Baby Food Business Plan, With a Projection

A baby food business plan has two choices that shape everything else: frozen or shelf-stable, and tested or hoping. A shelf-stable jar of vegetable puree is a low-acid canned food, with the federal registration and process filing that comes with it, so this plan sells frozen. And parents and grocery buyers both ask what's in it beyond the vegetables, since FDA has set action levels for lead in foods for babies, so the plan carries a lab-testing budget every month. In the example below, a baby food maker in Connecticut sells frozen puree trays at markets, weekly delivery boxes, trays to grocers and frozen finger-food bites, and ends its first year about $30,200 ahead on $106,900 of sales, with the cooking paid. Below is a description example, each part of the plan, the rules, the first year month by month, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the foods, the ages, frozen or shelf-stable, who buys, the goals.
• Frozen avoids the low-acid canning rules; shelf-stable jars bring them.
• Cost a tray from the produce up: cooking and portioning, the tray, the cold chain, the fees.
• Weekly delivery boxes bring the most a customer; grocers bring volume at a wholesale price.
• Budget lab tests for lead and other metals every month, by ingredient and by supplier.
• Keep every batch's produce lots, so a test result leads to the trays it touched.
• TaroStack keeps every batch with its produce lots and every tray counted by flavor and freezer. More below.

Part 1: the business description

Thimble Islands Kitchen, a made-up baby food maker near Branford, Connecticut, I use in these examples, writes:

Thimble Islands Kitchen cooks single-vegetable and mixed purees and soft finger foods for babies from local and organic produce in a shared licensed kitchen, frozen in two-ounce cubes, sold at farmers markets, in weekly delivery boxes, and to a few grocers.

Part 2: the rules

A shelf-stable vegetable puree in a sealed jar or pouch is a low-acid food in a hermetically sealed container, and a commercial processor of those registers with FDA and files its thermal process for each product before selling it (21 CFR 108.35). Frozen purees don't take that route, which is why this plan freezes. FDA's guidance for packaged processed foods for babies and young children under two, purees in jars, pouches and tubs among them, sets action levels for lead: 10 parts per billion for fruits, most vegetables, mixtures, yogurts, custards and single-ingredient meats, and 20 parts per billion for single-ingredient root vegetables and dry infant cereals (FDA). The guidance is FDA's recommendation, not a rule a small maker files under, but it's what buyers and parents will ask about, so this plan tests its ingredients and finished purees and keeps the results with the lots. Your state licenses the kitchen; ask what it requires for food made for babies. This is general information, not legal advice.

Part 3: what a tray costs

The cold chain is the cost most plans forget: a delivery box carries $7 of insulated box, cold packs and driving, nearly as much as the $9.80 of produce in it. Keeping frozen food frozen from the kitchen to the customer is covered in shipping perishable food for a small business. The lab tests aren't in these costs; at about $300 a month they're a fixed cost.

Part 4: customers and prices

At full speed the delivery boxes bring about $3,200 of the month's $8,000 of contribution, from 30 families a week, and the market trays about $2,700. The grocers take the most trays, 600, and bring about $1,300. A family that signs up for the weekly box is worth the most and stays for months; a baby only eats purees for so long, so the plan is always finding the next family. Finger foods are made for babies old enough to pick them up, sized and textured for the age on the label.

Part 5: the first year, month by month

Fixed costs are $2,015 a month: the shared licensed kitchen ($900), freezer power and storage ($150), lab tests for lead and other metals averaged ($300), product liability insurance ($200), market fees ($150), the website and subscriptions ($80), marketing ($200), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:

The year's sales are $106,904 and the profit $30,228, with the cooking paid at $18 an hour in the variable costs. Cash falls to −$1,240 by month 3, and produce is bought and cooked ahead of the market, so the plan keeps $5,000 of working cash. At full speed that's about 1,900 trays a month and about 105 hours in the kitchen. How to plan a frozen food business more broadly is in frozen food business plan.

Part 6: the startup budget

The first lab tests are a round of each ingredient from each supplier before the first sale, so the results exist before a parent asks. How a business keeps track of test results and certificates from suppliers is in certificate of analysis tracking. At $30,200 a year, the $12,900 spent before working cash is earned back by month 9.

Get the template

Download the baby food business plan workbook. Four sheets: your trays, boxes and bites with price, variable cost and a month's volume at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Twelve purees and four finger foods, produce from five farms, a batch a day, trays in three freezers, 30 boxes packed every Thursday, grocers reordering, and a lab result that comes back two weeks after the batch it tested. A notebook can't say which batches used the carrots a test flagged, which families got trays from them, or how many sweet potato trays are in the freezers.

How TaroStack does it

TaroStack keeps every batch with its produce lots and every tray counted by flavor and freezer.

Batches with their lots. Each puree is a recipe of its produce, trays and labels; each batch notes which produce lots went in, on its own, and gives the trays a lot with its date. Test results can sit on the batch record as custom fields with their limits.

A result that comes back late. If a test flags a lot of carrots, the batches that used it can be put on hold, kept from sale, and one recall report shows which grocers and customers got trays from them, and what's still in the freezers.

Trays by flavor and freezer. Trays are counted by flavor, lot and freezer on a phone, and a grocer's order is picked from the earliest dates first, with the lots each grocer got recorded as it ships.

Recipes, batches, lots, holds and recalls are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a baby food business profitable?

It can be. In the example, a maker selling frozen purees at markets, in weekly boxes and to grocers ends its first year about $30,200 ahead on $106,900 of sales, with the cooking paid, and most of the money from delivery boxes and market trays.

Does a baby food business register with FDA?

It depends on the food. A shelf-stable puree in a sealed jar or pouch is a low-acid canned food, which means registering with FDA and filing the process. FDA has also set action levels for lead in foods for babies. Your state licenses the kitchen.

How much does it cost to start a baby food business?

In the example, $17,900: a blast freezer, chest freezers, a steam kettle and blender, portioning tools, label design, a first round of lab tests, delivery boxes, a website, and $5,000 of working cash.

Should homemade baby food be sold frozen or in jars?

For a small maker, frozen is simpler: shelf-stable jars and pouches of low-acid purees bring federal registration and process filing. Frozen brings a cold chain instead.