For the other 95 percent, their tasty morsels and elixirs remain hidden away in middle America, destined to remain staples at bake sales or tailgate parties.

For small- and mid-sized companies looking for their own Holy Grail – that gleaming, eye-level patch of shelf space – the stakes are much higher, though the aspirations remain the same. Surely, there is a difference-maker that separates the dust bin from the home pantry?

As chief marketers with a combined half-century of experience in the food and beverage industry, we have seen our share of well-funded failures and bootstrapped successes. But we have also seen companies that have adopted a best-practices approach to traveling the road from test lab to consumer success – and have replicated this formula over and over.

In this blog series, we want to use our body of experiences to help small- and mid-sized companies find the secret to successfully growing their F&B brand in today’s retail landscape. We want to help them capitalize on retailers’ need for innovative and compelling brands to drive store excitement and traffic.

The process of commercializing, launching, and growing new F&B brands is not easy – but we think you can apply some ideas and tips that will improve your chances of success and strengthen your commercialization plan.

From Idea to Ideation: A Common F&B Origin Story

Inspiration can strike anywhere – but in the supermarket business, the tale generally goes this way:

While shopping at their local grocery store, someone realizes there is no food that meets all their families wants/needs. They get annoyed at the lack of choices, so they decide to work in their own kitchen developing something that meets all their necessary criteria.

They perfect the taste, make it organic, and remove all the unfriendly ingredients. They bring it to parties and hand it out to all their friends and family. Everyone tells them it is a winner and that they would buy it all the time if it were in the local grocery store.

So, they take the next step and develop a fun name, produce a cool logo, and develop an interesting website. They start packaging it up and selling it at farmer’s markets and local festivals and events. People keep asking if it is available in grocery stores, so they decide to run some numbers and talk to a few people and -- lo and behold -- they convince themselves they have a big, innovative idea that is different from anything else out there. They are ready to quit their day job and start the journey to becoming a food industry millionaire.

People do it all the time, right? You just need a good product, a catchy name, cool package design, and a lot of passion. How hard can it be?

Recently, in the span of one week, we talked with three such entrepreneurs, all in the same food category, which experienced this same progression. They all wanted to sell their business because they were struggling to find success in commercializing and scaling their idea. They found it exceedingly more difficult, time-consuming, expensive, and dynamic than they ever could have imagined.

A Single, Make-or-Break Point of Failure

The fact is, it is exceedingly difficult to commercialize, launch, and scale a food and beverage brand at retail. Failure is not just a function of bad ideas, products, or names – stores are loaded with all sorts of oddly named, unexceptionally tasting products that maintain and grow distribution for decades.

In fact, many retailers love to give local start-up brands a chance to prove themselves and appreciate these locally-sourced, innovative ideas.

So where is the point of failure? Simply put – the leadership of these startup brands do not understand the retailer’s perspective. They do not speak the retailer’s language. They do not know or have not considered all the supply chain, sales, and merchandising complexities of securing and keeping distribution in retail stores.

Believe it or not, satisfying consumers can sometimes be the easier part to understand. Satisfying wholesalers, distributors, and retailers is the challenging part.

A Retail Language Primer

To that end, here are 10 tips and ideas to get on the same page with retailers and improve the chances for your food and beverage brand to find success:

1. Explain the problem. Do you understand the challenges that exist in the current category and how your brand solves it? Wholesalers, distributors, and retailers love clear stories that fill category gaps.
2. Prove your claim. Ensure you have evidence of your boast. If your product tastes better than the competition, prove why. You do not need an expensive analysis. Just validate your claim.
3. Work through your supply chain. Offer proof you have thought through the supply chain issues. Don’t wait for the buyer meeting to find out you don’t have the right case count, pallet configuration, package dimensions, shelf heights, lead times, or minimum shipping quantities. Nothing stalls distribution gains faster than supply chain breakdowns.
4. Anticipate all your costs. Outline all the trading costs before setting your wholesale prices. Costs for slotting, promotional support, merchandising, damage and returns, LTL shipments, re-packing, etc., are real. Make sure you plan for them upfront. Ask, clarify, and ask again.
5. Be realistic about shelf placement. As a new brand, you are not likely to get a primo eye-level location or end-of-aisle display (though it doesn’t hurt to ask). Ask ahead of time what it will take to get better shelf placement. Understand the sales velocity hurdles and the time the retailer will give you to hit those hurdles. Ensure your support plan will get you over those sales hurdles.
6. Do not skimp on margin estimates. As a new brand, retailers are going to take higher margins on your product to compensate for the risk. Distributors will do the same. Ensure you estimate margins appropriately — otherwise you may find your brand priced out of the market before you even get started.
7. Act quickly to drive velocities. Just because you gained distribution does not mean you will keep it. If products aren’t moving at appropriate rates, buyers will discontinue them quickly to make room for other new products. They will likely give you a chance to increase your sales rates, but you need to be proactive and move to address issues quickly.
8. Be prepared for success. What happens if the buyer loves your product and wants to place it in two hundred stores in the next few weeks? Have a plan ready ahead of time.
9. Have a well-defined strategy. Most start-up brands do not have a clearly articulated strategy that outlines what success looks like, where the brand will play, how it will win, or what resources are needed. Consequently, every sales/marketing activity looks good. Remember, random acts of marketing are an illusion of progress. A good strategy starts with an interconnected set of choices.
10. Be willing to say no. Many retailers are happy to take your slotting money knowing you will likely fail. If you do not get the right level of distribution, with the right retail pricing, the right support plan, and right retail shelf placement, be willing to say, “No thank you.” The allure of store distribution —even under the wrong conditions —can be extremely enticing.

Adhering to these tips may not guarantee your success — but they will increase your odds of gaining the distribution you need to grow your new business. If you are stuck, need help, or would like an expert’s viewpoint on your marketing plan, reach out to us at chiefoutsiders.com.