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/139333
brand spotlight PROFESSIONAL ASSESSMENT: WHAT YOU CAN LEARN FROM REDWOOD HILL FARM Food and beverage marketing expert Tammy Katz of Katz Marketing Solutions in Columbus, Ohio, evaluates some of Redwood Hill Farm's strategies and discusses ways other companies can strengthen their own brands. Seek and Exploit Market Voids: Redwood Hill Farm constantly identifies and capitalizes on market voids: new, high-growth areas in which there is emerging consumer demand and no one filling those needs. When the owners saw unmet needs for artisanal goat cheese products and lactose-free yogurt and kefir, they quickly developed and added these high-potential new products. They have successfully avoided price-based competition with major food brands by exploiting these niches. What You Should Do: Constantly monitor category performance, adjacent categories, restaurant and culinary, and overall consumer trends to anticipate what new items, flavors, package sizes, delivery systems, product benefits and packaging structures your consumers are likely to want and need in the future—particularly those that are too small for the largest brands and food manufacturers to pursue. These are the profitable niches that are ideal for specialty food brands to exploit successfully, and avoid or outmaneuver the "big guys." Build a Consumer-Driven Distribution Plan: Since inception, Redwood Hill Farm built distribution where heavy users of its products shop, starting with health food stores, and then natural food and specialty food stores. This allowed it to build a strong, loyal user base and a more profitable brand. The business resisted temptation to chase highervolume traditional grocery stores and clubs, where the brands would likely sell slower and less profitably. What You Should Do: Build your distribution and expansion strategy based on where your heavy user shops most frequently, projected profitability (factoring in distribution, trade and consumer promotion costs), and where your brand can compete effectively within its category. Rigorously assess the profit potential of new distribution opportunities, particularly if slotting is required. Select distribution outlets in which your brand can be a fast mover due to consumer demand—not where you can buy distribution but suffer from poor sell-through. Carefully Expand Production Capacity: Redwood Hill Farm made two very smart and creative moves to expand its production capabilities and protect the company's future: pursuing co-pack and co-op production deals. This let the business grow production capacity and overhead more conservatively and cost-effectively than by making a major investment in production or purchasing a new farm. It avoided an all-too-common problem of making an overly large production investment, then being forced to cut prices, contract manufacture, or privatelabel solely to pay for excess capacity. What You Should Do: Don't overbuild beyond near-term demand. Huge increases in manufacturing overhead can hurt your company or force decisions that are inconsistent with building a profitable brand. To increase capacity, always critically evaluate your build, buy or partner options—particularly if the expansion hinges on one or very few accounts. Food and beverage brand marketing expert Tammy Katz is CEO of Katz Marketing Solutions (katzmarketingsolutions.com). She has led numerous Fortune 500 and specialty food brands and launched more than 100 new products with cumulative sales of $2 billion. Katz serves on the Board of Directors of several food companies and is adjunct instructor of brand management at the Fisher College of Business MBA Program at The Ohio State University. as the first cheese. In 1994 the company moved its goats three miles away to a larger farm and a larger creamery and introduced the country's first Camembert-style cheese from goat milk. By 2004 Bice and Schack built a creamery, where the company now makes all its products. "We've come full circle," she says. "At our new state-of-theart creamery we now do co-packing for other people." 140 ❘ SPECIALTY FOOD MAGAZINE In 2010, Redwood Hill introduced a new line of lactose-free cow's milk products, using milk from a nearby farm, under the name Green Valley Organics. "We had seen lactose-free milk but no lactose-free yogurt and kefir," Bice notes. The newer brand produces 12 products including a 6-ounce honey yogurt, a 12-ounce sour cream, a 32-ounce strawberry pomegranate acai kefir as well as a 32-ounce creme fraiche specialtyfood.com for foodservice. In 2012 the line grew 45 percent over 2011 sales. Sustainability and Marketing From its earliest days, Redwood Hill Farm has been committed to providing a sustainable environment and implementing green practices for the benefit of the goats, the land and people. All of the company's nearly two dozen products—six varieties of yogurt,