Running two food brands from one kitchen

You can run two brands from one kitchen and share almost everything: the oven, the fridge, the utilities, the wholesaler run and your own time. What you cannot share is the numbers. Each brand needs its own cost per product, its own contribution margin and its own slice of the shared overhead, split by the kitchen hours it uses. If it all goes into one spreadsheet tab, one brand can quietly pay the other's bills for months.

What to share and what to keep apart

Sort every cost into one of three groups.

Belongs to one brand. Anything only one brand uses: its ingredients, its packaging, its labels, the commission of the channel it sells through, its samples. These go straight into that brand's cost.

Shared but measurable. Ingredients both brands use, such as sugar, eggs or oil. If you buy one sack of sugar for both, charge each brand for the grams its recipes use, at the sack's price per gram. Do not park the whole sack on whichever brand "uses more".

Shared and not measurable per product. Kitchen rent, utilities, the business phone, software subscriptions. This is your overhead, and it needs a rule to split it. The guide on how to allocate overhead to products covers the options. For two brands in one kitchen, splitting by kitchen hours is usually the fairest.

Split overhead by kitchen hours, not by sales

Splitting by sales sounds fair: the brand that sells more pays more. In practice it punishes the brand with a high price and rewards the one that ties up the kitchen all day. Rent and power are used while you cook, not while you sell.

The method:

1. Add up the month's overhead.
2. Log each brand's kitchen hours for the month: production, packing and cleanup. A sheet of paper taped to the fridge is enough.
3. Divide the overhead by total hours. That is your kitchen cost per hour.
4. Multiply it by each brand's hours.

Now each brand carries what it actually uses.

The number that compares brands

Once the costs are apart, compare brands by contribution per kitchen hour: the brand's total contribution margin divided by its kitchen hours. In a small kitchen your time is the scarcest thing you have. A brand that sells a lot but eats your whole day can leave less per hour than one that sells little. The guide to contribution per kitchen hour explains why this ranks products better than margin alone.

Worked example: hot sauce and brownies

You rent time in a shared commercial kitchen and run two brands: a hot sauce in 150 ml bottles and brownies sold in boxes of six.

Monthly overhead: kitchen membership $300, phone and software $100. Total: $400.

Kitchen hours this month: hot sauce 20 hours, brownies 30 hours. Total: 50 hours.

Kitchen cost per hour: 400 ÷ 50 = $8.00.

The arithmetic: hot sauce 150 × 5.40 = $810, and 810 ÷ 20 = $40.50 per hour. Brownies 60 × 7.50 = $450, and 450 ÷ 30 = $15.00 per hour. Variable cost covers ingredients, packaging, labels and the waste in each recipe.

Looked at as one business, you clear $650 + $210 = $860 a month after overhead, which feels fine. Split apart, the picture changes. Brownies take 60% of your kitchen hours (30 of 50) and bring in about 36% of the contribution (450 of 1,260). An hour spent on brownies earns well under half of an hour spent on hot sauce.

That does not mean you should drop the brownies. Your hot sauce buyers may also buy brownies, or brownies may sell all year while sauce is seasonal. It means you now know what to ask: whether the box can carry a higher price, whether bigger batches would cut the hours per box, or whether the sauce deserves more of your selling effort.

What splitting by sales would have shown

Take the same $400 and split it by sales. Hot sauce sells 150 × 9 = $1,350 and brownies 60 × 15 = $900, for $2,250 in total. Hot sauce would carry 1,350 ÷ 2,250 = 60% of the overhead, $240, and brownies $160. Brownies would look $80 better than they are, and they are the brand using the most kitchen time.

Same customers or new ones

A second brand usually starts for one of two reasons: you want to sell something else to the people who already buy from you, or you want to reach different people.

If it is for the same customers, the second brand lives off how well the first one treats them. Everything about keeping customers coming back applies. A customer who orders sauce and brownies together gives you two contributions for one delivery. Ask yourself whether you really need a new name or just a new product under the existing one. Every brand is another Instagram account, another label design and another customer list to keep up.

If it is for new customers, the second brand starts from zero. The word of mouth your first brand has earned does not transfer by itself, because people recommend names they recognise. Work out what your first customers will cost you before you order labels.

Rules that keep the numbers apart

• One sales record per brand, even if everything lands in the same account.
• Shared purchases are logged once and split by recipe, never by guesswork.
• Kitchen hours are logged on the day. Nobody remembers them at the end of the month.
• Check each brand's contribution per hour once a month. If one falls three months running, find out why before it drags the other down.

If a second brand is part of a bigger plan, the guide on how to grow a small food business helps you decide what to do in which order.

Do it with the calculator

Build each brand's recipes separately in the food cost calculator, with their own packaging and waste. It gives you the cost per unit; subtract that from the price and you have the contribution per unit for the table above.