This is the question ever Foodpreneur client asks during our first meeting. Starting a food business is more complex that just great taste. So Why do I think food entrepreneurs fail? They are stuck in the kitchen and think great taste is the only key to success.
So I wanted to share with you my first meeting with a new food client who wants to create a food business selling authentic Greek cookies called moustokouloura… they are dairy free and low in calories.Critical Questions to Ask Before Spending Money
So we first discussed Critical Questions to Ask Before Spending Money. I told John to answer each question as best as possible and leave those that you do not have answer for.
Research by Driving Around
John needs to familiarize himself with different supermarket formats and how they merchandise food. He will pay particular attention to cookies in the grocery aisle and cookies sold at the in-store bakery.
Cookies are typically sold in the following sections of the store:
- In Store Bakery
- Grocery Cookie Section
You want to begin determining where your cookies are best suited. Since Greek cookies are specialty baked items I think he will find that the in-store bakery is more appropriate.
All products have competition whether direct or indirect and you know the brands that are clearly NOT your competitors. So for example Johns Greek cookies will NOT compete with Oreos. When you first start your food business, determining competition is subjective and I will be relying on his opinion from observing the stores he visits.
So every foodpreneur first needs to capture the following information:
- What are the brands?
- What types and flavors of products within the brands?
- Pricing of Competition
- The type of packaging these brands are using? I tell every client that the foru roles of packaging results in effective Visual Marketing… your most important investment in your brand. For this part my recommendation is to take pictures of each rather than trying to write out an explanation of packaging types
John wants to make a single product. Bad decision! Introducing a single product is challenging for the following reasons:
A single item gets lost on the shelf… the product has a difficult time standing out and makes it harder to attract the customer due to limited product visibility. Research finds they brands have approximately one second to capture the shopper’s attention. Multiple products give you what is called the “billboard effect”. This creates Shelf Impact. Your brand is in competition with hundreds of other products. So, does it visually stand out on shelf?
The term billboard refers to individual packages of a brand of products that, when positioned together in the shelf, creates strong visual shelf presence. It helps the product utilize the space on the shelf to maximize consumer awareness and brand sales. The picture of Ritz Crackers from Packaging Design: Successful Product Branding from Concept to Shelf is a visual of what the billboard effect looks like.
When you are pitching to the retail buyer, presenting a single item or flavor is a big negative. Firstly the buyer understands the Billboard Effect and the positive impacts it has on attracting consumers to the shelf and getting them either to try it for the first time or become a repeat buyer.
Starting With One Product Results in Food Fatigue
There is something called “Food Fatigue”, essentially consumers get tired of eating the same foods over a period of time. Now if you have only one flavor of product and the consumer is seeking something new… well they have no choice but to search other brands. When they go to another brand, they might not come back.
So I told John to think about developing four flavors of cookies. He will have a higher probability of his customers staying with his brand by purchasing one of his other 3 flavors. This of course points the need for continuous product development so you can refresh your product line up one a year or so.