I have created a very versatile hot sauce. How can I do market research or what can I do to find out if it has potential as a viable business? Thank you for your suggestions.

Shami

Shami:

The first thing is to go to several competing grocery super stores and check your competition on the shelf. You'll likely have to look up as most hot sauces are on the top shelf. If you think your product compares well then you can think about moving forward.

The first and most important thing you must have to make a success of introducing a new product to the grocery shelves is a big pot of money. Without a proper war chest, you have little chance of success. Why? Because every thing related to your product, from marketing and manufacturing to brokerage and distribution cost money -- before you get any money from sales -- if you have any.

The second thing is to find other products to accompany the hot sauce. One product companies have a real hard time, even the successful ones. That Tabasco sause you'll see on the shelf used to be just one product and in recent years has expanded in to flavored sauces. Why? To keep their product on the shelf.

Grocery store shelf space is the most expensive real estate in the world!

I know about doing this as at one time I had over thirty food products in national distribution.

Hope this helps.

Kent Capener
Capener Consulting, LLC
http://www.capenerconsulting.com
Kent Capener
Capener Consulting, LLC
http://www.capenerconsulting.com

Thank you so much for your advice. Every tip helps.
Shami







>Shami:
>
>The first thing is to go to several competing grocery super
>stores and check your competition on the shelf. You'll likely
>have to look up as most hot sauces are on the top shelf. If
>you think your product compares well then you can think about
>moving forward.

You can create a business from this. Even though it is one product you are going to have to sell to individuals. A lot of people such as my husband are starting out at farmers markets and are doing quite well. You do not need to try to go to the big time just yet. As most of the grocery stores are going to want to see what kind of a track record your sauce has as far as sales are concerned. You can also sell to mom and pop restaurants as they are always looking for something new. You can also sell mail order assuming that your product does not have to be refrigerated. You can think about the big time later just get out there for right now. Also get your sauce in as many hands as possible. Get everyone you know to try it. That is what my husband did and he got out there by word of mouth and there is no more powerful advertising than word of mouth. I hope this helps you.

Thank you for your advice. I have to start small and every tip helps.

Shami







>You can create a business from this. Even though it is one
>product you are going to have to sell to individuals. A lot
>of people such as my husband are starting out at farmers
>markets and are doing quite well. You do not need to try to
>go to the big time just yet. As most of the grocery stores
>are going to want to see what kind of a track record your
>sauce has as far as sales are concerned. You can also sell to
>mom and pop restaurants as they are always looking for
>something new. You can also sell mail order assuming that
>your product does not have to be refrigerated. You can think
>about the big time later just get out there for right now.
>Also get your sauce in as many hands as possible. Get
>everyone you know to try it. That is what my husband did and
>he got out there by word of mouth and there is no more
>powerful advertising than word of mouth. I hope this helps
>you.

Check out the Hot Sauce Blog...
http://www.hotsauceblog.com/

... or more directly, their product review page...
http://www.hotsauceblog.com/hotsaucearchives/want-to-be-featured/

This could be a good place to test out how your hot sauce is received by some people that really know their stuff.


Marlin Creek - Idea Seeds
http://marlincreek.com

Mako's Kitchen
http://makoskitchen.com

Speaking of people who know their stuff... Anyone mind if I chime in???

Shami, for starters, you are considering entering the most fun industry in the world! And you have a lot of things that you will need to think about...

I have some thoughts for you that you will want to consider before you start.

From a marketing and sales standpoint...

1. Write a business plan. In other words, what are you doing, where are you going and how are you taking the sauce there? A good business plan will include the market research that you will have to do in order to be sure that you aren't wasting your time... For example, one thing you will learn is that Tobasco currently OWNS 30% of the hot sauce market. Are you going after that market or the remaining 70%?

2. As part of your business plan, write a marketing plan. Who is your target market, where will they get your product and why will they get it... What makes your product different from the other 10,000 some odd products out there???

3. Labels; Contact the FDA to ensure that your labels are compliant. This is where your food manufacturing lawyer will come in handy.

4. Web site, etc. You will need one of these. It's always the first question I get... Do you have a website.

From a hot sauce manufacturing standpoint...

1. If you don't already have one... find yourself a lawyer with expertise in the Food manufacturing field.

2. Unless you are ONLY selling at local farmer's markets or out of your front door, you will require an inspected, registered commercial kitchen in which to make your sauce. There are many restaurants and other food making establishments that will rent you space when the restaurant kitchen is closed, if you can't afford to build your own kitchen. The other option is to take your recipe to a co-packer (someone like us) and have them pack the sauce for you. You'll need a confidentiality agreement and there is where a lawyer will come in handy.

3. You will be required to register your business and get liability insurance and I will add incorporate your company because it will only take one food related complaint to completely bankrupt you and have you in financial and legal h*ll for the rest of your life.

4. How are you sourcing your ingredients, will they be there in sufficient quantities when that contract comes in requiring you to provide X,000 bottles of hot sauce???

5. What do you know about PH testing and shelf life? You will need to learn about them, they are key in hot sauce manufacture.

Stuff you'll want to know about trademark, copyright, etc...

You cannot trademark or copyright a recipe... While the written recipe cannot be copied by someone else the recipe itself is absolutely completely unprotected because recipe registrations are a matter of public record.

Do not register your trademark unless you are married to it and willing to fight to the death to keep it. (Ask me about our trademark battle) BUT... check with the trademarks database to see if the name you want to use is already in use. If it isn't, chances are you are safe, if it is, choose another name. Also, google the name you want and check to see if the website is available, there is nothing worse than naming your product only to discover later that someone else owns the name you are using.

Some other online resources: http://www.thehotzoneonline.com and http://www.thehotpepper.com I write for the Hot Zone and until August of this year was lead moderator at the Hot Pepper, I have become too busy with my business to continue moderating that forum, but you'll find some great resources there. When you go to get your first run of labels printed, tell Dan at BLP labels that I sent you. They are the premier printer in the business. (I do all of my printing in house, but if I were outsourcing, I'd use BLP.)

I noticed someone else on this board who is also in the hot sauce business, hopefully they'll chime in with some thoughts of their own, although, I don't think they manufacture. Regardless, they'll certainly have some advice on retailing and marketing.

And when you want coverage of your sauce, hit that link on the Hot Sauce Blog and contact Jonathan Passow at the Hot Zone link both forums are very well read and you'll get honest reviews from them.

If you have more specific questions that I can help with, or need some references in the industry, feel free to ask. I won't divulge any company secrets, but don't mind sharing industry info that I've accumulated along the way.

T

Tina Brooks, VP Marketing
Brooks Pepperfire Foods, Inc.
Makers of Peppermaster Hot Sauces
http://www.peppermaster.com

Eat more peppers!

Another thing to check out before you start giving it out or selling it is to make sure that you can make the sauce from home and sell it.

Where I live, that would be illegal. They make you go to a certified kitchen. You may have to do that, but it depends on your location.



Here are some market research resources from google:

http://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=GGLJ,GGLJ:2006-31,GGLJ:en&q=market+research

Go for it!

Maria Marsala

Let me help you substantially grow your financial advisory business or nonprofit with P.E.P. Increase productivity, efficiency, and profit.

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