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The 5 steps to Exhibition Success

You have chosen the best position for your stand, invested the money for the biggest one you can afford and then been shocked by all the additional costs – who knew electricity points cost so much?!!! So how do you now get the best return on that investment? Here’s the top 5 steps to success:

  1. Know your why – I am stealing from Simon Sinek’s great book title but it is important. Why are you attending – some reasons could be:

– to make some sales

– to get at least 50 qualified leads from independents

– to meet the big boys whether that is buyers from grocery multiple buyers, food service or travel industry

– to find business partners such as wholesalers, outsourcing or designers

Set an objective for the event just like you would any other marketing activity and then plan your approach based on this. Designing your stand to find a distributor will need different messages to how you design it to attract independent delis

  1. Fail to prepare, prepare to fail – make sure you have thought through every eventuality of the stand.

– how are you going to capture contact data? – are you relying on the exhibition data capture system – I suggest you also have a sheet for people to fill in – include a column for your personal notes of who they were and why you are keen to meet them – by the end of three days – you will have met so many people and not have a clue who they all were!

– make a list of everything you need – are you giving out samples? Do you have plates, spoons, allergen listings…….and always take refuse sacs and a bin!! And pens – you can never have enough pens!

– pre invite people – let everyone know you are going on social media and invite them to your stand number. Also if you have specific buyers you are wanting to meet – send them an invite via linked in

  1. On the day – get there early to set up so that you are ready when the doors open,

– brief your team (make sure you have enough cover) with the objectives, product knowledge and how to sell to people

– ensure everyone knows who the key buyers are so that if they come on the stand, they can pass them to you or free you up if you are tied up in a different conversation

– ensure everyone is dressed to fit the brand and are wearing comfortable shoes

– ban mobile phone use and eating on the stand – looks unprofessional

– plan in plenty of breaks for the team to keep them fresh and also to go see the competition!

  1. Afterwards – manage your expectations, I went to an exhibition last year and got 30 qualified leads – I followed them up diligently and not one turned into a sale. But it had raised my profile and new clients did follow – but there was a time lag. The picture at the top gives some great statistics on sales success – use them to feel reassured!!

– follow up as soon as possible but be patient – remember that show visitors will be inundated with follow up calls

– email first and then try phone calls

– don’t be a stalker – try and add value to your messages with information that your potential client may be interested in

  1. Next year – the last thing you may be thinking about is investing another load of money but IF the event is a success, now is the time to rebook – you will have a better idea of positioning for the ideal stand for you and a good chance of getting it.

Read now FREE chapter from Recipe for Success

Stress, distress and success of running a food business

Success is not final; failure is not fatal: it is the courage to continue that counts.

Winston Churchill

Over the past thirty-five years that I have been in retail, the world has changed greatly. The retailers dominate the retail landscape. Tesco has 28% market share of UK grocery but no brand has more than 1% — power is in their hands. £1 out of every £8 spent in the UK is spent in Tesco!!!

The consumer has changed greatly over the years. He/ she is now a shopper in charge of the decision-making process far more than ever. Brands do not hold the same dominant position that they once did — so what’s changed?

Massive proliferation:
• Number of products on offer — there are so many

more leading brands, challenger brands and own label. Coconut water started out as new in 2004 launched by Vitacoco — closely followed by a number of challenger brands; and then the big boys such as Innocent and retailer brands had offered variations. Indeed, the Innocent brand itself wrote the definitive book (in reality it’s great — A Book About Innocent) on how to launch a smoothie brand and it dominated the market until the own-label boys developed alternatives. And then, challenger brands such as Savse, found niches within the category that Innocent had effectively created — nipping away at Innocent’s dominant position creating a £10m brand of their own.

  • Number of ways of shopping — when I began my career at Tesco in 1986, we had about 350 stores. Now there are over 3,500 in the UK alone, not to mention overseas — and these are subdivided into Superstores, Express, Metro, online, etc. As I write, they are also in the process of bidding for Booker which will add further complexity to the offer. And this is just classic retail — there is also the growth of Amazon, home delivery, meal kits such as Hello Fresh, etc., etc. Just Eat turned over £370m in 2017 purely from delivering other outlets’ takeaways.
  • Ways of promoting — when I was young, there was only TV in the afternoon and evening and only three channels — BBC1, BBC2 and ITV. Now I believe there are over a thousand on my free sat box. As a brand manager, there were four ways we would promote a product — TV advertising, press advertising, PR and in-store promotions. Now, of course, there is the development of social media, and the ability to reach the customer with your message, becomes infinitely more complex. Once, we would just advertise on mass media and hope someone read it. John Wanamaker said “I know half my advertising works but I don’t know which half!”. But now you have the ability to target your message to one specific person, or ten or twenty.
  • Growth of private label — there are some markets that reign supreme on brand and we will look more at this in Chapter 5. But suffice to say that over 50% grocery is private label although the growth has reversed over the last couple of years.
  • Paradox of choice — the change in buyer behaviour. When I was at university, I did a whole module on the psychology of how people buy and how to make it more effective. There are more and more books written on this subject and also the paradox of choice and information overload. The consumer is in charge. She doesn’t have to rely on the advice of the local shopkeeper — which was just that: local and biased! Remember the BBC’s Open All Hours programme where Ronnie Barker’s fabulous Arkwright was always coming up with creative schemes to sell more products? Now there are online reviews to discover the best products, mysupermarket.com to find the best price and numerous other ways to inform and enable the customer. There is a wealth of information to turn the buyer into a true shopper — informed and able — and yet so overwhelmed by all that knowledge and the paradox of choice. I think this is why John Lewis so successful — other than its inspirational Christmas adverts about penguins and trampolining dogs, of course. You can still go and shop there safe in the knowledge that their staff are well trained to help you find the best product and “Never knowingly undersold” means you don’t need to worry about the price — an easy shop.

So, what does that mean to you working in food businesses, trying to make a success and make your profitable way through?

YOU NEED HELP!! And here it is, in the form of my book — Recipe for success. I have written this book for you.

Before we get into the detail of the book, I want you to think about the three possible outcomes for your business which form the title of this first chapter — stress, distress or success?

Which one do you want to choose for your business?? I have lived through all three with different clients over the years and want to ensure that once you have finished reading this book you have the plan for only one — success — hence the name of the book — Recipe for Success. But let’s think about the other two first!

Stress

The definition of stress is “a state of mental or emotional strain or tension resulting from adverse or demanding circumstances” English Oxford Living Dictionary. I often use the definition that it is the feeling of not being in control — pressure is great and stimulating but when it overwhelms then it becomes harmful.

It is likely you are reading this and nodding your head at this point and saying that IS the food industry. By its very nature of being fast and dynamic, there are going to be high pressure moments and these can be stimulating and rewarding. Many people in the food industry love the adrenalin rush, the need to solve problems and the high of success (myself included!).

But real stress is when you can’t cope with the rain of pressure and then it becomes a medically bad thing.

Everyone knows when they are stressed — can’t sleep, always tired, more headaches than normal (certainly true in my case). Maybe you dream about the particular situation. Sometimes you extrapolate and lose all sight of reality — I know I certainly have on several occasions in my life where I am not in control of the situation and a retailer is threatening to delist, we have a product recall or total inability to supply.

And what are the things we worry about?

  • Losing business
  • Falling out with key customers (and the potential of lost business)
  • Product recalls
  • Bad press coverage
  • Business going into distress (see next section!)
  • Personal impact — maybe getting sidelined from promotion or worse, getting sacked!

All of these are caused by fear of failure and often a lack of structure in the business to cope with the challenges that life throws at us. When I worked at ichiban, the MD had a catch- all for when things went wrong — and called it the “f***-up fairy”. I absolutely loved the description because it was said with a degree of sarcasm and cynicism, i.e. he meant how has this particular situation occurred without our being in control of the situation. Had some magical fairy come down and just created havoc or actually was it the fault of the managers who had missed some critical control point or understanding of the situation that had meant a disaster had ensued? After a few months working with the business, implementing new systems, putting in the right people to run them, the fairy did not visit so often — but she is definitely very stressful and in Chapter 11, we look at how you can protect against her!

Distress

When I started writing this book, I had never heard of the phrase “distress” being an actual term for a company that is struggling and in danger of bankruptcy. BegbiesTraynorspecialises in helping distressed companies and publish quarterly numbers for various industries including food. In Q4 2016, UK’s food and beverage manufacturing industry, which supplies the major UK supermarkets, showed a 13% increase in “significant” distress over the past year, with 5,986 businesses now struggling, compared to 5,312 at the same stage last year. The research indicates that small suppliers have been most affected, with SMEs making up 94% of companies in distress within the sector. That’s a lot of people like you and me sitting at their desk worrying about what is going to happen to their business.

The key indicators of distress are as follows:

  • Decreased profits — common in the current climate of inflation, Brexit, increased living wage and other financial pressures
  • Falling sales volumes and losing market share — possibly losing to other more nimble brands/suppliers and/or trading in a declining market
  • Pay cuts and freezes — apart from, of course, the ever- increasing living wage
  • Loss of regular customers
  • Cash flow difficulties — suppliers insisting on proforma
  • This can be a difficult situation not just for businesses in distress but also start-ups — both of whom may have poor credit ratings
  • Redundancies and loss of key personnel as people realise that the business is not doing well
  • Factoring invoices to try and support cash flow — many small businesses use factoring to enable them to overcome cash-flow difficulties but when the average food company net profit % is about 5% then giving away 2–3% is a significant amount to give away unless you need that cash flow
  • Borrowing to pay off existing debt

CASE STUDY

The company— I was working with a frozen food company in the North-East who had previously been in administration and had been given a new lease of life with new owners. The workforce worked tirelessly on their factory, rebuilding it from the ashes literally as it had suffered a fire. They developed new products, sold them into both retailers and brand owners and had a factory that achieved a positive audit on its first attempt. We had a great management team and quality products.

The problem— there were two issues surrounding profitability and consequential cash flow. The products had not been costed properly and the customer agreements had very long notice periods. Disaster struck as the two key ingredients — wheat and beef, the two key components of this company’s production — went through the roof in terms of inflation. I tried to override the customer agreements and negotiate through price increases but they were rejected.

Slowly the focus of the management team changed — we were managing supply, not on orders, but on what raw materials we had available. Some suppliers continued to be supportive but others moved on to proformas. We factored invoices to try and improve cash flow and spent our focus prioritising payment.

The solution— sadly, our first case study of the book does not end happily. The situation did not improve and the company went into administration, leaving many workers out of a job and many creditors out of pocket (including myself).

It was a horrible experience and I learnt many things about contract negotiation, product design and resilience at pushing through inflation — the sad thing is that the retailer who would not put up their cost prices for us, was forced to move to another supplier and in less than two months their retail prices went up by 30%.

One of the book’s key purposes is to help you avoid ever getting into the situation of distress and if you do get into trouble, as risks need to be taken, you will know how to find your way out again. Which leads us on to the happy place of success…

Success

So how do you avoid the stress and distress of the failing business and experience the joy of success of an evolving, profitable one?

Knowing it is running like clockwork with profitable products flying off the shelf and happy retailers and consumers alike! I developed the POWER model of success:

PProduct

The most important element of your business. Your business needs to sell great food that meets the needs of your consumer. Those needs may change but if you have an amazing product then retailers will want to stock you and customers will want to eat it. It is not always that simple, of course, as the needs of consumers change, competitors come and steal from your category, products come in and out of fashion and your once cheap commodity that you made it with becomes unbearably expensive. However, if you can take charge of your product offering, you are halfway home to taking charge of your business — we talk a lot about this in Chapters 5 and 6 and then the challenge of evolving to meet the market needs in Chapter 13.

CASE STUDY

The company— one product that I believe is pretty unique and has stood the test of time is Marmite. I talk a lot about Marmite in this book as I believe it is, in some ways, the perfect brand that has stood the test of time. It evolved as a by-product of the brewing industry being launched in Burton-on-Trent where there were a number of brewers and a lot of brewer’s yeast! It has a unique packaging shape and a name that references the pot and not the actual product. Maybe if it had been assessed in research, it would not have come to market as it is so polarising, yet they have used the “love it or hate it” theme in the advertising for over ten years.

The problem— how to keep evolving. The product is named after the shape of the packaging and let’s be honest, there is only one Marmite recipe!! No one has yet developed smoked BBQ Marmite or an avocado version!!

The solution— innovation around the edges!! The parent packaging has remained unchanged but there have been a number of customer-orientated changes e.g. squeezy bottles and little pots for the catering market (both Marmite shaped) or a variety of licensing opportunities — from crisps to chocolate.

So, they haven’t changed the product, just accepted its uniqueness and the phrase “something/someone is like Marmite” is now widely used. And due to this uniqueness, it commands a high price despite Marmite-gate, when Tesco and Unilever fell out over inflationary increases. It actually breaks some of the rules/suggestions that we make later in the book that you should meet customer needs — it is exceptionally high in salt but perceived as high in B vitamins so it is almost a health food, plus half the population hates it! Find another Marmite and to my mind, you have found product nirvana.

OOrganisation

When a business first starts up, there is usually an entrepreneur who has an idea and begins making it in their shop or on the kitchen table. They do all the work and then slowly begin to evolve, bringing in help. From there, the organisation will grow to meet the needs of the business organically until sometimes you have a complex structure that is unwieldy and complicated. The business targets may not all be aligned and people may have forgotten the point of what they are trying to achieve.

Similarly, the type of people a business needs will change and grow as the direction and strategy of the business evolve. So, taking the recipe for success of your food business means making sure your organisation is well structured, focused and well led which we will examine in Chapter 10. The people need to be well chosen to meet the needs of today and be invested in to enable them to evolve for the needs of tomorrow.

WWell-being

Well-being is a strange one to suddenly introduce in amongst all this management speak but it is one for me that has been key to my success and survival during the tough days of f***-up fairies and difficult retailer conversations when the stress is high and joy is low.

It is critical to think about how you look after yourself as an individual — knowing yourself and how to take care of your well-being is paramount to success. There are many studies that show that people perform better when they are well rested, well nourished, fit and healthy. It is kind of obvious but not always thought about in the business context. And similarly, not just your personal well-being but also that of your staff. It is no coincidence that larger companies offer gyms on site, free gym membership and yoga classes in the lunch break. A team at the peak of its health and fitness will take much better charge than one that is exhausted surviving on little sleep and rubbish food.

EEvolution

As discussed in the beginning of this section, we will focus on how to keep a business evolving in Chapter 13. It is a critical part of any business to keep understanding the changing needs of the customer and adapting product offer accordingly.

But not just the product… the organisation, marketing, even legislation, etc. The world is so fast moving you have to keep up and your business needs to evolve with it.

RResults

I have talked about the need for a well-aligned team with focus on the same end game and nothing is more important to get results. Chapter 11 talks about what type of targets you need to set and how to monitor them. How can you know if you are doing well if you don’t have a detailed breakdown of your profit margin by product possibly by day or at least by month?

Some products don’t have a variable cost — the line is set up and it runs off a batch and that is that. However, if you take sushi as an example, the profit can vary by day and by season due to the volume variations — more sales on a Monday as people are being healthy and more in the height of summer and the lowest ebb at Christmas. The cost of the product doesn’t really change in terms of raw materials but the labour costs vary as the efficiency of the lines changes with less product made per shift.

It is important to understand the drivers of your products’ costs and potential risks — currency/inflation, etc. But it doesn’t just have to be financial numbers — quality, supply and even staff absence can all be measured and quantified.
You need systems in place to do the measuring and

people who are brought into the targets so that they know why they are working with them and how they are going to help make their life easier.

So, in summary, this book sets out to find the recipe for success and how to avoid the stress and distress of running a food business and to give some insights into how to create success and enjoy being part of an amazing, stimulating industry.

Exercise

Divide a piece of paper into two (or use two PowerPoint slides or Pinterest boards or whatever is your thing) and list out in words, draw pictures or use photos and build your model of:

– what success looks, sounds and feels like
— what stress and distress look, sound and feel like

for you. It is good to have something that you want to go towards and something you definitely want to work away from to help motivate you when times get tough and the f***-up fairy comes.

So, now you have your vision and what’s going to feel good; we had better find out where you are now — in Chapter 2 which is available for order on Amazon — https://goo.gl/cCY7qC

The risks of being a retail buyer (or how to get a listing!)

Imagine you are the buyer of a major retailer – you get upto 200 emails a week from people wanting to list their products. You have a great range already – its not doing badly – why take the risk of launching another product??

Then out of the blue, something different and interesting – you have seen it out in the trade – you are interested. But there’s a big risk of change – so how does the supplier alleviate that fear and make it easy for the buyer to have the confidence to take the plunge?

Risk no 1 – it won’t sell and I will have lost sales for the space for something else

The biggest challenge for a buyer is choosing a product that is going to grow the category and provide exciting new opportunities for his/her customers. And as they don’t have elastic shelves, to sell more than the product that is already on the shelf. So how do you alleviate their fears and reassure them that this is the product for them?

  • Show how your product has a unique difference to anything else on their shelves which is relevant and important to the retailers customers
  • Demonstrate with examples from other retailers, online sales, markets how your products are selling well and how they have grown the overall category
  • Build their confidence with your social media following that you have dedicated and loyal customers who will come in their direction
  • Offer them a strong (but profitable) commercial deal with investment in marketing that will build success for the product

However please do NOT offer them sale or return or to pay for any waste. I have clients who do this but it is potentially signing an open cheque. The buyer needs to have the confidence that the product will succeed. The only time I have agreed to pay for waste is when I had a short dated product that would be unsaleable unless I moved it through retail quickly

Risk no 2 – it does sell and they can’t keep up with demand

Success brings with it its own challenges. I remember the Brewdog guys talking about the problems that their listing in 400 Tesco stores gave them in terms of production and cashflow. So it important to work out what the business will mean:

  • Capacity – can you meet the increased demand in your factory. Would you need to put on another shift, bring in additional people and even in some cases build another factory (it does happen!)
  • Cashflow – retailers are a lot better at paying invoices and shortening settlement terms but lets just do the maths. You sell a product for £1 into 400 stores and it sells 20 per store per week – that that’s £8000 per week they owe you. Your first order will be big as well as you need to fill the shelves so assume additional 8 per store. With 30 days terms, you will supply 3200 for shelf fill plus 32000 units to restock. Assuming it costs you 50p to make you are looking at £17600 investment.

So know your business and its capabilities before you go to your retailer meeting – you may want to just take a few stores to enable you to understand their systems, minimize YOUR risk and to ensure that your listing is a long and happy one. Not one that just crashes and burns after a few weeks.

If you need help with planning your retailer route to market, please feel free to contact me at karen@foodmentor.co.uk.

Five things customers REALLY want from their food

The consumer is no longer a simple animal. There is the paradox of choice that renders most people incapable of change. 85% of our food purchases never change. Most people eat the same sandwich for lunch every day. Online ordering from Ocado, Just Eat etc reminds us what we bought last time and, despite all the interrupters in the world, the majority of people get the same stuff

So what’s the secret to getting people to buy more food – what do they REALLY want?

  1. To save money – I talk to a lot of food start ups who are all creating premium brands. There are niches for these but the majority of people have little money so think about ways you can save the customer money and yet create value and profit at the same time – Aldi and Lidl have managed it!
  2. To eat really tasty food – it is important that food tastes good – it seems obvious but how many people have bought a snack bar that tastes like ground up shoes? Or had a sandwich that is bland, soggy and uninteresting? People want to enjoy their food! So many worthy brands do not deliver on taste – yet the successful ones do – making it yummy and scrummy is the key so long as you observe the next point…..
  3. To stay healthy –not everyone is obsessed with health but many consumers want to know that the manufacturer has thought it through – kept the salt low, not put in dodgy fats, high sugar or other additives.  So many premium own label ready meals, such as Finest and Taste the difference, are high in fat or salt or both – it does make it tasty but there needs to be a balance
  4. To treat themselves and add joy to their lives – most people view treats as unhealthy – wine, cheese or chocolate. But it provides a short term fix of joy. The only product I have found that is a healthy treat is sushi – which does actually research as both.  People use food to help them feel better eg when something bad happens, breaking up the monotony of the day with a great lunch sandwich or demonstrating how foodie they are by having the latest recipe or ingredient. So create amazing happy products both in their recipes and marketing
  5. To add joy to others – as we approach Christmas, this is the backbone of the retailer adverts. Creating amazing food to share, impress and please others. To make life easy when entertaining, to demonstrate our cleverness at finding such interesting products or just showing the love by feeding others

And what is missing from that list? Actually to provide the body with nourishment and fuel for the day – the real purpose of eating!! But somehow that has become a given – I did some research on diet foods recently and we got 20 reasons why people eat before we actually got to “to stay alive”

So when designing your products, creating marketing stories or choosing positioning, it is important to think about which of these basic needs are you fulfilling. Try this 3 point plan to draw up what your customer really wants

  1. Who are your buyers? Use your social media or sales data to get a feel for the demographics).
  2. What do they really want – what is their key goal from the 5 – are they living to eat or eating to live?
  3. How do they think? Are they cautious people or spontaneous? Innovators or laggards – if they don’t like change – can you force it upon them or do you just get them to buy more

What is their decision tree for buying products and how can you catch them through marketing, packaging design or merchandising as they shop

If you would like more detail on this subject, chapter 3 of my book Recipe for success – ingredients of a profitable food company is a good place to start. Click here to order on Amazon

5 Mistakes to avoid in 2018

Last year I wrote a book called – Recipe for success – the ingredients of a profitable food business and whilst it is aimed at food producers, the principles are just as applicable to any consumer good whether that is a chocolate mousse or a mascara

 

And so are the mistake that companies make time and time again in selling and marketing their lovely products.  2018 is going to be a tough year – food inflation is still on the up, Brexit uncertainty is going to continue to bite and experts are predicting a share price crash.  So what mistakes should you avoid in 2018?

 

  1. Creating a product that is too expensive to sell – let’s be honest, we all pay a bit too much for somethings – the branded trainers, the luxury perfume. But in general, there is a ceiling price for a category whether it is food or toiletries. Make sure that before you design your product – you research what the market will bear in terms of retail price and design your packaging, recipe/formulation accordingly.
  2. Going mass market when niche is so much more productive

When I wrote my book, I aimed at a specific niche of food producers – I may have sold more copies if I had written a general business book but there are so many more people out there with that type of book and readers are harder to find.  With a niche positioning, you can target your marketing more effectively and identify a gap in the market that other people are not filling and therefore it makes it easier to sell to your retailers and distributors  Take the example of Pip n Nut – she started by offering nut butters in sachets – finding a niche of providing nut butters on the go – she established the brand, got some traction and then expanded into broader markets, couple of years later – creating a business that is now turns over £9m

  1. Running before you can walk – so many start ups that I meet, want to launch into the multiple retailers (my area of expertise) before they have established any sales on the ground. They also look for investor funding when they don’t have one sale under their belt other than a few market stalls. Build a solid strategy for your business with a route to market that covers at least the first two years and establish a track record and traction.  The exception to this is probably Brew Dog who went from selling a few high alcohol beers to suddenly being asked to supply 200 stores – a rare X factory moment but from that they flew to a business that has been valued at upto £1bn!!
  2. Not thinking beyond the first listing – when we first start a business, we become obsessed with getting that retail listing – but then when its in the store – what do you do to keep it selling? There are so many ways to sell product through – sampling, promotions and social media – focus in on your key retailers and boost their sales. You also need to consider pipe fill with new products. If you think about Cauli rice, they started with a one product (clue is in the title) and then expanded into a number of different flavoured rice.  They are now changing their name to Full green as they want to expand into other vegetables such as sweet potato rice etc.  Evolution not revolution (although total brand name change is revolution!!)
  3. Trying to do it all yourself – my resolution for 2018 is to outsource as much as I can in terms of accountancy and admin (my worst nightmares) and social media – which I have learnt to do reasonably well but am sure someone else could do a lot better. As an entrepreneur, we are all run ragged trying to do everything and we get exhausted and burnt out.

 

Work with a business mentor like myself (and there are plenty for free as well – try Princes Trust, if you are sub 30, Virgin startup and local authorities) to plan out your business priorities and what you can delegate.  I know it sounds expensive but think of the opportunity cost of your time – can you make more money focussing on selling more products and building a promotional programme vs sitting at a computer screen trying to do your receipts!!

 

Avoid these big 5 mistakes and you will have a very prosperous and happy 2018!

5 mistakes to avoid when selling into UK retailers

I started life in a department store and then moved to be a buyer first at Tesco and then Boots. I then turned gamekeeper and moved to food suppliers as a commercial director and have spent the last 10 years selling into retailers. So what are the 5 mistakes that companies make when trying to get a listing in a UK retailer?

  1. Failing to get the appointment — it is so hard to get an appointment or even a reaction from a retail buyer. On average they have over 200 emails a day and if you are someone like Selfridges most of these will be from companies wanting you to look at new product ideas. So what can you do — get the right buyer (use linked in), warm them up (find anyone you know, who knows them) and send an email. Then a letter and then call to follow up. Don’t stalk, never ring or contact on a Monday and don’t use their personal email if you find it on Linked in!!! And don’t be disheartened if they don’t respond, it may not be the time of year that they are looking at your category. Write again a month later!
  2. Fail to prepare, prepare to fail — if you get a meeting — prepare!!! Know your business, know your numbers and know the retailer you are going to meet. Make sure you have visited their stores before the meeting and if you have a linked in profile of the buyer, get to know them. And know what you want to achieve — what key selling points to you want to get across and what do you want — a listing, an increase in distribution, promotional ends?
  3. Be adaptable — I went to a presentation with Selfridges, a few weeks ago with a beautiful 12 page presentation on the market, company and products — he swept it aside (very politely) and said lets look at the products. I was delighted to do as he asked and of course having prepared the presentation, I had the key selling points in my head but could adapt them to the meeting.
  4. Don’t be afraid to ask and listen to the answers — sometimes it is impossible to have all the answers and knowledge about a potential customer. If you can demonstrate that you have researched them but for example in the case of Eurostar, it is impossible to have their range detail without a trip to Paris (ok not bad thing!) but if you ask the buyer what they are looking for, listen to the answer. Think how you can adapt your product or proposal to meet their needs
  5. Being afraid to say no — if your buyer, as one did the other day to a client of mine, says I don’t like your packaging and so please change your brand design and then we will list the product ….think about it. Does the buyer have a point or is this YOUR brand design — they wouldn’t suggest that coca cola changes from red to pink spots so why would then to you?! Also don’t be afraid to say no if the deal just isn’t right — again, a client of mine was asked to reduce her prices to so low that she didn’t make money just broke even — but this would mean that the rest of her business retail prices would be compromised and of course her bottom line would be severely impacted. Its hard to walk away but I have done it a couple of times and then they have come back with a better offer!

I specialize in helping businesses to get their products onto retailer shelves and help them stay there so get in touch if you would like a FREE half hour introductory chat about your business and how I might be able to help you

Innovation

Innovation is this amazing intersection between someone’s imagination and the reality in which they live. The problem is, many companies don’t have great imagination, but their view of reality tells them that it’s impossible to do what they imagine.” Ron Johnson, CEO, JC Penney

Most food businesses are governed by the necessary structure and rules to ensure consistent quality and maximum health and safety. So how do you enable the culture that allows people to go beyond their view of reality and really live their imagination?

Here are a few ways to a creative and innovative culture:

  1. Take it from the top!!

Within the majority of innovative businesses, there are strong leaders such as Mark Zuckerberg, James Dyson and Richard Reed, who are obsessed with driving creativity and newness in their business. PA Consulting undertook a survey of 821 senior executives about innovation and found that 81% of successful businesses had leaders who offer their employees an inspirational sense of purpose when it comes to innovation.

  1. Building a creative culture

Giving people the time to be innovative is key. Often day-to-day pressures get in the way of the innovation projects so we need to ensure that we build innovation into everything we do rather than it being the project that gets looked at on a Friday afternoon.

It is important that everyone in the team is aligned and enabled for evolution and innovation. Taking risks and accepting that some will fail needs to part of the culture and encouraged not punished! Ways of encouraging the creative passion include:

  • Innovation incentive scheme –most clients have an incentive scheme whereby great innovative ideas are considered and the idea generator is rewarded with a percentage of the money saved.
  • Off-site creativity days — It’s good to go off site and focus on new ideas and innovation planning. Ensure part of that day involves going to inspirational sources such as Liberty and Paperchase for design and colour themes. Go to a gift show or art exhibition or just walk down the street and look in shop windows. Be a magpie and steal ideas from where ever you find them.
  • Creative play –some of my best ideas come to me in the shower, when I am out shopping or at three in the morning when I can’t sleep ie when I am not thinking about work! It is great to create a play area where you can take time out from the computer — read magazines, doodle, and generally let the creative mind run free.
  1. Use of fresh eyes— sometimes bringing fresh eyes to each job role can really help to give a fresh perspective. This can be:
  • Rotating people from their traditional roles in the business and getting them to challenge traditions in other areas.
  • Ask suppliers to present inspirational ideas for your business
  • Subscribe to newsletters such as www.thefoodpeople.co.ukwww.foodbev.com/newlettersetc
  • Use a consultant or interim on a short term basis who has a different set of experience and will be able to look at your business with a fresh and innovative perspective.

There is no doubt that innovation drives business value and profitable sales growth. And by following some of these ideas and creating an innovation culture to enable and motivate your team and by keeping a strong source of new ideas and viewpoints, you can drive food innovation that keeps your business ahead of the pack — and of course winning Quality food awards long into the future!

Setting and getting the right price for your product

As part of my profile raising strategy to publicise my book — “Recipe for success — the ingredients of a profitable food business”, I was asked to deliver a masterclass how to make a profit.

And it got me thinking — how few people in the food industry actually talk about making money — so is it a dirty word (or indeed phrase?) . There is much written on creating your brand, designing great packaging and generating great innovative ideas (see my last blog!) but what about simple focus on making money!

I have read Simon Sinek’s book “Start with why?” He says it is not about making money or selling the widget for a profit, It is about “why”. People are looking for a story — the reason that you get up in the morning. The purpose, cause or belief that inspires you to do what you do. And that is great foundation for why you are making the nut butter, gluten free bread or vegan sausages. BUT, you cannot achieve your why without making money and you may want to save the world from a shortage of nut butter but to do this you need to make a profit so you pay the mortgage, rent or buy your own food!

So how do you make it happen? To make money you need to focus on very simple economics:

  1. Set the right retail price

What price will your product sell for?

  • Know your USP — if you have a unique product that you cannot get anywhere else then you can set a high price. I have just paid £78 for a replacement Apple charger for my macbook air — other brands are available but I love my mac! Would I pay more? Probably!!
  • What’s the competition pricing — there is always a competitive alternative even if your product is the most unique on the planet. Especially if it is a food because at the end of the day you are competing for share of stomach — and theres lots of alternatives out there for that. So be careful in defining your market
  • Market strategy — where does your product sits in the hierarchy — premium, midmarket or economy?
  1. Negotiate the optimum selling price to retailers and wholesalers (or online)

My clients often ask what margin should they allow for when selling to retailers — it really does depend on the market category, retailer and strength of the brand. But you can ensure you are at the top end of the margin spectrum by simple negotiation techniques:

  • Avoid sending a price list — share the price verbally. It makes it easier to justify.
  • Be 100% committed. Know that your selling price is the one you need to sell at and ditto with your retail price (and have the evidence to prove it).
  • Be firm and direct — no soft signals such as “I think the price is around £x”
  • Offer other negotiation chips than than price eg free sampling, social media support

Be prepared to negotiate but also to walk away — you won’t sell to everyone so don’t compromise on price and undermine the profitability of your business

  1. Design your cost base to deliver profit from 1 and 2

Here are 7 key killers of profit before you even think about marketing and selling costs!!

  • Bespoke ingredients and packaging — a unique ingredient maybe the backbone of your USP and in which case it’s a great idea but for most of us, the simpler the better — don’t overcomplicate with bespoke recipes or packaging. Innocent didn’t use a specially tooled bottle — why should you?
  • Labour intensive production — try and simplify the number of stages in manufacture so that you keep the labour costs down as much as possible — do you really need that extra garnish?
  • Low volumes — time and time again, clients of mine come up against MOQs from suppliers — it is the killer so when designing your business model — try and think of how to maximize volumes or use standard off the shelf components
  • Shelf life and waste — waste is such a buzz topic at the moment and deserves a blog of its own. But minimizing how much you put in the bin, whether that is made stock due to over enthusiastic forecasts or waste during production will have a massive impact on profit. Work on creating a product with maximum shelf life — invest in good shelf life testing — retailers love it and so will you!!
  • Raw materials inflation — if you are dependent on a specific raw material — eg nuts if you are making a nut butter think about how you will hedge against inflation — in these days of Brexit, it is not going to go away as a challenge to the bottom line
  • Distribution — small businesses struggle with finding ways of getting product to customers.
  • Retailer requirements — ensure that when you are negotiating you are not building in agreements that add cost eg asking for small uneconomic deliveries, shelf ready packaging they don’t use (that cost one client of mine £250k per annum) etcetc

Did you notice the order in which I had written those three economic factors? I started with the end in mind at the beginning. How many people actually deliver the process in that order?? Set the retail price, calculate selling price and THEN design the product. In own label situations, I have done this a lot — create a ready meal for £3, retailers needs x% margin, we need y% and therefore this is the target cost. It is a great way to change the perspective that you work from.

Conventional wisdom designs the product, does a cost plus calculation and then goes into the market place to sell it. And then we cost engineer to try and claw back enough money to make a profit. This doesn’t really work! It is better to start with proft and work backwards.

There is a great book called Profit first by Mike Michalowicz who says from DAY 1, you start by banking profit in a separate account and this is a great way to focus the mind — maybe it does stifle investment and growth but it does enable you as the entrepreneur and business leader to ensure you are making money from the start. He says if you aren’t making money then don’t do it — simple!

In summary then, I don’t think making money is such a bad focus and we do need to have it as an underlying theme throughout our product and business design. We need to talk about it more to ensure that food businesses thrive and flourish. Then we can achieve our why in the least stressful way (and make a profit!).

5 Top tips to design your food business that has success running through it like Brighton rock

In the past couple of weeks, several food SMEs decided its just not worth it in terms of effort or cannot move forward without significant investment.

Did they not work hard enough?

Did they have a bad product?

Did they have poor brand design

Absolutely not!!! But what they all have in common is they started their business with love and enthusiasm but ran out of energy, money or both.

When I begin working with the client, the first thing we think about is what is the end goal — what do you want to achieve from this business? A legacy for your children, a decent level of income or creating brand equity that will be sufficient for a buyout in 5–10 years’ time

Once you have that clarity, you can begin to design the business that has success through it like Brighton rock!! So what are the top 5 things, we focus on?

  1. Who is your customer?

Many start-ups make the mistake that their product is for everyone — it may well be but even Coca cola which is a mass brand has a number of target markets that they subsegment through products and marketing — Diet coke man anyone?!!

It is much cheaper to find a narrow customer niche and target them than try and market to everyone.

Create your customer avatar and stick to it!!

  1. What are your product, company and brand values?

The one thing we know about entrepreneurs is that they have great ideas — lots and lots of them!! We all do! The skill is honing down into one product range (park the others, you can launch them in phase 2 or 3!!) and focusing on that — focus works!!

I have a very simple but effective model that takes each of the three elements and picks 4 values — that’s it — your brand in 12 words — simple!!. These then underpin product design, marketing, social media targeting and distribution strategy

  1. What’s at the core?

How do you sum up your brand in two or three words — I am a massive fan of Marmite as a brand, a marketing powerhouse and I do LOVE it! And their core proposition is “Love it or hate it”. This underpins everything they do from social media to TV ads etc

It is important to have that clarity so again you can focus on what is important.

  1. Make a PROFIT!

If you don’t design your business to make money from day 1, then it won’t on day 365. I have had several clients who have said — I will put the prices up once I am established — no, you won’t actually. As your business grows from kitchen table to small unit to factory, your customer base will change and they will want more margin — so you will make less money per unit. So, start as you mean to go on — making money!! So keep your fancy ingredients, bespoke packaging and complex product recipes to a minimum!

  1. Who’s gonna pay?

The costs of setting up a business are considerable. Especially if you are looking to create that £5m brand. Scaling up can put massive pressures on cash flow — eg you want a £1m turnover sales business. With 30 days settlement terms from main retailers, you need at least two months cashflow — so £167k before you even think about investing in CAPEX, forward buying to ensure best prices etc etc. There are very few contracts in the food industry with food retailers so you will have difficulty convincing a bank to lend!

So where the money will come from? Crowd funding, accelerators or angel investors are all great options but you need have the first four firmly in place before considering reaching out for money.

4 Steps to great category inspiration

When I begin a category review process, there are four stages I go through to get to the stable of future product launches and refreshes.   I am going to detail each of these and then bring it together to see how this can create the product differentiation which gives you the product power that we all seek to achieve profitable sales with less stress.

  1. Food trends– the beginning of every year heralds a plethora of food trend information as various magazines, bloggers and other organisations herald the new up and coming foods stuffs we are going to eat.  The more quirky get coverage in the Daily Mail and we in the food industry work out which ones might just be relevant and which will come and go with no impact.  The key subjects of the day at the moment are free from, reducing sugar, nutrient value of vegetables.

We use the food people (www.thefoodpeople.co.uk) for our key source of trends as they provide a great service both generically and also bespoke for specific market challenges.  We then look at their data and review what is going on in our market and related markets – when working on sushi new concepts, we often go and look at what the high end chocolate retailers are doing as their packaging and merchandising are very akin to our own.

The biggest challenge in mature food markets is to find the next big thing – coleslaw is the biggest selling pot salad, salmon nigiri the most popular sushi piece, cottage pie best selling ready meal – how do you get the inspiration to find other products that the customer will embrace.  Food safaris are a great source of knowledge but its important to take advice on where to go – companies like www.npddirect.com can be really helpful.  Going to Japan does not find the most innovative sushi nor does Italy generate the best ideas for pizzas.

  1. Customer research

“Your most unhappy customers are your greatest source of learning” – Bill Gates

Understanding why your customers don’t buy is a great source of new concepts.  At Ichiban our research showed that customers didn’t like the nori (black seaweed) that is found in a lot of our products.  We came across a company in the US who make wraps for sushi from vegetables and fruit and after a lot of hard work making them work in the factory we launched them two years ago.  The innovation won us Food manufacture SME innovation of the year 2014.

I always think the washing power guys understand their customers- whiter whites were key 30 years ago and now we all want our colours to be maintained especially black.  There is a massive push on fragrance with Febreze and Lenorunstoppables that give 9x more fragrance that fabric conditioner alone!  A scary concept but I am sure it is not too over powering.

So how do you find out what the customer wants?  Ask them! There are several approaches that we use to get to the heart of the customer.

  1. Surveys – we wanted to know if customers use the chopsticks that we put in the packs – so we ran an omnibus study (www.tnsglobal.co.uk/tns-direct/omnibus) which gave us some great feedback on when people eat sushi, whether they use the ginger and yes only 25% use the chopsticks.
  2. Published data – in the food industry we have always been a bit wary of published data such as Mintel as it is more generic but it can be useful for getting an overview of a new category that you may feel the brand will extend into.  It is also possible to buy Kantar, Nielsen and other data but can be a challenge if you are in a very small category or in one like food to go which is difficult to read.  My frustration also is that once you have bought the data you are not allowed to share it with the customer which kind of reduces its usefulness as an influencing tool.
  3. Ad hoc research – for understanding what the customer thinks they want, this is invaluable.  This can be either group work, at fixture in depth interviews or accompanied shops.  It enables you to pick the target audience very specifically and tailor feedback to your needs.  It can be expensive and also people often don’t really do what they say they are going to do. The most illuminating work I have done recently has been with non purchasers who either reject the product or the retailer that I have been working with.  This gives massive insights into their perceptions of product, category and retailer offer although the latter is difficult to influence as it is the overall retailer brand they have issue with.
  4. Sales data – I know that sales data represents what has gone before and therefore not a predictor of the future but never underestimate what you already know from your sales figures especially if you have access to the powerful retailers databases.  Plus of course there is loyalty card data such as Dunn Humby and Nectar data which can provide a lot of in depth information but at a price!
  5. Social media – this is a great source of immediate feedback to your products and particularly useful for brands – It is important to respond to criticism as well as positive feedback quickly. Your loyal followers will feedback on new concepts and marketing – either publically or part of an offline ad hoc review.
  1. Old fashioned idea generation

I have always worked with my teams using brainstorming or other such techniques to randomly come up with new product concepts.  If it is well chaired and the “no idea is a bad idea!” mantra is adhered to then it can provide a great list of ideas and concepts for working on – have a look at www.mindtools.com/brainstm.html

  1. Chefs and others – new recipes, packaging etc

Once the research has been done, macro concepts identified, then there is a great opportunity to work with your in house chef or bring in someone to inspire and provide new ideas – we use www.binghamandjones.co.uk who have a great background in added value convenience foods and really come up with some great concepts and tasty food to boot!

Also work with your packaging suppliers to find new ways to package products – the use of straight on trays for improving the visuals of pizzas, cooked meats and yes sushi delivered massive uplift in sales and brought new customers to the categories as they could see the products stimulating purchase.

So that’s a little overview of how to get to the customer needs and drivers and find out what will convince them to buy more – clearly the product needs to be viable and cost effective and in the third article of this series, we will look at how to assess feasibility and to get a product that the customer and consumer will pay for.