Before diving into retail, I enlisted the help of the Drexel Food Lab to understand the processes of mass production. Since I no longer have my own restaurant, making the sauces in-house was impossible, and I now work with two co-packers who manufacture my sauces, 40 gallons at a time.
Jonathan Deutsch, a professor of food and hospitality management and director of the Drexel Food Lab, confirms this was the right decision: “Engage a food scientist or research chef early. We often find ourselves called in to undo a problem.” Though the Drexel Food Lab doesn’t assist with manufacturing products, Deutsch acts as an advisor. “Our sweet spot in the process is around the time the entrepreneurs have identified a general opportunity but don’t know exactly what the product will look, feel, and taste like.”
But Deutsch warns entrepreneurs who fall in love with their products. “CPG is all about compromise. It’s not that CPG companies can’t produce something like the world’s great restaurant chefs – it’s that to have something stable and safe on a shelf, compliant with regulations, with a consistent supply chain, means you have trade-offs. People in love with their products don’t compromise well.”
When seeking a co-manufacturer, Tavss insists: “Do your homework. “You are trusting them to make your product for you… you need to make sure it tastes right and is produced safely.”
Cayne emphasises the importance of doing your market research. “You might have a great pretzel but if you don’t understand the dynamics of the salty snack category, then you’ll be in for a surprise when you find how crowded the category is. Go to grocery stores and go online. A product exists in an ecosystem. Think about what’s on the shelves, who’s the consumer, what sizes are consumers used to getting. If you’re looking to scale, these are all the things you need to take into account.”
Sarah Nathan, the owner of Bloom CPG Consulting, elaborates: “The biggest hurdle is grabbing a shopper’s attention amongst a sea of options. It’s all about the Four P’s: Product, Placement, Price and Promotion.” These involve “understanding the space, branding that will stand out on a shelf, having a competitive price point, and having the funds to promote strategically.”
“Think about margins,” Cayne adds. “It’s something that restaurant people are good at because we’re used to operating with bad ones... I don’t think people realise how many chunks get taken out along the way. Think about labour, even if you’re making it yourself right now. Distribution, even if you’re sending it out yourself right now. As you add layers, these will eat into your profit.”
Consultants like Nathan and Liz Thompson, of Liz Thompson Marketing, can assist with this line of thinking and carve out goals for retail entrepreneurs, whether modest or involve becoming a national brand on thousands of grocery shelves. Like Deutsch, they aim to help at any stage of the process, but emphasise engaging professionals early on.
Each of these experts stress the importance of funding. Thompson says: “I jump in when they are ready and explain that introducing a new product, no matter on how small a scale they start, will still cost several thousand dollars.”
Failure of products is frequently tied to underfunding, the absence of a business plan and lack of understanding the variables beyond production runs: trademarking, promotion, distribution are but a few.
While Thompson declares: “Launching a new product is not for the faint-hearted. It is possible to put together a solid plan with a small budget and do things slowly, but you need a good plan. Never jump into trying to launch a new product. And have a good understanding of where you want to start.”