Entrepreneurship doesn't come with an instruction manual. Unfortunately, many things are learned on the job. This got us thinking – what are some things you wish you knew when starting your CPG business? #TheThingsWeDidn'tKnow
Nadine Joseph, founder of Peak & Valley and 2021 Enthuse Foundation Pitch Competition Finalist, posted on LinkedIn about her experience with barcodes a few weeks before her brand was set to hit Whole Foods Market.
"I received an email from our distributor - our barcodes weren't scanning in," Nadine wrote. "The barcodes, as printed on our labels, were too small to be scanned. I had designed these labels in Photoshop and had no idea what the barcode sizing was supposed to be (I just eyeballed it). (I came across a vendor) printed my barcodes the same day and overnighted them to the distributor. An absolute lifesaver. We got the stickers applied, and the launch happened on time. And, needless to say, all of our barcodes are correctly sized now."
Since education is part of the Enthuse Foundation's mission, in our latest blog series, we'll briefly break down some new concepts and pass along our knowledge to the next generation of CPG entrepreneurs. First off, the Universal Product Code (UPC).
UPC is the Dewey Decimal System for the retail industry. A UPC is used to identify and track products in stores and warehouses. It comprises a 12-digit numerical code represented by a series of vertical bars of varying widths.
Look at any packaged item and find a barcode – the UPC.
How do the numbers add up?
Here's a quick breakdown of the barcode. The numbers aren't random – they serve a purpose.
·MFG (UCC Company Prefix) is the number provided by the GS1-US (more on them below.
Product # assigned to identify your individual products and may consist of 2 digits (100 item codes), 3 digits (1,000 item codes), 4 digits (10,000 item codes), or 5 digits (100,000 item codes) and is determined by the length of your UCC Company Prefix.
Check the Digit calculated from the MFG and Product # to ensure the data has been correctly composed.
What is the GS1-US?
GS1 US® is a not-for-profit information standards organization with 300K+ members, and GS1 Standards are the world's most widely-used supply chain standards. The GS1 US administers the Universal Product Code (UPC) barcode and other information standards and data carriers.
If you want to sell products in retail or to any third-party seller, your first step is to obtain a GS1 US GTIN ($30) or GS1 Company Prefix ($250+) based on your barcode needs.
For example, for one product line (strawberry jam), a GS1 US GTIN might be sufficient. However, for multiple flavors, sizes, and product lines, a GS1 Company Prefix might be required. Utilize the GS1 US barcode estimator or contact the organization directly to determine your suitable membership.
Note – the GTIN or Company Prefix purchase will only provide you with the Company Prefix, not the entire barcode.
Best Practices for Product Barcodes
Once you've secured a Company Prefix, it is time to create your barcodes (either yourself, on the GSI-US website, or through a third-party agency). Here are some tips.
Size: The nominal dimension of a UPC is 100% Magnification Factor or 1.469 inches wide (from the far left-hand side number to the far right-hand side number) by 1.02 inches tall (from the top of the bar code to the bottom of the human-readable numbers). The minimum size of a UPC is 80% Magnification Factor (80% of the nominal size), and the maximum size of a UPC is 200% Magnification Factor (200% of the nominal size).
Color: Black is the best color to print your bar codes, but you can also use dark blues and greens. Generally, the best background color is white, although light colors like yellow will work. Be cautious when considering recycled paper. Make sure you have the colors checked by a bar code verifier before printing.
How Can I Learn More About UPCs?
Here are more resources:
GS-1 – Go right to the source. GS-1 offers webinars, templates, and blog posts about the UPC.
AccuGraphiX – Suggested by Nadine. A GS1 US partner since 2004, the company offers expert knowledge in barcode verification, application identifiers, UPC identification, and more.
inFlow – Barcodes are part of a larger supply chain. The key to scaling a successful company is ensuring processes are in place to handle growth. inFlow helps companies take their data management from spreadsheets to software. Here's a guide the brand published about barcodes.
California Label Products provides labels and tags for product branding and identification to customers around the globe specializing in food/beverage brands.
Bandolier (Canada-based) – A small-footprint marketing, product development, and creative agency specializing in consumable CPG products from food and beauty to cannabis, beverage alcohol, and nutraceuticals.
Consumers might not even notice a barcode on your product. Still, besides your ingredients, it might be the most critical item on your packaging. Incorrect barcodes can cost your company money and/or time, so it is crucial to understand the UPC and learn from our mistakes.
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