Food Packaging Startups – Economics, Growth & Technical Aspects

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As online shopping practice around the world extended to such a degree that it brought even foods and prepared meals directly from the fields and kitchens and delivered right at our doorsteps, packaging technology now plays an important role which has rarely been a part of the American farm and kitchen and this is also true for most part of the world now.

But that is changing in recent years as people started to consider creating their own start-up food companies and expanding their small-scale production houses with more equipment and resources to meet the demand. Changes in state-level “Cottage Food” laws and increased interest in locally grown products has caused an enormous increase in homemade and Farmer’s Market products to go for retail sale. But, to do so, an efficient and cost-effective means of packaging of food products needs to be introduced which is economically viable to food start-ups and small-scale production units those have limited resources and technical knowhow in automated product packaging field. LENIS MACHINES INC. offers food packaging and production related machinery especially suited for food-startups, small and mid-sized food production and packaging units in a budget and limited technical resource.

There are 42 states that have passed some sort of Cottage Industry Food Law that allows production of certain food products in home kitchens for retail sale. Each state has its own interpretation of what specific products they allow, but generally they allow home kitchens to make and sell food products without the costly oversight and licensing required by commercial food producers. The concept is to use home kitchens to produce low-risk foods in controlled quantities to lower potential risks in the process. The foods that are allowed are 

mainly high-acid products, baked goods, or low-moisture content products, so the microbial hazard risk is low. Each state has different regulations, so you should check with your state’s specific law before you start a business; for example, California limits gross annual sales to $50,000 and interstate sales is not permitted. Other states limit factors like the number of employees, size of the facility and specific information on the label.

Retail sales are generally at Farm Markets, but many products are being sold to restaurants and caterers as artisanal products. The local sourcing of these products provides a level of quality and freshness not easily found in normal food distribution systems and this appeals to “Locavors.” The concept is to allow farm producers to add value to their products through minimal processing and packaging and benefit from the added income. The concept also serves as an incubator for small businesses. If the product is successful then there is the opportunity to take the product to the next level beyond local distribution and sales. This is a path entrepreneurs can use to easily enter the market to test their product’s acceptance. This mimics a simple grass roots business development system used in other industries that reduces the barriers to market entry and helps start-ups develop, ultimately adding to the state’s economic well-being.

In combination with the relaxed regulations for small food producers, Farm Markets are creating retail outlets for these products, which is the second half of the equation. They are the traditional Farm Markets on the farmer’s property and more recently urban Farmers Markets with multiple stalls in a central shopping location popping up one or two days a week. Last year according to the USDA 167,000 farms engaged in this activity with a dollar value of $8.7 billion dollars. This market is broken down into 3 categories:

• Direct to consumer $3 billion

• Institutions and Intermediaries 3.4 billion

• Restaurants, caterers, and supermarkets $2.3 billion

This market follows the “Buy Local” trend as 81% of these sales are made within 20 miles of the consumer’s home.

Food-startups, small or mid-sized food production and packaging units on the supply side of packaging can address this emerging market by recognizing what types of packages and packaging machinery and technologies it requires. The packaging community could be instrumental in this effort and use the following packaging attributes, machinery, and technologies where applicable and demandable:

Manual Packaging & Sealing Using Semi-Automatic Fillers

Manual packing and sealing in premade flexible-film pouches can use semi-automatic auger-fillers for powder product packaging and Semi-Automatic Linear Weighers or Multi-Head Weighers for grains, granular or block type product packaging. 

Auger fillers are primarily used for filling powder products in food, beverage, cosmetic, pharmaceutical, and chemical packaging industries. The production efficiency of a packaging line is primarily determined by the speed, accuracy, and precision of the filling equipment. Due to those precision, accuracy and productivity requirements, small businesses are moving more towards an automatic way of filling products instead of the traditional manual filling methods. This allows customers to save on labor costs, reduce product waste, increase productivity and quality of measurement using the help of the automated or semi-automated filling equipment.

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Figure 1:  Semi-Automatic Auger Filler for Non-Free-Flowing Powders and Free-Flowing Micro-Grains

Semi-Automatic Linear Weighers can be used to weigh and fill grains, granular products and block type products in premade Doypacks, standup pouches, flatpacks, gusseted bags, and other types of premade or preformed bags that can be sealed manually.

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Figure 2:  Semi-Automatic Linear Weigher for Weighing Granular Products

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Figure 3:  Semi-Automatic 4-Head Linear Weigher for Weighing Granular Products

Manual Sealing of Premade Bags Using Manual Sealers

High-quality manual heat sealers would be a boon to food packaging, and the heat-sealer should be able to handle mono-films and heavy laminations. For added convenience and greater flexibility, foot operated standing type heat sealers can be used which can be operated hands-free and very convenient to handle the filled pouches manually for sealing operation.

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Figure 4:  Foot-Operated Pouch Sealer

For higher speed sealing and added functionalities, such as, gas (inert gas like Nitrogen) flushing or vacuum operation and date-code printing operation on the bags, Semi-Automatic Band Sealers can be used. These band sealers come in variations for gas flushing with a Nitrogen generator or vacuum function which includes a high efficiency vacuum pump or just with simple sealing and coding operation.

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Figure 5: Semi-Automatic Band Sealers for Pouch Packaging

Premade Bag Packaging Using Premade Pouch Packaging Machines

There are variety of formed or premade flexible film-based pouches of different materials and geometries available that include Doypacks or stand-up pouches with zippers, liquid fitments attached premade Spout Pack bags of high-barrier materials for liquid products, lucrative Shaped-Cut premade standup or flatpacks, premade 4-side or 3-Side sealed bags or premade sachets etc. 

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Packaging machinery needed for those types of bags are automatic premade pouch packaging machines. There are entry-level Doypacker Machines suitable for food startups and works on both bags with or without zippers at a packaging speed of 5 to 15 bags per minute depending on the weight, size and type of products packed. These machines are suitable for advanced food-startups and small-scale food production and packaging facilities who wants to move towards packaging automation from a manual packaging background.

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Figure 6: Entry-Level Doypack Packaging Machines

Rotary Premade Pouch Packaging Machines are moderate to high-speed premade pouch packaging machines suitable for small to mid-sized food packaging businesses with a packaging speed of 20 to 60 packs per minute depending on the product, weight and bag size. Various kinds of pouch types and sizes e.g. Doypacks, are easily handled in rotary pouch packaging machines. Suitable for powder, grains, or granular items and liquid or pasty products. Generally, these automatic machines come in a line of machines including Automatic Material Conveying Equipment: Inclined Screw conveyors, Z-Bucket Conveyors, Automatic Filling Equipment: Auger Fillers for powder products, Multi-Head Weighers for grains, granular items and block products, Piston Pump Fillers for liquid and pasty products, Delivery Conveyors and Rotary Tables.  

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Figure 7:  Rotary Premade Pouch Packaging Machines

Rotary Vacuum Premade Pouch Packaging Machines are specialized machines for meat, fish and other food item packing in Doypacks, standup pouches and retort packs (as a modern alternative to canning process). These advanced machines fill the premade bags, vacuums them up to 99.9% and then seals the bags making easily perishable food inside to store and keep fresh for a long time. These machines are replacing the canning process with retort pouches which are also known as soft-cans.

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Figure 8: Rotary Premade Vacuum Packaging Machine

There are also Horizontal Premade Pouch Packaging Machines in simplex and duplex orientation for high productivity needs. All the above machines are Fill & Seal machines for various kinds , shapes and sizes of premade bags.

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Figure 9: Horizontal Premade Pouch Packaging Machines

Pillow Bag & Gusseted Bag Packaging Using Vertical Form Fill & Seal VFFS Machines

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Pillow bags or gusseted bags are widely used in food packaging and are very economical type of packaging compared to premade pouches. The pillow shaped bags with sealing in both ends and in the middle are generally formed, filled, and sealed in Vertical Form, Fill & Seal VFFS Pouch Packaging Machines which are automatic pouch machines where the whole packaging process starts from a single roll of printed film (with your brand and logo) and then filled with products and sealed in a high-speed automatic process. Pillow bags are not stand-up type pouches, but gusseted bags can stand up if filled with heavier products especially powders and grains.

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Figure 10: Vertical Form, Fill & Seal VFFS Pillow bag or Gusseted Bag Packaging Machines

Quad-Seal Bag or Stabilo Bag Packaging Using Vertical Form Fill & Seal VFFS Machines

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Figure 11: Quad-Seal Bags or Stabilo Bags Made in a VFFS Machine

Quad-Seal Bags or Stabilo bags are special type of stand-up pouches made in a VFFS packaging machine. These bags are modern looking stand-up pouches with distinctive seals at the four corners of the bag which helps keep the square shape of the bag and also helps to keep the bag in a standing position. Being made is a VFFS machine, this type of packaging is very cost effective in terms of machine price and also in terms of film material price as it forms the bag within the machine from a roll of flexible film which is about 30% cheaper than premade bags in the long run.  

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Figure 12: Quad-Seal or Stabilo Bag Packing Vertical, Form, Fill & Seal VFFS Pouch Packaging Machines

Flatpack, 4-Side or 3-Side Sealed Bag Packaging Using Horizontal or Vertical Form, Fill & Seal Machines

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Figure 13: 3-Side Sealed Bag or Sachet

Flatpacks, 4-Side or 3-Side Sealed Bags use Horizontal Form Fill & Seal HFFS Flatpack Packaging Machines or large sachet packaging machines. HFFS Flatpack Pouch Packaging Machines make high quality bags and are generally high productivity machines. VFFS or Vertical Form, Fill & Seal machines can also make larger Flatpack, 4-Side or 3-Side Sealed bags but HFFS offer better packaging quality.

Stickpack, Stick-Bag or Small Sachets Using Stickpack Packaging Machines

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Figure 14: Stickpack or Stick Bag Packaging

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Figure 15: Multi-Lane Stickpack or Stick Bag Packaging Machine

Stickpack, Stick-Bag or Small Sachets are made using Single-Lane Stickpack & Sachet Packaging Machines and Multi-lane Stickpack Packaging Machines for high productivity. Stickpack packing machines are a special type of VFFS machine that makes, fills and seals stick shaped packs from a roll of flexible film automatically. Multi-lane machines cut the wide films in slits according to the number of lanes the machine supports and then forms, fills with products and then seals the stickpack. These machines are getting very popular as single-serving products are becoming increasingly popular.

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Figure 16: Single-Lane Stickpack, Stick Bag or Sachet Packaging Machine

The single-lane stick pack packaging machines are preferred by the food startups as it requires small investment and good for testing a product in the market before going in full-fledged production. The multi-lane version of the machine is mostly used in high productivity environment and can come in the form of 4 to 18 lanes in a single machine. All these machines can pack powders, grains and liquid products with appropriate fillers. 

Flow Wrapped Bags made by Flow Wrapping & Packaging Machines

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Figure 17: Pillow Bag Snack Bar Packaging Using a Flow Wrappers

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Figure 18: Horizontal Flow Wrapping or Flow Packaging Machine

Flow wrapped bags are made by Flow Wrapping & Packaging Machines. These bags are actually similar to pillow bags or gusseted bags but formed, filled and sealed in a horizontal arrangement. Flow wrappers or flow packing machines are horizontal type flexible film packaging machines and can pack a wide range of items from smaller items like hard candies (at a speed of 800 candies per min), snack bars to large chickens or bulk number of vegetables supplied on a horizonal moving conveyor belt for packaging. These machines are also used to pack variety of bakery, confectionary and other non-food items individually or in a group of 2, 4, 6, 8, 12. Items include cookies, buns, breads, hamburgers, soap bars etc. 

Vacuum Packing is another type of packaging of food and vegetable items using Vacuum Packaging Machines. These are semi-automatic machines with one or two vacuum chambers. Food or non-food products are placed in between two flexible films and then vacuumed and sealed. The vacuum action gets the air out from 95% to 99% reducing the oxygen content inside the bag thus making the food preserved longer.

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Figure 19: Vacuum Packaging of Fresh and Frozen Food

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Figure 20: Vacuum Packaging Machine

Thermoforming Packaging of food items uses Thermoforming Vacuum Packaging Machines. These automatic machines make trays within the machine, fills with food products on the trays, seals the top with a layer of flexible film and then cuts the trays out and delivers. These machines come in many variety including skin type thermoforming machines, normal tray forming and top sealing type thermoforming machines, and there is blister packaging type thermoforming machines.

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Figure 21: Thermoforming Packaging Machine

Farms, Farmers markets and Supermarkets can use Tray Sealing Machines for packaging food items in trays and seal them with a clear food grade flexible film for display and labelling, dustproofing, and keeping them fresh for longer time. Tray sealers come in semi-automatic and fully automatic format.

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Figure 22: Sealed Tray Packaging of Fresh Food

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Figure 23: Automatic Tray-Sealing Machines for Food Packaging

Teabag packing for boutique shops can be an interesting business. Teabag packaging is a multistep process done in a single machine or in a line of machines. There is an inner bag and an outer bag in a teabag. Teabag packing machines fill and pack variety of green tea, black tea, scented tea, coffee, Chinese tea, health tea, rose tea, ginseng or spice tea in a fully automated process and can be used by small home-based business or by a small production house. 

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Figure 24: Teabag Packaging Machines

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Figure 25: Tea Bag - Inner & Outer Bag

These are just a few ideas that may be useful to startups and small-scale to mid-sized packers as they grow. The manual packing machines with semi-automatic fillers can be very suitable for homebased packers using manual sealers. 

Another thought is that this local food production and packaging could be viewed as a means to improve food protection at the household level and could be applied to developing areas where food loss is a key concern. Automating food packaging machinery can improve food hygiene, quality, freshness, and shelf-life of the food a lot. Save Food is an international effort to bring these types of ideas to the table, and maybe the Packaging community could be instrumental in this effort.