Know your market and numbers: Strategies for creating a food or drink start-up
Posted: Tue 1st Oct 2019
Starting a food or drink business? Ignore the hype and all those who tell you what they think you should do.
Focus on building your business with razor sharp thinking and targeting, so you can be the last one standing, says Vhari Russell, Enterprise Nation member and founder of The Food Marketing Experts.
Know your market: Be clear and own your segment
Knowing your competitive set is not enough to justify a launch. Understanding what the consumer wants, their current buying habits and what they need should form a large part of your pre-launch work. Ask yourself 'what problem am I solving?' and if you can answer this with conviction then you have a chance of success.
There are categories and products so new and innovative that the consumer doesn't know they need them, but in order to position correctly and with the right messaging it is crucial to research and understand where the right fit is.
The best source of data and consumer buying behaviour is via the likes of Mintel, Euromonitor, Kantar etc. Most are available to read and access for free at The British Library. Buyers read and respect this data, so you can be sure that when you use it to build your case for launch and positioning it is solid.
Doing your own consumer research is obviously good too, but only if you have a large enough sample and it is done with clear and relevant, not leading, questions. This piece of work takes some time and don't underestimate the value of really knowing everything about the market and the consumer before you start to create your launch plan.
Be clear on what makes you unique. If you're a 'me too' then make sure you are a massively better version of what you are replicating. If you are a small niche product, or aimed at the mainstream be really clear on what segment of the market you sit in and why you are an expert in it.
We need to move beyond the generalised term 'millennial' as a description for target consumers. This covers too many segments and age profiles and makes it harder to win when you try to target all of them. Look at which segment(s), exact age profile, demographics, and lifestyle choices they make and be as specific as possible.
Get your supply chain right: No supply chain, no product
The most important factor in maintaining launch momentum and building your brand. Get your manufacturing right and the rest will follow.
Having a great product means little unless you can get it manufactured to your spec and requirements. Finding a partner manufacturer can be a really tough ride, but even in an industry with a reputation for being old school and male dominated, there is always one who will listen and work with you. Founder Cassandra Stavrou at the hugely successful Proper Corn brand managed to find a manufacturer who would spray her corn the way she wanted it done after many failed attempts. She still partners with that same manufacturer today.
Bear in mind that unless creating a niche product (e.g. unique high quality product for a small segment) having six months shelf-life on ambient products is key to getting wide distribution. Some distributors will of course work with less than six months but to get the widest distribution then a longer shelf life will be crucial.
Know your numbers: Know the cost of doing business
An ex Microsoft executive once said "know your numbers" as it's the basis of success. It's a mantra worth noting as the most challenging part of starting out is having enough money to do get the basics done, and also keep a good cashflow. There is a cost to doing business no matter which way you enter the market. The big retailers will expect promotions and support in store, proof that the brand is willing to play hardball and worth their time.
Even if part of a start-up support scheme, there is only so long they will hold out before asking or expecting investment. The distributors will expect investment in advertising, attendance at their fairs and various other contributions. Map out and plan your launch to market knowing how much it may cost you, or know where and when you may need to source external investment to get to wider distribution.
Risk manage: Understand points of resistance
This is a lesser done exercise but one that deserves airtime and more attention. Current political climate aside, the economics of not knowing your risk factors and where your pain points may be can be a recipe for overnight failure. If you know where your risks are you will know how to mitigate them. Start-ups are really hard work and every successful one had terrible set-backs and hurdles they had to overcome.
By spending even a little time on where you think your points of resistance are and preparing for how to solve these you can save yourself time, money and stress. Being agile is one thing ,but being able to deal with major hurdles and issues requires resilience and the principles of risk management.
Invest in the brand: Build a first impressions brand
Consumers don't like being sold to. They like making a choice around what they want to buy, based on their needs and how well they can connect to a brand. We're aware that consumers buy into brands with stories and purpose. If you don't have either then you will need to be solving a problem or need that cannot be solved by another brand. A great example of this is Uber. No one particularly likes Uber or their complex story of internal issues, but everyone says they need Uber in their lives.
If you don't have a large, or even small budget consider just how important first impressions are. If your brand identity and message is not clear and does not communicate the values of your brand the consumer is not going to buy into it.
Find a way, and invest as much as you can in a great designer or brand team who can create an iconic, well researched look and feel for your brand. Your designer or brand team should be able to advise you on positioning, brand values, essence , messaging on pack based on market research as well as proposition messaging.
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