Thinking of learning how to start a popcorn business from home?
Whether you’re thinking of launching the next Orville Redenbacher or you’re coming up with a new keto-friendly popcorn for crossfitters, you’re going to want to know the ins and outs of launching a popcorn brand online.
The popcorn business is a multi-billion dollar category, so there’s plenty to go around.
Let’s talk about it…
Is A Popcorn Business Profitable?
Fun fact: Popcorn is actually the highest margin product in a concession stand.
There are tons of successful popcorn brands from Orville Redenbacher to Skinny Pop. The mere fact there are multiple profitable popcorn brands today proves the popcorn business is profitable.
That’s not to say popcorn is immune to bad unit economics though.
Every category of food will have profitable and unprofitable brands. So it’s up to you to make it profitable by being smart with your unit economics.
How Much Does It Cost To Start A Popcorn Business?
We’re going to focus on creating your own brand of popcorn with a 3rd party manufacturer.
Ultimately, there are 2 main factors that will determine the cost to start a popcorn business.
Cost per unit – the cost per individual unit of your product
Minimums – the minimum amount of inventory you must purchase
What determines the cost per unit and your minimums will come down to the quality of your product and the manufacturer you work with. So if you want to build a super high end popcorn business, you’re likely going to pay a lot more than someone who is just private labeling an already existing and probably cheap popcorn.
Of course, the solution isn’t to just make the cheapest popcorn.
The solution is to be intentional with the product you’re making and the brand you’re building.
This is why I generally recommend you budget $5,000-$15,000 to start a popcorn brand.
It’s very possible to start with less and very possible to start with more. Again, it’s all going to come down to the cost of producing each bag of popcorn and your manufacturer’s minimums so you can get started.
The Popcorn Business Plan: Build
Almost all food and beverage beverage brands deal with the same problem – low price points. The same goes for even premium priced popcorn. This makes it hard to make any sort of paid advertising to be your primary source of traffic when starting a completely new brand.
That’s why I suggest you start building an audience 6 months before you launch.
First, pick a channel. This can either be a blog, Youtube, or TikTok. Then you’ll want to produce content that will attract the kind of customers you want. For example, you may want to do recipes that involve popcorn. You can also do TikTok jokes related to popcorn. You can also produce keto-related content if you’re launching a keto popcorn brand.
In all cases though, your goal is to build that audience so you can minimize acquisition costs.
The initial jumpstart will also help you be more profitable, so you can order larger batches of popcorn, which in turns leads to higher profit margins per unit. This then makes paid advertising to be a more viable source of traffic as you grow.
The Popcorn Business Plan: Launch
One month before launch, you want to start sending your traffic to an opt-in page that promises people notifications about your new upcoming popcorn brand. This will be your highest performing marketing channel during the launch, so don’t take this lightly. It’s important.
Once it’s launch time, you’ll want to start promoting your 1st round of popcorn.
I’m specifically saying “1st round” because you’ll actually want to take a “stair step” approach by eventually having a 3-round launch sequence. In other words, you want to sell out your 1st batch of popcorn first before ordering another batch.
This way, you can remove the stress of having to be perfect with cash allocation.
It also gives you breathing room to calmly get customer feedback on your product so you can make any necessary changes to the product and packaging. The extra profit margin you have because you launched to an owned audience also makes it more likely you’ll be able to afford these improvements, as well as a bigger batch, which in turn gives you a higher profit margin.
By the 3rd round, you should have enough confidence in your product and data to keep your store opened permanently.
The Popcorn Business Plan: Scale
Once you’re ready to scale, it’s time to broaden your horizons.
There are 4 main traffic sources to consider.
If you have a strong brand story and USP, look into earned media. This would include PR such as getting on Forbes, as well as influencer marketing. The great part about PR is that it’s essentially free traffic, while also doubling down as proof for any paid media operation.
Second is paid media. This is primarily going to be Facebook and Instagram ads. If you do everything right during the build and launch phase, this should open up to be a viable marketing channel. As long as you keep a look at your ROAS, you should scale the fastest with paid.
Third is Amazon. There are a ton of successful popcorn brands on Amazon and for good reason… it’s the number one search engine for ecommerce products. This will likely be an important channel since popcorn relies on volume to make a good profit.
Lastly, is retail. The real power of the internet is to act as a launchpad to get you into physical retail stores. It doesn’t mean you can’t build an ecommerce-only popcorn brand. It just means that physical retail is the simplest, most reliably profitable way to scale a popcorn brand. This is mostly because CAC is stable, so you can just focus on getting into more stores.
The key here is to work on one channel at a time.