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How to Start a Food Business in Arkansas

A food processing business creates food products for sale, either direct to the consumer or to retail and wholesale markets. To be successful, an entrepreneur in this industry must understand the consumer demand, regulations and food science of their product. This overview will help you determine whether starting a food processing business is right for you.


Initial Steps to Start a Packaged Food Business

Market Research and Business Considerations

Evaluate your food concept to determine if it will be successful and profitable in the marketplace. Consider the following research activities:
  • Visit local markets
  • Conduct interviews with retail market managers
  • Research trends in the packaged food industry
  • Compare competitor prices
  • Provide taste tests and samples of your product
Keep track of product costs such as ingredients, packaging and labor. If the product is profitable, create a business plan to guide your financial goals and management strategies. Your local Small Business Technology Development Center offers free services for your business needs.

Contact the Arkansas Small Business Technology Development Center

Homemade Food or Manufactured Wholesale Foods?

To help build up capital, some companies start by making food products in home kitchens. Products that are non-time/temperature control for safety, Non-TCS foods, are allowed under state law to be made at home. This provides a lower cost entry into the marketplace to test new food concepts and business models. However, there are limitations to making and selling homemade food products. To understand the differences between producing homemade foods and wholesale manufactured foods view our page, Arkansas Food Freedom Act: How to produce food products at home.


Proceeding with a Manufactured Wholesale Food Product

The How to Start a Food Processing Business in Arkansas publication by the Arkansas Food Innovation Center is a great in-depth resource to guide you through these steps.

Product Development, Testing and Scale Up

Begin your process by writing down a description of your product. This would include the ingredients, processing methods and packaging steps. Next, determine if the product can be produced according to food safety regulations. Reach out to your local Environmental Health Specialist to discuss your product and related food safety regulations.
 
NOTE: Some categories of products, such as salsa and BBQ sauce, will need additional processing verification. There are fees associated with this service.
 
Once you have formulated a recipe, begin making test batches to scale up production. You may need to adjust components of your recipe as the volume of product grows. Consider using a shared-use commercial kitchen facility during this testing phase. Here is a listing of facilities in Arkansas:

Processing Rules and Regulations for Packaged Food Products

When you have finalized your commercial scale recipe, your product will need to be approved and made in a facility inspected and permitted as a "Manufactured/Wholesale Food Establishment" by the Arkansas Department of Health (ADH).

You will also need food product liability insurance to protect you and your company in the event of an unforeseen food safety issue.

Companies that manufacture food for human consumption are also subject to the federal Food Safety Modernization Act, Prevention Controls for Human Food. Even small food business are required to implement food safety practices and are strongly encouraged to create a culture of food safety in their facility.  At a minimum, food businesses will need to have an employee training program and good manufacturing practices (GMP's) as part of a food safety plan.

Review the webinar below and this factsheet to learn about these regulations, how they apply to your business, and how to maintain regulatory compliance. 

Processing Regulations for Small Food Manufacturers, 10/23/2020

Labeling

The majority of food recalls occure when a product has been mislabeled, creating financial loss with the affected products. When developing your label, be sure to include these mandatory elements:

  • Statement of identity 
  • Net weight 
  • Ingredient list, which specifies ingredients containing the key 8 allergens
  • Name and place of business of manufacturer, packer or distributor
  • Nutrition Facts label

Review the Food and Drug Administration's informative guide on how to properly label food: A Food Labeling Guide: Guidance for Industry.


Are there any resources to help me get started?

Share Grounds

The Share Grounds are ADH permitted facilities available for developing, testing and manufacturing food products. Visit our client page and contact a Share Grounds manager to learn how the Share Grounds can fit your food business needs.

Arkansas Food Innovation Center

The Share Grounds project is a smaller model of the Arkansas Food Innovation Center (AFIC). The AFIC was established to assist entrepreneurs and farmers prepare food products for sale in commercial markets. 

The AFIC is a certified and inspected facility for food product development and processing for commercial sales. The AFIC is a fee-based service located in Northwest Arkansas and the UA System Division of Agriculture Food Science Department. Watch their video below to learn more.

The AFIC has developed a number of publications to assist entrepreneurs in understanding the technical, legal, and financial aspects of creating a small scale food processing business in Arkansas.

AFIC Publications

Additional Resources

 

 
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