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The Great Basin Community Food Co-op first opened to the public in downtown Reno with 500 feet of retail space, eventually hitting $1 million in sales in one year. In 2012 they moved to another 3-story location of about 3,000 square feet (on the main floor) even closer to downtown. In 2017, the store had about $4.5 million in sales after rapid growth.
Food entrepreneurs will always have lots of goals competing for their attention. Good entrepreneurs know how to prioritize goals and optimize their efforts for the goals they are pursuing as priorities. This allows them to build financially successful companies and, over time, pursue many more big, hairy, audacious goals than they would have otherwise.
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The Old Fort at Hesperus’ team sees farming education as a continuum where different people are best served by discreet programs, depending on their interests and stage of development. Their sustainable agriculture program includes an educational garden internship, a farmer-in-training program, and market garden incubator.
The inevitable question food entrepreneurs face when scaling is “should I manufacture food in-house or use a co-packer?” The food entrepreneur’s business model, stage of business, financing capacity (i.e. how well they can raise money) and the availability of co-packing capacity for their specific needs all make a difference in deciding how to answer that question.
Being a food entrepreneur is in some ways about balancing empirical reality and a belief in something you cannot see clearly, like where your business will be in 3-5 years. Food entrepreneursshould clearly state their assumptions about the future and test their assumptions constantly, asking the advice of people who they can trust to ground-truth their ideas.
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This hub discovered that the bigger the business got, the more money it lost and that moving aggregation functions off of the owner’s farm caused the operation to be less efficient at that level of sales. The owner chose to contract the business to focus on getting profitable and repaying existing suppliers.
Food businesses should know the role that online sales will play in their revenue stream and in their business model. Consumers are starting to become omnichannel in their food shopping expectations. Like most things in food entrepreneurship, it is best to let your customers lead the way, and if they expect to find you online, go online and conquer.
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Seal The Seasons began production in one of the partitions of a shared-use commissary kitchen facility where they installed an Individually Quick Frozen (IQF) production freezer, later partnering with a co-packer in 2017 and almost doubled their gross margin contributions as a result, passing more money to their farmer suppliers.
Decisions to pivot should be based on a food business’ target consumer’s preferences, category growth (or decline) and other general market trends. Many traditional food and beverage companies have been slow to respond to changing consumer preferences, loosing market share and profits in the process.
Focus is what gives food business owners clarity about their strategy and about the tactics needed to carry it out. Tools like the business model canvascan provide focus and clarity to their business model and the strategic implications of choosing a particular business model path or going after a particular target customer.