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Understanding Pricing and Optimizing Costs
July 15, 2021 @ 10:00 am - 12:15 pm
Welcome to another virtual workshop in our So You Want to Start a Food Business series! This time, we’re talking all about the almighty dollar. As a new, small producer the first step you take into the marketplace is setting your price. Too high and your new product is dead on arrival, too low and you may spend years losing money until you can increase it to where it should have been from the start. Starting a CPG food business successfully means having a solid understanding of your money coming in and out and that starts with understanding your price and your costs. This virtual workshop will cover startup strategies for pricing your product and optimizing your product’s cost structure.
In the first part of this workshop, our Farm Program Director David VanEeckhout will walk you through the factors to consider when determining the best price for your product, and how that changes depending on market and scale. He will also cover what a break-even point is and how to calculate it so that when opportunities arise for different markets, you know how low you can go.
The second part of this workshop will address the always important issue of costs. Effectively pricing a food product for the marketplace depends on a number of factors but is fundamentally based upon a deep understanding of your COGS (Cost of Goods Sold). In this portion of the workshop, AURI’s Lolly Occhino and Jason Robinson will break down:
- How COGS impacts pricing
- How product and process decisions influence COGS
- Why it’s never too early to consider/explore cost optimization
- Strategies to reduce your product COGS (and increase your profit)
Last but not least, you’ll see these concepts at work in the real world in a conversation with Belén Rodríguez, owner of local empanada company Quebracho. She will share her own firsthand experience as a small food business owner as she navigated pricing her product and optimizing her costs as she moved into the CPG market. Whether you are in the ideation phase of starting your own food business or you’ve already got a product on the market, this is a valuable workshop you won’t want to miss.
Seeing the need for accessible and relevant information tailored to food makers in our community, The Good Acre in partnership with AURI, a nonprofit whose mission is to help Minnesota food and ag businesses bring their ideas to reality, developed So You Want To Start A Food Business. This series of workshops are designed to give small consumer packaged food (CPG) businesses the education, support, and connection to resources they need to thrive.