How to Start a Consumer Packaged Goods (CPG) Business with a Minimum Viable Product (MVP)

As food startup consultants focused on helping entrepreneurs launch and grow their food businesses, one of the questions we often receive at The Food Mint is how to start a consumer packaged goods (CPG) business.

Having been through the process a few times as entrepreneurs ourselves and having also advised and worked with startups doing this exact thing, we’re happy to share what we think are the basic building blocks to any good CPG business.

We strongly advise anyone looking to start a CPG business to keep their costs down and to run a lean operation.

In this post, we aim to advise you on not only how to launch a CPG business, but also how to do it in the cheapest, quickest, and smartest way possible.

“Fail fast” is the mantra of Silicon Valley, and encourages entrepreneurs to launch before they think they are ready, and far before they think their product or service is perfect. Why? Because you’re never going to know what your customers really want until you present your product to them for feedback. (You will most likely be wrong if you think you can build what they want in your first attempt.) So fail fast, friends, and fail cheaply. 

1. Nail and Scale Your Recipe

Presumably you have a recipe you want to take to market. Maybe it’s a barbeque sauce, maybe it’s an energy bar. Most likely you’ve been producing your recipe for a while now and your friends and family are telling you how much they love it. They’re probably also asking you how they can buy some.

Before you can do that, and if you haven’t already, you need to write your recipe down. More than writing it down, you’ll also need to convert your recipe to grams, as most larger scale producers — and any larger batches you might produce yourself — will require a recipe based on grams rather than cups and tablespoons.

Whether you produce at home, in a commercial kitchen, or with a co-packer, you’ll thank yourself later for nailing your recipe and putting it into an easily scalable format.

2. Figure out your Minimum Viable Packaging

Your initial packaging doesn’t have to be perfect, but it needs to be functional. As an example, when my father and I first launched Norm’s Farms, we put our elderberry juices into barbeque sauce bottles, and I designed the labels myself (with strong input from my dad). Our first juice products were really ugly, but they were just perfect in that we were able to really quickly go-to-market.

This is what the startup industry refers to as a Minimum Viable Product, or MVP. It’s a prototype of your product that allows you to start soliciting feedback from your target customers as soon as possible.

There’s no way Norm’s Farms could have nailed $37K in sales in our first 6 months had we not made the most of the materials we had on hand. Customers were able to give us feedback on not only the ugly barbeque sauce bottles that dripped when you poured from them, but also on our flavor options, our price point versus the competition, and our product benefits.

We eventually discontinued these products because our gross margins weren’t high enough, but it was a great lesson in getting started with what you have.

Similarly, at Tovala, a meal delivery service meets home appliance startup, we produced our first meals at home. I was the first chef, our initial packaging was far from perfect, and we delivered all of our first meals ourselves.

Two of our early recipes, including a delicious pozole stew, included broth. We bought aluminum trays online that came with snap-on plastic lids. We used rubber bands to secure the lids, and we used our home printer to make the meal labels and cooking instructions.

We delivered the meals ourselves in brown paper bags that we labeled with sharpees. Every bump and turn the car took, the broth from those pozoles sloshed around and out of our MVP packaging. It was far from perfect.

But it was enough to serve our very first customers, and it was the perfect way to start getting feedback on our recipes and learn what we would eventually need from our packaging.

What’s the cheapest and easiest way you can package your product in order to get it to your first customers for feedback? Start there.