The path of a food entrepreneur is this: getting out of the kitchen, getting on the shelf and getting on the consumers plate. The downfall of food entrepreneurs is they get stuck in the kitchen, meaning they focus so intently on the "food"… thinking incorrectly that this is the path to success. Why does this happen?
I was inspired to write this after ready Jay Goltz article Speed Counseling for Struggling Business Owners.
Investing in Feel Good Things Will Empty Your Wallet
You have a great recipe, make it for your friends, they say "this is great and you should sell this" and the story begins. For many it never goes beyond this. For some they go head-long down the path of crafting the food and start spending money on attorneys, trademarking, business entity, packaging, inventory, a web site, food production equipment… most anything tangible. By the time people come to me for help they typically have invested upwards of $20,000! It feels good spending money on things that one can feel and see.
What is the Customer Problem You Solve?
Yet ask these food entrepreneurs the 3 most important questions: What is the customer problem you solve? How will your product solve the problem? How will you make money? Sadly most will have never thought about these or inadequately address them. Having run business pitch programs, well over 80% need to go back to the drawing board or seek another career. I recently published the Ready. Set. Cupcake! Pitch and this illustrate a great business pitch for the food business.
Being successful in the consumer foods business is complex and far different from launching an app or social site and most business counseling services are ill prepared to provide the right help.
Retail Ready Shelf Ready Food Products
You need to focus on developing retail ready products.
· That means having products that fit the category. So for example most supermarkets have snack foods in the grocery section and the deli section. These are 2 different buyers at the retailer and different requirements.
· Which category can you best compete? Be prepared to address this with a compelling answer to the Why.
· Having the correct retail price that fits into the category requirements? Have you looked at other products on the shelf? Don't believe for a moment you can be 25% higher in price just because you taste better. Most buyers will see this as too risky to out on the shelf/
· The right pack size and the right master shipper. If you are making a hot sauce and your competition is packed in 12 oz bottles, you have to be within a size range that is competitive. Make sure you fit on the shelf… no one will give you shelf space if you have a product size that is inefficient on using shelf space. The boring master shipper is important… if you pack too many individual units in once case, you won't get on the shelf… No buyer will purchase a product packed 24 to the case if that product is expected to sell one unit per week!
How to Create a Sales Pitch to the Supermarket Buyer
Do you realize that if you want the grocery buyer to put you on the shelf, something elses has to be discontinued OR reduced in facings? Just think about the last time you went food shopping … did you see lots of empty spots on the shelf? Nope!
The supermarket buyer takes on some risk by discontinuing an existing product in favor of your untested, unknown brand. Retail shelves are realestate and generate sales and profit per square foot, lineal foot, per facing, whatever the metric.
Getting on the shelf is a topic too large for this blog post so here are some resources I have created to help you understand the process:
It takes more than a great tasting product to be successful
You can be successful… just recognize you need to "ask for directions" AND listen to them. Let me end up by quoting Jay:
"You know how when some guys are lost they will resist asking for directions and keep driving? It is something like that, but instead of staying lost or finding their way, there is a third possibility - they crash. Otherwise Jay's insight is correct… you might crash."
Do you want to crash?