How to Start a Popcorn Business

by Temiloluwa Alagbe
143 views 7 minutes read
A popcorn stand.

Popcorn. It’s the ultimate snack. Its irresistible aroma and rich taste make it a staple at movies, games, and even in homes. Besides giving your taste buds a treat, popcorn also has the potential to fill your pockets. If you are an aspiring entrepreneur looking to get into the popcorn business, then this article is for you. In this all-inclusive article, we dive into the flavourful world of the popcorn business with tips on how to successfully navigate through. Let’s begin!

Overview of The Popcorn Business

The popcorn market is growing with an estimated market value of over $8 billion and a compound annual growth rate of about 11.1%. The industry’s growth is driven by the convenience of the snack, a rise in global disposable incomes, and an increased awareness of the health benefits of popcorn. Industry segments include;

  • The producers who grow and harvest the popcorn kernel.
  • The manufacturers who process and package the popped kernels.
  • The distributors who distribute the popcorn to retailers.
  • The retailers who sell them to the final consumers.

Although this is the standard distribution channel for popcorn, it has become a popular industry trend for producers to sell products directly to consumers. Some other industry trends include;

  • Flavoured popcorn.
  • Convenient packaging.
  • Sustainable and eco-friendly production and packaging practices.

Is Popcorn Cheap to Make?

Yes, popcorn is cheap to make. Let’s do the math together.

The ingredients you will need to make a 350g packet of popcorn are popcorn kernels, oil, and salt.

350g of popcorn kernels will cost about $0.05, a one-litre bottle of oil costs about $5.00 (30ml will cost about $0.009), and 1.25ml of salt costs about $0.0003. Hence, the total cost of making a 350g pack of popcorn is $0.0593 (less than a dollar).

If you wanted to make 100 packets, it would cost you only about $100 (factoring in the cost of additional ingredients like flavours and butter) making popcorn one of the cheapest snacks to produce.

Is The Popcorn Business Profitable?

The popcorn business is highly profitable as it is relatively easy to start with an average profit of 20% – 30% (with the potential to be as high as 80%). The affordability of popcorn is what makes its profit potential so high. In addition to having high profit margins, the popcorn business offers a variety of business models. You can choose to either open a traditional (brick-and-mortar) popcorn store, run a popcorn cart, or even start an online popcorn business. The business allows you to choose whatever business works best for you.

Equipment Needed to Start a Popcorn Business

Essentials

1. Popcorn kernels

You can’t have a popcorn business without popcorn kernels as they are the basic ingredient for popcorn. The quantity of popcorn kernels you will need is dependent on your business size and a sack of popcorn kernels typically costs $2 – $15.

2. Popcorn machine

Although it is possible to make popcorn on a stove or in a microwave, a popcorn machine is highly recommended to increase productivity and improve popcorn quality. The cost of a popcorn machine ranges from $50 – $5,000 with the reason for the wide range being the availability of the different machine models. They include:

  • The basic countertop model (produces 1- 2 gallons of popcorn, costs $50 – $200).
  • The mid-range countertop model (produces 2 – 3 gallons of popcorn, costs $200 – $500).
  • High-end countertop model (produces 3 – 4 gallons of popcorn, costs $500 – $1,000).
  • Floor models (produces 4 – 6 gallons of popcorn, costs $1,000 – $5,000+).

If you plan to operate a mobile business, you will need a cart with an in-built popcorn machine and these cost between $2,000 – $10,000. However, to serve a healthier snack, we recommend you get air poppers and these cost between $500 – $3,000.

3. Seasoning and flavours

It is always better to opt for healthier flavouring options like smoky paprika, lavender honey, and mint lime to create a healthy and flavourful snack. You can also choose to include healthy toppings like chia seeds, dried berries, and chopped nuts to enhance your popcorn’s nutritional quality and create uniqueness.

4. Packaging materials

Rather than using plastic bags, it is advisable to use eco-friendly packaging like paper scoops and compostable paper popcorn boxes. Compostable paper packaging costs about $0.10 – $0.30 per box, recycled paper costs about $0.07 – $0.25 per box, and paper scoops cost $0.02 – $0.15 per scoop.

5. Payment system

An operational payment system is important for the effective running of your business. You can either get a cash register, a point-of-sale system or open a bank account, and you can choose to have all three in place. The important thing is that your customers can make payments with ease.

Optional Equipment

1. Oil

Oil is only optional if you have an air-popping machine. On the other hand, if you have purchased an oil-popping machine, you need to purchase oil as well. We suggest that you go for healthier oil options like coconut oil, olive oil or avocado oil. The cost of a litre of oil ranges from $0.50 – $15, depending on the kind of oil.

2. Food warming machines

You can purchase food warming machines to maintain the freshness of already popped corn. You can either get a heating lamp, a warming cabinet, or a warming deck with in-built popcorn machines. Food warming machines typically cost between $100 – $1,000.

How Much Does it Cost to Start a Popcorn Business?

1. Legal costs

Before you launch your popcorn business, you have to fulfil your legal obligations by obtaining the required licenses, permits, and registrations. Although your legal duties may differ depending on your business location, we have provided a list of some of the most important licenses required to start a popcorn business:

i) Business license

Irrespective of your location, you need a business license to legally operate a business. The process of getting a business license is heavily dependent on your location. However, it typically involves submitting a business name, filling out an application, and paying applicable fees. You may also need to acquire some licenses before you can successfully apply for a business license. The cost of getting a business license usually ranges from $50 – $500.

ii)Food service permit

Because you are dealing with food, you must get a food service permit from your local health department. The process of getting a food service permit also depends on your location and for this reason, you should contact your local health department first. Upon contacting your local health department, you will be provided with all the information you need. Getting a food service permit typically involves filling out an application, receiving food handler training, and scheduling an inspection. The cost of getting a food service permit ranges from $50 – $1,000, depending on various factors.

iii) Tax ID number

You will need a tax ID number to process taxes and the process of getting one is relatively easy. It typically involves filling out an application and gathering the required documents for submission. The cost of getting a tax ID number is relatively free.

Other licenses and permits that you may require are dependent on your business location’s food and safety laws and practices.

In essence, you should expect to spend between $500 – $3,000 on obtaining the necessary licenses and permits.

2. Equipment and ingredient costs

You can’t have a functioning popcorn business without getting the necessary ingredients and equipment. The total cost estimate for equipment and supplies ranges from $1,000 – $5,000, depending on your business size and location.

3. Insurance costs

Regardless of your business size, it is important to protect your business from unforeseen circumstances. Although insurance costs are heavily dependent on your insurance plan, you should expect to spend between $500 – $2,000 annually.

4. Promotion and marketing costs

You will need to let people know about your business, hence, you must factor in promotion and marketing costs. Advertisement costs are heavily dependent on your location and your target market but you can expect to spend between $200 – $5,000 on promotion and marketing.

In summary, the total cost of starting a popcorn business ranges from $3,000 – $8,000.

How to Start a Popcorn Business

1. Identify your target market

Having a broad audience is not the best decision for a business as there are diverse people with different preferences even in a small room. Finding a group of individuals with similar preferences and centering your business around them is the first excellent decision you can make for your business. Narrowing down your target market will help you tailor your products and marketing strategies to their needs, making it easier for your products to make sales.

2. Conduct market research

Researching your target market is just as important as identifying them because you can’t meet their needs if you don’t know them. There are various ways of obtaining the information you need and some of them include the following:

  • Customer observation.
  • Surveys.
  • Interviews.
  • Focus groups (group discussions).
  • Field reviews.

3. Choose a business structure

Choose a business structure that works best for you. You can either solely operate your business (sole proprietorship) or you can own the business with other partners (limited liability). Here are some factors to consider when selecting a business structure:

  • Liability risks.
  • Growth plans.
  • Funding.
  • Management and ownership.
  • Regulatory requirements.

4. Determine your products and services

The next step is to create a product list with the information using the results obtained from your market research work. Your product list should be tailored specifically to your target market’s needs and preferences as this is the most effective way to ensure sales.

5. Choose a business location

You can start your popcorn business from home or you can rent/build a designated area for it. Either way, you have to select a location for your business operations to take place. You should keep in mind that your location has to be accessible to your target market.

6. Select a business name

Create your brand’s identity by deciding on a creative name and logo for your popcorn business. You can also come up with a catchy business slogan that will improve your brand’s visibility.

7. Draft a business plan

After obtaining all the important information and creating your brand identity, you must meticulously plan out your business. You need to have a business plan because it is unwise to enter the business world, especially one as competitive as the popcorn business, without a solid plan for success. Drafting a foolproof business plan is the first step and most important step towards business success. An excellently written business plan also has the potential to earn funding for your business.

8. Register your business

Now that you have the blueprints for your business, you need to obtain legal approval to move forward with your business plans. The location of your business will determine the licenses, permits, and registrations you need to complete, their costs, and how long this process will take.

9. Get insurance

Once you have gotten the legal permission to start your business, there’s only one more thing left on your to-do list and that is protecting your business. Insurance is one of the best backup plans your business can have and it reduces overall risks that your business may be facing.

10. Implement promotional strategies

At this point, you have fully set up your business and you’re ready to begin operations. But you’re missing one thing. Customers. Because there can be no business without customers, you must implement strategies that will draw them to you. Some of the most effective promotional strategies include:

  • Social media marketing.
  • Partnerships.
  • Email marketing.
  • Setting up at events or pop-ups.

It is important to note that the most effective promotional strategies are heavily dependent on your location and target market. For this reason, it is important to conduct market research first as it will lead you to the best marketing strategies for your business.

How to Package Popcorn for Sale

1. Choose packaging material

You must first choose the material you want to store your popcorn. You need to consider a few factors when choosing a packaging material and they include the material’s ability to retain freshness and its resealability. Some excellent packaging material choices include plant-based film pouches, resealable paper stand-up pouches, and recycled paper bags.

2. Apportion sizes

Determine the sizes you want to sell your popcorn in. Although you can decide to sell your popcorn in a single size, it is always best to give people options. Determine the portions you intend to sell and package them accordingly.

3. Brand your products

After packaging your product, the next step is to brand it. Come up with a creative and eye-catching design to put on your popcorn products. If you are selling popcorn in different flavours, ensure that each flavour has a distinct packaging style.

It is also important that you check the packaging regulations in your area of operation and adhere to them to prevent sanctions.

How Much Should I Charge for a Bag of Popcorn?

The regular price for a bag of popcorn is $5 – $7. However, this does not have to determine the prices of your own products because multiple factors should determine your product prices. They include:

  • Your target market’s purchasing power.
  • Portion sizes.
  • Profitability.
  • Brand and value perception.

Best Countries to Start a Popcorn Business

1. The United States

The United States popcorn market value is estimated to be worth over $12 billion. The market value is expected to reach $18.8 billion by 2031 which proves that the United States has a large and growing popcorn market. For this reason, it can be very profitable to start a popcorn business in the country. In addition to the country’s large market, there is also a high demand for both traditional and gourmet popcorn options in the United States.

2. Canada

Like the United States, Canada has a large and growing popcorn market with an estimated market value of $12.9 billion. Canada has an annual popcorn consumption rate of 8.2kg per person, proving that popcorn is a staple snack in the country. Additionally, the country’s diverse population presents a wide range of taste preferences, thus, creating multiple niche options. Canada also has a business-friendly environment with a strong infrastructure and a stable government.

3. Brazil

Brazil has a growing demand for healthy and gourmet popcorn options, making it a good place to start a popcorn business. The country also has a large snack market estimated at $67 billion with popcorn being one of its major contributors. The relatively low cost of raw materials and the business-friendly environment of Brazil are additional advantages of starting a popcorn business in the country.

4. Australia

Starting a popcorn business in Australia can be a profitable venture because of the country’s large popcorn market and consumer base. The Australian snack market has an estimated value of $10 billion with popcorn being in constant demand. The Australian popcorn market is also experiencing a growing demand for gourmet popcorn options and the favourable business conditions of the country make the launching of your business relatively easy.

5. India

The Indian popcorn market has an estimated value of $118 million and it is expected to reach $845 million by 2031, indicating that India also has a large and growing popcorn market. Additionally, the country’s large population gives your business the potential to have a large customer base, making India an excellent place for your popcorn business.

6. South Africa

South Africa also has a large and growing snack market with popcorn being one of its major contributors. In addition to its large snack market, the cost of getting the raw materials for your popcorn business in the country is relatively low and the country also provides a stable and supportive business environment.

How to Start a Successful Popcorn Business

Starting a popcorn business is one thing but starting a successful one is a different ballgame. Anyone can start a popcorn business but the difference lies in making yours successful. Here are a few tips that will boost your business’ overall chances of success:

1. Offer unique flavours

It is important to set yourself apart from other popcorn businesses by selling a variety of unique different popcorn flavours. Offer a popcorn experience that cannot be gotten anywhere else.

2. Use high-quality ingredients

In your quest for uniqueness, do not neglect quality. High-quality ingredients produce high-quality popcorn so you must not neglect your ingredient’s quality. Serve unique popcorn flavours made with only the best ingredients.

3. Use attractive packaging

In addition to offering high-quality and unique popcorn products, it is important to use eye-catching packaging. Remember that it is the packaging that will first get your customer’s attention and for this reason, your popcorn packaging should be aesthetically pleasing.

4. Be present

By this, we mean that you should be an active community member. Participate in community activities, join groups, and volunteer your time because this earns you extra points with the locals. When you are actively involved in your locality’s growth, the people will feel obligated to reciprocate by purchasing your products, thus, increasing your business’s popularity.

5. Get good equipment

Purchasing high-quality equipment will boost your productivity levels and help you provide high-quality customer service and products. The quality of your equipment is a determining factor for your product and service quality and as such, it is important to use functional equipment.

Business Name Ideas for a Popcorn Business

  • Kernel Konfetti.
  • Poptastic.
  • Crunch City.
  • Kernel Kreation.
  • Butter Bliss.
  • Salty Symphony.
  • Giggle-Pop Shop.
  • Crunchy Critters.
  • Gourmet Pop.
  • Kernel Korner.
  • Butterball Bites.
  • Kettle & Cob.
  • Poppin’ Pleasures.
  • Amaizeing Kernel.
  • The Gourmet Kernel.
  • Crafted Corn Confections.
  • Heirloom Corn Creations.
  • Movie Night Munch.
  • Rainbow Corn Company.
  • Cornucopia Crunch.
  • Movie Munchies.
  • Poppin’ Joy.
  • The Popcorn Palace.
  • Kernel Klub.
  • Giggle Grains.

Popcorn Business Success Stories

1. Garrett Popcorn Shops

Garrett Popcorn Shops is a gourmet popcorn shop with multiple stores in the United States and Canada. The store was first founded in Chicago, Illinois in 1949 by Gladys Otto Garrett. The business started in her kitchen with CaramelCrisp, CheeseCorn, Buttery, and Plain being the only flavours. The business grew its customer base by using top-notch ingredients and packaging its products in front of customers. This soon became one of their most effective marketing strategies as the long lines and satisfied customers became testimonies of the quality of their products. Fast forward to the present and they have over 100 stores in various jurisdictions in the United States and even Canada. One of the biggest drivers of Garrett Popcorn Shops’ success was the founder’s involvement in the community’s development and her ability to quickly adapt to changes in industry trends.

2. Funky Chunky

Funky Chunky is a popcorn store known for its bold popcorn flavours. The business was founded by the married couple Jeff and Kelli Berg in 2009 in California, USA. Jeff Berg was looking for a new business to venture into and Kelli Berg loved to experiment with popcorn ingredients. They came together and started a gourmet popcorn business named Funky Chunky with their first flavour being Sriracha Lime which became an instant hit. Customers nationwide found the uniqueness and balance of the popcorn flavour irresistible and as a result, their business grew exponentially. Over time, they launched more flavours like the Chocolate Pretzel, Peanut Butter Cup, Sea Salt Caramel, and Chip Zel Pop. Most of the company’s success is because of its unique popcorn flavours and the playfulness of its packaging with slogans like “Popcorn with an attitude” and “Warning: May cause addiction”.

3. Popcorn Girl

Popcorn Girl‘s success story is particularly inspiring because the business was founded by a single and unemployed mom of two boys. Her name is Mary Berg. After facing the struggles of unemployment, Mary Berg entered her kitchen and started the popular business that is now called Popcorn Girl. By incorporating her Mid-Western roots into her popcorn, Mary Berg was able to create tasty flavours with aromas that pull customers in. As her customer base grew, local businesses began to notice her products and offered her shelf space in their stores. These products became very popular with the locals, earning her the name Popcorn Girl. Over time, her customer base grew and her business expanded exponentially. Now, Popcorn Girl is a flourishing business with three outlets in Las Vegas.

The keys to her business success include her ability to keep up with industry trends, her participation in events and pop-ups, and her involvement in community activities.

4. The Kettle Gourmet

The Kettle Gourmet is an online-based popcorn business with its products featured in various stores around the world. The business was founded in Vermont by a native named Zac Bromley in 2017. The business idea was birthed when the aroma of popcorn wafted through the room while he was watching television with his young son. Then, he entered his kitchen and began developing popcorn products by experimenting with a heirloom recipe. His products quickly made sales across the Vermont community and stores began stocking up their shelves with his popcorn. This birthed a new age for his business as he countless online orders began to pout in because of his addictive popcorn flavours. Today, the Kettle Gourmet is a leading popcorn business with products being sold in different parts of the world. His business success was majorly driven by the uniqueness of his popcorn products.

Conclusion

The popcorn business has the potential to yield high profits but like many other businesses, its success depends on your management skills. Because the business is relatively cheap and easy to start, it is highly competitive but with the right strategy and information, you can rise above the competition. Fortunately, you are already on the right path because you have dedicated a part of your day to arm yourself with the right information by thoroughly reading this article. The next stage involves putting all the information you have garnered to good use. We are rooting for you, budding business mogul!

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