How A Specialty Brand Usually Starts Up
Many young food manufacturing brands start with the same story--
perhaps yours is the same. It typically starts with a home or restaurant
chef, who we will call Mr. Goodfooder. Here is his story of how his
food (and his company) came to be.
Mr. Goodfooder first made his signature dressing for his family, and
then for a few friends. After a few weeks, his food became renowned in
his community. One day, someone said to Mr. Goodfooder in passing, “You
should sell this! It is so good, it would really sell!”
And so, a spark was ignited in his entrepreneurial spirit, and Mr.
Goodfooder began the journey of starting his own line of dressings. He’s
decided that with his quality ingredients, he will sell to Whole Foods
and a number of other natural and mainstream grocery stores. And he
knows that his food will be a hit-- because it’s that good. And lucky
Mr. Goodfooder… he is right!
But, for Mr. Goodfooder to start up his own brand, there’s still a
number of things he’s going to have to learn. And if you’re looking to
create your own line of products, you’ll need to learn the same things.
5 Steps To Starting Your New Specialty Food Brand
1. Learn How The Natural / Specialty Food Industry Works (In General)
This step is KEY,
so listen up! If you’ve never been in the food business before, you’re
not alone. Many great brands come from founders who used to work in a
variety of other industries.
To really get your feet underneath you and make smart business plans
for the future, you’ll need to get a firm grasp on how thing work in the
specialty food world. The best place to find out answers to all of
these questions is to attend the Fancy Food Show put on by the Specialty Food Association, and sign up for the Education Seminars.
This is an association that provides guidance to young brands starting
out, and will be a strong networking and selling platform for you as you
continue to grow. First things first, attend a show and learn as much
as you can about your industry. It will absolutely be worth the money.
This is the first step, the foundation, from which you’ll make all of your future business decisions. Through these seminars, you’ll get vital answers to questions like:
- Who will sell your products?
- Who will buy them?
- How will you go to market?
- How do you get a distributor to pick up your products?
- Where will you get your ingredients from?
- Will you manufacture them yourself or use a co-packer?
- How will you market your brand?
You will not be able to successfully move on to the next steps
without knowing all of the background information that they can teach
you. Even though you can move on to the next steps and just wing it, you
will thank yourself later for taking the time to attend and learn
everything you can.
2. Decide Who Will Be Making Your Products
Once you’ve attended the Fancy Food Show (and gotten a good dose of
inspiration and business answers) you’ll need to begin working on your
operations/manufacturing plan. When it comes to actually making your
products, there are a number of ways that you can structure your
business plan.
You can set up your own manufacturing plant, which you’ll have to
scale as you continue to grow. You’ll be responsible for all of the
production, sales, marketing, and business admin side of your new
company. As you grow, you’ll need to hire employees, move into a larger
space, set up a production line and more. This system requires capitol
for investment, and will take a substantial amount of your time to
actually produce the product (and/or oversee your facility and team).
You can work with a co-packer or co-manufacturer (which stands for
contract packer or contact manufacturer). Their job will be to assemble
your product exactly as you specify; using the packaging you choose,
your design, your labels and your ingredients. They will also deliver
the loads of finished products to the locations you specify. Sometimes
co-packers are responsible for ordering raw ingredients, and sometimes
you will be. Every co-packer will have their own minimum requirements to
do a production run for you, and they will expect that you will
continue to increase your sales.
The advantage to this co-packer system is that it takes production
off of your plate, and utilizes their full scale production line that’s
already been set up. This keeps your operations working at
max-efficiency and allows you to spend your time actually selling the
product and growing the brand.
A good co-packer can be hard to find though, and relationships take a
long time to build. We suggest looking through the following listings
for co-packers:
- Specialty Food Resource | Co-Packer Listing
- BBF Direct | Working With Co-Packers Article
If you work in a particular industry, you may contact a complimentary
company to yours (but don’t try a direct competitor) and ask if they
would be willing to work out a co-packing arrangement. Even if they
don’t do this for their primary business, they might be willing to
consider your proposal.
3. Create Your Brand
You’ll need a brand, a product name and a logo. You’ll at least want
to create something basic, even as you start at the beginning stages of
your business.
If this sort of work isn’t your forte, think about hiring a branding
company before you take your final product to print. The labels on your
product will have a large impact on your overall sales-- though
remember, labels aren't everything.
Remember that in the long run, you’ll also need a website and line
cards for each of your particular products. These line cards will give
information to buyers about a particular product (or line of products),
and will include photos, pricing information, nutrition, case layouts
and sizes and more. You can work on these larger marketing pieces over
time.
4. Get Your Business Details In Line
Think about everything you’ll need to answer, to be able to sell your
products to grocery stores. Questions from buyers may be about your
company or they may be about the logistics of the products. Putting
answers together can be a complex process-- they’ll require making some
larger business decisions and getting all of the pieces of the puzzle
together for when you officially start making sales.
- What’s your retail and distributor price? To be able to answer that you’ll need to first be able to answer: what are your margins, your cost of ingredients and the co-packing or manufacturing costs?
- What distributor carries your products?
- What’s the minimum order?
- What makes your product different than others like it?
- What kind of customer is interested in your product?
- Why would our customers want to buy it?
- Do you have samples ready for buyers to taste?
5. Do Sales Presentations and Demos
To really complete the start-up process you’ll need to sell
something. Even if you just produce a few sample runs of your product
and you do some demos to buyers, this is a good way to start the
process.
You’ll need to set up meetings with buyers as they’re analyzing your
particular category once every year or two. It will require calls and
presentations, as well as providing samples for them to try your
products.
Once one grocery chain picks up your products, that will prompt a
distributor to get your item set up in their system. From there, selling
will get easier because you’ll already have one distribution channel in
place. This means that companies who work with that same distributor
can simply add your products to their current orders.
Unfortunately, These Steps Don’t Always Happen In Order
The process of starting your new specialty food company will not
always follow these steps as outlined. This progression is not as clear
and linear as it may appear on paper. It can be complex, with some steps
taking months and then sometimes all of the pieces come into line at
once and you’ll need to make all of your decisions immediately!
Starting your new brand will always be challenging. Your business
decisions will not always be straight forward or outlined. But will it
be worth it? I think you already know the answer to that.
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