This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hello, what's up? Greetings and welcome. This is Chris Guillebeau, your host of "Sottosville School." Every other Monday, we look at a specific topic related to starting or growing your project. If you'd like to check out any of those archives, we're calling it the classroom series, just go to the classroom page. Conveniently, it has the same title.
You can just go to sottosvilleschool.com/classroom to access all of the archives. For the first half of the year, we did it every week. So there are a lot of topics there. And some of these topics may relate to what you're working on or what you're thinking of working on, and others may not. So that's okay, just pick and choose what is good for you.
I always want you to use your time well. And of course, we've got new case studies coming out every week, along with all of the interactive features such as questions and answers and throwback Thursday. All right, for today, let's look at the topic of selling a food and beverage product, also known as FNB. I briefly mentioned this a couple of weeks ago in a question and answer episode. So I'm excited to delve into it in some more detail here.
I'm pretty much right off the bat here. The first thing to note when you're talking about food and beverage is that this industry poses some pretty unique challenges. It also comes with some opportunities, of course, like we've had a number of stories. I'll tell you a couple of examples in this episode. We've had a number of stories that people have done very well, but it also comes with some pretty unique and not small challenges.
Okay, and like I said, they're not small, so let's not make light of them. First of all, this industry is more highly regulated than lots of others. For a lot of different projects, you don't really need any special licensing at all, but for a food product, you usually do. And it's not just a matter of the red tape, getting the license or whatever. The bigger problem is that food is difficult to ship or transport, and it has a limited shelf life.
So you can probably imagine some of the great complexity that comes with trying to take an initial food and beverage idea or a concept into something that can grow and be distributed regionally or nationwide or internationally. There's this built-in expiration date on everything that you make. Every granola bar you whip up has got that expiration date on it, whether it's printed on it or not, it's there, right? So you make too few granola bars, you miss out on sales. You make too many, you're probably gonna end up eating some of those expired bars yourself or just wasting them.
So maybe we should just insert a little brief pause here to say if selling a food item isn't your vision, do something else, right? There's all kinds of things you could do. So if you've got three ideas and one is pretty simple and feasible, and the other two are pretty complex, why not choose the simple and feasible? And not trying to discourage anybody who does have this as their vision, just wanna call out everybody else and say, you only get into this world if you really want to be in this world. So last week we had a listener question, I believe the guy's name was Joe, and Joe is having a lot of success baking and selling his delicious vegan oak bars at the farmer's market.
And he wants to grow his business, but he also wants to stay away from anything that requires real scale. I think he said in his question that he basically wanted to grow, but he didn't want to grow too much. So what would be his next step? And I think this is interesting, but tricky because he can say at the level he's at, he's doing well at the farmer's market, vegan oak bars for the win, or he can explore the world of outsourcing and co-packing, which we'll talk more about in just a moment. But it's kind of hard to split the difference without just working more, which is a recipe, no pun intended this time, for burnout.
So if you go down this road, be prepared to make that choice at some point. Be prepared to come to the point of deciding, okay, I do want to grow this, I am going to do that research. I might not be able to bootstrap everything. I might have to actually raise money for something, or I'm just going to be okay with the farmer's market or whatever the initial experiment is. Okay, so on to co-packers and commercial kitchens.
With a commercial kitchen, you rent space in a large industrial size kitchen. This allows you the chance to make large batches of your delicious item, whatever it is, maybe you're roping your kids or your neighbor or your buddy, and usually pay by the hour. So you might schedule and swing by for four hours once a week, for example. And obviously if it grows, you can do more. With a co-packer, this is actually another business.
This is somebody else's business, some other company that does everything for you. So a co-packer is in the business of taking your recipe and making your product in bulk, which in an ideal world is amazing because that then leaves you to focus on sales and marketing. But as I said, ideal world, there are quality control issues. It's not cheap. There's no guarantee that what you made at a small scale is going to work on something larger, just to name a few problems.
Not even to mention that whole thing about shipping and distributing your product and like how long does it last, et cetera. So when it works well, it can be great, but when it doesn't, you have big problems. Now, what is a practical action step? Before you do anything at all in this space, do some research about cottage laws in your area. So just go online, type in the name of your city or town or area, state, province, whatever, and type cottage laws.
You're gonna see some information most likely. These are regulations that initially came from British common law. They've been integrated in other parts of the world, including the US and Canada. And it's handled differently in lots of different jurisdictions. But the idea is to make a distinction between the Joes of the world who are selling their oak bars at the farmer's market and the kind of business that needs more inspections and approvals.
It's trying to make it easy for a school to have a bake sale, for example. So these laws vary a lot, but often it has to do with the volume of product you're selling. So taking your oak bars to the farmer's market once a week, no problem, selling thousands of them to Whole Foods. Well, you actually need to go through more of a process for that. All right, we're gonna take a quick break to say thank you to our sponsor.
I really appreciate them allowing this to be completely free to our listeners. Then when we come back, I'll give you three examples of interesting food and beverage side hustles that we have featured on the show. [Music]
All right, so a few examples, and this was tough to choose, by the way, because I actually found more than 60 examples just right off the bat when I first searched in my software that contains the stories. So if you go to sidehustleschool.com/podcasts, I believe we have a whole category for food and you can actually see a lot of those examples, probably some others as well. So I chose episode 919, 919, mountain biker takes beeline to all natural profits.
And episode 219, mammoth bars, two friends start $25,000 a month paleo bar business. And with those guys, they were specifically adamant that they would not have preservatives in their product. Of course, having some preservatives makes it much easier to produce your product in bulk and distributed across the United States or wherever your location is. But they were adamant that they were gonna grow their business and scale it as they have done. It's actually much more than $25,000 a month, but they were gonna do that without using preservatives.
And the last example, ice cream for dogs, which we featured in a throwback Thursday episode, I believe in June, that was originally episode 384, frozen yogurt dog treats are no barking matter. And if you just think about the complexity that's involved here, this last one, that last example is especially tough because they're selling a product in their case all over the United States. They have distribution in lots of different stores and it's frozen yogurt. So it has to remain frozen pretty much at all times. So it's a tough, tough challenge, but they have cracked it.
And so when I said at the top of the episode, unique challenges, unique opportunities, because they have figured it out, this now means that they are essentially protected. You might have an idea and say, well, I've got an idea for some different flavors or my dog tried their dog treats and didn't like them. So I think I can do better. Well, good luck because as I said, it's pretty tough to figure out. This is called a moat in the startup world.
It's like they have this, imagine it's a castle. It's the frozen yogurt dog treat castle. And because they have figured out this difficult challenge, it's gonna be hard for anybody else to come in and compete. Okay, so that was episode 384. The other two were 919 and 219.
919, 219, 384. You can always get to any episode that I mentioned by just going to sidehustleschool.com/thatnumber. Now your assignment for the week, if you are interested in a food and beverage side hustle, if you're not, that's okay. No assignment, you know, just keep listening. Keep working on your idea.
But if you are interested, look up the local laws and regulations for your area. This is a good first step for anybody. You might also want to see while you're doing that, if there's a food incubator or a local organization that specifically serves aspiring foodpreneurs. Because in most mid-size and large cities, there is at least one. And even in a lot of smaller areas, there's something like that.
So check that out, because they're gonna have a lot of resources. You can read notes for this in every classroom episode this year at, what did I say? sidehustleschool.com/classroom. This has been episode 1346. Thank you for joining me.
Got a good week coming up and I hope you'll stick around. My name is Chris Guillebeau. This is Side Hustle School. [Music]
From the Onward Project.
