7 Ways to Grow Your Food Business

Action plans by Guest Blogger: Michael Adams

Editor’s note: Michael Adams is the Co-Founder of Gredio, web-based food manufacturing software for specialty food companies built to help you effortlessly run your business (and forget about Excel spreadsheets). He also runs Green Mountain Mustard, found in over 100 retailers across New England.

www.gredio.com

You’ve got your product. Sales are going well at the farmer’s market - maybe you’ve been able to create room on the shelf for your products at local retailers. A lot of food producers don’t make it as far as you have. But, you have a unique problem on your hands.

How do you grow your food business beyond just a couple of stores?

Most importantly, how do you make your food business your full-time gig and get rid of that pesky side-job. This is where, just like many small businesses, you have to get creative.

Here are 7 ways to grow your food business as well as the steps to be successful in each growth opportunity.

1. Retail/Wholesale

This is the most popular way to grow your food business. Getting your product into thousands of retailers is every producer’s dream. But, going from 10 to 100 to 1,000 retailers is tough enough. Here’s a five step action plan to grow your retail presence:

1. Ask customers where they want your product

2. Contact the store to find out who the buyer is

3. Send over samples, price sheet, and a business card

4. Follow up one week later to see about meeting the buyer

5. Promote your new retail location to your customers.

It’s a simple action plan, but that’s really how it’s done. If customers tell you where to go, they’ll at least be buying your product. Why buy where your customers aren’t? Let’s move on to the second way to grow your food business.

2. Ecommerce

Selling your product online is becoming an easy way for food producers to reach customers across the nation. Being able to buy hot sauce from Vermont, granola from Washington, and oranges from Florida not only creates a web of commerce, but helps others discover products without leaving their couch. That means if you’re a rural Virginia honey producer, your market is really the nation - not just your small-town customers. How can you take advantage of the web to grow your business? Here’s five steps to take:

1. Compare ecommerce options. (there are more than just these 10)

2. Select and build your store (you can get a designer to help you)

3. Think about what promotions and shipping you’ll offer your customers.

4. Create an experience with your product (they only have one chance to open your box)

5. Promote your store online and to your customers (especially tourists)

3. Fairs and Festivals

There’s almost nothing better than being able to interact with your customers. You get to know how much they love your product. You get to hear what recipes they’ve used your product in...and more! Here’s how to get your product into more fairs and festivals:

1.  Use festival directories FestivalNet and Craft Show Yellow Pages to find events.

2. Ask other food producers about shows (they’ll know which ones are good)

3. Try as many shows as possible (some will be good, some bad)

4. Build a beautiful display (this is no farmer’s market. You’re next to artists and craftspeople)

5. Emphasize free shipping (give tourists an incentive to buy).

4. Food Service

“Do you sell in bigger containers?” If you get that question all the time, I’d explore food service packaging - in quarts, gallons, condiment packets, etc. It’s a great way to sell a lot of product quickly. Plus, you get on the menu at some top restaurants in your area. Here’s the quick list of how to get started in food service:

1. Figure out your needs to package in larger containers

2. Determine your product cost and appropriate margins

3. Find a foodservice distributor or start knocking on doors (we find after lunch is the best time)

4. Make suggestions on how to use your product in certain dishes (do you research beforehand)

5. Follow up with restaurants directly (distributors don’t always have time to sell your product)

5. Catalog

Thought direct mail was a dying breed? It’s actually quite popular. From postcards to mail-order catalogs, more businesses are looking to use catalog sales to grow their food businesses. Here’s 5 tips to make your holiday catalog sales season a success:

1. Identify catalogs you would like to be in

2. Plan 4-6 months ahead (catalogs take a long time to plan)

3. Send samples (plus, make sure you’re including why you’re unique.)

4. Promote that you’re in the catalog - help the mail-order company drive their own sales!

5. Follow up after the catalog run to see how you can be a part of the next catalog (assuming it went well!)

6. Private Label

As one of my favorites on the list, private labeling offers other companies the opportunity to put their own label on your product. For example, when you walk into a store and it seems there’s an endless amount of food products - that’s private labeling. The store has taken other company's recipes and labeled them as their own. Here’s 5 tips to make private labeling work for you:

1. Let them create their own label art (you have better things to do)

2. Have minimum orders (10 cases of product is a good recommendation)

3. Put it on your website (don’t let it be a secret)

4. Target weddings and corporate events (they LOVE to private label everything)

5. Let it happen (many private label companies simply fall into place)

7. Daily Deal Sites

Daily deal sites are all over the place.There’s tons of them. From Groupon to Living Social, LocalvoreToday to Jumponit (a few local ones in Vermont), they offer companies a chance to build their fan base. But, there are some things you have to watch out for. Here are a couple tips:

1. Make the deal worth it (offering free shipping isn’t going to cut it)

2. Make it profitable (make sure you’re making money)

3. Run the deal on multiple deal sites - you can attract a larger crowd

4. Try your deal at different times of the year (holidays are almost always best!)

5. Learn and improve for next time (it never goes right the first time - learn and try again)

What strategies have used to grow your food business? Let’s start a discussion below in the comments and grow our food businesses together.

From Farmer's Market to Macy's

Interview with Kathleen Escamilla-Hernandez

http://www.cocoamains.com/

By Kathryn Gordon and Jeff Yoskowitz of FoodStartUpHelp.com

Kathryn:  Hi Kathleen, you’ve come a long ways since you started at ICE (Institute of Culinary Education) as my student 2 ½ years ago!   We’re very excited. Is it true you just got your first purchase order to sell your Cocoamains macarons at the Macy’s flagship store in Manhattan?

Kathleen:   Yes!  It was interesting to be in the negotiations with such a large customer.  Prior to this, I was selling my macarons and other baked goods at a farmers’ market!   I loved the farm market and meeting my customers directly – but this is a fantastic next step for my business. I do plan though, to continue selling at the farmer’s market in the spring.

Jeff:  You began at a farmer’s market in NJ earlier this year. Can you talk about that process?

Kathleen:  The farmer’s market debut allowed me to pull together my business structure.  When I first started at ICE, I was looking to do something in baking that was creative since I formerly designed children’s wear.   I didn't know precisely what I wanted to do, but I loved pastry and it was a creative outlet from the stress of my former career.  The opportunity to sell on weekends at the farmer’s market came along, and I took the plunge.  I also started to do some dessert catering.   It helps to have a supportive husband, who is also a graphic designer!  At first, I wasn't sure what would sell and I offered pound cakes, madeleines and macarons.  The macarons sold out immediately! 

Process wise, I had to file my LLC, get a trademark, have the website developed, do my Serv Safe certification (which you can do entirely online through www.servsafe.com -- it’s very interesting!), obtain general liability insurance, complete the mandatory paperwork to sell at a farmer’s market, find a commercial kitchen to work in, develop my macaron formula, flavors and prices, buy a tent, and create signage, flyers and business cards!  At that point, I didn’t yet need packaging.  

All summer, I was baking all night, working from 4 am to 2 pm for my regular job, and getting 4 hours sleep.   However, it was a fantastic way to work out the kinks, make money, allow clientele to get to know my product and also allow me to get feedback on my product.

A friend of mine said:  "You don't go to the farmer’s market to make money - you go to promote your product."  But I told him you go to do both or else why bother going if you don't make money?

Jeff:  When do you launch at Macy’s?

Kathleen:  We just opened at Macy’s Cucina and Co. earlier this week.  We gave away free macarons from 11 am until 2 pm!

Currently I am working on my display case – I can create whatever I want in terms of macaron cakes, gift baskets, etc.  It’s a lot of fun.  I like figuring out how to make lacquered display macarons look as realistic and beautiful as the edible ones!

Kathryn:  Originally the Macy’s Department Buyer for Cucina and Co. wanted you to just have fresh, loose “grab and go” macarons available for purchase out of their refrigerated case?  

Kathleen:  Yes, but then a Macy’s Vice President decided that he wanted to offer gift boxes.  There was a bit of going back and forth.  We decided to do both, and now, my custom boxes are being created.  When we open, there will be 2 sizes of macarons available in 8 flavors:  large and Cocoamain’s mini Mac Poppers!  Pre-packaged Cocoamains gift boxes will be available for the holidays which is great, because a lot of people shop at Macy’s and it’s located so conveniently to Penn Station that commuters can pop in and pick up a present!  We’re all hoping that the eye-catching appeal of macarons will do the trick!

Jeff:  What makes your macarons different from other macarons, Kathleen? 

Kathleen:  I respond to my feedback from my customers and offer fresh, accessible flavors.  I have some popular standard flavors (5) and will rotate in (3) others seasonally.   For example, the Macy’s buyer mentioned that she would like to attract customers at breakfast time – and I turned around and gave her my cinnamon raisin twist macaron with cream cheese filling.  It’s absolutely delicious, especially with morning coffee!  So I have flavors that appeal throughout the day to consumers.

Cocoamains offers American theme flavors in appealing colors.   Compared to other macaron start ups, my texture is soft and my flavors are “bumped up.”  The large size fits into someone’s palm in an appealing way like the size of a cupcake.  The mini Mac Poppers are cute, and allows someone to sample all the flavors.

Jeff:  Kathleen, where do you do your production?

Kathleen:  I was working in one commercial kitchen in NJ but I am switching to a larger, brand new facility that lets me rent time on a monthly basis.  I just signed that contract.  I had outgrown the freezer space in the first kitchen.

Kathryn:  How will you transport your macarons to Macy’s?

Kathleen:  As an approved vendor, we have a wide range of hours we can unload at the loading dock from even as early as 5 am.  I plan to arrive early to avoid city traffic, and will be able to bring the macarons straight from my commercial kitchen facility up to the refrigerated case at Macy’s Cucina and Co.  

Kathryn:  What’s one of the biggest lessons you learnt between finishing at ICE as a pastry & baking student and becoming an entrepreneur?

Kathleen:   When your instructors tell you to practice piping, they mean it!  On my first day of externship at Bouchon Bakery, I piped their signature Bouchons for 12 hours.  I had recently had a carpal tunnel operation and there was nothing like that much piping to bring back my hand strength.  I will be hand piping my own macarons until I can justify a depositor, since I am now so fast at piping!

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