How to Start a Food Processing Business in Canada

Starting a new business can be overwhelming, especially so in an industry that is as highly regulated as the food industry. Here at Localize, we love supporting awesome new food brands. To lessen the intimidation of getting started, here we outline the basic steps any entrepreneurial-minded individual interested in selling a food product should consider.

YOUR PRODUCT IDEA

• Every successful business starts with an idea — what product(s) are you inspired to make?

MARKET RESEARCH

• Meet up with members of your community already running food businesses — ask them about the reality of starting up, their tribulations, and for advice to inform how you proceed.

• Product test and do market research before investing too much time, money, and resources to identify your niche market and solve problems before they come up.

• Fine tune your concept, distribution, price, and promotion accordingly.

Learn more:

Canadian Business Network – Guide to market research and analysis

CREATE A BUSINESS PLAN

• Outline what your business will do, how it will be operated, and set realistic goals.

• Learn how to scale your production for commercial sales.

• Get your finances in order. Secure funding to grow your business once you have your initial product, business plan, and a small cash flow (no matter how minuscule) — think about crowd-funding and government grants.

• Find a team that aligns with your company values and culture.

Learn more:

Canadian Business Network – Writing your business plan

REGISTER AND NAME YOUR BUSINESS

• Decide what business structure suits your business plan best:

1. Sole proprietorship – You are on your own and assuming all responsibilities, risks, and triumphs.

2. Partnership – You and one or more partners share all responsibilities, risks, and triumphs.

3. Corporation – You run the business as a separate legal entity from you and your assets.

4. Co-operative – Owned and controlled by members who benefit from the business.

Learn more:

Canadian Business Network – Registering your business

MANUFACTURING FACILITY

• Consult with your municipal office to ensure your prospective location is zoned properly for a food business.

• To mitigate costs, consider using a co-packer,renting out a licensed commercial kitchen and processing space, or joining in a shared kitchen.

• Map out logistics of procurement, receiving, storage, and distribution.

PERMITS, SAFETY, AND REGULATIONS

• Refer to the Canadian Food and Drugs Act to set up your production, labelling, and promotion to meet federal mandates.

• Search here to see if you require any additional permits based on your specific business and location.

• Inform your municipal public health unit of your prospective food business, set-up a meeting with your Public Health Inspector, and follow all health and safety requirements.

Learn more:

Canadian Food Inspection Agency – Guide to Food Safety

LIABILITY INSURANCE

• Product liability insurance protects you in a situation where consumers endure illness or injury from the food that you sell.

• Costs approximately $300-$700 annually, depending on size and risk evaluation.

Learn more:

Insurance Bureau of Canada – Business insurance coverage

PACKAGING AND LABELLING

• Balance what you want to communicate with shoppers on-package with what is required to include by law.

• Packaging can go beyond just checking the boxes of compliance — quality brand design and the creative incorporation of storytelling on-package are hugely influential for marketing, promotion, and advertisement.

Interested in exploring how to go beyond the package to tell your story and share more information consumers care about? Learn about our scannable graphics that link to your online Localize profile here. Not yet a Localized vendor? sign-up free.

• Check out The Food Maker’s Guide to Labelling in Canada and learn how to meet specifications set out by Food and Drugs Act (FDA) and Regulations (FDR), Consumer Packaging and Labelling Act (CPLA), and Canada Agricultural Products Act (CAPA).