SO
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Exploring
the Potential
for
New Food Products
Food and Fiber Center
ially
S peoco d
G
INTRODUCTION
The Food and Fiber Center of the Mississippi State
University Extension Service has worked with hundreds of
entrepreneurs and small businesses since its beginning in
1974. The people who come to the Center for help range from
those with just an idea for a new cookie to those with millions
of dollars looking at a major processing operation. After years
of answering the same questions, the staff of the Food and
Fiber Center discovered that the initial information needs are
essentially the same for almost all clients.
The purpose of this publication is simple and straight
forward—to provide information you can understand and use
to avoid investing time and money in developing a product
that may have little chance for success in the marketplace.
There is no attempt or intent in this guide to address the
questions of your personal abilities or capabilities of going
into business. It does not provide specific details about
licensing and/or reporting information necessary for starting
a business in the State of Mississippi. This information is
available from the Extension Food and Fiber Center and
through several resources and agencies such as the Small
Business Development Centers located throughout Missis-
sippi (Appendix A) or through the Jackson or regional offices
of the Mississippi Department of Economic and Community
Development (Appendix B). It is the Center’s intent to help
guide you through the product development, manufacturing,
and marketing stages of a project to force you to analyze the
economics of a venture before you commit yourself to it.
All the topics covered may not be of interest to you at this
time but should prove useful as your business develops. If
you are somewhere in the middle of the journey, you
possibly will be able to pick up at that point and get the
information most suited to your immediate needs.
This publication should help you develop a more sharply
focused picture of the product you have in mind. The Food
and Fiber Center staff and their respective responsibilities and
a mission statement are provided in Appendix C. After you
have read through this publication, you should be able to ask
specific questions that will assist the Center in helping to meet
your needs. For more information, please call the Extension
Food and Fiber Center at 662-325-2160.
Exploring the Potential for
CONTENTS
THE PRODUCT .................................................................. 2
PROCESSING ...................................................................... 3
Processing Regulations ............................................................ 3
Product Recall Plan .................................................................. 4
Safety, Shelf Life, and Sensibility ........................................... 4
Additives .................................................................................. 4
PACKAGING ....................................................................... 5
Image ....................................................................................... 5
Labeling ................................................................................... 5
Patents and Trademarks ........................................................... 6
Bar Coding (UPC) ................................................................... 6
Case Counts ............................................................................. 7
PRODUCT PRICING — GROSS MARGINS AND MARKUPS ........ 7
Selling Price Determination ..................................................... 7
PROFITS AND BREAK-EVEN ANALYSIS .................................... 8
CONCLUSION .................................................................... 8
APPENDICES ...................................................................... 9
A - Mississippi Small Business Development Centers ......... 10
B - Mississippi Department of Economic and Community .. 12
Development Liaison/Field Offices ................................ 12
C - Food and Fiber Center Mission Statement and Staff ...... 13
D - Good Manufacturing Practices ........................................ 15
E - Mississippi Public Health Districts and
Supervising Environmentalists ....................................... 25
F - Label Companies ............................................................. 26
G - Analytical Testing Labs .................................................. 27
H - Container Companies ...................................................... 27
THE PRODUCT
Staff members of the Extension Food and
Fiber Center have worked with many individu-
als who toyed with a product or service idea for
a period of time and then reached the point at
which they must do something with it or forget
it. At this stage it really is still just an idea. This
doesn’t present a problem. In fact, this is prob-
ably the best place to start, since little time or
money has been invested in the project. For
convenience, start with the idea. Now what?
Once the idea is formed and the Food and
Fiber Center has a reasonable understanding of
what the product characteristics are, that is,
what the product looks like, feels like, tastes
like, maybe even smells like, a specialist can
One of the most important evaluate the idea's potential. One of the most
initial questions is.... important initial questions is, “Will this product
meet a specific need in the marketplace?” This
“Will this product meet is an area many people cannot accurately evalu-
a specific need in the ate because they are too close to the idea. The
marketplace?” product becomes a personal thing and, there-
fore, any criticism (of the product or idea) is a
criticism of the person's creativity or business
sense or, in some cases, his/her value as a person
altogether. For this reason, it is a good idea to let
an objective third party evaluate whether or not
the product addresses a specific need in the
marketplace. This will depend on the character-
istics of the target market and the number and
strength of competitors in the market. If the
product does not appear to meet a need, a
second opinion might be needed, depending
on how stubborn you are and how confident
you are in the third party. When it becomes
clear the answers you are getting are consis-
tently no, it would be wise to toss the idea
before investing time and money.
Assume there seems to be an existing need
in the marketplace. The next question is, “What
must be done to make it presentable to the
consumer?” The following addresses some of
the major issues in transforming an idea into a
viable consumer-ready product. A detailed
analysis of your specific product needs to be
developed in the early stages of evaluating
potential for success.
2 EXPLORING THE POTENTIAL FOR NEW FOOD PRODUCTS
PROCESSING
For small businesses, product development (process-flow diagram) of the production pro-
(usually experimentation) of most food products cess so you can adequately describe and explain
takes place in the home kitchen. Production is each step in processing your product. In devel-
limited. Perhaps the most difficult decision to oping this flow diagram, it will be necessary to
make is the one that forces you to take the plunge answer certain questions, including the follow-
into commercial production of a product. For ing:
food items, this means a whole new set of prob- • How will raw materials (ingredients) be
lems must be considered. Two major obstacles delivered? In what form? Size?
to overcome include complying with regulations • How will ingredients be stored? Frozen?
and providing for consumption a safe and desir- Refrigerated? Dried?
able product that can be “mass produced.” It • What must be done to ingredients before
seems logical that if all regulations are met, the use? Measure? Clean? Thaw? Weigh?
latter takes care of itself. This isn’t always the • How much time is necessary for prepara-
case. You must consider other factors that affect tion? Cooking? Cooling? Packaging?
the acceptability of the product from a consumer’s • How will finished product be handled and
viewpoint. stored? Frozen? Refrigerated?
For many, the initial bottleneck that forces
the decision to “go commercial” occurs when This exercise will force you to think through
you reach the limits of the home kitchen. In most the amount of work and storage space needed. It
cases, approval by regulatory agencies to manu- will also help you determine the type and size of
facture a food product in a home kitchen will not machinery and equipment needed for your op-
be granted, which means whatever you were eration and what your labor requirements will
doing, you probably should not have been doing be. This information will prove essential as you
anyway. Notice the “in most cases,” because estimate the size of facility needed and the
there have been exceptions in situations where dollars required to start up your production.
compliance with regulations can be achieved in
a home environment. PROCESSING REGULATIONS
One way to deal with the problem of expan- Two regulatory agencies that oversee pro-
sion without investing a lot of money is to enter cessing food products on the federal level are
into a contractual agreement with an existing the Food and Drug Administration (FDA) and
processor, that is, someone who will process the United States Department of Agriculture
your product to your specifications, package and (USDA). As a general rule, if your product
label it with your company logo, and, in some contains more than 3 percent raw meat or poultry
cases, also distribute the product to regional and/ or more than 2 percent cooked meat or poultry,
or national markets. This alternative eliminates the processing of that product falls under USDA
many of the headaches of complying with regu- regulations; otherwise, it falls under FDA regu-
lations and allows some flexibility to test the lations.
water before diving in head first. This might be The regulations governing “good manufac-
a less expensive way of expanding, since no turing practices” are published by the Office of
investments in facilities and equipment are nec- the Federal Register, along with hundreds of
essary on your part. On the other hand, some of pages of information specific to problems you
the control for maintaining the desired product may never encounter. A copy of the current
quality and day-to-day management will be taken "Good Manufacturing Practice in Manufactur-
out of your hands. ing, Packing, or Holding Human Food,” Part
If you decide to “do it yourself,” you 110 of the Code of Federal Regulations, is
need to develop a step-by-step description provided in Appendix D.
COOPERATIVE EXTENSION SERVICE • MISSISSIPPI STATE UNIVERSITY 3
The local agencies to advise you on the adopted so individual lots of the product can be
things necessary to comply with the various traced from the processing facility to the end
regulations include the Meat Inspection Divi- user. Use the code date on all quality control
sion of the Mississippi Department of Agricul- records, production reports, and shipping forms.
ture and Commerce (MDAC) for USDA regula- Examples of code dating:
tions and the Mississippi State Board of Health
for FDA regulations. You should contact the Julian Date Code
director, Meat Inspection Division at MDAC 2316A
(601-359-1191), or the supervising environmen- 231 represents the day of the year
talist for your district (Appendix E). The food 6 represents the year 1996
technologist at the Food and Fiber Center A represents hour period or
(662-325-2160) at Mississippi State University production batch
can also advise you on preliminary requirements
Gregorian Date Code
to comply with USDA and/or FDA regulations .
June 5, 1996A or 6/6/96A
PRODUCT RECALL PLAN Date is self-explanatory.
From time to time a food processor may A represents hour period or
need to remove one of its products from the production batch
market. The vast majority of recalls are volun-
All products produced should be recorded
tary. Whether or not the problem is minor or life
on a daily production log, identifying the prod-
threatening, good advance planning is the key to
uct produced, total number of cases produced,
resolving it thoroughly and quickly.
and case size. This information is linked to
The Food and Drug Administration’s guide-
invoices of shipped product, bill of lading, and
lines, policies, and procedures for recalls can be
inventories.
found in Title 21, Part 7 of the Code of Federal
If a legitimate customer complaint is re-
Regulations. A food technologist with the Food
ceived or if the company has found a problem, a
and Fiber Center can provide you with a copy of
recall can be initiated more easily with the use of
the regulations and more specific details on a
the described coding systems. If a recall is nec-
recall plan.
essary, the product can be identified, accounted
Recalls are usually initiated as a result of
for in inventory, put on hold, and tracked to the
consumer or customer complaints. It is essential
customer until all products are accounted for and
that every legitimate consumer and/or customer
located. Arrangements should then be made to
complaint is documented and investigated thor-
get products returned to the processing facility.
oughly. Sometimes a product problem is identi-
fied before the product leaves the processor; it
should be documented and investigated the same SAFETY, SHELF LIFE, AND SENSIBILITY
way. Food safety has received much attention in
In order to recall a product, the processor recent years. As new products and technologies
must be able to identify the product involved and are developed and consumers become more and
determine the distribution of that product. A more knowledgeable about food additives and
code-dating system needs to be part of the treatments such as irradiation, food safety will
company’s policy. Print production date code become even more important. Most food safety
on all finished product packages and/or cases. issues can be handled easily if the manufacturer
This code can identify the production date, uses the proper manufacturing procedures and
shift, or hour of production and/or lot or batch exercises common sense. Tamper-resistant clo-
number, and production facility. Each processor sures might or might not be necessary, for ex-
may devise its own variation of coding. It is ample. Even food-borne diseases are minimized
important that a meaningful product coding be by proper handling and care during the manufac-
established and a record-keeping system be turing process.
DISTRICT 2 DISTRICT 5
Sam Agnew, Community Services Ken Johnston, Existing Industry & Business
Patrick Lewis, Financial Resources George McFarland, Community Services
Bill Mobley, Existing Industry & Business MDECD West Central Field Office
Danny Liles, Existing Industry & Business Post Office Box 849
Nancy Knight, Appalachian Regional Jackson, MS 39205
Commission Street Address:
MDECD Northeast Field Office 1300 Walter Sillers Building
Post Office Box 1606, Tupelo, MS 38802 550 High Street
or 330 West Jefferson, Tupelo, MS 38801 Jackson, MS 39201
Tel: (662) 844-5413 Tel: (601) 359-3593
Fax: (662) 842-3667 Fax: (601) 359-2116
Serving: Alcorn, Benton, Calhoun, Serving: Copiah, Hinds, Madison, Rankin,
Chickasaw, Itawamba, Lafayette, Lee, Simpson, Warren, and Yazoo Counties
Marshall, Monroe, Pontotoc, Prentiss,
Tippah, Tishomingo, and
Union Counties
DISTRICT 3 DISTRICT 6
Frank Short, Existing Industry & Business Paul Walker, Existing Industry & Business
Dorothy Henson, Community Service Chuck Nelms, Community Service
MDECD Northwest Field Office MDECD Southwest Field Office
Post Office Box 32, 119 Grand Boulevard Post Office Box 728
Greenwood, MS 38935-0032 Southwest Mississippi Community College
Tel: (662) 455-4508 Brumfield Building
Fax: (662) 455-7903 Summit, MS 39666-0728
Serving: Attala, Bolivar, Carroll, Grenada, Tel: (601) 276-3089
Holmes, Humphreys, Leflore, Fax: (601) 276-3870
Montgomery, Sharkey, Washington, and Serving: Adams, Amite, Claiborne,
Yalobusha Counties Franklin, Jefferson, Lawrence, Pike,
Walthall, and Wilkinson Counties
§ 110.10 Personnel
The plant management shall take all reasonable measures and precautions to ensure the following:
• Disease control. Any person who by medical examination or supervisory observations is shown to
have, or appears to have, an illness, open lesion, including boils, sores, or infected wounds, or any
other abnormal source of microbial contamination by which there is a reasonable possibility of food,
food-contact surfaces, or food-packaging materials becoming contaminated, shall be excluded
from any operations which may be expected to result in such contamination until the condition is
corrected. Personnel shall be instructed to report such health conditions to their supervisors.
• Cleanliness. All persons working in direct contact with food, food-contact surfaces, and
food-packaging materials shall conform to hygienic practices while on duty to the extent necessary
to protect against contamination of food. The methods for maintaining cleanliness include, but are
not limited to:
16 EXPLORING THE POTENTIAL FOR NEW FOOD PRODUCTS
1. Wearing outer garments suitable to the operation in a manner that protects against the
contamination of food, food-contact surfaces, or food-packaging materials.
2. Maintaining adequate personal cleanliness.
3. Washing hands thoroughly (and sanitizing if necessary to protect against contamination with
undesirable microorganisms) in an adequate hand-washing facility before starting work, after
each absence from the work station, and at any other time when the hands may have become
soiled or contaminated.
4. Removing all unsecured jewelry and other objects that might fall into food, equipment, or
containers, and removing hand jewelry that cannot be adequately sanitized during periods in
which food is manipulated by hand. If such hand jewelry cannot be removed, it may be covered
by material which can be maintained in an intact, clean and sanitary condition and which
effectively protects against the contamination by these objects of the food, food-contact
surfaces, or food-packaging materials.
5. Maintaining gloves, if they are used in food handling, in an intact, clean, and sanitary condition.
The gloves should be of an impermeable material.
6. Wearing, where appropriate, in an effective manner, hair nets, head-bands, caps, beard covers,
or other effective hair restraints.
7. Storing clothing or other personal belongings in areas other than where food is exposed or
where equipment or utensils are washed.
8. Confining the following to areas other than where food may be exposed or where equipment
or utensils are washed: eating food, chewing gum, drinking beverages, or using tobacco.
9. Taking any other necessary precautions to protect against contamination of food, food-contact
surfaces, or food-packaging materials with microorganisms or foreign substances including,
but not limited to, perspiration, hair, cosmetics, tobacco, chemicals, and medicines applied to
the skin.
• Education and training. Personnel responsible for identifying sanitation failures or food contami-
nation should have a background of education or experience, or a combination thereof, to provide
a level of competency necessary for production of clean and safe food. Food handlers and
supervisors should receive appropriate training in proper food handling techniques and
food-protection principles and should be informed of the danger of poor personal hygiene and
insanitary practices.
• Supervision. Responsibility for assuring compliance by all personnel with all requirements of this
part shall be clearly assigned to competent supervisory personnel.
§110.19 Exclusions
• The following operations are not subject to this part: Establishments engaged solely in the harvest,
storage, or distribution of one or more “raw agricultural commodities,” as defined in section 201(r)
of the act, which are ordinarily cleaned, prepared, treated, or otherwise processed before being
marketed to the consuming public.
• FDA, however, will issue special regulations if it is necessary to cover these excluded operations.
Subpart B - Buildings and Facilities
§ 110.20 Plant and grounds
• Grounds. The grounds about a food plant under the control of the operator shall be kept in a
condition that will protect against the contamination of food. The methods for adequate mainte-
nance of grounds include, but are not limited to:
1. Properly storing equipment, removing litter and waste, and cutting weeds or grass within the
immediate vicinity of the plant buildings or structures that may constitute an attractant,
breeding place, or harborage for pests.
2. Maintaining roads, yards, and parking lots so that they do not constitute a source of
contamination in areas where food is exposed.
APPENDIX H
CONTAINER COMPANIES —
GLASS, PLASTIC, PAPERBOARD, AND CORRUGATED
BGLASS AND PLASTIC
Arkansas Container Company Louisiana Packaging
516 W Johnson 4747 Conti Smith Container Corporation
Jonesboro, AR 72403 New Orleans, LA 70119 P.O. Box 18551
Phone: 501-932-0168 Phone: 504-482-7866 Memphis, TN 38181-0551
Fax: 501-932-5283 Fax: 504-482-7870 Phone: 901-794-0597
Berlin Packaging Pressware International, Inc. Fax: 901-794-8142
435 E Algonquin Road PO Box 28147 Tricorbraun
Arlington Heights, IL 60005 2120 Westbelt Drive 612 Distributor’s Row
Phone: 1-800-423-7546 Columbus, OH 43228-0147 Harahan, LA 70123
Fax: 1-800-423-7545 Phone: 614-771-5400 Phone: 504-733-9293
Berry Plastics Tricorbraun Fax: 504-734-7091
P.O. Box 959 4056 Homewood Road, Suite 3 Ultra Pac, Inc.
Evansville, IN USA 47706-0959 Memphis, TN 38118 21925 Ind. Blvd.
Phone: 812-429-9522 Phone: 901-362-8000 Rogers, MN 55374
www.berryplastics.com or 1-800-325-7149 Phone: 612-428-8340
Fax: 901-366-1910 1-800-999-9001
US Can Company
1101 Commerce Road Richards’ Packaging International Phone: 612-428-2754
Morrow, GA 30260 4721 Burbank Rd., Suite 21 Fax: 612-428-3462
Phone: 770-968-1880 Memphis, TN 38118 www.ultrapac.com
Fax: 770-961-5071 Phone: 901-360-1121
www.uscanco.com Fax: 901-360-0050
Contact: Gay Edwards