Food entrepreneurs can get a leg up on the competition with limited funds, experts say.
Startup food producers seeking to gain a foothold in the market can do so with minimal investment if they are resourceful in their marketing, pay close attention to product quality, and take a careful approach to working with brokers and retailers.
Those are some of the insights from a session at the Summer Fancy Food Show presented by Chobani Incubator. For the past two years, Greek yogurt pioneer Chobani has been mentoring small start-up companies that align with its mission to provide “better food for more people.” Chobani
Incubator adopts a handful of these companies at a time, providing each with a $25,000 grant and access to the company’s expertise and resources.
The most important attribute a startup food company needs is the ability to solve a problem or meet a pressing need, said Jackie Miller, director of Chobani Incubator.
Miller led the panel discussion, which featured input from other members of the Chobani management team and the co-founder of Banza, one of the first companies that joined Chobani Incubator.
Key takeaways include:
1. Consistently high quality is the best marketing.
John Levy, director of platform marketing for Chobani, said makers need to ensure they are producing their product in a manner that yields optimum results in every batch, so that anyone who tastes it will become an ambassador for the product. “You are only as good as the food you sell,” he said.
2. Sample, sample, sample.
Brian Rudolph, who co-founded chickpea-based pasta company Banza with his brother, Scott, said his company reaped tremendous benefits from sampling the product at farmers markets and especially from conducting demonstrations at retail. “It’s a great way to get the word out, and get feedback,” he said.
3. Get your broker on board.
Companies need to select the right broker who has the qualities and connections that meet their needs, but they also need to make sure the broker buys into the product with enthusiasm. “You have to get your broker excited about your product,” said Rudolph. “You have to sell them on your product just like you sell any other customers. Just because they are working for you doesn’t mean that’s where it ends.”
4. Adjust the product size to meet your price point.
Companies should consider tweaking the product weight or size to be price competitive. “You don’t want to be twice the price of the competition,” said Levy. “You have to look at it from a market basis, and you have to look at it from a cost of goods sold basis, and use size and weight to your advantage to help equalize that game.”
5. Be relevant to retailers.
Makers can conduct consumer surveys online at a relatively low cost that can focus on the customers of specific retailers, and take those results when they pitch their products. “You don’t need thousands of dollars,” said Levy. “When you go to a buyer, you can tell them some insights about their customer and how they feel about your product.”
6. Consider innovation through alternative product formats.
If a category becomes cluttered with me-too products, one way to continue to differentiate is by revamping the format of the product to meet a consumer need. “What would make it easier for your customers to use your product, and use it more often?” said Levy. “How do you make it fit in their lives in an innovative way?”
Mark Hamstra is a regular contributor to Speciality Food Magazine and Specialty Food News.
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