Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.
Issue link: https://specialtyfoodmagazine.epubxp.com/i/235863
Q: Are there challenges in selling a frozen food product that we may not have considered? Q: A lot of people are price sensitive and a higher price may stop them from trying a new product. Should we undercut margins, or go for just break-even, in the beginning in order to meet the prices offered by big players? JJ: I wouldn't recommend cutting your prices. You must sell your product for what it is worth, and by that I mean you must make sure that you are making money. If you were to sell your product at a loss, you would not know if the product can sell at the correct retail price. You will eventually have to increase your price or you'll be out of business before you even get there. Don't be concerned with price or the large companies. Larger companies cannot do boutique business because it would be too costly. If your product is as good as you think it is and as original, and there is a need for it in the marketplace, your customers will pay for it. Q: As a small company we have a lot of innovative new product ideas, but not enough resources and bandwidth to launch them. How should we create an expansion strategy without ignoring/ hampering our existing products and also not missing out on opportunity? JRF: It's not what's new, it's what sells. For 40 years, this has been our motto: Stay true to your core because that is what makes you money and keeps you in business. However, consumers do crave new products, and we try to bring out a few each year. I recommend laying out your product ideas over a five-year strategic plan, remember- PHOTO: KARAN GERA SS: Retailers have far fewer shelves for frozen foods than other consumable products and use them to represent products in every category from frozen pizza to corn. Add competition to this from large companies with deep pockets for slotting and promotions, and it makes it difficult for small companies. On the manufacturing front, freezer space is expensive to build or rent, so increasing production is harder than expected. Ice cream is especially temperature sensitive. As a perishable item, spoils are always higher than other consumables. Frozen food needs to deliver at a certain temperature [zero degrees]; better-quality ice creams should deliver at -10 degrees. Transporting product at this temperature is a challenge; you would probably be sending LTL [less than a load] shipments, and these costs run high and eat into your margin. If you have a few shipments turned away due to temperature, you incur high cost on time and money. You are on the right track with supporting investments needed for the retail business with strong business in other channels, such as foodservice, retail kiosks (like the lassi bars) and local markets. ing that launches require time and money. Your plan should outline company mission, vision, marketing plans, sustainability, process improvement, internal operations and administration. Set goals under each one with a timeline and a dollar value assigned to each. Based on your product line, it seems you will have a lot of time involved in educating the consumer about the benefits of lassi compared to what is currently sold in grocery stores. Focus on the expansion of your core up and down the East Coast and then focus on the West Coast before creating a lot of new products that may get lost in your efforts. Q: How do small businesses spread awareness of a product without spending a lot of money? DH: The absolute most effective way to get word of mouth for almost no money is to make a fantastic item that people want to talk about. Most food-purchase decisions are made on-site so be sure the packaging and positioning are also amazing to grab new customers. It is almost required to have a social media presence and it doesn't cost much, although it can be time-consuming. The challenge is that few small brands have gotten big returns on their efforts. You can ask your retailers for special displays or signage. Product demos are the most effective way to get new buyers to try an item. But demos are expensive and you need to move enough product to justify the expense. Experiment with different stores, days of the week, times of day, personnel, presentations, et cetera. Public relations can be the best friend of the smaller company. The American way is to root for the little guy who finds a way to succeed, and the media responds to this theme. Blogs, TV shows, newspapers, magWEIGH IN azines, radio stations all are looking for new ON MORE products and companies, especially if they QUESTIONS from Monsieur have a compelling backstory. You can comSingh Lassi at municate via inexpensive online PR sites, by specialtyfood.com/ onlinehighlights. reaching out to media outlets directly or by splurging on a PR agent/agency. @ Denise Purcell is editor and Susan Segrest is a contributing editor to Specialty Food Magazine. WINTER 2014 117