The article will cover product development, ice cream, from concept to completion. The time line will vary and depends on complexity of product and level of tasks to take your product to completion. You’ve been making a frozen dessert at home, have a great recipe and now want to produce and sell commercially, but are you ready and more importantly are you prepared?
Let’s take a overview from 30,000 ft. of the schedule and list of tasks to keep you on course to effectively make your product and sell in the commercial space. The overall time frame will vary, depending on a variety of factors including the time of year you plan to launch your commercial product, outside supplier restrictions, the decision making process, friend and family feedback, product complexity, formula modifications and predicted unforeseen’s. However, the list provides a good idea of what to expect “down the road and around the corner”.
Step 0:
You’re already making a ice cream or non-dairy frozen product at home, using a home ice cream freezer, your home freezer (that’s the compartment holding the party ice) and using ingredients from the local grocery store.
Step 1:
30 days – Identify Core Ingredients
Products purchased from the grocer may include added ingredients that are not required in you product, like preservatives, mono and diglycerides, salt, corn starch or artificial sweetener. As example, if your recipe calls for pasteurized egg yolk, the store brand may include on the ingredient statement, items like color, salt or possibly annatto color that you would not actually include in your recipe. So finding core ingredients that represent your recipe is critical.
Step 2:
30 – 90 days – Product Breakdown & Composition
The home equipment being used does not represent the workings of commercial equipment or manufacturing process, so knowing your target over run in the product, total solids and milk fat are important in identifying your products’ makeup. The difference in equipment and process will greatly affect the final product and what you’re making at home will be very different than in a commercial manufacturing environment. What could some of the differences include?
Overrun, the amount of air naturally folded into ice cream during the churning, freezing process, your home freezers’ dasher blades are slower in rpm’s than commercial as well as smaller so longer freeze times occur at home (30 minutes compared to 12 minutes or less). If the mix was not cooked prior to batch freezing, then the way the molecules in the ingredients commingle will be very different than if cooked or pasteurized in commercial manufacturing. If you are cooking the mix, then the high temp. goal along with cooling time is probably longer, because chilling systems and pumps are not being used.
There are solids in the product deriving from milk fat as well as ingredient like cocoa or sucrose, so calculating and targeting the products total solids is critical. Lastly there is milk or butter fat amount, that contributes to the products texture, mouth-feel and body. So to recap, know the products milk-fat content, over run, total solids and pasteurization requirements, to define your product and remember this has nothing to do with flavoring, simply the composition of the base mix.
Step 3:
60 – 100 days – Convert a Recipe to a Proven Formula
When a product is made in a commercial facility, it is required to present a formula that identifies, batch size, the amount of each ingredient by weight and measure and the percentage of each ingredient and calculated for the batch size. Other items in a formula sheet include the ingredient name, part number and supplier source.
The formula is considered the schedule “A” and supported with documents called schedule “B’ showing data information on each ingredient. Schedule “B” sheets can include ingredient origin, composition, certifications such as organic or kosher and lab analysis reporting of bacteria etc. You’ll probably need to hire a food scientist specializing in frozen dairy and non-dairy products to turn a kitchen recipe into a commercial formula.
Step 4:
60 – 120 days – Working with a Food Scientist to Create a Proven Formula and Approved Samples
After hiring, you will need to articulate the composition of each base product so the the scientist has a target goal point to reach. The food scientist, although experienced in the category and probably has made similar products, may not offer opinion on product texture or ingredients unless you specifically request feedback and opinion.
The scientist’s goal is to create a product that you defined in the recipe or formula by ingredients, over-run, butter fat and total solids and hired to follow your initial instructions without deviation until the first round of samples are made. If specifics like total solids and butter fat are not known, then present the ingredients and usage and clearly describe the characteristics of the finished product you want to achieve.
Once first round small batch samples are provided and made on small scale commercial equipment, then a discussion can takes place to discuss possible formula modifications to improve the finished product.
The number of discussions and finished samples will vary, but if everyone is knowledgeable, engages in specific feedback and clear on the revised formula, then estimate no more than three rounds of adjustment and samples to get to the approval stage. For the sake of cost and time savings, I recommend the test lab and sample shipping come from the same location as the scientist.
Keep in mind the food scientist is on-board for base mix composition and formula adjustment, they should have no bearing or influence on flavor profile as this is subjective and in my opinion personal to the owner. They may however share with you flavor suppliers and the type of flavor to use in your product.
Step 5:
30 – 60 days – Find Ingredient and Packaging Suppliers
Now that you have approved formulas, you’ll need to determine the source of packaging and ingredients for your product line. If you are using a co-packer they should be able to direct you to suppliers they use and some ingredients may already be in-house. Depending on the co-packer, you may be required to find and manage your proprietary packaging and ingredients and others may order on your behalf. Keep in mind the packaging will need to come from the supplier that is tooled to the filler.
As for payment, again it depends on the policy of the co-packer, some will require payment as items are received and other will include them in their “plant cost”. Whatever the situation, be clear on the costs of every component involved in your product. Myth, the co-packer is totally responsible for the quality and liability of your product.
This is a false premise and even though you pay them for their expertise and use of equipment, this is your product, with your brand name on the container. In the event of a quality, weight or other complaint you will receive the initial call from the customer. On the same score, you will get the compliment for making such an amazing product.
Step 6:
90 days – 6 months – Make Your Own Product or Use a Co-Packer
Most clients will initially say they prefer using a co-pack manufacturer, because they have little desire to operate their own facility and don’t want the time and expense burden. However in most instances, once a client comes away from an initial meeting, they realize the cost of using a co-packer to meet their minimum order requirements is higher in both total units produced and overall cost to cover the purchase order. For the average pint product made in 3 – 4 flavors and 20 – 22 pallet quantity (a truckload) you can expect to pay $70,000 – $90,000 before shipping and storage once the truck arrives at your destination.
The client can quickly understands it maybe in their best interest to start manufacturing in their own small facility. There are advantages and a time for either scenario and if you choose to start making your own in a small production, the advantages can prove to be larger than starting with a co-pack manufacturing. Here are a few advantages to consider, making flavors in smaller quantities, faster product turn-over, testing new flavors and building a larger portfolio, lower cost per unit, product and flavor control and having the ability to discontinue a flavor quickly with little waste, if the public is not purchasing and enjoying as much as you.
Finally, with the above cost assumption, you can quickly realize the return on investment in owning your own facility. Keep in mind, as the business and volume increase, you can then search for a co-packer interested to take over one or many of the higher volume flavors.
Step 7:
45 – 90 days – Artwork and Legal Declaration on the Package
Once you’ve established where your products will be produced, you will need to create the artwork and legal information that will be printed on the cup, lid and possibly a wrapper. To do this you will need to understand the suppliers die-line and print area parameters, the software art file they use and total amount of colors they have the ability to print.
You will need to hire a graphic design artist, to place your logo, marketing information, nutrition panel, upc, ingredient statement and any certifications within the printing parameters. Most packaging manufacturers will have a graphic design department, but will not offer to create your label. However I suggest calling first to inquire on their services and capability. Once you approve art proofs, the manufacturer will create the printing plates and run the order. On average and out of season expect a six to eight week turnaround from plates to shipp date.
Step 8:
7 – 10 days – Secure Freezer, Transportation and Delivery
If you’re using a co-packer, then most likely they will not offer freezer storage once the product is made and for some will not have a specific carrier to call to pick up your product. Both areas are important to secure and clearly understand prior to production. If you do not have a place to store pallets, then you’ll need to investigate public cold storage facilities and confirm that they already store ice cream and dairy based products that require a lower guaranteed storage temperature than a water base product.
I prefer a constant storage temperature of -10?. Then there is over-the-road transportation and delivery and be clear on the terminology and purpose of each service. Transportation, is for long haul and the carrier charges in a few ways, full truck, LTL (less than load) or by cube, but typically use the first two. If you are on the east coast and excited about a new client on the west coast, then you will have two choices. Pay for a dedicated truckload no matter if there is one or 20 pallets and LTL or from one pallet to as many as you want and hope you realize that there are cost differences between the two with LTL as higher.
Also keep in mind when calculating expense and transit time, that with LTL your couple of pallets will be first delivered to a transfer depot, possibly unloaded and stored to later load to share the trailer with a number of other customers going in the same direction. My concern with LTL is the way pallets are handled in and out of a controlled temp. Environment, where your pallets lie in the delivery schedule and how many stops were made ahead of your’s where the trailer doors needed to be opened.
February not a concern, then there’s August. For dedicated trucks going across from coast to coast, I would estimate $3,800 – $4,500, now divide by the number of units shipped. Delivery, indicated a local or regional freezer truck delivery service where you take the customers order and they delivery to the customer, they may or may not collect on the invoice. For deliveries you can have your own truck and driver or use a distributor that already has designated routes and stops.
For you own, you have the ability to have your driver also act as a salesperson and incentive with commission to grow the customer base in an area, additionally you can offer a pack and pedal service where the driver directly fill the case, rotates, fronts product, make a credit adjustment for damaged goods and possibly collect on the invoice.
Step 9:
30 days – Calculate The Unit Cost of Goods or ”COG” and Gross Margin
Most of the time I’ll be told what someone did in sales, but what was actually made in gross profit? Many believe they have a grasp of their costs, but most times while breaking it down and asking specific questions, the client did not include so diluted their margin.
When working with a client, my breakdown is made up of three parts, ingredients, packaging and plant cost (manufacturing overhead). If you are doing business with a co-pack manufacturer, many times they will provide a fully loaded unit cost, so you won’t clearly know the segment cost and where costs can be improved in the future. The co-packer
Step 10:
30 – 60 days – Make Your Product in a Commercial Environment
You’ve secured a co-packer or decided to build and make your own, have a proven formula, understand the product composition and finished product expectations, calculated the COG’s, understand the manufacturing process, ordered ingredients and packaging and have a plan for ready to go product once it’s made. NOW you’re ready to start selling.
Depending on the project and levels of tasks to complete, the suggested time frame from conception to completion is 4 – 8 months.
Book a session with Darryl to begin the journey of digging into the details to move your project forward and to the next step.
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