Retail Sales

So many chef’s and owners dream of bottling and selling their own line of products. Whether it is fruit chutney or salad dressing, tomato sauce or salsa, many of these products, given the chance, can ultimately do quite well in the mainstream American marketplace. In fact, a large number of these products already grace the tables of some of the country’s finest businesss, winning critical acclaim on a daily basis. Unfortunately, the process of graduating from the dining room table to the marketplace can be very difficult, time consuming and expensive. This is not to say, however, that it is impossible. If you have developed a product and would like to see it manufactured, there are a few things you should consider before getting started.

What’s In A Name?

First and foremost, before you put your name on the label, you must believe totally in the excellence of your product. You will be going through a lot together over the next few years, and your product will become a major part of your life. There will be days devoted solely to promoting your product, and you will be thinking about it from the time you wake up in the morning to when you go to bed at night. You will be judged by your product, and everyone who comes in contact with it will tell you exactly what they think.

Why Your Product?

The next most important consideration has to do with demand. Does the world need another product like yours? Have you created something that people would want to buy? Is there anything new or unique about your product? Is it true that the giant manufacturers can create a demand for tap water in a bottle simply because they have enough marketing and advertising dollars? Perhaps not, but most start-up individuals cannot compete in their arena. However, if you think your product could get even a small slice of the market, this could translate into a decent amount of money. So you need to be realistic when assessing market demand.

Production

The next thing you must determine is how and where you are going to manufacture your product. In the very beginning most people start out small, literally producing and storing products in their homes or businesss. This is a fine short-term plan. It gives you an opportunity to feel out the market and see if there is any interest or demand. To do this you simply need to make a few batches. Then, go out and give away free samples to friends, family, neighbors, and employees at local grocery stores, delis, businesss, gourmet shops, meat markets, etc. Ask these people for their comments. Listen to their advice. Try to hear and understand what they are trying to tell you. Make adjustments in your recipe if necessary. If someone says they love your product, they may or may not mean it. A more certain indicator is when people start asking about price and where they can buy more. The key to your success is in getting your first customer, who can be as little as one grocery store, one business or one mail order company. You really need a commitment from someone who will buy your product once you move on to the next step, which is manufacturing. Now that you have determined there is a demand for your product, you will need to produce enough to meet this demand. Usually this means a commitment of more time and money to your project. As you grow from the homemade-sample-jar stage to the next level, you will need to make decisions.

Branding Elements

A very important step is creating the container, label design and logo that will give your product a unique look and an identity of its own. So much of the success of your product will be determined by these factors. When looking for a label company to print your labels, remember that most of them have graphic designers and artists in-house who can help you. The two biggest questions to ask yourself about labeling have to do with Nutritional Analysis and UPC Coding. I have to advise you that both are very important. The laws regarding nutrition are only going to get more rigid. The good news, however, is that the price of analyzing a recipe has gone down from approximately $600 a couple of years ago to about $100 today. As for UPC codes, there are not too many retailers around who don’t use UPC coding to track inventory and sales, and I think it is worth the investment. At this stage, it is a good time to review all the positive things related to your product. You think it is excellent. You have determined there is a demand. You have created an interesting label that will make people notice your product at first glance. Now you need to find someone to manufacture the complete product for you. Your best bet is to find a reputable co-packer; this will be the fast, easy and economical way to get your product to market.

Co-Packer’s

Co-packers are manufacturers who own factories already in production, so they have the equipment, ingredients and employees to take your recipe and turn it into a finished product. The best way to find a co-packer is simple: go to your local supermarket and look for products similar to yours–let’s take salad dressings as an example. There are dozens of dressings in the salad dressing aisle. Look at the different labels and find out who is manufacturing the dressings most similar to yours. Try to find local companies, and then contact them to find out if they do co-packing. Line up a few appointments to tour their factories. You need to find a manufacturer who has the raw ingredients, machinery and technology to re-create your recipe to your exact specifications. Be advised, however, that many manufacturers will not want to bring in special ingredients just for your recipe. They will try to persuade you to use the ingredients they have in-house. This may or may not be good for you. Ask the manufacturers for samples of their in-house products such as oil, tomato paste, lemon juice, wine, vinegar or cheese, and try to use them in your recipe. If their in-house products work well in your recipe it will help keep your costs down. If they change the flavor profile of your recipe, you probably won’t want to use them.

The First Run

The next step will be to produce your first batch of product. Most co-packers have a minimum first run, and you will probably want to go with that minimum the first time around. You will have to negotiate price and terms before going into production, but don’t expect to make any money on the first few batches. The most important thing about the first batch is going to be the quality of the finished product. It is easy to understand that a ten-gallon recipe does not always translate exactly to a 100-gallon recipe, so before you even start you must meet with the technician in charge of your product and discuss all aspects of your upcoming production. Draw on their experience and knowledge to assure that your first run won’t be a disaster. During that first run, you must be there every step of the way, tasting your product as the ingredients are mixed; take good notes to assure consistent quality for upcoming batches. Having successfully completed the first half of your project–manufacturing, it is now time to proceed to the other half of the project–selling.

Sales & Marketing

Whereas the first part of the process is pretty concrete, the second part is very abstract, and there is no exact formula or recipe to follow. The truth is that selling, which is the promoting and marketing of your product, is the single most difficult part of your project. It is here that the future of your product is decided. I truly believe that the success of any product is due to the many marketing and promotional ideas you will utilize to sell you products. Without any real money for advertising, the small guy must rely on his own creative energy to promote his product. Some of your ideas will work best than others, but most will be a lot of fun. At this point I would like to relate some sales and marketing ideas, in no particular order, to help you create promotions of your own from some of my clients. Large companies with name brand products have a lot of money budgeted for advertisement and promotion. If you can figure a way to help them sell more of their product by using your product, they are usually willing to back you in some sort of way. Could your product be used as a dipping sauce to enhance their product? Would they consider using your product at food shows if you donated the product? Could you stand at their food shows and demonstrate how the two products work together? These are all very inexpensive ways to get your product out in front of the public, and they give you the exposure needed to get started. One of the first promotions a client ever did was to bring a product to a very popular radio show disc jockey and suggest that he give away bottles to his callers as a small token of appreciation. He liked the idea and gave away my clients product for more than nine months. An hour didn’t go by during that time without the mentioning of their product–all for the cost of about $5 a day. As a business owner, there are other venues open to you as well. One of my clients is often asked to submit recipe ideas to the food sections of major local newspapers, and by doing so, makes sure his product is included as an ingredient in these recipes or the recipe itself. He put an asterisk next to the name and sys it is available at certain major grocery stores, even though it actually isn’t. He did this three times within a year. This tactic caused people to ask for the product in so many of these stores that they eventually decided to carry it. I know this could have backfired, but when you are a small guy, you really have nothing to lose. Also be sure and tell you co-packer to send my product to anyone requesting samples. A client never thought this would get him into jail. But that is exactly where the co-packer is now selling his product–and paying him a five percent commission. The correctional system is huge and purchases a lot of food. This example brings us to another point that you should realize. People who market products have an intimate understanding of their many uses and applications. You need to design a number of ways to use your product because an outsider might not realize its full potential, and most people will lose interest if nothing clicks within the first two minutes of trying your product. In this case, you need to be ready with some creative ideas. You should also be sure to find a way for people to make money as a result of using your product, rather than shouldering it as another expense. Another client always keeps an eye open for different fundraisers and when she finds one, she donate a case of “autographed” bottles of her product. This gives her great exposure and credibility, all for the cost of one case of product. When the Taste of Chicago opens every year, a client of mine doesn’t need to buy a booth to sell food, he just donates a couple of cases of his product to a few different booths. They place it out for the customers to use free of charge, and he get great exposure without having to commit a lot of time or money to the event. I also believe that it is imperative to have your product on the tables of some high profile businesss, more than just your own (of course this will only work with those who are not in direct competition with your venue). Do whatever you can to secure this opportunity, even if it means giving that business plenty of free product. People will sample your product and chances are that someone else will find a need to carry it as well. You can also have the business ask a distributor to carry your product for them.

Brokers & Distributors

A distributor, however, will seldom find new customers for you. You are lucky if they are organized enough to deliver your product. If a distributor picks up your product, you may want to make some co-calls with their sales reps to let their customers know that the distributor now carries your product. If a distributor approaches you and wants to carry your product, you must always go C.O.D. for the first three orders. If a broker is interested in representing your product, ask him for a list of products that he currently handles. Call those companies and ask what they think of that broker. Remember, though, that brokers and distributors are not end users, and cannot make people buy your product. They may be able to place your product in certain locations, but it is ultimately up to you to get people to buy.