Making it for somebody else

Private label is manufacturing under somebody else's name: a restaurant's house blend, a butcher's rub, a retailer's own range. It is a different business from your brand and it can support it well.

What you are actually selling

Capacity and capability rather than identity. The customer owns the brand, usually specifies or co-develops the product, and takes the retail margin. You take a manufacturing margin on volume you did not have to market.

Why it suits spice

The process is simple, shelf life is long, and the minimum viable run is small compared to almost any other food category. A restaurant wanting two hundred jars of their own rub is a real order and a plausible one for a small producer.

It also uses inventory you already hold, so the working capital demand is modest.

What to settle before the first run

Who owns the formula. If you developed it, say so in writing and say what happens at the end of the relationship. If they brought it, be clear you are making theirs.

Whose name is on the label as manufacturer, packer or distributor, because that placement carries regulatory meaning rather than being a branding choice. Who is responsible for label compliance, including the rule that paprika, turmeric and saffron must be named or declared as "spice and coloring".

Minimum run, lead time, and what happens to leftover packaging printed with their name.

The dependency risk

Private label revenue is concentrated. One customer can be a large share of your output, and when they leave, or bring it in house, or sell the restaurant, it goes at once.

Treat it as a supplement to your own brand rather than a replacement for it. The margin is lower and the relationship is theirs to end, which are both reasons to keep building the thing with your name on it alongside.

References