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Shrinking Your Products for Foodservice

Mini-size products are a staple at hotels, on airplanes and in other foodservice settings.

By Eva Meszaros

Photography by Marc FerriI; Food Styled by Leslie Orlandini; Props styled by Fran Matalon-Degni

The word foodservice generally brings to mind larger-volume items with practical never-to-be-seen packaging. But then there is the other side of foodservice- miniature products created for special promotions, gift bags or to service the airline and hotel industries. We look at the benefits (including new clients and exposure) and the challenges (including manufacturing issues and costs) of sizing down your products.

Single-serve foods are a staple of the travel and luxury industries, whether it’s special airplane snacks and drink mixers, smaller products for the hotel room minibar or grab-and-go promotional items at spas or country clubs. As national interest continues its shift toward better-quality food products and ingredients, many foodservice clients want to upgrade their offerings and are reaching out to specialty food companies.

Four suppliers that are active in this segment- Borsari Food Company, Hubbard Peanut Company, Lake Champlain Chocolates and Robert Rothschild Farm- share how they found success in going small, and what advice they have for other producers looking to make the move to single-serving foodservice.

Getting Started

There are different paths into the bite-size-product market but, for these companies, going small often started by filling a niche or a request.

“We began more than 45 years ago by hand-packaging small three-quarter-ounce bags for the Virginia Peanut Growers Association to use for promoting the peanut industry,” says Lynne Rabil, president of Hubbard Peanut Company, Sedley, Va., which then built a client base largely on word-of-mouth references. The company’s current offerings include 1-ounce bags of Hubbies salted peanuts, available at hubspeanuts.com and used by hotels, gift-basket businesses and country clubs, as well as under private label for various trade organizations.

Lake Champlain Chocolates, Burlington, Vt., also has a long history in producing smaller products. “Offering single pieces of chocolate was really how Lake Champlain Chocolates started,” says Meghan Fitzpatrick, the company’s marketing specialist. Though the line began for retail, Lake Champlain’s products moved into foodservice as nearby hotels and resorts started looking to feature local Vermont products. This has proved lucrative to the chocolatier, especially for weddings.

“People want to feature local, high-quality products that will impress their guests,” Fitzpatrick says. “We are active in the wedding community and have relationships with organizations like Wedding Wire (a wedding-planning website) that have given us more exposure to their audience,” she adds.

Lake Champlain offers a vast array of products, such as Chocolate Hearts (popular at weddings and spas), Thin Dark Mint Squares (often used for turn-down service in hotels) and Chocolates of Vermont, which feature handcrafted molds such as bee hives for the Honey Caramel flavor. Bulk chocolates, wrapped in custom embossed foils, are available online in a variety of packages, such as Dark Chocolate Squares at $65 for 110 pieces.

Borsari Food Company, Lakewood, N.Y., maker of Borsari Bloody Mary Mix, took a proactive approach. The founders, husband-and-wife team Adolph and Betsy Morando, started out by pairing 4-ounce versions of their concoction with vodka and gin mini-bottles as guest favors for local weddings and golf tournaments. The gift became so popular that they decided to reach out to TheKnot.com, another planning tool for weddings, which still sells the product today. Borsari also sells the mix to boutique hotels.

Existing connections were a boon for Robert Rothschild Farms, Urbana, Ohio. The snacks and condiments producer had made contacts through its broker network, which had existing relationships with some buyers. But the company’s presence at Fancy Food Shows is what brought about connections with major U.S. airlines, hotels and a casino group, says Rob Jelinek, vice president of sales and marketing for Robert Rothschild. “A number of those relationships have begun via an introduction either in San Francisco or New York,” Jelinek shares. Through leads and introductions at the trade show, the company has brought to foodservice products such as its top-selling Grab ’n Go, which pairs Robert Rothschild pretzels with its flavored dips.

The Challenges

Even if a customer requests these special-size products, the logistical, financial and positioning considerations must be evaluated before deciding if this is the right market for your business. At first, for example, Hubbard Peanut Company had issues getting a return on investment, due to the high upfront cost of buying the necessary equipment for the endeavor.

“A tremendous number of small bags must be sold in order to recoup the costs within a reasonable amount of time,” Rabil explains. “Whether it is through multiple accounts, a commitment from one or two large accounts or a combination of both, there must be strong, regular volume. A good alternative for small companies is to identify someone willing to co-pack,” she advises.

There is also a worry that the smaller, less-abundant presentation can impact the overall opinion of the product. “Single servings can sometimes be perceived as not being premium,” Lake Champlain’s Fitzpatrick explains, so assessing whether it strengthens or detracts from the brand is important when considering a foray into micro-packaging.

The Benefits

Though there are obstacles to consider, getting into the single-serving foodservice business can be worthwhile. New customers, increased profits and great exposure are all potential wins for a business looking to expand its foodservice offerings. And success can go beyond single-serving sales.

Borsari Food Company experienced a boost in larger-package sales and in its customer base after introducing its mini Bloody Mary Mix. “Those who have purchased the micro-sizing are repeat customers,” says Betsy Morando. The success of its 4-ounce drink mixes has extended to the company’s other products, including the 32-ounce container. “The foodservice producers are able to ‘sample’ products with the hope that the consumer will come back to buy the full-size regular packaging,” she adds.

Fitzpatrick agrees. “The strategy behind offering these individual pieces was that people could try one without committing to buying an entire box of chocolates,” she says. “Once they had one bite they would come back for more- and, we hoped, end up buying that bigger box.” Beyond that, satisfaction with the regular product can lead to foodservice orders for weddings or business events.

Questions to Ask

Robert Rothschild Farms’ Jelinek suggests a handful of questions to ask before diving into this segment of foodservice:

Does your product lend itself to easy use and application?
Are you committed to this?
Are you prepared to deal with high service expectations from your customers?

After making these considerations, companies then need to create a solid business strategy before courting potential customers. “Cost and capability are critical,” Jelinek emphasizes.

Timing is another factor that can’t be stressed enough. Rabil of Hubbard’s remembers turning down major airlines in the past because of unwillingness to commit to more than a year-long contract. Equipment expenses were nearly debilitating for Hubbard at the outset, so long-term commitments were vital for the business. “Some may say we should have jumped in at that time,” she recalls, “but our style has always been to walk before we run.” |SFM|

Eva Meszaros is associate editor of Specialty Food Magazine.

This article was featured in the July 2011 issue of Specialty Food Magazine. See other articles in this issue at: July 2011 Specialty Food Magazine.