7 tips for the next generation of food entrepreneurs

Successfully introducing a food or beverage product in a market with limited shelf space and rising costs is challenging. Food entrepreneurs need to be innovative, risk-tolerant and highly adaptive.

Jo-Ann McArthur, president of Nourish Food Marketing, an advertising agency specializing in food and beverage clients, and Sheena Russell, founder and CEO, Made with Local Snack Foods, say the right skills combined with solid business strategies can help support a successful launch into the highly competitive food and beverage industry.

Here are their top seven tips to keep in mind when starting a food and beverage processing business:

1. Lay the groundwork

McArthur says laying the groundwork is important. While it’s tempting to leap into product creation, before doing so, invest time to understand your potential market and the gap your product will fill.

“The most successful founders are people who solve their own problem," McArthur says. “These products come from a personal place, and it helps make a point of difference in the marketplace.”

2. Do your own product testing

Farmers markets provide an ideal environment for a market launch, helping entrepreneurs connect with consumers and receive immediate feedback on their products.

"Chances are your first product is not going to be perfect," Russell says. "If you're engaging with customers, you’re getting information back to you in real time.”

Also, read the consumer comments on websites of similar products and visit retail stores to help identify packaging trends, market gaps and your target audience’s needs.

“It’s about how do you fit into that share of stomach. It's tough because your cost base when you're starting out as a founder, you know it's going to be high,” McArthur says. “You're not going to be cost competitive necessarily, so that’s the tough slog of this.”

When launching your product, start locally and foster relationships with smaller retailers and consumers, then slowly scale up to larger retailers.

3. Ask for help

Be bold and ask for support and advice; however, when doing so, connect with companies that have experience with the food and beverage industry.

“Retail consumer packaged goods are a very unique beast,” Russell says. “So, finding somebody who really can help support you will be worth their weight in gold.”

Developing a solid financial plan, which includes researching and applying for grants and loans, can provide the additional support that your business needs. Know your superpower and do your best to align in the early days with mentors.

The same goes for moral support, Russell says.

Launching into the food and beverage industry can feel intimidating. However, it does not need to be done alone. Reach out to others in the industry for support and advice.

“It’s about dropping the ego a bit and knowing that nobody understands every nook and cranny of this industry,” says Russell.

Surround yourself with individuals who are supportive and knowledgeable to help take your business to the next level. Successful entrepreneurs recognize their own areas of expertise and seek out experts to support them in the other aspects of their business.

“Know your superpower as a founder and do your best to align in the early days with mentors, other founders and people who can fill in the gaps for you," Russell advises.

4. Be curious

Being inquisitive can deepen your understanding of the market and provide you with the tools to develop a compelling marketing plan.

“Your marketing plan happens before they even put you on the shelf,“ McArthur says. “For them to list you, they delist someone else, so you have to have a plan to make sure that you're selling more than that product you're replacing.”

5. Don’t try to please everyone

When conducting market research, ensure that your vision of the product isn't lost in the desire to please all consumers.

“You don’t want to have a beige product,” McArthur says. "It's OK to have some people hate your product as long as there are enough people who love it."

6. Lean into technology

Technology is continually advancing, with programs that can take over routine processes, data collection and analysis.

Russell says her business has its own enterprise resource planning software that integrates business processes like planning, inventory purchasing, sales, marketing, finance and human resources.

“It runs the show,” Russell says. “It’s incredible and is something we depend on to keep us running smoothly and operating efficiently.”

7. Adopt the entrepreneurial mindset

Operating your business requires making decisions that can alter your trajectory. This is particularly true when levelling up the operations to work with larger retailers. The key is navigating larger decisions in a way that responds to your life and business needs. Believing in yourself as a business owner is vital when venturing into this industry.

“Doubting myself less could have saved some grief and gotten us on certain paths a little sooner,” Russell says.

McArthur and Russell agree it’s important food entrepreneurs tell the story of their product and share the vision for their company. Taking that extra step can strengthen the relationship with your consumer base, create a connection and develop brand loyalty.

In the highly competitive food and beverage market, it’s important to stay a step ahead of competitors. The right skills, combined with solid business strategies, help support a successful launch into the highly competitive food and beverage industry.

Article by: Anne-Marie Hardie