How to Start a Food and Beverage Business Online
Whether you’re an aspiring baker, a coffee addict, or a Japanese snack connoisseur, a Filipino’s love for food is simply undeniable. And while some passions remain personal, some become entrepreneurial, with many selling their homemade banana bread or sushi bake to much fanfare and support. Maybe you own a restaurant or food store and have been looking to transition online. Or maybe you’ve always had a talent for cupcake decorating and have dreamt of sharing your creations with the world. Whether you’re a newcomer to the industry or have decades of experience under your belt, our guide will help you transition to online and more.
Why start a food and beverage business online?
The continual shift to digital and online spaces due to the COVID-19 pandemic has not only affected the way we work and interact with each other but also revolutionized the way we eat. Nowadays, food delivery has become the norm; restaurant closures and the inability to move around freely have also prompted us to cook more at home. For busy workers, prepackaged meals have been a lifesaver. Where food deliveries had once been the occasional splurge of the week, groceries can now be delivered directly to our homes with just a few taps on our mobile devices.
In the realm of food business, more and more brick-and-mortar restaurants are transitioning to selling online. From adapting their menu items to ready-to-eat frozen meals to creating custom delivery websites for stores, the pandemic has not only pushed businesses to innovate online but also contributed to an increase in revenue. A report by the USDA Foreign Agricultural Service projects that the food and beverage ecommerce market in the Philippines will increase by 30%, from $216 million to $280 million, this year alone. Everyone from homemakers to food start-ups in local communities is going into food retail, and it’s no wonder why. Anyone can start a business just by preparing food at home and delivering the products through courier apps.
Currently, the food and beverage market is expected to grow at a 7.16% compound annual growth rate between 2021–2027 according to a report by OG Analysis. If this positive outlook hasn’t pulled you in, perhaps the prospects of owning your own business will. We won’t lie — starting a business can be risky, pricey, and will take a large chunk of your time. But with the right plan and vision to see it through, your slice of the cake (excuse the pun) may not be far off in the growing food and beverage industry.
Should you start a food and beverage business today?
Food is practically the easiest industry to get into because we eat every day. Food is an essential human need after all. The average person eats three meals a day with snacks in between, and that can mean thousands of different ways to produce and sell food products to a hungry market. Not to mention all the different flavor profiles you can pick and choose from, as well as packaging that can be easily modified to fit your needs. Your business type can be flexible and adapted to your budget and consumer demand. And while having a full-time food enterprise may be your ultimate goal, food businesses can also be a go-to source of additional income since kitchens are readily available at home.
Before you start
While some food businesses start as passion projects that serve specific cuisines, most businesses serve a practical purpose as embodied by the street food vendors, fast food chains, and food and beverage manufacturers. An easy way to start your business is to create food that is easy to make, affordable, and most of all, delicious! But before you do anything else, we recommend that you first do your research. Find out if your product idea is already being sold online, seek advice from other food entrepreneurs, visit your local trade show, and sell your products to friends and family for some honest feedback. Consider food laws and regulations, including storage and shelf life. Each food and beverage product will have a different requirement. Through research and testing, you’ll gain insights into how to sell your products in a competitive industry, including how to innovate against prevailing food trends and gain practical knowledge on how to source your supplies and deliver your products.
“Consider food laws and regulations, including storage and shelf life. Each food and beverage product will have a different requirement.”
Planning your online food business
Not sure how to start? We’ve added some business ideas below. But for everything else, a simple business plan can help you get started. Business plans help refine your idea, define your business goals, and give you the opportunity to research your market. Start with a summary of your business, add your competitive advantages, and expected sales for the year. Explain your products and your service style and provide a detailed analysis of your target market. Have an online market strategy mapped out based on your budget and have an overview of your kitchen solutions and operations to define your suppliers, tools, and equipment. Finally, ground your food business with a financial plan that includes projected opening costs, a simple sales forecast, and a break-even analysis noting the number of sales you’ll need to recover your expenses. You should also start looking for the right online marketplace for your products. While social media sites can help connect you with potential customers, creating your own online store website using an ecommerce platform provider like Cafe24 adds legitimacy to your business, equipping you with secure payment solutions, and offering inventory support for high-demand products.
Food and beverage business ideas:
- Retailing: grains, wheat, rice, coffee.
- Baked goods: bread, cookies, cakes, pastries.
- Packaged snacks: local delicacies, candies, nuts, seeds.
- Homemade beverages: brewed coffee, milk tea, horchata, coconut juice.
- Themed concepts: Korean grocery store, Japanese snacks, etc.
- Diet-specific: vegan, paleo, sugar-free, gluten-free.
- Prepackaged meals: frozen foods, meal kits, microwaveable foods.
Perfecting the recipe
If you’ve decided to craft your own food and beverage products then perfecting the recipe is the logical next step. If you do not own a family recipe handed down and proven over many generations then creating a product that’s a hit among your market is your next bet. Being able to put down a well-crafted and popular recipe helps define how many ingredients you need to order at any given time. If your product is made from natural and organic ingredients the transparency and health benefits will be appreciated by health-conscious customers. Survey your friends, family, and other buyers to increasingly perfect the taste, texture, and price point of your product.
Want to find out which of your food and beverage products are popular with customers? With Cafe24, you can download the Purchasing Pattern Display app to show customer preferences with a visual display or use our Smart Recommendations Basic app to offer products customers are most likely to buy.
Food production
Depending on the scale of your food production you can choose to create your food products at your home kitchen, a commercial or shared kitchen, or cloud kitchens. You can also outsource the production to trusted manufacturers, all with varying degrees of certifications, licenses, and permits. For many, it’s cost-effective to start making food at home and move over to shared kitchens when it becomes profitable to do so. During this process take note of your production and expiration dates, as well as proper inventory, handling, and storage for finished products. Lastly, It’s important to always keep a clean and sanitized kitchen following proper food safety guidelines.
“It’s important to always keep a clean and sanitized kitchen following proper food safety guidelines.”
Packaging and labeling
After ample research and testing, you should be able to see the big picture for your product. Understanding the market helps define the look of your packaging. Knowing where to sell and how to store your product determines what materials you can use. Choosing a memorable name with fitting brand colors also adds to the product’s appeal. For food packaging and labeling, be sure to comply with local FDA rules, requirements, and regulations. If you manufacture, distribute, or trade in wholesale, you must be registered with the Philippine Food and Drug Administration (FDA). For large productions, you may be required to register your business and products to receive the necessary permits and certificates to operate.
“Understanding the market helps define the look of your packaging. Knowing where to sell and how to store your product determines what materials you can use.”
Advertising and marketing
While a “brand” may give a company or product meaning, branding is simply how your brand is perceived by others. A great product not only has great visual design but should also possess an identity that uniquely positions itself to appeal to your target market. From online promotions, to store design and features on your website, it is imperative that you create customer experiences that evoke positive associations with your business. If you choose to create an online store with Cafe24, check out our themes page for professionally made designs, both free and paid.
When advertising online, it’s important that you create communication channels for customers to contact you, are searchable by your target market, and that you build brand awareness. Some of the ways you can apply these tips include creating active and responsive social media accounts, enhancing your online store with search engine optimization (SEO), and boosting your posts on Google or Facebook ads. With Cafe24, promoting your store on social media is easy with Social Share Buttons. The app allows you and your customers to share your store pages on Facebook, Twitter, and other social media channels.
For your marketing strategy, the original marketing mix (4Ps of marketing) defined by Edmund Jerome McCarthy can help you define your goals. The 4 Ps are: understanding your Product, deciding on a Price, having a Place for your product, and Promotions for your product.
Using the 4 Ps can help you make marketing strategy decisions by answering questions like:
- What’s your unique selling (USP)?
- Are you reaching your target market?
- Is the product what your target market wants or needs?
- How different is your product from your competitors?
After gaining some objective-driven insights on your strategy, you’ll be able to market both online and offline more effectively. Start thinking about the platforms you want to market on, the medium it is presented, and the budget, time, and resources you’ll have to allocate to see your plan through.
Where to sell your food and beverage products:
- Friends and family — Get honest reviews and support from people who know you and your product best.
- Social media — Platforms with low barriers to entry are social networking sites like Instagram and Facebook.
- Small and large retailers — After fulfilling food regulatory requirements and perfecting your packaging, you can persuade supermarkets and convenience stores to stock your products.
- Online food and grocery deliveries — If you previously had a restaurant or plan to start a cloud kitchen, then getting on food and grocery apps is a good option. This route would be ideal for those who plan to sell freshly made food or grocery items for same-day delivery.
- Ecommerce platforms — Are you reselling or creating products with a long shelf life? Do you have enough storage at home? For unique products such as food, selling on Lazada or Shopee will maximize your product’s reach. But to fully maximize your store’s credibility and cater to an increasing volume of orders, having your own website built on a trusted ecommerce platform like Cafe24 will help with your brand image and allow you to manage your inventory, sales, and deliveries all on a single platform. Building a long-lasting and trustworthy brand takes time, so set it up on a platform with no upfront costs.
Going online: Payments, fulfillment, and delivery
Whether you’re selling on online marketplaces or social media platforms, it’s important to define the parameters of your food products’ reach. Choose insulated packaging for example, or provide same-day or scheduled delivery for perishable goods. For payment services, some users will prefer to pay cash on delivery, but digital wallets like Paymaya and payment solutions like Dragonpay are becoming increasingly popular for payments online.
While selling on social media platforms can be a good option for new entrepreneurs, you can also build a loyal following through rewards, loyalty points, and promotions on your own online store website using Cafe24. When you sign up for an account, you can access food-related themes and numerous apps including the Proof of Payment app to help you confirm payment transfers. For ease of delivery, you can download the Cash on Delivery app for your logistical needs.
Once you’ve got all the details of your business plan down, it’ll take no time at all to open your online store. You can create your own online store website with Cafe24, and the best part is that there are no registration fees or hosting fees to worry about at all! With themes, apps, and tools at your disposal, designing and building an online store can be done for free on a single platform. Start selling your food and beverage products on Cafe24 today.
