Successful food businesses focus on distribution
Consumer packaged food products succeed in wide distribution.
As a Michigan State University Product Center counselor, I work with small food manufacturing businesses that want to wholesale their products into the grocery channel. This is a sound strategy to make a consumer packaged product successful.
Most food entrepreneurs focus on making a product that tastes good. They will be encouraged to bottle their BBQ sauce because all of their friends like it. Or, they use a handed-down recipe that is exceptional. The entrepreneur takes the recipe and packages the product and then begins to sell the product at farmer’s markets, local events or other venues. They sometimes want to experience exponential growth by selling through distributors.
Some food entrepreneurs focus their work on making the product taste great—which is important—but taste alone doesn’t make the product sell. Most consumers treat great taste as a given—an expectation of a consumer packaged good. Successful food entrepreneurs spend their time in getting the product into wide distribution. This is not an easy task. Most distributors are loath to take on an untried product.
Some food entrepreneurs that I work with create a product that they are very proud of, and believe that the product would do well in a retail environment. And that may be true for a few products, but for most food products, an entrepreneur must work to get into wide distribution. Food entrepreneurs will have to do many things to get their product onto the retail store shelves.
Distributors will want to take your product once you have proved that you can produce enough product to satisfy demand, and that there really is a demand for your product. Food entrepreneurs can create demand for their food product by allowing potential consumers to sample the product. You can set up a sampling booth at local carnivals, county fairs, farmer’s markets, local events, downtown sidewalk sales events, trade shows and at other venues where your potential consumer dwells.
Then, you should get your product into a few retailers and placed on the shelf. Building a relationship with the local grocery store or convenience store operator does this. Once the product is on the store shelf, take the time and do sampling events on a Saturday morning or other busy times at the store. This will drive sales. Now you can track your sales and create a history.
Present your sales history to potential distributors. They will want to take on a product with a strong sales history. Distributors and retailers do not want to take on a product that is not going to be pulled through the sales channel. Product sampling and strong promotion is one effective method to get your product into wide distribution.
Paul J. Werner is a Michigan State University Extension educator from L’Anse, Michigan. You can obtain free business counseling by registering with the MSU Product Center. Werner has many years of experience in small business ownership and entrepreneurship; he and his wife currently own two small businesses in the Upper Peninsula of Michigan.