Food Testing Lab Business Plan [Sample Template]

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Are you about starting a food testing business? If YES, here is a detailed sample food testing lab business plan template & feasibility report you can use for FREE.

Okay, so we have considered all the requirements for starting a food testing business. We also took it further by analyzing and drafting a sample food testing marketing plan template backed up by actionable guerrilla marketing ideas for food testing companies. So let’s proceed to the business planning section.

If you are a scientist and you intend starting your own business, you can decide to start a food testing lab business; this industry is open to certified lab scientists cum investors.

Starting a food testing lab business requires training, experience, creativity, reasonable startup capital, license and detailed business plan. The truth is that you can’t just wake up and launch your own food testing lab business; you must follow established protocols. This industry is highly regulated because of the potential risk involved.

Below is a sample food testing lab business plan template that will help you successfully write yours without much stress.

A Sample Food Testing Lab Business Plan Template

1. Industry Overview

Food testing labs engage in food testing, and food testing is a process used to check whether a food is safe and that it does not contain harmful contaminants, or that it contains only permitted additives at acceptable levels, or that it contains the right levels of key ingredients and its label declarations are correct, or to know the levels of nutrients present.

Food testing lab business is a subset of the Laboratory Testing Services industry and establishments that operate in the Laboratory Testing Services industry perform physical, chemical and other analytical testing for commercial purposes.

Such testing may occur in a laboratory or an on-site facility (i.e. where the product is manufactured or developed). Most results from industry-led tests are checked against government regulations and environmental, industrial and product standards. Please note that this industry does not include medical and veterinary testing labs.

In an increasingly regulated society, pressure on operators to ensure the safety and quality of their products is higher than ever. A greater number of government safety regulations and consumer lawsuits have led to rigorous testing of manufacturers’ goods prior to sale.

The industry has grown over the past five years, driven by renewed consumer spending and corporate investment in the development of new products. As companies accommodate stricter environmental regulations and invest in new products over the next five years, demand for laboratory testing services is expected to grow.

The Laboratory Testing Services Industry is indeed a thriving sector of the economy of countries like Israel, Japan, Canada, India, China, United Kingdom, Germany and the united states of America. Statistics has it that in the United States alone, the industry generates over $20 billion annually from more than 10,837 registered and licensed laboratory testing services companies (food testing labs included).

The industry is responsible for the employment of over 150,989 people. Experts project the industry to grow at a 2.0 percent annual rate from 2014 to 2019. Bureau Veritas, Intertek Group PLC and SGS SA are the companies with the lion shares of the Laboratory Testing Services industry in the United States of America.

A recent report published by IBISWORLD shows that capital expenditure in the Laboratory Testing Services is low. For every $1.00 spent on labor, an estimated $0.07 is allocated toward capital. The majority of work requires specialized, high-cost equipment to conduct certain types of tests. Additionally, depreciation expenditure is expected to account for 3.8 percent of industry revenue in 2018.

Nonetheless, the industry is heavily labor intensive. Industry employees perform a range of activities, from simple manual tasks and automated experimental procedures to high-tech testing. Since the industry requires a highly skilled labor force, wages are high. Labor costs account for about 50.7 percent of industry revenue in 2018 and have risen substantially over the past five years.

The bottom line is that the laboratory testing services industry is still very much open for new entrants; the competition within the industry is not as stiff as similar industries. If your food testing lab is well – staffed and equipped, it can gain fair share of the available market in any country or region you intend launching the business.

2. Executive Summary

Nicole Williams® Food Testing Lab, Inc. is a licensed laboratory testing services company with bias in food testing that will be located in an industrial area in Bowling Green – Kentucky. We have been able to secure a long-term lease agreement for a facility in a strategic location with an option of long-term renewal on terms and conditions that are favorable to us.

The facility has government approval for the kind of business we want to run and the facility is easily accessible to our target market.

Nicole Williams® Food Testing Lab, Inc. is in the laboratory testing industry to perform physical, chemical and other analytical food testing for commercial purposes. Such testing may occur in a laboratory or an on-site facility (i.e. where the food product is manufactured or developed). We are also in business to make profits at the same time to give our customers value for their money.

We are aware that there are several food testing labs scattered all around the United States, which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that can easily accept our services and brand.

Much more than offering highly regulated scientific services, our customer care is going to be second to none. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they patronize our services.

Nicole Williams® Food Testing Lab, Inc. will ensure that all our customers are given first class treatment whenever they bring their food items/products for testing in our food testing lab. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to. We will ensure that we get our customers involved when making some business decisions that will directly or indirectly affect them.

Nicole Williams® Food Testing Lab, Inc. will be owned and managed by Dr. Nicole Williams (PhD) and her immediate family members. Dr. Nicole Williams has a PhD in Molecular Science. She has over 20 years’ experience working in related industry as a senior research director prior to starting Nicole Williams® Food Testing Lab, Inc. She will be working with a team of professionals to grow the business.

3. Our Products and Services

Nicole Williams® Food Testing Lab, Inc. is going to run a standard and licensed food testing lab whose services will not only be accepted in Bowling Green – Kentucky but also throughout the United States of America. We are in the Laboratory Testing Services industry to make profits and also to give our customers value for their money.

We will ensure that we do all that is permitted by the law in the United States of America to accomplish our business goal and objective. These are some of the services that we will be offering;

Food allergen testing
Food chemical analysis
Food contact tests
Food contaminant testing
Nutritional analysis and testing
GMO testing
Melamine contamination testing
Microbiological tests
Spiral plating for bacterial count
Pesticide residue testing
Veterinary drug residue testing
PCR food testing

4. Our Mission and Vision Statement

Our vision is to establish a standard food testing lab whose services will be not only be accepted in Bowling Green – Kentucky, but also throughout the United States of America.
Our mission is to establish a standard and world class food testing lab that in our own capacity will favorably compete with leaders in the industry. We want to build a business that will be listed amongst the top 20 food testing labs in the United States of America.

Our Business Structure

Nicole Williams® Food Testing Lab, Inc. is established with the aim of competing favorably with other leading food testing labs in the industry. This is why we will ensure that we put the right structures in place that will support the kind of growth that we have in mind.

We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

Chief Executive Officer (Owner)
Senior Research Fellow / Lab Scientist
Human Resources and Admin Manager
Sales and Marketing Manager
Laboratory Assistant
Accountants/Cashiers
Customer Care Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO (Owner):

Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
Responsible for fixing prices and signing business deals
Responsible for providing direction for the business
Responsible for signing checks and documents on behalf of the company
Evaluates the success of the organization.

Senior Research Fellow/Lab Scientist

Responsible for research and development in collaboration with others on projects. He or she makes detailed observations, analyzes data, and interprets results. Research associates prepare technical reports, summaries, protocols, and quantitative analyses.
Responsible for identifying patentable inventions and acting as principal investigator in conducting his or her own experiments.
Performs a variety of food testing research tasks and experiments. He or she may be required to make detailed observations, detecting food poisoning problems, and instituting corrective action.
Determine optimal cultural requirements and perform tasks related to food related disease prevention; they often are required to collect, record, and analyze data, as well as interpret results.
Participate in scientific conferences and contribute to scientific journals.
Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
Ensures that the lab meets the expected safety and health standard at all times.

Human Resources and Admin Manager

Responsible for overseeing the smooth running of HR and administrative tasks for the organization
Defining job positions for recruitment and managing interviewing process
Carrying out induction for new team members
Responsible for training, evaluation and assessment of employees
Oversee the smooth running of the daily office and chemical lab activities.

Sales and Marketing Manager

Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
Models demographic information and analyze the volumes of transactional data generated by customer purchases
Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
Documents all customer contact and information
Represents the company in strategic meetings
Help increase sales and growth for the company

Accountant/Cashier

Responsible for preparing financial reports, budgets, and financial statements for the organization
Provides managements with financial analyses, development budgets, and accounting reports
Responsible for financial forecasting and risks analysis.
Performs cash management, general ledger accounting, and financial reporting
Responsible for developing and managing financial systems and policies
Responsible for administering payrolls
Ensuring compliance with taxation legislation
Handles all financial transactions for the organization
Serves as internal auditor for the organization

Client Service Executive

Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
Manages administrative duties assigned by the manager in an effective and timely manner
Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
Receives parcels/documents for the company
Distribute mails in the organization

Laboratory Assistant:

Responsible for performing a wide variety of research laboratory tasks and experiments, making detailed observations, analyzing data, and interpreting results. He or she maintains laboratory equipment and inventory levels for laboratory supplies. He or she may also write reports, summaries, and protocols regarding experiments.
Performs limited troubleshooting and calibration of instruments.
Responsible for handling agriculture and food testing, environmental testing, product performance and safety testing and product certification
Responsible for handling food allergen testing, food chemical analysis, food contact tests, food contaminant testing, nutritional analysis and testing, GMO testing, Melamine contamination testing, microbiological tests, spiral plating for bacterial count, pesticide residue testing, veterinary drug residue testing and PCR food testing
Performs routine maintenance of equipment and other related duties as required.

6. SWOT Analysis

We are quite aware that there are several food testing labs in the United States of America which is why we are following the due process of establishing a business. We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Nicole Williams® Food Testing Lab, Inc. employed the services of an expert HR and Business Analyst with bias in startup business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Nicole Williams® Food Testing Lab, Inc.;

Strength:

Part of what is going to count as positives for Nicole Williams® Food Testing Lab, Inc. is the vast experience of our management team, we have people on board who understand how to grow a business from the scratch to becoming a national phenomenon.

So also, our state of the art food testing lab machines and equipment, the wide varieties of food testing services we conduct, our large national network and of course our excellent customer service culture will definitely count as a strong strength for the business.

Weakness:

A major weakness that may count against us is the fact that we are a new food testing lab in the United States and we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business especially when big names like AbbVie, Amgen Inc., Genentech Inc., Monsanto and Gilead et al are already determining the direction of the market both in the United States and in the global market.

Opportunities:

The opportunities available to food testing labs cum laboratory testing services are enormous and this is anchored on the fact that it is compulsory for any chemical related products and food to undergo mandatory testing in the United States.

As a result of that, we were able to conduct a thorough market survey and feasibility studies so as to position our business to take advantage of the existing market for food testing services and also to create our own new market. We know that it is going to requires hard work, and we are determined to achieve it.

Threat:

We are quite aware that just like any other business, one of the major threats that we are likely going to face are economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new food testing lab in same location where ours is located and where our target market exists.

7. MARKET ANALYSIS

Market Trends

A close study of the trends in the Laboratory testing industry shows that the industry is growing rapidly, with revenue increase over the last five years driven by rising use of chemical based products. Even though the industry has grown, a consolidation trend has emerged as large laboratory testing companies have increasingly targeted industry firms for acquisition, to expand their services portfolios ahead of impending patent expirations.

Sustained spending on research and development, including by the federal government, will benefit the industry going forward, driving growth in revenue generation and of course profit. The fact that there are several fields that need the input of food testing services to boost production makes it an industry that is worth paying attention to.

The industry has thrived due to higher government regulation of consumer and food products, government regulation across a range of industries has stimulated demand and aided by the projected expansion of the economy, experts expect industry revenue to grow. Lastly, external factors such as research and development expenditure and consumer spending in the Laboratory Testing Services industry will impact industry performance.

Lastly, consumer and industrial manufacturers are major users of laboratory testing services, and a decline in corporate profit can lead to a reduction in R&D expenditures. As companies choose in-house product testing instead of outsourcing such services to laboratories, demand for this industry can also diminish. Corporate profit is expected to increase in 2019, representing an opportunity for the industry.

8. Our Target Market

When it comes to the services offered by food testing labs, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just an industry, but all the industries that manufacture food – based products.

In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us. Hence our target markets are;

All manufacturing companies that manufacture food based products
Food processing and preservation companies
Medicine and pharmaceutical manufacturing companies
Hybrid food processing and production companies
Hybrids crop cultivators
Hybrid animal breeders
Hybrid bird/poultry farmers
Hotels and restaurants
Dormitories and schools where foods are served

Our competitive advantage

A close study of the laboratory testing industry reveals that the market has become much more intensely competitive over the last half decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry. We are aware of the competition and we are prepared to compete favorably with other laboratory testing services companies in Bowling Green – Kentucky and throughout the United States.

Nicole Williams® Food Testing Lab, Inc. is launching a standard food testing lab that will indeed become the preferred choice for businesses in and around Bowling Green – Kentucky. We have easy access to highly skilled workforce, proximity to key markets and recommendation/accreditation from authoritative sources.

Part of what is going to count as competitive advantage for Nicole Williams® Food Testing Lab, Inc. is the vast experience of our management team, we have people on board who are highly experienced and understand how to grow a business from the scratch to becoming a national phenomenon. So also, our state of the art food testing machines and equipment (laboratory), the wide varieties of services that we offer, our large and far reaching national network and of course our excellent customer service culture will definitely count as a strong strength for the business.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups food testing labs) in the laboratory testing services industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

Sources of Income

Nicole Williams® Food Testing Lab, Inc. is established with the aim of maximizing profits in the laboratory testing services industry in the United States of America and we are going to ensure that we do all it takes to offer our services to a wide range of customers.

Nicole Williams® Food Testing Lab, Inc. will generate income by offering the following services;

Food allergen testing
Food chemical analysis
Food contact tests
Food contaminant testing
Nutritional analysis and testing
GMO testing
Melamine contamination testing
Microbiological tests
Spiral plating for bacterial count
Pesticide residue testing
Veterinary drug residue testing
PCR food testing

10. Sales Forecast

One thing is assured when it comes to food testing lab, if your laboratory and services meet the expected industrial standard and if your laboratory is centrally positioned and easily accessible, you will always attract customers.

We are well positioned to take on the available market in Bowling Green – Kentucky and every city where our services will be offered and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.

We have been able to examine the laboratory testing services industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below is the sales projection for Nicole Williams® Food Testing Lab, Inc., it is based on the location of our business and other factors as it relates to small scale and medium scale food testing lab startups in the United States;

First Fiscal Year (FY1): $250,000
Second Fiscal Year (FY2): $550,000
Third Fiscal Year (FY3): $950,000

N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

Marketing Strategy and Sales Strategy

Before choosing a location for Nicole Williams® Food Testing Lab, Inc. and also the kind of services we will offer, we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market in our target market locations.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time and also for our services to favorable compete with other leading laboratory testing brands in the United States of America.

We hired experts who have good understanding of the laboratory testing industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Bowling Green – Kentucky and other cities in the United States of America.

In summary, Nicole Williams® Food Testing Lab, Inc. will adopt the following sales and marketing approach to attract clients;

Introduce our food testing lab brand by sending introductory letters to manufacturers of food – based products, hotels, boarding schools and other stakeholders in Bowling Green – Kentucky and other cities in the United States of America
Advertise our services in community – based newspapers, local TV and radio stations
List our business and products on yellow pages’ ads (local directories)
Leverage on the internet to promote and market our food testing lab services – brands
Engage in direct marketing and sales
Encourage the use of Word of mouth marketing (referrals)
Join local chambers of industry and commerce with the aim of networking and marketing our services.

11. Publicity and Advertising Strategy

In spite of the fact that our food testing lab is a standard one with a wide range of laboratory testing services that in few years from now will favorably compete with other leading brands in the industry. We will still go ahead to intensify publicity for all our brand. We are going to explore all available means to promote Nicole Williams® Food Testing Lab, Inc.

Nicole Williams® Food Testing Lab, Inc. has a long-term plan of attracting clients all around the United States of America which is why we will deliberately build our brand to be well accepted first in Bowling Green – Kentucky before venturing out. Here are the platforms we intend leveraging on to promote and advertise Nicole Williams® Food Testing Lab, Inc.;

Place adverts on both print (community – based newspapers and food science magazines) and electronic media platforms
Sponsor relevant community programs
Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our food testing lab brand
Install our billboards in strategic locations all around major cities in the United States of America
Distribute our fliers and handbills in target areas
Position our Flexi Banners at strategic positions in our target location
Ensure that our staff members wear our customized clothes, and all our official cars are customized and well branded.

12. Our Pricing Strategy

Nicole Williams® Food Testing Lab, Inc. will work towards ensuring that all our services are offered at highly competitive prices compared to what is obtainable in the United States of America.

In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our services are offered a little bit below the average price of various laboratory testing services in the United States of America. We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our brand.

Payment Options

The payment policy adopted by Nicole Williams® Food Testing Lab, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Nicole Williams® Food Testing Lab, Inc. will make available to her clients;

Payment via bank transfer
Payment via credit cards / Point of Sale Machines (POS Machines)
Payment via online bank transfer
Payment via check
Payment via mobile money transfer
Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for our services without any stress on their part.

13. Startup Expenditure (Budget)

Starting a standard food testing lab is indeed capital intensive. The bulk of the startup capital will be sent on leasing or acquiring a facility, acquiring license and in purchasing chemical lab machines and equipment. Aside from that, you are not expected to spend much except for the purchase of chemical supplies, paying of your employees and utility bills.

These are the key areas where we will spend our startup capital;

The total fee for registering the Business in the United States of America – $750.
Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
Marketing promotion expenses for the grand opening of Nicole Williams® Food Testing Lab, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
The cost for hiring Business Consultant – $2,500.
The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $76,600.
The cost for construction of a standard chemical testing lab – $100,000.
Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
The cost for start-up inventory (laboratory equipment, chemical supplies, and packaging materials et al) – $80,000
The cost for store equipment (cash register, security, ventilation, signage) – $13,750
The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – $4,000.
The cost of launching a website – $600
Miscellaneous – $10,000

We would need an estimate of $500,000 to successfully set up our food testing lab in Bowling Green – Kentucky.

Generating Funds/Startup Capital for Nicole Williams® Food Testing Lab, Inc.

Nicole Williams® Food Testing Lab, Inc. is owned and financed by Dr. Nicole Williams (PhD) and her immediate family members. They do not intend to welcome any external business partner which is why she has decided to restrict the sourcing of the startup capital to 3 major sources.

Generate part of the startup capital from personal savings and sell of stocks
Source for soft loans from family members and friends
Apply for loan from the bank

N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of any business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Nicole Williams® Food Testing Lab, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to offer our food testing services a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.

Nicole Williams® Food Testing Lab, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

We know that if all these are put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

Business Name Availability Check: Completed
Business Registration: Completed
Opening of Corporate Bank Accounts: Completed
Securing Point of Sales (POS) Machines: Completed
Opening Mobile Money Accounts: Completed
Opening Online Payment Platforms: Completed
Application and Obtaining Tax Payer’s ID: In Progress
Application for business license and permit: Completed
Purchase of Insurance for the Business: Completed
Leasing of facility and construction of standard food testing lab: In Progress
Conducting Feasibility Studies: Completed
Generating capital from family members and friends: Completed
Applications for Loan from the bank: In Progress
writing of business plan: Completed
Drafting of Employee’s Handbook: Completed
Drafting of Contract Documents and other relevant Legal Documents: In Progress
Design of the Company’s Logo: Completed
Printing of Promotional Materials: In Progress
Recruitment of employees: In Progress
Purchase of the needed food testing lab machines and equipment, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
Creating Official Website for the Company: In Progress
Creating Awareness for the business both online and around the community: In Progress
Health and Safety and Fire Safety Arrangement (License): Secured
Establishing business relationship with food manufacturing companies, and other related stakeholders: In Progress