Did you know that most gourmet popcorn companies are family owned and therefore are considered “mom and pop”? Gourmet popcorn is considered to be the fastest growing snack food business among entrepreneurs. Whether you are a family of five or just a one man show, a gourmet popcorn business has historically proven to be a profitable business. Here are 5 reasons you should start a gourmet popcorn business.
1. Low Start-up Costs
A gourmet popcorn business can be started for less than $1,000 depending on the flavors you want to sell. Materials such as oils, dry seasonings and kernels have a relatively long shelf life if handled and stored properly, making it easy to get started quickly. Aside from the initial capital investment in equipment, ongoing expenses would be ingredients, labeling and packaging. Once you remove the capital expenses, all the other expenses can be kept to a minimum if all cooking and packaging is done and kept in-house.
2. Potentially a Home-based Business
In several states, home-based businesses making and serving limited cooked goods are allowed. In Texas this provision is referred to as “Cottage Law”. Cottage Law permits the home-based sale of limited cooked goods that pose minimal risk when served to the public. Such items include; jams/jellies/preserves, cakes, cookies, pies, brownies, pretzels and yes…. even gourmet popcorn. All products need to be packaged, properly labeled and sold direct to the customer (examples: county fairs and farmers markets). With such provisions there are exceptions. Your state may require you to carry a valid food handler’s license. These are fairly inexpensive (less than $10.00 on average) and can be obtained quickly online.
As you can see, you are limited to the types of products you can sell. Also, you are limited to the amount of annual income you can earn from this business model. In the case of Texas Cottage Law, the limit is $50,000 per year. Please check with your state to determine if there is a similar provision such as Cottage Law. If you find yourself earning more than $50,000 out of your home-based business, you can take your earnings, and begin producing out of a rented shared commercial kitchen space to remain compliant to state and local food safety laws.
3. High Profit Margins
As mentioned in point 1, ingredients for making gourmet popcorn are fairly inexpensive. What sells gourmet popcorn is the quality of the ingredients, the creativity of the flavor(s) being offered, and the presentation/packaging being used. Consider that a large buttered popcorn from a movie theater sells on average for $7.00, yet costs the theater less than $1.00 to produce (including the paper bucket). So, if you were to produce gourmet popcorn and sell it in 5 cup bags for $5.00, the cost of that product could easily be as low as .50 or .75 cents. In the gourmet popcorn business, your biggest expenses would be the packaging and the label its-self. HOT TIP: When designing your labels, consider the size of the labels and the amount of colored ink being used. You typically want to keep your label costs as low as possible to ensure the highest profit margins possible. The market is wide open, and during certain times of the year (October through December) making money with gourmet popcorn is almost a guarantee.
4. Sparks Creativity
When you think about it, popcorn is a blank canvas. Popped popcorn has no real flavor whatsoever, until it is buttered, salted or seasoned. There are hundreds of gourmet popcorn flavors. What makes popcorn “gourmet” is your creativity. If you are reading this article you are not just wanting to possibly be your own boss, but you feel you have a unique idea or concept. Popcorn is a perfect medium to experiment and create amazing flavors. Although there are thousands of gourmet popcorn companies in the United States alone, the market is not saturated. There are people just like you coming out with new and innovative flavors.
In a down economy, there are several businesses that have historically been recession-proof.
Some examples are:
- Certain forms of entertainment
- Barber and Beauty – When people are feeling their worst, they always want to look their best.
- Comfort Foods – When people do not have a lot of money, they want to eat something inexpensive, filling and tasty.
Now some would argue that gourmet popcorn isn’t always inexpensive, but there are ways to make it affordable using methods that large manufacturers use such as making the bags smaller or offering “buy 2 get 1” offers, and so on.
If you make a quality product and provide excellent customer service, customers will always be there to support you. One last point: A mom and pop gourmet popcorn company can potentially do anywhere between $50,000 to $700,000+ in annual sales depending on the brand and marketing.