Entree to the Food Business, Everythings Coming Up Organic

Organic foods are everywhere and for a simple reason: Every day, more and more people are demanding them as part of a healthy lifestyle. You can cash in on this growth market if you know what you're getting into, have a clear vision

Fifteen years ago, Marla Reis wanted to open an organic teahouse. Instead, she went to graduate school, became a psychologist and an Orthodox Jew, had three kids and started eating only organic food.

All of that fueled the start of her dream business – Café Emunah, a spiritual, organic kosher café with a Zen minimalist design in Ft. Lauderdale , Fla. It’s not the teahouse she once envisioned, though it does have an organic tea bar. Reis’ new café reflects her life values – part of a growing trend in the food industry of blending personal values with business for long-term success.

While healthy eating is a hot channel into the food business today, Reis believes it’s not a passing fancy. “Once people incorporate it into their lives, it becomes a mainstay,” she says.

The sector is hungry and looking to be fed, with 64 percent of all U.S. consumers buying specialty foods in 2006, according to National Association for the Specialty Food Trade, in New York . And most of those making specialty food purchases as part of a healthy lifestyle are 18- to 24-year-olds.

Environmentalism Aspects

Steven Batzofin created his 2005 startup, Earthwise Bag Company, to grab his piece of the niche: environmentally friendly products. The California resident makes reusable non-woven, poly-based shopping bags that are sold nationally in 2,700 stores for about $1 each.

Batzofin started up with his uncle, Stan Joffe, a marathon runner who noticed plastic supermarket bags in trees after heavy rains in L.A. “We’ve always been environmentally conscious,” Batzofin says. “This was a nice project for us and one we thought we could make a difference with.”

As in all startups, passion is key, Batzofin says: “Any store will tell you that being organic is one of the fastest growing areas. [But] it’s about your passion for what you’re doing and what you’re selling – then learning a little about the supermarket business.”

‘A Meaningful Point of Difference’

Terry Frishman, a New York business consultant who guides food startups, says it’s crucial to create something that leads consumers to choose you over the competition. “There’s lots of ways to develop a meaningful point of difference,” Frishman says. “It could be organics, social causes, environmental.

“How can you leverage consumer behavior? Come up with something that really appeals to what’s going on in the world.”

Gigi Lee Chang did just that. Raised in California and now living in New York , Chang made baby food from scratch when her son Cato began eating solids, mainly because she was raised eating home-cooked whole foods.

“We like to eat on the healthy side and prefer to cook our own food,” says Chang, who created Plum Organics frozen baby food in 2005, and is poised to reach $1.5 million in sales in ‘07.

With a business background, Chang understood how to start a company – but she knew nothing about the food industry. She researched for nine months, and was certain her products would be a hit because other moms kept asking how she made Cato’s meals.

She also sat down with supermarket buyers. “There’s a lot you can learn from retailers,” Chang says. “Get five or 10 minutes with them and shoot your idea by them or get their input.”

She also advises closely studying other products aimed at your ideal customer. Find out what resources they used, including package designers, distributors and manufacturing plants. Chang looked at other healthy children’s products and even called some of their manufacturers.

Fundamentals, Fundamentals

Hot as the health food niche is, getting in and succeeding demands the same careful research and legwork as any startup. That means a tight concept, thorough business plan and clear vision. “You have to go in with a very innovative sense,” Reis says. “People may try to dissuade.

“Stick to your concept, and stay true to your vision. All the decisions you make have to be informed by that initial vision.”

Lynne Meredith Schreiber is a StartupNation contributing writer .

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