Using the MSU Product Center to Take Your Cottage Food to the Next Level
Author: Diane Longanbach, Kara Lynch
Diane Longanbach, a MSU Product Center Innovation Counselor, talks with Kara Lynch on the services that the Product Center provides. If you have a cottage food, or a value added product that you would like to take to the next level, the Product Center is a great way to start. Learn what type of services they provide and how you can connect with them.
February 23, 2023
Transcript
Speaker 1:
Welcome to Think Food Safety. A podcast on topics that affect the food we eat. Michigan State University extension educators talk with food industry professionals to provide information and share resources on hot topics and best practices to keep people safe from foodborne illness. Thank you for tuning in. Let's get started and answer those questions that you didn't even know you had. I am excited to welcome Diane Longanbach today. Diane is an innovation counselor with the MSU Product Center and is here today to talk to us about the services this great organization is part of. Welcome, Diane.
Speaker 2:
Well, thank you, Kara. Thanks for having me out today.
Speaker 1:
Yeah. I'm excited to talk to you. Why don't we start by having you tell us just a little bit about yourself, including what you do at the product center. Basically, what the product center is. Just kind of give us an overview.
Speaker 2:
Sure. I have been a product center counselor probably for a little over eight years. The Product Center really provides one-on-one business counseling for food entrepreneurs in the state of Michigan. Most of our clients are clients that have a recipe, and they want to have that recipe in the grocery store. So that's the majority of the people that we help with. Sometimes people also have a farm, then they have a value-added product that they have there at the farm that they sell.
Speaker 1:
You're kind of helping them get it to that next level, Sounds like. Can you tell us what services the Product Center provides for entrepreneurs?
Speaker 2:
Sure. We provide one-on-one business counseling that would be by phone or online, and sometimes even meet with a person face-to-face depending on what the services are that we're delivering.
Speaker1:
One thing that I'm involved with my work team and I know you are as well, is the cottage food law. Let's I guess maybe backup even a little bit and talk about what the cottage food law is and if you don't mind just kind of giving us a summary in your words.
Speaker 2:
The cottage food law really has been a great service for people to be able to use and not have to operate under a license. So obviously, some products qualified to be able to operate under the cottage food law, whether it'd be baked goods, candy. So what's great about the cottage food law, it allows people to operate out of their home kitchen versus having to run a kitchen. It does have stipulations though, of how people can actually sell so they can only sell directly to people. They have to be able to meet the person face to face. It does allow them to sell, whether it be in farmers markets or another local face-to-face formats to be able to make some income on the side, maybe prepare themselves for the next step if they do have those wishes to be able to sell to stores or online someday. To prepare themselves for another step, or just to be able to use sales for extra income.
Speaker 1:
That's a great explanation. I also want to direct people that if you do have something in mind, we have a lot of information on our website, the MSU Extension website. We have a couple of other podcasts that we have already recorded, just basic information on the cottage food law. So, if you are wanting to find out more about that as a listener, I would encourage you to listen to some of those other podcasts. If someone is selling under the cottage food law, maybe they are getting bigger and they want to start selling online. Or maybe to stores or like a third party. What do they need to do to legally do this?
Speaker 2:
Sure. One of the big differences is obviously you're going to be out of your home kitchen, and you'll be needing a commercial kitchen. So, the local health department licenses commercial kitchens. So, it's going to be a licensed commercial kitchen from the local health department. Sometimes people do kitchen incubators or shared kitchens. Sometimes maybe there's a local restaurant that'll allow you to use some of their space. But again, a commercial kitchen would be needed. And sometimes there's a cost for that, so that changes the financial profile of your business. Then a state license will be needed, and that would be a Michigan Department of Agriculture and Rural Development license. And the license will really be dependent on what you plan on to actually do. Then ServSafe which is a class that's acquired by the kitchens that you'd be operating off. And if you have a meat or dairy product, there's a lot of other regulations that are involved, and obviously you're not going to be making those products under Cottage Food law, anyways. But if you do want to sell to stores and online with a meat or dairy product, just realize there's a lot of regulations around that. So come to the Product Center and we'll be happy to walk you through all that.
Speaker 1:
You certainly have a lot of resources. And just as a plug also MSU Extension, my teammates through the food safety team do offer ServSafe instruction and certification exams as well. If somebody is interested, they've realized this, they want to start growing, they've got a commercial kitchen maybe, start their process for licensing, but they need a little bit more. What is that process that they can begin to become a Product Center client through you. What are those services offer?
Speaker 2:
Sure. Well, go ahead and if you're interested in being a client of the MSU Product Center, go ahead and go to our website. We have a tab you can click on to register to be a client. It is a $50 fee, onetime fee, but it's unlimited business counseling that you'll receive from that $50 fee. Sometimes we have people that maybe even that $50 fee is a little bit prohibitive. So, we encourage you to just go ahead and register anyways. And we can talk about what we can do about that $50 fee. If people have a really healthy food product, then they can qualify for a special program that we already have that will waive that fee.
Speaker 1:
Beyond the counseling, what are some of the other services?
Speaker 2:
We offer Nutrition facts label development. Although nutrition facts isn't necessarily a requirement for companies that are first starting on as far as the requirement from the state, it is oftentimes a label that consumers want to see, right? All of us, when we go shopping for a product, will pick it up and usually turn it around to the label and look at the nutrition facts. Maybe looking at sodium calories, fat carbs. That's oftentimes a service that people do want because they know that people are looking for that so we can provide nutrition facts. It's fee-for-service again. Then product testing again, not every product is going to need product testing, but products like condiments or anything that's going to be shelf-stable, that's in a jar like salsa, etc, will require some product testing. We can guide you on that. But that again, is a fee-for-service, but it is also something that's absolutely required for licensing. Just know that we provide that along with some other we can also refer you to other services outside of the state that do the same testing. But it's a convenient service to have right here in the State of Michigan,
Speaker 1:
We see salsa a lot. A lot of people want to sell pickled items too. Pickled asparagus everything, right? And they want to they want to sell that. Or they'll have something like a salsa. But those I'm guessing those would have to undergo product testing.
Speaker 2:
Absolutely. They have to go undergo a process authority review is what it's called. We have many clients that are involved in doing that, Amish clients, et cetera. But we all know that we've done that for years, right in our home, maybe for ourselves, but in order to be able to do it commercially, there is testing required. This process of review that the state will require before you can get licensed to be able to sell that product.
Speaker 1:
That's reassuring to know that there are those extra hoops. That can be a dangerous arena if people don't do things properly. Well, so someone who has signed up to be a client with that counseling that you provide. What are some of the different services with that?
Speaker 2:
Sure. We have different areas that we can help people on. One of them is business development. So, if you think about maybe what your corporate structure, What's your financial plan? What's your business plan overall, we can talk about that. Get you started, refer you to any specialized services such as an attorney or an accountant to really help you prepare. But we can talk about those initial conversations on that. So, you can know what you really need to ask the specialists in that area. Product development. We talk about recipe commercialization. Oftentimes people come to us with a recipe and it's in cups, right? Two cups of this, teaspoon of that. And we help you really look at how do you commercialize that recipe? What, how can you put that into weights, which is really what needs to happen. And oftentimes people really want fresh ingredients, but if they want to scale up and to be able to sell it to several stores, maybe not just in Michigan but beyond Michigan. They want to put it to that level. Oftentimes they'll want to go and have a cold packer, someone else make it for them. Or they'll just need to be able to produce in such a high volume that they'll want to maybe switch to a canned product versus a fresh just for time efficiency. So, we really talk about what, what they need to do based on what their goals are. Otherwise, we have licensing and regulations. So, we can talk to people about whether they need a retail license or a wholesale license or if they will need a license for their storage. Whether they'll even need product testing. So, there's a lot of nuances related to licensing and regulation so we can help people with. We also help people with packaging and labeling. So, we can look at if they're going to be selling wholesale or online, sometimes they'll need their product to last longer, the shelf stability of it. So, we'll talk about maybe how packaging can relate to how long the product lasts on the shelf. We can also talk about the need for tamper-proof, labeling and packaging and the seal of it. We can also talk about state regulations for labeling itself, what they actually need on the label, right? And then if they're going to sell on the store or UPC symbol or a barcode is needed from most every store. So, there's a lot of different parts, really the packaging and labeling.
Speaker 1:
So, do you help them set the packaging up? Are you referring them to packaging?
Speaker 2:
Right, That's a good distinction to make. We're actually, we're not providing the service where we're working with their label to get it ready. We're making them aware of what are the state rules for this and that. Where do you go and buy a bar code? Where do you place it at?
Speaker 1:
A lot of coaching in providing resources for people that don't have that information. Yeah.
Speaker 2:
Yeah. We also talked to them about production and efficiency. Oftentimes when people have a cottage food business, volume may not be very high or not as high as it would be if you're going to do online sales and store sales. And it's really, really a game changer when you're starting to produce in a high-volume manner. It really requires a different way of operating, whether it's how you're setting up your kitchen, whether it's the number of people that are required to be there. Maybe you're not hand placing your label, maybe you're having a labeling machine. So just a lot of things to think about when you think about what volume you'll be producing at. So, we really walk people through that. And then marketing itself. When you're Cottage Food, you're right there in front of a business, right there in front of your clients that you're selling to. Whereas when you're selling online or to stores, there’s some different readiness factors that are really required. And so, we really kind of help people think about that, walk through that.
Speaker 1:
A lot of services. I would think that would certainly be worth that small fee that you charge. So, you talk about the labeling and having those resources to get people where the product needs to be? But also, how about connecting clients with the stores or different retail outlets? Like is that something that you also provide?
Speaker 2:
Right and that is also sometimes the greatest struggle or area of assistance that people really desire.
Speaker 1:
Okay.
Speaker 2:
One of the things that I thought was really helpful that we provide is sometimes we'll have stores come to us. Like for instance, the new Meijer format stores. Those store buyers have come to us and say, Hey, we really want local food businesses. Could you really connect us up with some of those businesses we'd like to interview them. Or please have them come into our store, introduce themselves and we can try their products and try and put those items in their stores. So sometimes we will have stores coming to us and so we'll reach out to our clients on that. Sometimes when we have clients, for instance, many of my clients are in the Lansing area. I know who those store buyers are, and I can give them the contacts for those store buyers. And then also contact the store buyers and let them know, give them a heads up that one of my clients is coming that way. Also, we have our Making it in Michigan event. That's a trade show annually where we have buyers come in throughout the state of Michigan that will walk the trade show and determine what products they want to invite into their store. So that's a really big benefit that's offered annually.
Speaker 1:
I think it's interesting that you're getting big stores like Meijer who are wanting to focus more on at the local level. Have you only seen that more in the recent years or is that something that they've always tried to do?
Speaker 2:
Well, I think it's because of Meijer's realization that people are wanting a smaller, local, smaller format of a grocery store in a local feel. So, they've changed their operation to these smaller markets versus the big box Meijer that you, that we still have to have these more local format store. As I bring that up as an example. But oftentimes our clients do definitely get more traction when they go to a local specialty food store versus trying to get into a Meijer. For one, Meijer is going to have a high-volume. Now these little format stores smaller formats stores or should I say, for Meijer, is not going to have as much of a volume. But if you get into the larger stores, the volume is going to be probably a barrier for people that are just coming out of Cottage Food law going into stores, specialty food stores are definitely the best option for people when they are first starting out. It's good to get people's feet wet when they're going into stores in a store that has a smaller volume that they'll be selling. So, they can get their system together and ready and get used to that before they go to a larger volume store so they can make a good presentation and be successful when they do that.
Speaker 1:
Sure, you certainly don't want to set people up for failure. I can see that though, like you're going from this small cottage food business, relatively small, I mean, might be big in there. They've done well, but to go from something like that to retailing it in and having a lot more traffic. Yeah. It's a lot of different things to consider that you didn't have to, and it was just your one or two man operation probably. Is there any other things that come to mind taking it to that next level, whether it's selling it to stores or online.
Speaker 2:
Sure. I think one of the biggest changes for when people go from Cottage Food to the store. There's a few of them that I'll mention here. One of them is shelf-life, how long your product will need to last. So, if it is a perishable product, you still only have about seven days. If it's a refrigerated product or even a bread product, you really only have seven days that you have just that it's good for as good quality. Let's say that it's shelf stable and it's safe, but it's not good quality afterwards. So, what I want to figure out, how can you extend the shelf life at all? Maybe that's within your recipe or maybe how can you extend it through your package itself so it's maybe more airtight and can last a little bit longer. It's crunchier, has good texture, et cetera. So, people really need to think about that packaging. For instance, if you're selling a protein bar, oftentimes if you're selling at a farmer's market, maybe you're going to sell in a tub. But if you're going to sell in a store, you need to go to the stores that you are going to be in and look at what kind of packages are actually there. Do they hang their packages there? Are they on the shelf? Do you need maybe more of a soft pouch versus a tub. Do you need more exciting, higher-quality graphics and labeling to be able to look more professional than maybe you were in the cottage food market that you're selling in. So that can be packaging and labeling maybe needs to be different. And then for licensing, just realizing that if you produce somewhere and then you store your package somewhere else, then you'll probably have an additional license that will come along with that. Again, your volume, as you think about how much volume you're going to make. Just realizing the marketing, itself is totally, totally different when you're in front of people. You already have a reputation developed in your area so people are aware of your company and may be more likely to buy your product because they know who you are and they know your company, they have confidence in it. They were already able to sample right there without having to pay for it before they sample. And you're probably just competing with the people beside you in the market or competing with the locals basically. But if you're selling online, you really need a strategy for how are you going to get the word out so people are even aware of who you are. What's your online store format? How are you developing it? How are you actually going to get it there shipped there in one piece, so it's not broken or smashed. In selling in the store. You're marketing to store buyers. Not necessarily. Well, that's your first step, is marketing to store buyers. And there's some pieces of information documents that need to be developed to be able to walk into a store to sell it. Getting that bar code on there, figuring out how you're going to actually get to those stores and provide sampling, so people really do want to buy your product. And then how are you distributing it to all these different stores? There's a lot of things to think about. Really do encourage people to sign up for our services, to prepare themselves and make sure that they're really ready for those different steps that they decided to take.
Speaker 1:
A lot of detail that probably doesn't come to the forefront of most people's minds. So, it sounds like the Product Center really is a great starting place for someone that's wanting to get to that next level.
Speaker 2:
On April 20th is our 14th annual Making it in Michigan trade show and conference. This is a great format for people to come to. We have some great panels. One of our panels is store buyers and distributors where they're talking about what they are looking for when somebody comes to them for the first time. We also have a financial panel, and we have an entrepreneur panel of companies that have really made it in their company and they're giving some of the tips and tricks of what to do. Obviously also part of that is our trade show. And we have companies that have started out with us and are doing quite well on their own now. We have the gluten-free bar or GFB. Maybe you'll see those in Meijer. Dave Sweet Tooth who has really elevated himself going to 7/11 stores and airports now. Some great entrepreneurs that used our services initially and just really took off and are making great sales. Also, Humus Goodness, which is a minority women owned business and now she's going to be in Meijer and IGA. So, the reason why I bring that up is the Making it in Michigan trade show is the great place to go to kick off your business with some of the Michigan buyers. So come on out. And that's April 20th.
Speaker 1:
I have been able to attend that before and it is exciting because you've got some great speakers. I saw when I was there just to see all of the vendors that there are and we know that that's not even all of the people that have a production company out of Michigan, but just a lot of new people in. Yeah, got to sample some really, really, really good food. So, I'll put a plug-in for that. Do go. Alright, well, you've really given us a great summary as to what the Product Center is and does and how you work. I guess I would like to wrap it up with just to let everybody know maybe how to contact them as your products center. What's the best way to do that?
Speaker 2:
Well, our website, I would encourage people to go to the MSU Product Center website. You can see what our services are there and then there's a box that you can click on for new clients. Just fill out the real brief registration on there and become an MSU products center client. Be happy to work with you. You get to set the pace of what we work with you on. We don't make you jump through any hoops at all. We just really focus on what you're interested in learning and help support you as much as possible and what your goals are for that service.
Speaker 1:
Also, you can find it if you just Google MSU Extension Products Center, but also if you do want their address, it's canr.msu.edu/productcenter. You should be able to find it that way. Well, I appreciate you Diane coming here and talking to us. And we really have enjoyed partnering with you and other innovation counselors when we do Cottage Food Law classes. What a great service. And again, thank you for coming and sharing all of your information with us.
Speaker 2:
Thanks Kara. This is a great service for people be able to listen to us as they're running down the road doing their job, right?
Speaker 1:
Yes, it sure is. MSU is an affirmative action equal opportunity employer. Michigan State University Extension programs and materials are open to all without regard to race, color, national origin, gender, gender identity, religion, age, height, weight, disability, political beliefs, sexual orientation, marital status, family status, or veteran status. This information is for educational purposes only. Reference to commercial products or trade names does not imply endorsement by MSU Extension or bias against those mentioned.
Print
Email