Business Basics for Alberta Food Processors - Facilities

 
 
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 What kind of facility do you need? | Home kitchens | Food establishment permitted facilities | Co-packing

What Kind of Facility Do You Need?

While working on product development, you also need to be thinking about your production facilities. The following should be considered:

  • where you plan to sell your product
  • availability of facilities in your community
  • amount of money you have to invest in buildings and equipment
  • long range plans for growth
Home Kitchens

If you prepare your product in your home kitchen, you are limited as to where you can sell the product. Alberta Approved Farmers’ Markets are your only option.

Farmers’ markets have restrictions on types of foods that can be sold, and regulations for the safe handling of the food. For example, no one can offer for sale home canned foods other than jam, jelly, pickles and relish. Pickles and relishes are products prepared from vegetables and fruits with salt, sugar and/or vinegar. Pickles include cucumbers, green pepper, beets, carrots, mushrooms, kimchi, sauerkraut, green tomatoes and onions. Relishes are a combination of these products. Other products need prior approval from the regional health authority.

Foods that may be sold include fresh vegetables and fruit and potentially non-hazardous home prepared food, such as: breads, buns, muffins, fruit leather and dry soup starters. Potentially hazardous foods can only be sold at farmers’ markets if they have been prepared and packaged by or in a facility that has a food establishment permit.

Farmers’ market requirements are a part of the Food Regulation (AR 31/2006) of the Public Health Act. Check with the regional health authority for complete details.

Food Establishment Permitted Facilities

If you want to expand sales beyond the farmers’ market, or if your product does not qualify for farmers’ market sales, you will need to explore other facility options. To sell food products in retail or to food service establishments, you must produce your product in a facility that has a food establishment permit issued by the regional health authority.

It is important to explore alternatives for food establishment permitted facilities. One option is to develop a separate area in your home. Another option is to rent commercial space. The third alternative is to build a processing plant.

Home-based Food Establishments
A home-based food establishment must be separate from your domestic kitchen. You must have a way to keep your domestic food activities completely separate from your business. Restrictions and regulations on operating a home-based food business vary with the municipality. Zoning regulations and the impact on your neighbors will be considered. You may or may not be required to submit plans to get a development permit. Before you can begin operating you will be required to get a food establishment permit from the health authority in your area.

Consider carefully the pros and cons of a home-based business. What affect will it have on your family now and in the future? What will the impact be if you want to expand?

Commercial Production Facilities
Before you build or renovate space for your own processing area, you may want to see if you can rent space from an established facility with a permit. These can include: community halls, restaurants, churches, local caterers and other food processors in your area with approved commercial space available for rent or lease.

It is a good idea to consult with the Public Health inspector about using the facility. You will still need a food establishment permit for your business, as well as a business license.

Examples of standard requirements:
  • All surfaces, including the floor, walls, ceiling, counters, cupboards and shelving that is located in any storage, food preparation area or walk-in cooler/freezer, must be constructed of materials that are smooth, non-absorbent, free of cracks or crevices, easily washable, and of good repair and sound condition.
  • Dry food storage space must be adequate for the size and type of food facility.
  • Cold food storage equipment must be sufficient to store all perishable foods, and equipped with thermometers.
  • Storage space for your employees’ personal effects (i.e. purses, shoes, clothing) is required. Lockers located in the staff washroom are an example.
  • All foods must come from an approved source. All water must be potable.
  • A hand-washing sink is required in the food preparation area.
  • There are two options available which meet the dishwashing requirements. The first is a three-compartment stainless steel pot sink, complete with drain boards and back splash, that’s deep enough to submerge the largest cooking utensil. The second is a two-compartment sink and a commercial dishwasher, which meets National Sanitation Foundation requirements. Extra water heating equipment may be required if a high temperature dishwasher is used.
  • An approved method of ventilation is required to remove odors, grease, smoke, steam and heat from areas where food is prepared.
  • Adequate lighting and ventilation are required. Adequate make-up air is required for the proper operation of the kitchen exhaust system. Lights must be covered with shatter shields.
Co-packing

A co-packer is a food processing company that processes, packages and distributes a food product on behalf of another company. You may want to consider this route before making a major investment in facilities and equipment. If you are short of capital or if producing your product requires special equipment like bottling machinery, safety sealing or packaging equipment, or industrial kitchen equipment, this kind of arrangement may be a good starting point.

A contract with a processor spells out responsibilities and time lines for the processing of the product. Confidentiality agreements, drawn up by a lawyer, usually protect companies from having the co-packer take the recipe and produce a similar product that they can market while processing the product. A confidentiality agreement may be in force up to two years after the co-packer ceases to pack product for that company.

Using a co-packer can also give you the ability to test a product before launching into a full-scale production operation. You may be able to negotiate a number of services: recipe development, ingredient procurement and quality control. Processing costs are usually based on a per case or per pound basis.

Some small food processors have used hospitals, caterers, restaurants or bakeries as co-packers. They may process the products in off-hours to utilize their own staff and equipment more efficiently.

The Alberta Agricultural Processing Industry Directory lists companies by product category and is a good place to start searching for a compatible co-packer. Co-packers make sense if you want to tap into the expertise of an established food processor and utilize its processing and packaging equipment until you have established a strong market.

For a copy of the directory check Alberta Agriculture and Rural Development’s website at: http://www.agriculture.alberta.ca or call a New Venture Coach at 310-FARM (3276).

Co-packing: Questions to Ask
  • Does the co-packer’s facility seem clean and well run? Can you inspect it whenever you want?
  • Does the co-packer seem trustworthy? Has he had any problems with co-packing relationships in the past? Has he ever been sued?
  • Who owns the formulation – you or the co-packer? Is the co-packer willing to agree explicitly not to make a competing product and to leave your customers alone?
  • How flexible is the co-packer’s operation? If your product is a success, will the co-packer be able to increase production to meet demand?
 
 
 
 

Other Documents in the Series

 
  Business Basics for Alberta Food Processors
Business Basics for Alberta Food Processors - Preface
Business Basics for Alberta Food Processors - Introduction
Business Basics for Alberta Food Processors - Starting Out
Business Basics for Alberta Food Processors - Business Planning
Business Basics for Alberta Food Processors - Business Considerations
Business Basics for Alberta Food Processors - Food Processing Regulations
Business Basics for Alberta Food Processors - Facilities - Current Document
Business Basics for Alberta Food Processors - Product Development
Business Basics for Alberta Food Processors - Processing and Packaging Equipment
Business Basics for Alberta Food Processors - Packaging and Labeling
Business Basics for Alberta Food Processors - Distribution and Sales
Business Basics for Alberta Food Processors - Promotion
Business Basics for Alberta Food Processors - Financing
Business Basics for Alberta Food Processors - Sources of Assistance
Business Basics for Alberta Food Processors - Additional Resources
 
 
 
 
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This information published to the web on June 1, 2005.
Last Reviewed/Revised on March 31, 2012.