Sometimes certain products or certain classes of products make more sense in certain markets than others. For example, heavy or perishable food items make less sense to sell online due to the shipping costs and logistics involved. But unconventional markets could make sense if location or customer data suggests it is a good idea.
Good strategies are ones that reflect current relationships with customers/partners and current market realities, and thus, can shift as those things shift. Without a well-documented strategy, even well-meaning food entrepreneurs can get distracted or fail to execute on their business’ core needs and goals.
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The auction focuses on getting smaller producers in the area to the scale to where they can sell and get attention for their products. Last year the auction grossed over $300,000, with the auction taking a 16% commission for all vegetables sold.
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Since the snack category is crowded, Evolve Brands has focused their efforts on sales and marketing to build and continually support a strong distribution footprint of around 2,500 independent, natural and co-op grocery stores. From there, they can pursue a larger go-to-market strategy.
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A trip to Expo West in 2010 validated the demand and uniqueness of RP’s gluten-free SKUs, generating demand that spawned rapid growth of the brand on a more national level, which can be challenging to manage the customer relationships and the right equipment setup/space to match production with demand.
In a marketplace with rapidly changing food preferences, restrictions, diets and ethical concerns around food production, one of the biggest challenges is figuring out how to deliver a product that solves enough problems for the right customers while building a strong relationship with them.
Sometimes the ideal distribution path looks different than the entrepreneur intended when they started the business. The brands that survive today’s marketplace will be making decisions about distribution and channels of delivery with customer expectations and preferences at center stage.
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Funky Fresh Spring Rolls is a company that produces uniquely flavored, hand rolled spring rolls that are baked or grilled (not fried) with fresh and local ingredients. The Funky Fresh team began selling at Farmers Markets, which in addition to providing early cash flow have functioned as market research labs, allowing them to talk directly to consumers.
Building markets and the supply chain relationships necessary to support them requires a long-term vision that aligns consumers, suppliers, funders and their brand. But, if it is properly built and capitalized, it can lead to a defensibly unique business model that allows that food company to be built to last.
Because the food space is competitive, online and off, emerging food companies have to spend lots of marketing and sales dollars to get consumer attention and trial by paying to have their product in the right place with the right positioning.