How to choose a private label kitchen: a complete guide for food entrepreneurs

In today’s competitive food landscape, private labeling has become a powerful strategy for entrepreneurs to launch or scale their own food brands without owning a production facility. 

Whether you’re an established restaurant operator or a first-time CPG (consumer packaged goods) creator, choosing the right private label kitchen can directly impact your product quality, brand identity, and bottom line.

What is a private label kitchen?

A private label kitchen is a specialized food production facility that manufactures products on behalf of another company, typically under that company’s brand name. Unlike traditional co-manufacturing relationships, where brands might have limited customization, private label kitchens often offer a more flexible model that allows entrepreneurs to develop unique recipes, packaging, and brand narratives while outsourcing the production process entirely.

Depending on your business needs, a private label kitchen might handle everything from sourcing ingredients and prepping food to cooking, packaging, and labeling.

For example, a restaurant looking to bottle its signature kimchi or hot sauce could work with a private label kitchen to replicate the recipe at scale. Similarly, a ghost kitchen operator might develop a new vegan frozen meal line and use a private label kitchen to fulfill growing retail and e-commerce orders.

Why private labeling is a growing trend

Private labeling is gaining momentum across nearly every retail and food category, but the food industry is leading the charge. According to Statista, private label brands held over 17% of the global FMCG (fast-moving consumer goods) market in 2024, with mature markets like the U.S., Germany, and the U.K. seeing shares exceeding 25% in some categories.

This growth is driven by several converging factors:

• Higher profit margins: Private label products typically deliver better margins because businesses control production costs and set their own pricing strategies.
• Increased consumer trust: Modern consumers are more open to store brands and independent labels, especially those offering clean labels, transparency, and ethical sourcing.
• Retailer demand: Large retailers (like Whole Foods, Costco, and Target) actively seek private label brands to differentiate their offerings and improve profitability.
• E-commerce and DTC enablement: With platforms like Shopify, Amazon, and Instagram, it’s easier than ever for small brands to go direct-to-consumer with private label food products.

In the restaurant and food delivery space, private labeling also plays a unique role. Through commissary kitchens and ghost kitchen models, operators can quickly develop secondary or “virtual” food brands under a private label, expanding into new cuisines, price points, or dietary niches without opening additional storefronts.

Whether you’re a local taqueria bottling your famous salsa or a delivery-only kitchen launching a high-protein frozen meal line, private labeling allows nimble innovation with low operational risk.

Read more: How to start a Commissary Kitchen? Your complete guide to success!

Benefits of using a private label kitchen

Before diving into how to choose the right private label kitchen, it’s important to fully understand why so many emerging and established food businesses are embracing this model. From financial efficiency to long-term scalability, private label kitchens offer a strategic foundation for food brands aiming to grow without taking on unnecessary risk.

Here are the key benefits explained in greater detail:

1. Lower startup costs

One of the most immediate advantages of working with a private label kitchen is the significant reduction in capital expenditure. Instead of investing hundreds of thousands of dollars to build or lease a commercial kitchen, plus purchasing equipment, hiring staff, and navigating permits, you can outsource production to an already-operational facility.

2. Faster time to market

Speed is critical in today’s food industry, where trends shift quickly and customer expectations are high. Private label kitchens often have streamlined systems in place, including pre-approved formulations, production equipment, packaging solutions, and regulatory know-how, that enable brands to go from concept to shelf or storefront in weeks rather than months.

3. Expertise and compliance

Food production is highly regulated, and ensuring safety and compliance is non-negotiable. Private label kitchens typically operate under stringent guidelines such as HACCP (Hazard Analysis and Critical Control Points), GMP (Good Manufacturing Practices), and local health codes. Many are also equipped to meet the standards required for certifications like USDA Organic, Gluten-Free, Kosher, Halal, or Non-GMO.

4. Scalability

As your business grows, so will your need for greater production capacity. A major benefit of working with a private label kitchen is the ability to scale your operation without needing to reinvest in infrastructure.

5. Product consistency

Consistency is a cornerstone of food branding, your customers expect the same taste, texture, and presentation with every purchase. Private label kitchens are equipped with standardized production methods, batch monitoring tools, and quality control protocols that help ensure uniformity across every product run.

6. Reduced operational complexity

Launching and running a food business comes with countless operational demands, from managing labor to sourcing packaging and navigating logistics. Many private label kitchens offer turnkey solutions or partnerships that streamline these processes.

7. Access to innovation

The best private label kitchens stay on top of industry trends, from emerging ingredients (like adaptogens or upcycled foods) to new preservation methods (like high-pressure processing or vacuum sealing). When you work with an experienced facility, you gain access to R&D teams, trend forecasts, and pilot programs that can help you stay ahead of the curve.

Read more: Shared Vs. Private Kitchens: Making the right choice for your business

What to look for when choosing a private label kitchen

Choosing the right kitchen requires more than just a quick search, it involves evaluating everything from facility standards to production capabilities and business alignment. Here’s what to look for:

1. Production capabilities

Ensure the kitchen can handle the type of food products you want to make, whether it’s frozen meals, sauces, baked goods, beverages, or fermented products. Ask about:

• Batch size minimums and maximums;
• Equipment types and limitations;
• Special processes (e.g., pasteurization, fermentation, allergen control).

2. Regulatory compliance

A good private label kitchen should comply with local and federal health codes. Look for certifications like:

• USDA and FDA registration (in the U.S.);
• GMP (Good Manufacturing Practices);
• HACCP food safety programs;
• Organic, Kosher, or Halal certifications if needed.

3. Customization and R&D support

If you have a unique recipe or brand identity, you’ll need a kitchen that offers recipe development, sampling, and testing. Some even offer R&D chefs who can help you refine your product.

4. Packaging and labeling services

Some kitchens offer turnkey solutions, including bottling, packaging, and label printing. If not, you’ll need to coordinate with a third-party packager.

5. Location and distribution logistics

Proximity to your distribution zone reduces freight costs and shipping times. If you’re working with a ghost kitchen or DTC (direct-to-consumer) model, local production is essential.

6. Pricing structure

Understand the full pricing model, including:

• Setup fees;
• Per-unit cost;
• Storage or warehousing fees;
• Packaging surcharges;
• Overage or rush fees.

Always request a detailed quote and compare it against your profit margins.

Read more: How much does It cost to start a ghost kitchen: A complete guide

How CloudKitchens supports private label kitchens

CloudKitchens isn’t just a space, it’s a launchpad for food innovation. If you’re an entrepreneur or restaurant operator looking to expand your food brand with private label products, CloudKitchens offers:

• Commercial-grade kitchen space: Fully licensed and ready for food production.
• Integrated delivery platform: Reach customers directly with built-in logistics.
• Multi-brand capabilities: Run multiple food concepts under one roof.
• Storage and packaging zones: Ideal for small-scale CPG production or ghost grocery concepts.
• Business support: Get guidance on local regulations, food safety, and scaling operations.

By leveraging CloudKitchens’ network and infrastructure, you can test private label products, expand into new markets, and grow efficiently, without investing in your own facility.

Looking to scale with a private label kitchen? CloudKitchens makes it easy. Learn how our turnkey kitchen solutions can support your private label food brand.

DISCLAIMER: This information is provided for general informational purposes only and the content does not constitute an endorsement. CloudKitchens does not warrant the accuracy or completeness of any information, text, images/graphics, links, or other content contained within the blog content. We recommend that you consult with financial, legal, and business professionals for advice specific to your situation.