I’ve spent the last 14 months or so working in the food sector. Not exclusively, but a few days a month, enough for it to form a sizeable chunk of my workload and recent experiences.

So here’s what I’ve learned about food. Not food itself – after all I’ve been a consumer of it for the wrong side of half a century – but the food business. I’ve listed 6 things I think are important, at least for new or small players in the industry. The FMCG business is a whole different ball of wax, I imagine

  1. Location, location, location. Not where your store is, we all know that one, but where in the store your product resides. The easier it is to spot or find, the more you’ll sell. You need to bolster a poor location with something eye-catching if possible
  2. Taste. Taste is the number 1 driver for consumers. If the food doesn’t taste good, it’s really hard to shift. Even superfoods struggle to move if they taste less than appealing
  3. COGS. Control over your Cost of Goods Sold – or COGS  for short – gives you options. The lower your COGS, the greater your gross margin. If you can’t lower your COGS any further, your back’s against the wall
  4. Distribution. Distribution is key. You need to get your product onto shelves, but then you’ve got to get it off the shelves and into shopping bags. A good distribution partner is a key element of this, and the key to scaling. A bad one will just wait for the orders to come in, leaving you to work hard with the retailer while all the time giving your wholesaler margin that haven’t really earned. The more the players in the distribution chain, the more margin you have to give away, which feeds into point 3
  5. Badges. You need the badges for premium products. The organic, sustainable and vegan check marks and accolades are important credibility nudges, and prestigious awards help a lot too
  6. Graft. It’s a lot of graft building and sustaining a product line. Almost everyone, especially lean model companies, has to do the graft and sell it themselves to start
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