If you want to learn how to start a frozen food business from home, you have to think differently.
The truth is, the frozen food section is one of the most competitive sections in a grocery store. Frozen food is also one of the most difficult products to sell online. So either way you go, you’re going to have one hell of a time. So what should you do?
In my opinion, you have to play moneyball.
When you can’t play like the big guys, you have to go by a completely different paradigm. One that will give you a chance to win by looking for untapped opportunities others don’t see.
Let’s talk about it…
Can I Sell Frozen Food Online?
The short answer is yes.
The long answer is yes, but you have to be much smarter and more attentive with your logistics. Otherwise, your customers will receive thawed products, which can lead to a mess you really want to avoid unless you prefer furious customers over happy ones.
It’s for this reason why most frozen foods are sold only through physical retail.
But with ecommerce growing at a rapid pace and the flexibility it gives to new business owners, it would dumb not to take advantage of it. Not to mention that it can give you a better chance to get your product in retail stores since you now have data to prove your product sells and an audience that can help generate more foot traffic to those stores.
Is The Frozen Food Business Profitable?
In my opinion, if you can find multiple big businesses in a category, you can safely say that category is profitable. In frozen food, there are multiple billion dollar and 9 figure brands. There are also multiple highly successful DTC brands who also sell through retail.
None of this guarantees that you will be profitable.
However, it does prove that it is 100% possible to be profitable.
The big lesson here isn’t that frozen food can be profitable. That is a given. It’s if YOU can be profitable, which ultimately will come down to your accounting skills. If you can manage the logistics and marketing costs of frozen food, then it’s not only possible to be profitable, but it’ll be inevitable.
So yes, the frozen food business is profitable… if you make it so.
How Much Does It Cost To Start A Frozen Food Business?
There are 2 main things to consider when it comes to starting costs.
1/ Cost per unit
Cost per unit is the actual cost to produce an individual unit of your frozen food. Basically, if you use expensive ingredients, your cost per unit will increase. The cheaper the ingredients, the lower your cost per unit. Same for packaging.
Minimums are the minimum amount of units your manufacturer allows you to purchase so you can do business with them. Since they’re also a business, most frozen food businesses will need decent sized minimums so they can make a profit.
Your cost to start a frozen food will be directly affected by these two factors.
To give you a starting point though, I suggest budgeting anywhere between $25,000-$50,000 to start a frozen food business.
It’s completely possible to start with less or more, so take this estimate with a grain of salt.
If this sounds like too much, the best thing you can do is look for a frozen food category that costs less per unit and manufacturers who don’t require huge minimums to get started.
How To Manufacture Frozen Food
Manufacturing frozen food is a simple process that takes a lot of time and energy.
Essentially, you first have to figure out what you want to manufacture. This includes not just the product type, but all of the specific ingredients and measurements. At least, as much as you can before talking to any sales reps. So you’ll be spending a lot of time on Google at the start.
Once you’ve figured out the product details, it’s time to look for manufacturers.
All you have to do is go to Google and type in your “[category] manufacturer” or “[category] private label”. For example, “frozen pizza manufacturer” or “frozen pizza private label”.
This will lead to a ton of potential partners.
Your job will be to go through every page, shortlist the viable manufacturers, and then call their sales reps one-by-one. It’s a pretty grueling process, especially if it’s your first ecommerce business and you have a lot of potential partners to work with. However, it’s necessary.
From there, you ask them if they can make your product to your specifications.
They’ll either say yes or no. If yes, ask them for next steps. If no, move on.
Frozen Food Business Plan
The secret to a bulletproof business plan for frozen food is to understand the nature of frozen food. Namely, the high shipping costs and shipping difficulty of your products.
Since these 2 things directly affect your profitability, the first step is to build an audience.
With audience building, you’ll get to promote your frozen food without having to pay a cent in advertising. This will allow you to be more profitable, which is absolutely critical at the start of your journey. You can then later diversify by using everything you’ve learned from your sales.
So 6 months before you launch, you’ll want to start producing content.
This means picking between a blog, Youtube, or TikTok and start talking about your topic. For example, if you’re planning on selling frozen pizza, make your content about pizza.
One more before you launch, you’ll want to send people over to an email list.
Once launch day comes, your job is to then to sell out your 1st batch of inventory by promoting it to your audience. If everything turns out well, launch a second, bigger round of inventory. And if that goes well, launch your 3rd batch of inventory and leave your shopify store open permanently.
From here, you’ll want to keep growing your audience.
You can play around with all sorts of marketing strategies to help grow your brand, but audience building is going to be the most important thing a frozen food brand can do to make sales online. It’s the only way to get around your shipping difficulties.
How Do I Advertise My Frozen Food Business?
Paid advertising is more difficult with frozen food products.
With that said, there are 2 main things you can do to make it easier.
First, you need to optimize your funnel. This means increasing your conversion rates, increasing your average order value, and increasing revenue earned within 30 days post-purchase.
This will allow you to handle the higher-than-average cost to acquire a customer.
Second, you’ll want to pick an ad platform that is cheaper-than-average to advertise in. Facebook and Instagram are still great. However, I would also look into Youtube and TikTok ads. It doesn’t mean you should do all of them. In fact, you should only pick one. If you don’t know which ad platform to choose, just pick Facebook and Instagram.
Lastly, you’ll want to triple down on ad creative.
Ad creative is going to be the biggest difference maker when it comes to the cost of acquiring a customer. The better the creative, the higher your ROAS or “return on ad spend”.
Advertising is a game of math.
Lower the cost of acquiring a customer and increase the amount earned per customer.
Frozen Food Marketing Ideas
There are plenty of frozen food marketing ideas you can try out.
If you’re already doing well with owned media, your next best organic source of traffic is earned media. This includes appearing on sites like Forbes or influencer marketing. Either way, this is a “warm” traffic source that doesn’t cost you anything to do besides shipping products.
This is going to be key to growing your frozen food brand.
The most important frozen food marketing idea though is to think of ecommerce as a launchpad that allows you to take your product to retail. Since the majority of frozen food sales still happen in physical retail stores due to the economics behind the business, you should optimize for that.
The best part?
You can use your audience building and earned media marketing strategies to directly lead to physical retail sales, which then opens up your opportunities to get you inside bigger stores.
Rinse and repeat.
Can You Sell Frozen Food On Amazon?
Amazon is the biggest online retailer in the world. Every business, regardless if you’re a frozen food business or not, should consider putting at least a few products on Amazon.
Unfortunately, you can’t sell frozen food on Amazon.
This doesn’t mean you shouldn’t figure out a way to use Amazon though. In some cases, you can use Amazon to introduce people to your brand.
For example, Night Food sells sleep-friendly ice cream.
However, they’ll also sell sleep-friendly health bars on Amazon.
It’s not exactly the most ideal situation, especially if you’re just learning how to start a frozen food business, but it allows them to use Amazon and funnel some of the awareness to the brand. It also prevents competitors from taking over Night Food’s keywords