts people and makes them want to try whatever you’re selling. Look into the websites of UPSIDE Foods and Daily Harvest—they’re so simple and easy to navigate, but they look so good that they make their food seem good.
If you want to create a website for an online business, hiring a UI/UX designer and graphic designer would be best. They can help you with everything from how the website looks and functions to the font and color used in the logo.
This is very important, as professional designers have an insight into how people react to different things, so they can build your brand so that it attracts your target customers.
The same goes for physical locations—you still need a great logo and catchphrase, but you would also need to hire an interior designer to help you out with the setting. They’ll have insight into making the space look functional and welcoming so your guests will always feel comfortable dining there.
Step 5 – Choose Your Suppliers
Another crucial thing for the food industry is to make a deal with good suppliers—people and companies you can rely on to give you healthy and fresh food daily.
Nowadays, a really big thing is to have sustainably and responsibly grown fruits and vegetables. Those who eat meat always want to know that the meat comes from reliable farms, while others may want the best alternatives to meat. So, there’s quite a lot to consider before making a deal with any supplier.
Looking into local farmers’ markets for fresh produce would be best. You can make a deal with the farmers to get you daily ingredients at reasonable prices. That way, you won’t have to overspend on food from questionable sources.
Furthermore, you need to ensure a schedule for when you receive your food and how much of it you receive—you should avoid food waste at all costs, as it’s not good for your budget or the planet.
But food suppliers aren’t the only suppliers you’ll be working with. Everything that you need for the business, you’ll have to receive from somewhere. That includes kitchen appliances, tableware, cleaning supplies—even the napkins you put on the tables. So, consider the suppliers you would want to use for all of these things before actually opening your business.
Step 6 – Hire Reliable and Trustworthy Staff
Hiring staff is never a business owner’s favorite part, but it’s an obligatory part, especially when it comes to restaurant businesses. When you start the hiring process, consider all the positions that need filling.
That will not include only the chefs but also the waitpersons, sommeliers, cleaning staff, dishwashers, hosts, bartenders, etc. Furthermore, you’ll need sales managers, purchase managers, marketing managers, accountants, HR, etc.
When you select the candidates, ensure you review their resumés and contact their references to learn more about their work ethics and previous experiences. It would be wise to run background checks as well, just for your own safety and the safety of those working at the restaurant.
Once you select the people you want to hire, ensure you make them aware of their obligations and what they must sign in the contract to avoid legal trouble in the future.
Hiring staff is also needed in online food startups, but it usually eliminates the need for waiting staff. Instead, you would need the chefs to cook the food and someone to deliver it.
Furthermore, you would have to hire accountants and managers to keep your business on track. It’s not wise to try and save money by taking all the responsibilities yourself—you might only end up tanking the business if you put too much on your plate.
Step 7 – Obtain Licenses and Permits
Obtaining licenses and permits is also not that fun, and will probably involve losing time and money and waiting in line for hours on end. However, you must do this if you don’t want your business shut down because of legal irregularities. Each state in the U.S. has its own regulatory body, so you can find more information on the entire licensing process from them.
When opening a physical restaurant, there are many licenses you have to think about. Here are only some of the licenses you’ll need to consider:
- Doing Business As (DBA) – a document regarding the business’s name, which must be individual to the business and trademarked, so that no one else can use it.
- Business license – a license stating that your business has been reviewed by the regulatory bodies and received the heads-up to start offering services.
- Food serving license – if you’re opening a restaurant, this is a must-have.
- Food handling permit – pretty obvious.
- Building health license
- Liquor license
- Dumpster permit
- Live performance and music license
- Sales tax license
You thought this was extensive? Wait until you see how many other licenses and permits you need before you start working. It’s a lot, but at least it will make your business a reliable and trustworthy one for customers.
However, we want to mention that some of these licenses take a while to be approved, so you do need to start the process before the opening day. Start at least a few months in advance and set the opening date only after you know when you’ll have all the licenses you need.
Step 8 – Develop a Marketing Strategy
Marketing is also an essential part of any business, regardless of whether or not it’s related to food. You must have a good marketing strategy from the minute you decide to start the business.
It’s crucial to attract customers and tell them why they need to focus on your food startup. With so many food startups at the moment, you’ll have to find a unique selling point that you put out there for everyone to see and decide whether it’s something that fits their needs.
If you have some marketing knowledge, you can always make a campaign yourself, but hiring someone to do this for you is also possible. We recommend focusing on social media as a way to spread the word about your business. Engaging posts and photos showing delicious food will surely attract everyone’s attention.
Furthermore, you can try advertising the business elsewhere, like on TV, through the radio, on billboards, posters, etc. The possibilities are endless, so we recommend taking advantage of as many as you can. But remember to continue with the marketing campaign even after the business opens—that will attract even more customers and help you boost your rankings.
Step 9 – Create Your Menu
As you would expect from any food business, you would also need a great menu—that’s the most important thing about your business and what will keep customers coming for more. Even if you have the greatest website or the most engaging social media posts, nothing speaks volumes about a food business as its food. So, let the food speak for itself.
When constructing the menu, make sure you’re inclusive. Nowadays, many people are on plant-based diets. There are vegans, vegetarians, people who are lactose intolerant, those who don’t eat gluten, and some who must be on allergen-free diets. You must be mindful to include options for everyone if you want them to visit your spot.
Furthermore, we recommend making a menu that’s not overly complicated or contains hundreds of meals. Stick to a limited selection, but make them stand out. Ensure you can’t find those meals elsewhere, as we said with the market gap before.
Even if it’s regular junk food you can find anywhere, add a twist so that people would want to buy yours and not the food from the place down the street.
Step 10 – Start the Business
After doing everything mentioned above, you’ll be prepared to launch your business. We wish you nothing but the biggest success in your startup and hope we’ve given you insight into some useful starting points.
Don’t forget—after the opening, ensure you put your business up for review at some famous review sites. That way, you can see what people are saying about it and what they dislike or like.
Find things you can improve on and expand on things that people love, but also engage with the online comments so that people know you’re listening and willing to change and improve.
Furthermore, consider inviting food critics and other experts from the culinary world to try your food and give you constructive criticism. Go out and do polls on how likely people are to use your services.
Don’t worry; the need for this will eventually be minimal, but you need to have a working business with a good reputation and many satisfied customers before you can truly take a breather. Until that time, go the extra mile to ensure your business is set up for success.
Thank you for reading this detailed guide on creating successful food startups. After reading everything, we don’t doubt that you’re prepared to start developing a business plan for your food startup. If you genuinely have a passion for it, your idea will grow into a successful business in no time. So, don’t hesitate to take the future of food into your own hands!
Remember that to create a successful food business of any kind, you have to consider more than just the food. The food is the start and the most critical part of the business, but consider the logistics and whether you have what it takes to see the process through. Hire the needed staff, decide on the funding, start advertising your business, and always let your food speak for itself!
So, do you have ideas flowing through your brain? Don’t hesitate to share them with us in the comments below. We can’t wait to read about your food business and, one day, enjoy the meals you create!