The U.S. food market represents one of the largest consumer sectors in the country, generating hundreds of billions in annual revenue across grocery, specialty, and direct-to-consumer segments. With growing demand for unique, local, and health-conscious options, there’s a real opportunity for new producers entering the space.
Launching a food business can be rewarding, but success depends on more than having a product people want. You need to meet regulatory requirements, design packaging and labelling that comply with food laws, manage pricing and inventory, and build a strategy to sell and distribute effectively.
Whether you’re starting from home or preparing for retail, this guide covers every step to help you launch a food business and start selling food products.
Key takeaways:
- You must comply with both federal and local food safety regulations and obtain the necessary food licenses before selling any product.
- A consistent, legal, and sellable product depends on proper formulation, packaging, labelling, and in some cases, shelf-life testing.
- Marketing, inventory tracking, and reliable delivery systems are critical for scaling and sustaining your food business.
- Choosing the proper sales channels, whether online, in person, or through retail, directly affects visibility, customer reach, and profitability.
1. Understand food laws and licensing requirements
Before you sell your first item, you need to know what’s legally required. In both the United States and Canada, food is tightly regulated to protect consumer health. But rules differ depending on what you're selling and how you're selling it.
To sell food in the United States:
- FDA compliance is required for packaged foods sold across state lines or online. That includes proper labelling, sanitary production, and facility registration.
- State and local regulations often vary. Many states offer cottage food laws that allow individuals to sell low-risk foods made in a home kitchen. Common examples include baked goods, jams, and candy.
- You may need:
- A business license from your city or county
- A food handler’s permit or food safety certification
- A health inspection if producing from a commercial kitchen or home
To sell food in Canada:
- You’ll need to meet Canadian Food Inspection Agency (CFIA) standards for labelling and production.
- Home-based sellers must check provincial rules. For example, in Ontario, you can start a home-based food business that allows low-risk foods to be sold without a commercial kitchen, but each province differs.
- Required licenses may include:
- Municipal business licenses
- Food handler certification
- Public health approval, such as a kitchen inspection, for your production location
Did you know: If you're using multiple food suppliers, you can use food safety software like Local Line to track food safety practices across all sources in one place.
2. Choose your food product niche
A successful food business needs a clear niche. This helps you stand out, target your marketing, and make decisions about pricing, packaging, and even where to sell.
Start by doing some market research and answering questions like:
- Who is your customer? (e.g., health-conscious shoppers, parents, athletes)
- What problem or craving does your product solve? (e.g., high protein, low sugar, comfort food)
- How is your product different from competitors?
Look for upcoming food trends and gaps in your local market or online. For example, gluten-free desserts that taste as good as traditional ones, or locally made condiments with unique flavour profiles.
Stay focused. Trying to appeal to everyone usually leads to bland branding and inconsistent sales.
3. Develop and test your products
Once you’ve chosen your food niche, it’s time to turn your idea into a repeatable, scalable product. This means creating a product that can be reproduced consistently, lasts long enough on the shelf, and complies with legal standards.
Food product development considerations:
- Standardization: Document exact weights, measurements, and cooking times.
- Shelf life: Use lab testing if needed to ensure your product is safe and doesn’t spoil too quickly.
- Ingredient sourcing: Use reputable suppliers who provide documentation for food safety and traceability.
If you’re offering products like sauces, frozen meals, or fermented goods, you may need to work with a food scientist or lab to validate shelf stability and pH levels.
Testing with friends and early customers can help you refine taste, texture, and packaging. But be sure to also test for legal and production consistency, not just flavour.
4. Handle packaging, labelling, and nutrition facts
Packaging does more than look good; it protects your food, provides required information, and helps customers trust your product. Legal labelling requirements differ between the U.S. and Canada, but both require specific details.
U.S. packaging must include:
- Product name and description
- Net weight in both imperial and metric
- Ingredient list (from most to least by weight)
- Allergen declarations (top 9 allergens, as per FDA)
- Name and address of manufacturer or distributor
- Nutrition Facts panel (mandatory unless exempt under small business rules)
Canadian packaging must include:
- Bilingual labelling (English and French)
- Nutrition Facts table and ingredient list
- Common allergens
- Best before date for perishable goods
- Name and principal place of business
Food packaging design also matters. Clear, readable fonts and contrasting colours help your label stay compliant and shelf-ready. You’ll also want to consider:
- Tamper-evident seals
- Barcodes (UPC) for retail sales
- Eco-friendly or food-safe materials for sustainability and compliance
5. Register your food business
Formally registering your food business gives it a legal foundation and protects you from liability. It also opens the door to business banking, food and farm grants, wholesale partnerships, and government programs.
Key decisions include:
- Business structure:
- Sole proprietorship is the simplest and cheapest to set up, but offers no liability protection.
- LLC (U.S.) or corporation (U.S. and Canada) protects your personal assets and may offer tax benefits.
- Partnerships can work for co-founders but require legal agreements.
- Tax IDs and numbers:
- In the U.S., get an EIN (Employer Identification Number) from the IRS.
- In Canada, apply for a Business Number (BN) through the CRA. This lets you register for GST/HST if needed.
- Insurance:
- At a minimum, get product liability insurance to cover risks like contamination or allergic reactions.
- If you rent kitchen space or have employees, consider general liability and workers' compensation coverage.
6. Set up your production space
Where you make your product depends on your local laws, the type of food you're making, and how much you're producing. Consider options like:
Home kitchen
- Legal only in certain states or provinces for specific products (e.g., cookies, jams).
- Not permitted for higher-risk items like meat, dairy, or fermented foods.
- Requires clear sanitation procedures and may be subject to inspection.
Commercial kitchen rental
- Shared-use kitchens allow you to rent certified space by the hour.
- Often come with equipment, storage, and cleaning stations.
- Helpful for scaling beyond cottage food limits.
Co-packing (contract manufacturing)
- A third party makes and packages your product under your brand.
- Good for shelf-stable or processed items like sauces, snacks, or condiments.
- Saves time but adds costs and complexity—be sure to vet partners thoroughly.
Regardless of where you produce, always follow food safety standards: clean surfaces, temperature control, pest prevention, and proper storage.
7. Price your product for profit
One of the biggest mistakes new food entrepreneurs make is underpricing their products. Your price needs to cover costs and reflect value in the market.
To price food effectively:
- Know your costs:
- Include raw ingredients, packaging, labels, kitchen rental, shipping materials, and labour.
- Don’t forget overhead like utilities, insurance, and licensing fees.
- Use a pricing formula:
- Consider your position:
- Premium products (e.g., artisanal, organic, allergy-friendly) can support higher prices.
- For competitive markets like snacks or sauces, price must match perceived value.
Check prices at local farmers markets and online stores to benchmark. Adjust for packaging size, quality, and uniqueness.
Read more about pricing food products for profit
8. Build your food brand and packaging design
Your food product might be great, but if the packaging doesn’t attract attention or reflect your values, it won’t sell. Branding isn’t just a logo, it’s how people perceive your product and trust what’s inside.
Food product branding tips:
- Tell a story:
- Use your label, website, and social channels to share how your product came to be.
- Focus on your values: local ingredients, family recipes, health benefits, etc.
- Design for shelf appeal:
- Clear typography, colour contrast, and consistent brand visuals matter.
- Invest in a professional label design or use template services tailored to food packaging.
- Choose the right packaging:
- Consider format (glass jars, stand-up pouches, bottles) for convenience and freshness.
- Use food-safe materials and factor in durability during shipping.
- If possible, opt for compostable or recyclable packaging to appeal to eco-conscious shoppers.
Brand identity should be consistent across your labels, website, social media, and product images.
Tip: Check out these farm logo ideas for branding and logo inspiration
9. Start selling online, locally, and through retailers
Getting your food product into customers’ hands requires a smart mix of channels. Each one has its pros and challenges, and the best strategy often combines several.
Local selling options:
- Farmers markets let you test products, build customer relationships, and gather real-time feedback.
- Pop-up shops and food fairs provide exposure to local audiences and opportunities to collaborate with other vendors.
- Independent retailers may offer consignment (you get paid when it sells) or wholesale (you get paid upfront at a lower rate).
Online selling platforms:
- Local Line is built specifically for local food sales—ideal for farmers, bakers, and producers looking to serve local customers with pre-orders and direct delivery.
- Shopify offers a customizable, branded store and integrations with payment, shipping, and inventory tools.
- Etsy is ideal for small-batch or artisanal goods, especially if you’re just starting.
- Amazon provides access to a massive audience, but has strict packaging, labelling, and fulfilment standards.
Read more about how to sell food online
10. Set up inventory tracking and batch control
Once you’re selling through more than one channel, you need to manage inventory carefully. Running out of stock can cost you customers, while overproducing ties up your money and storage.
Key inventory practices:
- Track raw materials and finished products separately.
- Assign batch numbers to each production run. This helps with food recalls, shelf life tracking, and ingredient traceability.
- Use software like QuickBooks Commerce, Craftybase, or in-built Shopify apps to sync inventory with your website and point-of-sale systems.
- Prevent overselling by integrating your inventory system with all active platforms and keeping stock levels updated in real time.
- Forecast demand based on seasonality, promotions, and past sales to minimize waste and maximize sales.
For perishable or high-volume products, using reliable food inventory management software is just as important as having a strong marketing plan.
11. Plan shipping and delivery logistics
Your product is ready, but getting it to your customers reliably is another challenge, especially for items that are perishable, fragile, or temperature-sensitive.
Shipping essentials:
- Packaging: Use insulated liners, ice packs, or shelf-stable formats if your product is heat-sensitive.
- Delivery speed: Offer standard and expedited options. Local customers may appreciate same-day or next-day delivery.
- Carrier selection: Compare costs and reliability from USPS, UPS, FedEx (U.S.), or Canada Post, Purolator, and local couriers (Canada).
- Shipping software: Tools like ShipStation or Pirate Ship help automate label creation, tracking, and customer notifications.
Local delivery tips:
- Offer pickup points at markets, stores, or shared kitchens.
- Use route planning apps for direct delivery to minimize fuel costs.
- Include order minimums to make local delivery profitable.
Make sure to build delivery costs into your pricing or charge separately to maintain margins.
Read more about how to offer home delivery for food products
12. Promote your food product effectively
Marketing is how you get noticed and build trust with new buyers. A strong product launch and consistent brand message go a long way in building momentum.
Proven marketing strategies:
- Social media: Use Instagram, Facebook, and TikTok to showcase your product with behind-the-scenes videos, recipe ideas, and customer testimonials.
- Email marketing: Build a list early with a simple landing page or checkout prompt. Offer promotions, updates, and seasonal products.
- Sampling: Offer samples at farmers markets, retailers, or via mail. Sampling increases first-time purchase rates.
- Influencer partnerships: Work with food bloggers or micro-influencers who align with your brand. Provide free product in exchange for honest reviews and exposure.
- Certifications: Apply for labels like USDA Organic, Non-GMO, or Certified Gluten-Free if eligible. These build consumer confidence and open up retail channels.
Tracking marketing metrics like sales data, social engagement, and repeat customer rates will help you refine your approach.
Download 20+ Free Food Marketing Templates to Get Started
Checklist for how to sell food products
Use this checklist to track your progress as you get ready to launch and grow your food business:
- Confirm food laws and licensing requirements
- Define your product niche and target customer
- Develop and test your product for consistency and safety
- Create compliant packaging and labelling
- Register your food business and get required licenses and insurance
- Set up a food-safe production space
- Calculate costs and set wholesale and retail pricing
- Build your brand and design your packaging
- Sell through online platforms, markets, and retail stores
- Track inventory and assign batch numbers
- Plan for shipping, delivery, or pickup logistics
- Promote your product through digital and local marketing
Local Line makes it easy to sell food
Selling food products requires more than culinary talent. It takes thoughtful planning, regulatory compliance, and reliable production, delivery, and customer engagement systems. Whether you are producing at home or preparing for retail, every part of the process, from product development to inventory and fulfilment, affects your results.
Start with a clear product idea, test it through local sales or farmers markets, and take the time to build your brand, pricing, and supply systems. Putting in the work on licensing, labelling, and marketing early helps you avoid complications and earn long-term customer trust.
If you are learning how to sell food, Local Line is an all-in-one food sales solution built specifically for producers. It helps you manage pre-orders, deliveries, inventory, and customer communication in one place so you can focus on making and selling great food.
With the right tools and systems in place, your food business can grow with confidence and reach customers wherever they shop.
Ready to sell food with ease? Get started selling wth Local Line
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