By Ben Rucker and Pablo Coronel, CRB
Now is a time of great opportunity for food entrepreneurs. Consumers are demanding more choices, and e-commerce is connecting buyers and sellers worldwide. Food startups can grow in new ways and more rapidly than was previously possible, but when success maxes out production capacity, the entrepreneur faces a new challenge—how to scale to keep up with demand.
The changing face of food innovation
The days of large companies dominating food innovation are over. Meeting consumers’ quickly changing culinary needs requires the nimbleness of a small company. Whether it’s a special dietary preference, trendy ingredient or flavor, appreciation for artisanal creation, sourcing preferences, or even a traditional family recipe, new ideas are coming from startups, which can test a concept more rapidly than a large company.
In response, large food companies are embracing acquisition as an innovation strategy—more good news for the entrepreneur aspiring for a big payoff.
However, the small size that enables a startup to move quickly can also be its Achilles’ heel when it comes to scaling up. Large companies have entire departments devoted to food scale-up that include food scientists, regulatory experts, process engineers, chemical engineers, and recipe formulators. Today, many home chefs and college students with a product idea or family recipe are the entrepreneurs who need to scale-up to a larger production. The operational complexities of scale-up can be a surprise and lead to unnecessary costs and delays.
Resources are available for small startups who need the temporary help of experts. Learning from others and planning ahead can help them avoid common pitfalls of scale-up. With that in mind, we offer 12 lessons for a successful scale-up.
1. DO adjust your formula for the larger scale.
Formula scale-up is not as simple as multiplying. In a home kitchen, you can double or triple a recipe and still use the same ingredients, measuring tools, and baking time. But when a yield increases from 10 to 2,000 pounds, things change:
2. DON’T assume your sourcing strategy will stay the same.
You were buying an ingredient in a 5-gallon pail. Now, you are buying it in a 50-gallon drum. Sourcing larger quantities can impact you in a number of ways:
Ingredient costs generally don’t have as significant of an impact on profit margins at a small scale. When scaling up, however, a costly ingredient could be a bigger hit to your bottom line. You may need reevaluate whom you’re buying from, or your formula may need to be rewritten to meet your target cost of goods sold.
3. DO consider changing your ingredient delivery methodology.
Another part of production that is impacted by scale-up is the ingredient delivery method you choose to use. For example, in a home kitchen or laboratory setting, incorporating a stick of butter into your recipe is easy—just cut it into pieces and transfer them into the mixer. However, when you are handling a 50-pound block of butter, your method is vastly different. You may need intermediate steps in your process to pre-treat your ingredients. It is also likely that you will need additional storage and staging areas for pre-staged ingredients and equipment, and you will exert more physical effort to transport and transfer ingredients. Other considerations include:
4. DON’T ignore the complexities of mixing and your specific needs when purchasing mixing equipment.
Mixing is a complicated science. Mixing a 50-gallon tank of ingredients is very different from mixing a 2,000-gallon tank. Many types and sizes of mixers are available to meet your specific needs. Determining which type (e.g., high shear, static, milling, anchor/helical) and size of mixer to buy requires expert knowledge. A wrong decision can be costly from food quality, production, and replacement cost standpoints. Be sure to factor the following considerations into your decision:
5. DO factor in ingredient kill steps.
Safety is a foremost concern for suppliers, consumers, and regulatory agencies. Products must not contain harmful microorganisms, and as such, a kill step—cooking, pasteurizing, or a pathogen-killing wash—is typically needed to ensure food is safe. Public safety and your company’s reputation is at stake. A hazard analysis of each step of your production will determine when and how the risk of microbial contamination can be minimized.
What may seem like a minor step, such as not pre-treating an ingredient to kill a potential pathogen or bacteria, could be enough to trigger a recall and destroy your brand reputation. The devil is in the details, and it is critical to have the expertise to know how and when a kill step is needed.
6. DO consider the impact of larger product quantities on heating and cooling.
Larger surface area and greater volume will impact heat transfer for both heating and cooling. When heating larger quantities, it is tempting to increase the temperature to increase the heat transfer to the product. Cooking for shorter times can improve flavors and nutrient retention. But for some heat-sensitive ingredients, higher temperatures can cause products to burn, a problem that affects the quality of the product and the cleanup. Larger quantities also impact your utility usage. How can you heat and cool most efficiently and to meet food safety requirements? Questions you should consider for your new process include:
Pilot testing can help determine the most efficient process for these costly process and utility changes or upgrades.
7. DON’T rely on trial and error to optimize your process.
Optimizing a new process can be very costly and time-consuming, but it doesn’t have to be. The challenges include dozens of parameters, changes in workflow, equipment decisions, facility layout, and scheduling both product and manpower. And the cost associated with experimentation isn’t cheap. Consider that you will need to pay for raw materials, manpower, possible rental of equipment, and use of space. This is an especially high price to pay when you’re also unlikely to fully optimize a process using experimentation alone.
Hundreds of questions need to be answered to properly scale up:
Simulation software is one solution.
Full scale-up can be simulated with predictive modeling software. This is how larger companies optimize their processes, and it eases the transition to higher production. While smaller companies cannot afford to buy simulation software, consulting firms make it available. When most process questions are answered by the simulation, the time and costs needed for experimentation are significantly reduced and tragic mistakes are avoided.
8. DO consider production requirements and future needs when making equipment decisions.
Understand your existing stock keeping units, new products in the pipeline and customers’ seasonal requirements when making equipment decisions. You’ll also want to factor in your ingredient selections, allergens, and order of additions when selecting equipment and testing. An equipment sizing exercise is recommended to develop production requirements:
9. DON’T ignore the impacts of scale-up on personal safety.
Workplace safety is a critical need for you and your employees’ well-being. Consider the fact that lifting and dumping larger raw material quantities into bigger equipment is more ergonomically challenging, not to mention that cleaning this equipment also takes more time and often requires harsh chemicals. Personal safety can only be ensured with a well-developed plan for all stages of production and sanitation. Consider the following questions:
10. DO make compliance with food safety regulations a priority.
Regulatory compliance is not optional, and your business needs to adjust to the rules and regulations at state, local, and federal levels. It’s important to understand if your business falls under Food and Drug Administration or United States Department of Agriculture jurisdiction and to understand which regulations apply to you.
At small production levels, keeping a kitchen clean and sanitary is relatively easy, but when you receive 20,000-gallon tanks of oil or are creating 5,000 gallons of product per hour, cleaning is more challenging. Food safety requires a commitment from the top down, and procedures must be in place to deal with all possible problems that can occur during production. Without professional guidance, you can quickly get into regulatory trouble. Be sure to consider the following factors:
11. DO reevaluate cleaning methods.
Changes in formulation and equipment sizing impact cleaning. As equipment becomes larger, cleaning by hand becomes less efficient.
12. DON’T overlook yield loss.
Minimizing product loss is one way of increasing your yield. Depending on your process, there are a number of ways to maximize the sellable product:
Certainly, the higher the value of your product and the more frequent your changeovers, the more important product recovery will be.
Scale-up is an exciting time with much hope and promise, yet it is also a vulnerable time for young businesses. Innovators who do not plan ahead can make tragic mistakes and suffer losses too great to survive. The challenges of scale-up are not insurmountable. Plenty of entrepreneurs have succeeded, and you can too! A key to success is learning from others who have navigated the start-up path ahead of you.
About The Authors
Ben serves as director of process technology at CRB. In this role, Ben provides clients with expertise and an in-depth understanding of process design and equipment. Prior to joining CRB, Ben spent 22 years with A&B Process Systems Corp. where he held several positions of increasing responsibility, including lead fabricator, plant team lead, lead manufacturing estimator, project manager and technical sales manager. Learn more about Ben here.
Pablo Coronel, PhD
Pablo serves as director of food processing at CRB. He holds a doctorate in food science and has 20 years of experience as a process engineer and food scientist. He makes it his mission to combine both roles in a seamless and structured way. His expertise includes process and product design and development, novel technologies and hygienic manufacturing. Pablo is recognized by the FDA as a food safety process authority and has been the recipient of six industry awards in recent years. Learn more about Pablo here.
CRB is a leading national firm in the design and construction of food and beverage facilities. Our full service team of engineering, architecture, construction and consulting professionals provide insight into new technologies and methods, process and packaging integration, lean design and food safety. Founded in 1984, we have grown to a team of more than 1,000 passionate professionals in 15 offices worldwide. Our single-minded focus on putting our clients’ interests first—every day, on every project—defines us as a firm. Learn more at crbusa.com/food-beverage