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28
May
2011

Top 10 Tips for Food Start-up Companies

by Claire Martinsen on Sat 28th May 2011 15:26

I was asked by the Business Editor of the EDP if I had any tips or pointers for a start up Food Business………the tips were printed in the EDP May 2011 . I am by no means an expert [and still learning all the time] but these are a combination of my time in big business and starting up Breckland Orchard

Here are the Tips:

Small food businesses – Top 10 pointers

[1] NATIONAL v LOCAL

Work out what market you are aiming for.  Options may be to have a large share of the local market, or a more diluted share of the national market.  Which market you aim for will have implications for routes to market, sales, packaging, price point, marketing messages etc.

[2] DIRECT OR VIA WHOLESALERS

Often when you are starting up its quickest and most cost effective to supply direct – either via Farmers Markets or by direct delivery.  When you are still quite small this is easy to do and administer, but as you grow this may become a logistical nightmare.  It’s worth considering at an early stage what you want your route to market to look like further down the road.  Wholesalers do take an additional ‘slice’ of margin, but they do also handle all the logistical issues, and this allows you to focus on making the product.

[3] GET TO KNOW YOUR CUSTOMERS

Customers and consumers are not always the same people!  Customers for a growing food company will generally be cafes, farm shops, village stores.  Consumers will be the customers of your customers. Spend time getting to know your customers – what are they looking for, what are their issues and concerns.  Interacting with consumers all day long, they will have a good idea about price points, packaging etc, and it is worth getting feedback from key customers on your product.

[4] GET TO KNOW YOUR CONSUMERS

Farmers markets are a wonderful way of really getting to know your consumers, and getting quick [and free] feedback on your products.  Make up small batches of new products and get some feedback.  Consumer understanding is really essential, and can help you tailor your product to meet consumers needs.

[5] DIFFERENTIATE AND KNOW YOUR COMPETITION

Be clear about your point of difference.  Retailers are not looking for ‘me-too’ products which just replicate products that they already have – they want a genuine point of difference.  You can’t communicate this point of difference unless you are really sure of it yourself!

Know everything you can about your competition – what their strengths and weaknesses are, their range, their price points, their on shelf impact and size offerings.  This will allow you to know how to really make your product different.  It could be that you want to play by the ‘category norms’ or to deliberately do something different.

[6] HAVE A ROBUST FINANCIAL PLAN

When you are making product for family and friends, or to sell at fetes and farmers markets it can be easy to simplify costs [including paying yourself a wage!].  As the business grows and develops, costs such as commercial premises, wages, employees, commercial equipment all come into the equation.  Before embarking on growth, make sure you have really robust plan that can support growth and all associated costs.  A business that is profitable on a small scale, may look very different when scaled up to much larger volumes.

[7] PACKAGING

Packaging protects a product, but its also an essential medium for communicating about your product.  A really good idea is to take your product into the environment where it is to be sold [shop shelf, fridge, freezer] and evaluate how it stands out on shelf and versus the competitive set.  This will give you a good idea of how it will appear to consumers at point of sale.  Is it the right size for the shelf?  Does the branding stand out enough? Are the colours right?  Product often look different on shelf versus close up.

[8] NEW IDEAS

Being a small food business allows you to be flexible.  Big food companies often lack the ability to be as close to their customers and consumers – so utilise it!  Review your offering at regular intervals, cut out slow sellers [otherwise known as shelf warmers] and bring new and exciting products to market in their place.

[9] MAKE YOUR PRODUCT VISIBLE

Having made a great product is just part of the conundrum – make it visible to both customers and consumers.  Big food companies have huge marketing budgets, being a smaller food business means being more nimble.  Utilise social media [Twitter, Facebook] to share news.  In store tastings are a great means of supporting your customers and letting consumers taste your products

[10] GET HELP ALONG THE WAY

There are some fantastic organisations to help you develop a food business, and network with fellow producers.  Try: Taste of Anglia [the Regional Food Group for the East of England], Norfolk Diet, amongst others!

www.brecklandorchard.co.uk

Posted in: Tips for running a food business

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