Private label hot sauce is a manufacturer's sauce in a bottle with your brand on it. There are two ways to do it. A stock recipe is a sauce the manufacturer already makes, often in a few heat levels, bottled with your label; the minimums are lower and there's no development fee. A custom recipe is your own sauce, developed with or by the manufacturer, with a higher minimum, a development fee and a formula that's yours. Either way, the label carries your name and address, and since you didn't make it, the name is qualified with words like "Distributed by" or "Manufactured for". Many hot sauces are acidified foods, and the manufacturer is the one that registers with FDA as an acidified food processor and files the process for each sauce and bottle size. Your decisions are the money ones: the minimum, the cost a bottle, and how many months the run takes to sell against the best-by date. In the example below, a Minnesota pitmaster prices both routes.
The short version
- Private label hot sauce is a manufacturer's sauce with your brand on the bottle.
- Stock recipe: lower minimum, no development fee. Custom recipe: your formula, higher minimum, a fee.
- The label names you with "Distributed by" or "Manufactured for", plus your address.
- The manufacturer registers as an acidified food processor and files each sauce's process.
- Compare quotes on cost a bottle and on how long the run takes to sell.
- Don't order more than you'll sell before the best-by date.
- TaroStack receives each run with the manufacturer's lot, and follows the bottles to every customer. More below.
Stock or custom
| Stock recipe | Custom recipe | |
|---|---|---|
| The sauce | The manufacturer's, often in several heat levels | Yours, developed for you |
| Minimum | Lower | Higher |
| Development fee | None | Often charged |
| Who owns the recipe | The manufacturer | Agreed in writing |
| Time to first bottles | Sooner | Longer, with samples and tests |
What a private label deal should put in writing is in private label agreement, and custom sauces in sauce co-packer.
The rules
| Rule | Where |
|---|---|
| The label's name | The manufacturer, packer or distributor and its place of business; if the named business didn't make it, qualified with "Manufactured for", "Distributed by" or wording that expresses the facts (21 CFR 101.5) |
| The address | Street address, city, state and ZIP; the street can be left off if it's in a current directory (101.5(d)) |
| The manufacturer's registration | An acidified food processor registers with FDA within 10 days of starting, and files the scheduled process for each acidified food and container size before packing it (21 CFR 108.25(c)) |
Whether a sauce is acidified is in acid food vs acidified food. This is general information, not legal advice.
An example: a pitmaster's house sauce
Silver Lake Smoke, the made-up pitmaster in Rochester, Minnesota, I use in these examples, wants its own hot sauce on catering tables and for sale at events and two local shops, about 140 five-ounce bottles a month. Two made-up quotes:
| Stock recipe, your label | Custom recipe, your label | |
|---|---|---|
| Minimum | 1,200 bottles | 3,000 bottles |
| Filled, capped, labeled, a bottle | $2.40 | $2.15 |
| Your printed labels, a bottle | $0.14 | $0.12 |
| Development fee | none | $1,200 |
| Freight | $180 | $320 |
| Run cost | $3,228 | $8,330 |
| Cost a bottle | $2.69 | $2.78 |
| Months to sell at 140 a month | 8.6 | 21.4 |
The custom sauce costs less a bottle to make but more a bottle all in, and its 3,000 bottles would take over 21 months to sell, past the 18-month best-by the manufacturer prints. Silver Lake Smoke ordered the stock smoked chipotle sauce with its own label, "Distributed by Silver Lake Smoke, Rochester, MN", and kept the custom recipe for when the shops sell more. A bottle costing $2.69 sells to the shops at $4.75 and at the events for $9. The manufacturer's registration number and process filing went in the file with the quote. How the brand's own sauce business would look is in hot sauce business plan.
Get the calculator
Download the private label quote calculator. One sheet: a column for each quote, with the run, minimum, loss, setup or development fee, price a bottle, labels, freight and storage, and the run's cost, months to sell at your sales a month, cost a good bottle and cash out before it sells. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The run arrives as 100 cases with the manufacturer's lot code. Some go to the catering kitchen, some to events, some to the shops, and when a customer asks about a bottle, or the manufacturer recalls a lot, a spreadsheet can't say where that lot went.
How TaroStack does it
TaroStack receives each run with the manufacturer's lot, and follows the bottles to every customer.
Receiving with lots. The run is received from the manufacturer with its lot and best-by date, and a GS1-128 case label can be scanned to fill them in.
Sales orders with lots. Each shop's order picks bottles by lot, oldest best-by first, and the delivery note prints the lot.
Recalls. One report shows every customer who got a lot.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| Which run is in the storeroom | Lot codes on the cases | Received with lot and best-by |
| Which shop got which lot | Not recorded | Lots on each delivery note |
| A recall | Calling every shop | One recall report |
Receiving, 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.