How an Online Strategy Can Supercharge Small Brands
January 31, 2020

How an Online Strategy Can Supercharge Small Brands

Business Models

Historically, getting products into brick-and-mortar grocery stores was the best way to for food entrepreneurs and farmers to reach consumers. This is still a popular and potentially profitable path. Shoppers are there to buy food, after all, so their attention is piqued, and they can feel, smell and sometimes sample new products.

But retail has its challenges too: tough to get on shelf, inventory tie-ups, retailer and distributor margins, to name a few. This is why FFI tells all of our clients that whether or not they go the retail route, it’s critical to have an e-commerce strategy.

Now, in 2020, selling online may not sound like a revolutionary idea. But it’s worth emphasizing because it can be an especially effective model for artisan food makers and specialty agriculture producers, particularly those just starting out. People increasingly want to know where their food comes from, thus making handmade, local and unique products in hot demand. Therefore, these kinds of companies have a hungry market to cater to, and by selling on Amazon, their own website or another e-commerce site, they can get their products to the people without jumping through the traditional retail hoops. 

Our most recent podcast guest is a big proponent of the direct-to-consumer online route—especially for food producers located far from big cities. Paul Scharfman, president of Specialty Cheese Company in Reeseville, Wisconsin, discusses how the internet has opened up major entrepreneurial opportunities for artisan food brands and specialty farmers all across rural America. He says they can now develop a quality product, “disintermediate the difficult distributors and major retailers, sell through Amazon or another e-commerce site, get their products to consumers and build a multimillion-dollar business based in rural nowheresville.” In fact, Paul’s son and daughter-in-law did exactly that with their business, Just the Cheese, in under two years. 

Certainly, there are countless benefits of brick-and-mortar that e-commerce can’t match, so it’s up to each entrepreneur to weigh the pros and cons of each. But for food and farming startups in rural areas, online is definitely worth exploring—at least in the beginning to kick-start their venture.

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

Consultant With TabletBusiness Model Insights

Raising CapitalRaising Capital

National Wholesale BrandsCPG/National Brands

Grocery Store Produce Section
Market Trends

Regenerative AgricultureFarming and AgTech

Mergers And AcquisitionsDeals/M&A

EventsIndustry Events