10 things you need to know before starting your CPG company
Understand your product development timeline: it takes about 6-12 months from idea conception to production to create your product line. It is always smart to add extra buffer to your timeline in case there are supplier and production delays.
Start with more SKUs! This will be beneficial for your launch plan and will allow you to slowly release products throughout the years.
Dream big and then finesse! It’s okay to have crazy, unattainable ideas at first. It is important to understand the workable parameters for a profitable project, but we specialize in doing the impossible. We will also let you know when a project is attempting to defy the laws of our physical world!
You will need to go through many rounds of taste testing, but begin with small groups first. Make sure that you are giving taste tests to people who are in your target demographic. Have many taste testing parties and administer a short, qualitative survey each time.
Understand your ingredients (more on this in another post!). How do your ingredients stand up in heat processing? How do certain crop outcomes affect the ingredient supply chain? Some ingredients will have more variance between productions or will change in flavor over time. Juices can vary in sweetness from season to season; products that contain live cultures may continue to ferment over time–vinegars, kombuchas, alcohols, etc.
Get started on your packaging as soon as possible. The first designs are always the hardest to complete (there will be lots of sample requests and last minute design changes). A typical design timeline is around 2 months (including 2-3 weeks for label printing). We can connect you with designers and printers!
Communication is critical with all of your production partners. Do not get discouraged by slow communication streams–many co-packers, designers, and suppliers are inundated with clients and can take a while to respond, but continue to persist. A nice email and a smile goes a long way!
Order your ingredients at least 45 days before your production run. There are often delays and long shipping lead times. Many co-packers will request that they receive your ingredients a set number of weeks or months in advance.
Go to your production runs! Not only is it important to make sure your product is tasting how it should, but it is important to develop your relationship with one of the most important partners, the people who make your product.
Freight is expensive and can raise your bottom line. Find a 3PL that makes the most sense location-wise for you. If you’re focusing on local sales, find one that’s close to you–you may be visiting the warehouse frequently for sample drops. Otherwise, we suggest looking for one located in the middle of the country (this will heavily reduce shipping costs for you). We can also help you find the right one.
Bonus: People in the CPG world tend to be very generous with their resources and information. There are many discord, slack, substacks, and other groups (Startup CPG, Snaxshot, CPGD.XYZ to name a few) where you can crowdsource information and connect with other like minded brands.
