Focus And Discipline Are Key To Food Business Success

Focus And Discipline

Focus is hard to come by nowadays. The Internet age of video ads, click bait and email inboxes that never seems to be manageable offers an endless stream of distractions. Even in physical grocery stores, food consumers have so many choices in nearly every category, and now they have options about what foods they want to order online and delivered vs. picked up at the store vs. have someone enter their house to place the groceries in their fridge.

Food and beverage entrepreneurs trying to reach consumers have to consider that the general food consumer is overwhelmed by their choices and ultimately has very little time to interact with unfamiliar food and beverage brands. And, what is more, not every consumer is the food business’ target consumer, so the pool of potential customers for up and coming brands is usually quite a small subset of the larger population.

The tagline from the famous business book Discipline of Market Leaders is “Narrow Your Focus, Choose Your Customers, Dominate Your Market.” Focus is what gives food business owners clarity about their strategy and about the tactics needed to carry it out. When we work with food and beverage clients, we use tools like the business model canvas to 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.

If the strategy is to dominate a niche nationally (like our featured podcast interviewees from Quince and Apple), it doesn’t make sense to chase every single opportunity for sales, even if the promise of immediate cash flow seems tempting. Saying no to “shiny objects” is easier if you know what you are saying yes to. Quince and Apple said no to discount retailers because they knew that they should not compete on price or volume but rather on the quality of their premium offering to a premium-focused food consumer.

It takes discipline to get simple, concise and clear about the business model path for a food business. Like any discipline, work must be put in on a regular basis to stay focused and on track. Only then can food businesses dominate their market and reach their target customer.


And now, our roundup of the best food and beverage finance news, events and resources from around the web…

Food and Beverage Business Models

Business Model Insights

  • What Makes an Ongoing Business Forecast Realistic? (SBA Blog) – “Start with the obvious: coordinate your forecast with your past results. Make sure that the types, categories, and items you put into your forecast match the types, categories and items you get reports on from your bookkeeping. Specifically, if you think of a forecast in a spreadsheet view with labels in the leftmost column and months across the top in the top row. Way too often people set up forecasts using different categories than what they get in accounting reports. Keep past and future aligned.”
  • Getting on—and off—shelves in today’s market (New Hope Media, featuring Tera Johnson)
  • 5 Lessons Learned: Legal Contracts That Every Food Business Needs (PilotWorks)

Raising Capital

Raising Capital

  • What’s My Valuation? Pt. 1 – Evaluating Valuation (Project Nosh) “Why are so many founders/executives/owners of growing businesses deeply concerned—or even obsessed—over valuation? I don’t know, but it really can be counter-productive. If most startups that fail do so because they run out of cash, maybe you should focus on understanding and securing the financing you need. When seeking financing, you are soliciting investors who may ‘pull the trigger’ on around one percent of the opportunities they see. Don’t let getting stuck on an above-market valuation be the reason you miss out on getting the cash you will certainly need to grow a capital-intensive CPG business, or lose a chance to connect with some folks who might have been excellent value-added partners.”
  • 3 questions investors consider when evaluating companies (New Hope Media)
  • Financing Your Expanding Business with the SBA (SBA Blog)

Grocery Store Shopping

CPG/National Brands

  • Why Category Management Needs More Critical Thinkers (CMKG) – “Why did they or didn’t they buy? Why is shopper satisfaction growing or declining? Why are business results trending up or down? As the shopper path to purchase becomes more complex and non-linear, so does the analytic pathway that we need to follow to understand the shopper. Linear thinking that has driven category reviews, assortment and planograms won’t help us as we move through massive amounts of more granular data, shopper insights and new data sources in this quest for shopper satisfaction. Step-by-step thinking creates a barrier to more strategic decision making because the path to analytics isn’t a straight line, but one that zigs and zags based on what the data says.”
  • What’s With All These Similar Distribution Measures? (CPG Data Tip Sheet)
  • Telling your story—and how it can help your brand (New Hope Media)

Grocery Store Produce Section

Market Trends

 Regenerative Agriculture

Farming and AgTech

  • Brands are key to regenerative agriculture (New Hope Media) – “The top solutions farmers need to see in the market to consider making a shift to regenerative agriculture include: demonstrated profitability, yields, reduced costs, demonstrated market demand and multiyear contracts to support their transition. We can motivate farmers to engage, but natural products brands are going to need to lead if we are going to do this at scale. Consumers are motivated and are ready to support responsible business practices. Already they are beginning to demand transparent and responsible business practices. For food manufacturers, there is an opportunity to rebuild consumer trust, and strengthen and differentiate their brands while working to reverse climate change. Growing regenerative agriculture practices means increasing demand, which makes natural products brands central to the effort.”
  • Tales of a Failed Agtech Startup: “Everyone thinks they’re an early adopter; few actually are” (AgFunder News)
  • Study: 28% of U.S. jobs are linked to food and agriculture (FoodDive)

Mergers and Acquisitions

Deals/M&A

Events

Industry Events

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