Starting a Food Business

Get Your Product Idea Out of Kitchen and on to Your Consumer’s Plate

 

Reading about Foods and Beverages on this site might make you “hungry” for starting your own food business. (Note: I will use food to cover both edibles as well as beverages). Over series of articles I will highlight do’s and don’ts garnered from my 35 years of experience in retail consumer foods.

Starting any business in today’s environment is difficult and the food business has an advantage over others businesses; we all have to eat! We also have different tastes and desires in our diets which allows very “niche” based food products to succeed. Food is an idea many people pursue as a business. Besides the fact we love to eat, food is easy to prototype; you can do it in your kitchen inexpensively. You also have the enjoyment of sampling your friends and making them happy with the wonderful recipe you took from concept to plate.

 

 

 

The Fancy Food Show is run by the National Association to the Specialty Trade NASFT and occurs twice a year. It is an amazing array of the most fabulous specialty foods both domestic and imported. For anyone thinking of pursuing their passion in food, this show is a must see. Over a three day period you will have a firm foundation of what products are currently in distribution and new products not yet on the shelves. It is fun “visual” market research helping you decide if your food idea is a real opportunity providing a unique offering to the consumer or one of many “me too” items. If you see too much competition, then you know it is time to go back to the drawing board. That does not mean you give up, it tells you to consider a new idea.

Is passion enough to make a new product a success? No. That is where practical passion comes into play.

Most food entrepreneurs are high on passion and like most people new to business have a large degree of “I don't know what I don't know”. You probably think that all you need is a great tasting product to get on the shelf. Well, that sounds logical because most of us like great tasting food. In the food business great taste is akin to a car having brakes! When you buy a car you expect that it has brakes and you do not make your purchase decision based on this attribute of the car.

Great taste is an expectation on the consumer’s part. Technically you can say it is a selling feature but in reality it is an expectation the consumer has when they pick the product off of the shelf.

 

 

 

Newcomers to the Consumer Packaged Goods (CPG) do not realize that this is a distribution channel intensive business with many gate keepers along the way. Gatekeepers in the business are buyers, merchandisers, distributors and brokers that you have to deal with one step at a time to attain your goal of getting on the shelf. Additionally the business of food has a high degree of complexity that newcomers don’t’ know about, creating hurdles that slow you down or stop you in your tracks.

The competition, both large and small are becoming very Entrepreneurial... they are getting really good at coming up with ideas, determining if the idea is a profitable opportunity and then successfully executing great shelf strategy. In a recent article New Products that are successful in spite of the economy, I highlight the recent The IRI annual Pace Setter report that shows less than 20% of new products exceed $7.5 Million in sales annually within 18 months of their introduction.

The IRI report statistic makes it clear that that passion is needed but practical passion composed of great marketing, product positioning and shelf strategy is necessary to increase your chances of success in the consumer food arena. Each article to follow will present one or more principles to help you learn that you need to know a lot more than just creating great tasting food to have a chance of getting on the shelf.

http://foodbeverage.about.com/od/Specialty/a/Starting-A-Food-Business.htm