How to Bring a Food Product to Market
All your friends tell you that you make the best strawberry jam they have ever tasted. But how do you know your hobby is ready to compete with the other preserves on the grocery shelf?
"You need to do a competitive analysis of who is already out there and how your product is different," says Barbara Lang, a consultant and author of From Restaurant to Retail. "People are often very naïve and think their product is different because it tastes better. But you need to drill it down to the message."
That said, niche products can mean big business. According to the National Association for the Specialty Food Trade, in 2010 specialty food will account for $50.3 billion in sales through stores, and another $12.7 billion through restaurants - accounting 13.1 percent of all food sales.
Bringing a Food Product to Market: Find Your Story
Francine Stephens, an owner of Bklyn Larder, a specialty food store in Brooklyn's Park Slope neighborhood, knows that small gourmet shops can't compete with the bigger stores on prices. Instead, she tries to find products that are exceptional – and have a story behind them.
"The products we bring in have a sense of place and a sense of history, a level of environmental importance," Stephens says. "We find products that aren't available everywhere."
Lang says that in addition to finding an area where your product can stand out – whether it is sustainability, a particularly desirable price point, or a relatable story – you need to determine what your goals or for where you want it to be sold. Are you thinking of farmers markets? A mail-order business? Small specialty shops or larger retailers?
"You have to be careful about your success. If suddenly Costco or Wal-Mart says they are going to take it, you have to put that money out and get that product produced – and there is no guarantee that they are going to keep that product on the shelf," Lang says. "You're learning curve should go at the same speed as your growth."
When French Culinary Institute grads Liz Gutman and Jen King decided to make candy together, they thought it'd be an easy way to make some cash on the weekends at Brooklyn Flea, a weekend market known for its artisanal food vendors.
Their candies – such as Beer & Pretzel Caramels – quickly gained a following. The brand, Liddabit Sweets, had several mentions in food blogs, magazines and even the New York Times. After a write-up in Real Simple magazine, they were getting two inquiries a day from retailers requesting their product – and couldn't keep up.
"It was the worst thing ever," Gutman says. "I was turning people down for months because we couldn't make any more."
Granted, more interest in your product than you can handle is many producers' dream, but it has put immense pressure on Gutman and King to catch up. They enrolled in a business class at Workshop in Business Opportunities, which offers entrepreneurship workshops in New York City. They are now working on a business plan and considering renting their own cooking space.
Bringing a Food Product to Market: Enlist Help
For those who have an initial plan but aren't sure how to proceed, Lang suggests going to your state's agricultural university or food science program, which tend to have strong community outreach programs. They can give you unbiased feedback on what type of products have worked in the past and whether yours seems like it could have a place in the marketplace.
Depending on the scale of your product, you might want to rent time in a commercial kitchen or work with a contract packer. If you are preparing your own product, make sure you are up to speed with state – and city – regulations for commercial food handling. And if you'd rather have a bigger co-packer handle your product, make sure that you own the formula that is being produced in case you ever need to change manufacturers.
A broker can help you enter large national chains. In contrast, most small gourmet shops are open to pitches from producers, and Whole Foods often introduces a small product in a store or a region to test out how it will perform. It even offers loans ranging from $1,000 to $100,000 to small producers to expand their operations.
When considering brands to carry, Whole Foods takes into consideration how much the producer can do to support the product from marketing, providing samples to customers, and being able to put its product on sale, or using coupons, says Errol Schweizer, Whole Food's national grocery coordinator.
Schweizer says that stores tend to give a new product a six-to-nine month incubation period to prove itself.
"Every time you put a product on the shelf, another product comes down," Lang says. "It's all about what it offers the consumer."