3 Reasons Not to Start a Food Biz

You see shiny jars of organic cherry marmalade on the shelves of some upscale food shop and you think, "I love making jam, I could do that."

Chances are you can't. Not now, anyway. This is a particularly terrible time to enter the artisan food market. Here's why:

1. The market is already too crowded.
That fantasy you had about quitting your job to go make artisan jam? The maker of that cherry marmalade had the same thought—five years ago. Caleb Zigas, executive director of the San Francisco business incubator La Cocina, says his organization's orientation sessions for would-be food artisans used to get 20 people. Now they draw about 150.

Alli Ball is the assistant grocery buyer at Bi-Rite, the market at the forefront of San Francisco's buy-local movement. Ball sees an ever-increasing stream of aspiring entrepreneurs dropping off samples.

"The bar is so much higher than it was a few years ago because there are so many producers out there," she says. "Just being small isn't enough. It has to be delicious, and it has to be different, but not so different that it won't appeal to a mass audience. It has to be sustainable, it has to have a great back story, and great packaging, and so on."

Indeed, Bi-Rite's shelves are so crowded that the store is constantly trying to figure out how to slot in more product—the store now "single-faces," stocking a single rather than a double row of products, and hangs bagged items from clips.

But if there are so many new products, shouldn't the overflow be spilling into bigger chains, like Whole Foods? It is—sometimes. Which brings up the second obstacle:

2. Grocery chains don't want you.
Not many food makers are able to make a living selling only to artisan markets, specialty grocery stores, and farmers' markets (especially since selling at farmers' markets is more expensive than most people think). It's a question of scale. Food products are not luxury items. The margins are small, so you need to sell a lot of product to make a go of your business. "The most common problem I see with craft food producers is that they only think about the local market," says Zigas.

For a small food maker, the holy grail is getting into the big chains: Safeway, Walmart, Kroger. Those retailers could buy in huge volume, if they wanted to. But they don't.

For a megachain, dealing with a zillion tiny food producers is so much harder than putting in a single giant order with Sysco. Ball's 70-hour workweeks at Bi-Rite are mostly consumed with the minutiae that come with ordering from the many rather than the few. In Northern California, anyway, Whole Foods has shown interest in stocking locally made foods, but so far that hasn't jumped to other regions of the country. Ball has a food-producer friend who went out of business, discouraged, after she figured out that in order to make $50,000 a year, she'd have to have product selling in hundreds of Whole Foods stores.

Grocery stores aren't just being jerky, by the way. Like food artisans', their margins are tiny (somewhere between 5 and 7 percent). Time spent dealing with multiple small producers cuts into their bottom line. That brings us to the third reason:

3. Your current job is easier.
Ball says that a lot of aspiring producers who show up at Bi-Rite are partly seeking a respite from their 9-to-5 jobs. Would they be as eager to get out of the office and into the kitchen if they knew that launching a successful food business requires much longer and more brutal workweeks?

Making things by hand is laborious. It's fun when you're making 20 empanadas for a party, but when you're pumping out 300 every single day, not so fun. Then there's the other stuff: packaging, marketing, insurance, health codes, delivery logistics, and everything else that goes along with a business that makes retail products.

Did we mention you'll have to work weekends? Karen Solomon, author of the seminal "kitchen projectry" book Jam It, Pickle It, Cure It, says farmers' markets, tastings, all that stuff happens on weekends. "It sucks working weekends," she says. "Going store-to-store and asking them to sell your stuff is a lot of work, particularly if you still have your day job."

Very little of this work, by the way, is actual cooking. You know—the thing that made you want to start your business in the first place.

Determined to launch a food business anyway? Check out these 4 Tips for Artisan Food Startups.

Image source: CHOW.com

Former CHOW contributor Joyce Slaton is an editor and writer in San Francisco. She takes her tea with sugar and milk and will sew you an apron if you ask nicely. Follow her on Twitter. Follow CHOW, too, and become a fan on Facebook.