A Checklist to Starting a Value-Added Dairy Foods Business

A Checklist to Starting a Value-Added Dairy Foods Business

There are several things to consider when starting a Value Added Dairy business, such as: marketing, manufacturing, and on-farm production to help launch your successful business!

Explore the market

Perform consumer market research. Who are your potential customers? and what are their needs?

Product

Define your product. What will you make? How much will you make? You will also need to decide on varieties, flavors and packaging sizes.

Type of Process

Define how you are going to make your product. Research manufacturing processes and key process parameters.

Facility and Equipment Needs

Define the facility and equipment needed to make, store, and distribute your product. Think about an average daily capacity, along with growth capacity for your facility.

Raw Materials Needs

Determine how much milk you will need. Consider that you can use 100% of your milk production; use a portion of your milk and market the remainder; or purchase milk from another producer.

Looking Ahead

Plan for the future. If your value-added product attribute depends on the production system such as organic, grass-fed, A2, goat or sheep milk, then plan for the transition.

Managing the Businesses

Plan for management of both businesses. Will the farm and the value-added business be managed separately or together? Who will manage each?

Business Plan

Develop a business plan that includes: Business goals & strategies, a financial plan that includes capital investments and fixed and operating costs, an HR plan, a marketing plan, and a processing plan..

Investment Analysis

Perform an investment analysis and project cash flow, these will allow you to assess the profit potential.

Selling and Distribution

Determine your marketing mix. What is your product line? Where will you sell? How will you distribute? How will products be priced? And, what promotional strategies and tactics will be used?

Regulatory Compliance

Get regulatory approval for your facility. Get your local dairy foods inspector to approve your facility and equipment plans; Get the necessary state permits and get product labels approved; Register your facility with the FDA. You will also need to comply with the Food Safety Modernization Act (FMSA).

Human Resources

Finally, build a good team to advise you, team members can include: an inspector or regulatory personnel, nutritionist, veterinarian, consultant, university extension, manufacturing expert. Assemble your team and meet with them regularly.

Remember, a successful and sustainable business is the result of a solid understanding of your markets and the technology needed to make your products, and a commitment to the highest quality farming, manufacturing, and business practices.

This program was developed by Food Safety CTS, LLC, for Penn State University.