Pasta Sauce Business Plan: Jars, Grocers and a Co-Packer

A 24-ounce jar of marinara costs about $2.65, tomatoes, olive oil, onion, garlic and herbs, the jar, lid and label, and sells to a grocer for $5.25. The jar is nearly half that cost. A sauce with onion, garlic and peppers in it is an acidified food when its pH is brought below 4.6, so before the first jar is sold the recipe goes to a process authority, someone at the business takes a Better Process Control School course, and the process is filed with FDA. The plan turns on grocers, who take cases every two weeks once a demo has won them, on kettle hours in a shared kitchen, and on the day a co-packer makes more sense. The plan below works per jar. In the example, a Pittsburgh sauce maker starts with $41,600, ends its first year about $5,100 ahead before the owner's pay, and makes about $3,300 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the sauces, who buys, where you cook, the goals.
• Cost each jar: tomatoes and olive oil by weight, the jar, lid and label.
• Plan sales by product: grocer jars, market jars, restaurant gallons.
• A sauce brought below pH 4.6 with added acid is an acidified food: process authority, school, FDA filing.
• The jar is nearly half the cost.
• A co-packer pays once grocers order more than your kitchen hours can make.
• TaroStack makes each sauce a recipe and each batch a lot with its code. More below.

Part 1: the business description

Three Rivers Sauce Co., a made-up pasta sauce maker in Pittsburgh, Pennsylvania, writes:

Three Rivers Sauce Co. cooks marinara and arrabbiata in a shared commercial kitchen and sells 24-ounce jars to independent grocers and at two markets, and gallons to restaurants. In its first year it aims to reach $19,220 of sales a month.

Part 2: what a jar costs

Grocers sell the 24-ounce jar for about $8.99. Imported San Marzano tomatoes would raise the tomatoes' cost by half; the sauce uses California tomatoes and says so. The difference between an acid food and an acidified one is in acid food vs acidified food.

Part 3: grocers, the process and the co-packer

The process authority set a pH limit, a fill temperature and a hold for each sauce, and the business filed the process with FDA before selling, with the owner certified through better process control school. Every jar carries a code for the batch. Grocers reorder every two weeks; restaurants take gallons weekly. Past about 3,000 jars a month, the kitchen hours stop making sense, and a co-packer that already runs acidified sauces takes over, in sauce co-packer.

Part 4: what each product earns

At full speed the business sells $19,220 a month and keeps $10,277, 53.5%; grocer marinara bring $5,200 of it.

Part 5: the first year, month by month

Fixed costs are $6,950 every month: shared kitchen hours ($1,500), wages for a cook ($3,800), store demos ($500), delivery fuel ($350), insurance ($300), market fees ($150), software ($50), and other costs ($300). Sales start at 35% of full speed:

The year's sales are $165,471, and the business ends it $5,077 ahead, before the owner's pay. It breaks even at about $13,000 of sales a month, in the sixth month. The lowest cash point, −$9,571 in month 5, is covered by the $12,000 of working cash with about $2,400 to spare. Grocers add a sauce one store at a time, and a demo in each new store gets it tried; the plan's ramp is mostly new stores.

Part 6: the startup budget

The $29,600 before working cash is earned back in about 9 months at full speed. Another acidified jar is in salsa business plan, and starting a co-packer of your own in how to start a co-packing business.

Get the template

Download the pasta sauce business plan workbook. Four sheets: your products, each with its price, variable cost and units a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month, the lowest cash point and whether the working cash covers it; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

The plan uses one cost per jar. Tomato prices move by the harvest, a batch cooks down further than the last, and a grocer asks which batch a jar came from.

How TaroStack does it

TaroStack makes each sauce a recipe and each batch a lot with its code, so a jar's code leads back to its batch.

Sauces as recipes. Each sauce is a recipe by weight: tomatoes, oil, onion, garlic, herbs, the jar and label, so its cost moves with the tomato and jar prices.

Each batch a lot. A batch records the ingredient lots it used, gets its own lot and date, and lot labels print for the cases.

Recalls. If a batch has to come back, one report shows every grocer and restaurant that got it.

Recipes, batches, lots 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

How much does it cost to start a pasta sauce business?

The example budgets $41,600, including $12,000 of working cash; the used van is the biggest item.

Is a pasta sauce business profitable?

It can be: the example makes about $3,300 a month at full speed before the owner's pay, and ends its first year ahead.

How much does a jar of pasta sauce cost to make?

In the example, about $2.65 for 24 ounces: $1.60 of tomatoes, oil and herbs, and $1.05 for the jar, lid and label.

Do I need a process authority for pasta sauce?

If the sauce is an acidified food, which a process authority can tell you from the recipe, yes, and the process is filed with FDA.