Some of the most innovative food products are a tough sell for consumers. It’s not that these items aren’t amazing. In fact, they may be super healthy and downright delicious. No, the real issue is often that consumers don’t fully understand the product, its purpose or its benefits—or their deeply ingrained beliefs and assumptions prevent them from seeing its true value.
Of course, these hurdles can be overcome, as several wildly successful food brands have proven. But doing so requires a significant investment in retailer and consumer education, which means time, money and peoplepower. Whether it’s in-store demos, eye-catching signage, special packaging or a social media campaign, entrepreneurs must budget for these efforts—both monetarily and in human capital—when bringing an out-of-the-box product to market.
Sometimes these investments pay off big-time and the company ends up with a winning consumer product. Other times, though, brands determine it’s just not worth it and decide to explore other avenues and channels instead.
Take insect protein bar company Chapul, for example, which tried for years to sell consumers on the health and environmental benefits of powdered crickets. Convincing people to get over the ick factor and try their bars required massive education efforts, and after about seven years on the market, Chapul opted to exit the CPG game. But the founders weren’t done with insects just yet—they switched their focus to insect farming ventures in Asia, where consuming creepy-crawlies is much more accepted.
Our most recent podcast guests, Dale and Pam Johnson of Century Sun Oil in Pulaski, Wisconsin, have also encountered the education obstacle in marketing their high-oleic organic sunflower oil to consumers. While most sunflower oils are high in omega-6 fatty acids, which get a bad rap, Century Sun’s product is richer in heart-healthy omega-9s. But since the health benefits of omega-9s aren’t well known, garnering major sales at retail would require education, and the Johnsons have determined it’s more cost effective to focus on their bulk business. They still sell at retail, but see bulk as the bigger growth opportunity.
This is not to say that investing more in consumer education wouldn’t be worth it for another company—it all depends on each entrepreneur’s interests and business goals. The point is that for unconventional food products to find success at retail or even direct to consumer, some level of education is required. Therefore, companies opting to go this route should work those investments into their business plans and budgets.
And now, our roundup of the best food and beverage finance news, events and resources from around the web…
Business Model Insights
- How to shape your sustainability story (GreenBiz) Having a recycling program is not the same as having a sustainability story; running a responsible business is not the same as having an actual program to reduce impacts. Companies must have a true sustainability story and share it successfully—here’s how.
- How to Remain Competitive in a Saturated Online Retail Market (Entrepreneur)
- The 3 Questions Entrepreneurs Should Ask Before Making Tough Decisions (Entrepreneur)
- Female Entrepreneurship Guide (Business Credit Cards) Starting a new business venture can be hard for anyone, but women often face more challenges than men, including access to credit, funding and membership. These hurdles can be overcome with education, innovation and the right resources.
- What the Big Banks Won’t Tell You About Business Loans (Inc.)
- Six Tips for Avoiding a Cashflow Crisis (Forbes)
- Grocery shoppers depend on product labels and shelf signage to eat healthily (New Hope Network) The average supermarket shopper seeks out six different front-of-package claims when purchasing food, new FMI research finds. There is clear momentum for claims related to minimal processing and ethical practices.
- Online grocery forecast increases to $143B by 2025 (Grocery Dive)
- Be straight with me: A new era in ‘woke’ food labeling (Food Dive)
- How are consumers’ perceptions of clean label evolving? (FoodNavigator-USA) Consumers have a basic understanding of “clean label”—for most, it means products made with recognizable ingredients and no preservatives or artificial additives. But new research shows this definition has evolved and become more nuanced.
- Despite growth in dairy, industry execs strike a cautious tone (Food Dive)
- Market analysis: Opportunities for low-sodium, reduced-sugar products (Food & Beverage Insider)
Farming and AgTech
- Could Cows Play a Positive Role in Sustainable Food Systems? (Modern Farmer) The beef and dairy industries face criticism regarding the sustainability of livestock farming. But a UPenn Veterinary Medicine initiative is showing how dairy cows could be a key part of sustainable agriculture and circular food systems.
- Occasional Tillage May Have a Place in Long-Term No-Till (Successful Farming)
- U.S. Heads for Highest Farm Income in Seven Years (Successful Farming)
- Danone North America partners with rePlant Capital (DairyReporter) rePlant will invest up to $20 million to help Danone North America’s farmer partners convert to regenerative or organic farming practices to increase biodiversity, enhance ecosystems and enrich soil.
- Mergers and acquisitions up again in annual Zenith report (DairyReporter)
- GrubMarket completes the acquisition of Organic Harvest Network (Produce Blue Book)
- Refrigerated Foods Association Exhibition & Conference – $, 2/23 – 2/26 in Orlando, FL
- MOSES Conference 2020 (MOSES) – $, 2/27 – 2/29 in La Crosse, WI
- American Food Sure Summit – $, 3/2 – 3/3 in Chicago, IL
- PACK EXPO East – $, 3/3 – 3/5 in Philadelphia, PA
- Expo West 2020 (New Hope Network) – $, 3/3-3/7 in Anaheim, CA
- National Good Food Network Conference 2020 (Wallace Center) – $, 3/10 – 3/13 in New Orleans, LA
- Edible-Alpha® Live! – $, 4/1 in Madison, WI
- SupplySide East – $, 4/21 – 4/22 in Secaucus, NJ
- Food Safety Summit – $, 5/4 – 5/7 in Rosemont, IL
- SAVOR™: An American Craft Beer & Food Experience – $, 5/15 in Washington, DC