3 Super-Sized Challenges Food Startups Face
Photo, from left to right: Douglas Quint, Bryan Petroff, and Rob Kaufelt
Small food merchants are having a moment, according to new data from American Express. Overall spending on small food businesses increased 5 percent in Q4 2013 compared to the same period a year earlier. The desirable Generation Y consumer demographic (roughly, adults under the age of 32) accounted for 28 percent of spending, the largest portion among all age groups.
Douglas Quint and Bryan Petroff, co-founders of Big Gay Ice Cream, and Rob Kaufelt, owner of Murray's Cheese, weren't the least bit surprised by the news. Both New York-based ventures have experienced considerable success with their stores, and Murray's has expanded nationwide to grocery chains such as Kroger's.
But during a panel in New York City Wednesday presented by the American Express U.S. Small Merchant Group, it was clear the founders' road to success has been anything but easy. In fact, it took years of sleepless nights and trial and error before they finally felt secure. Here are three of the challenges they went through that as a food entrepreneur you also are likely to face as your business grows.
1. Growth Without Sacrificing Quality
Finding a niche was no problem for Big Gay Ice Cream, which Quint jokingly described as "a summer project that consumed our lives." He and Petroff were so passionate about making ice cream fun that they were "willing to be a little bit crazy," he said, and do whatever it took to keep customers coming back.
But when it came to expanding their business beyond New York City's West Village, things got trickier. "How do we serve more people and not [feel the need] to micromanage quality?" Quint recalled asking. "You want your name out, but you don't to relinquish power." And the only way to grow, added Petroff, "is to let people take care of it." You have to "know you're hiring the right people who believe in your business" as much as you do.
2. Seizing the Right Opportunities
Not every opportunity is worth taking, said Kaufelt, who spent two years deliberating whether to take Kroger's offer of a store-within-a-store concept across the country. He was concerned about losing the old-school charm of Murray's, a Greenwich Village staple for 74 years.
When he figured out what it would take to maintain his brand, "I sent Kroger a huge list of things" that it was highly unlikely to agree to, Kaufelt said. To his surprise, the grocery company complied.
"It was clear the market in New York City was changing," Kaufelt said of his decision to partner with Kroger. "There were more chains--eight Whole Foods, eight Fairways, five Trader Joe's--and the mom and pops were dropping out." As a small business, he needed Kroger's support.
"We're good at sourcing, speaking up, creating passion, training, marketing, and events," Kraufelt said of his strengths as a small business owner. "[Kroger] is good at data, systems, professional management, training, and finances."
3. Putting Customers First
"We built this little freakazoid army, and I'd do anything for them still," Quint said of his stores' fan base. But repeating the same level of service isn't easy. As the company grows, you become consumed with accounting, hiring, and strategy, and it's all you can do not to snub customers when they get you at a bad time.
But as a food entrepreneur, "you have to have the hospitality gene," said Tracy Nieporent, the director of marketing and partner for Myriad Restaurant Group, which handles communications for New York stalwarts such as Nobu and the Acela Club at Citi Field. "A lot of people think they have it, but it's a bad way to start a relationship if you think of a customer as a number."
Quint put his stance on customer service another way: "I don't care what kind of morning you had," he tells his employees. "Someone just waited an hour to pay you $4. Smile at them. Or I'll kill you."
JILL KRASNY | Staff Writer
Jill Krasny is a staff writer for Inc. magazine, where she covers the intersection of entertainment and startups. Prior to Inc., she was a writer for MTV and Esquire and an editor at TheStreet. She is a graduate of the University of Southern California with a degree in communication. She lives in New York City.