Food Engineering/Manufacturing/Starting sauce business


hey Jim, I am starting a sauce business and my costs per bottle for co packing is about $2.07 per bottle. this is based on 100 cases. I want to start small and slowly grow and expand. Based on your experience, with a cost of 2.07 per bottle, how much do you think this should be sold to distributors? how much do you think this should be sold to retail? What is the approximate markups for distributors selling to retailers? And how much do retailers usually markup after you sell it to them? I know everyone is different but I just want an approximate percentage so I know what to work with. I am completely new to this industry. Any advice on how to reduce costs of packaging? Any advice would be helpful. Thank you for your time.


Not knowing anything else - like what kind of 'sauce' we're dealing with, or even the size of your bottle - the $2 seems high to me.  And, if we say that the split between manufacturing cost versus distribution cost is 20 / 80, your sauce would retail in the $10/bottle range...which seems to be prohibitively high.

My suggestion - if you are locked in to the $2.07 - would be to look at non-traditional sales / distribution, such as online sales, flea markets, local charitable events, etc.  That may permit you to sell in the $5 - $6 range, which competitively is about the highest you could go.  It would also minimize costs like advertising and other costs of sales.

Other suggestions I'd make would be to approach a popular local eatery, and see if you can get them to feature your product, and possibly co-sell.  Also, if the local TV station has a consumer reporter, approach them to possibly do a story about you.  They are always looking to fill air time, and stories about the 'little guy trying to make it in business' are always popular.

BTW, without knowing any details at all, there's no way I could make any comment re: your packaging costs.

Good luck!

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Jim Pfister


Food Engineering/Manufacturing, Food Packaging/Distribution, Engineering Beverage Lines, Reducing operating cost of packaging lines while increasing efficiency. Lean Manufacturing. Incorporating new package technology into existing operations. Training staff to achieve smooth transition from "start-up" to full production. Managing complex projects across multi-disciplinary lines. Equipment PreShipment Factory Acceptance testing and Commissioning programs for new equipment.


Employment history: Over thirty-five years of experience. Managed as much as $40MM in concurrent, multi-disciplinary projects, both domestic and international, and have worked with such firms as Campbell Soup, Coca-Cola, Hershey`s, and Nabisco.

Organizations: An author and speaker, as well as a member of the IoPP. Past Chairman of IoPP`s Consultant`s Council and Member of the Packaging Equipment Performance Committee.

Publications: PMMI Solutions `99, Monthly Packaging Tipsheets


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