Archives for posts with tag: Food production

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 you 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 COGSĀ  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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I love nuts, the salted kind. I’m not a huge fan of the unsalted kind, they taste pretty bland to me. Nuts are a good way of me staving off my hunger pangs with something that, in moderation, is pretty good for me.

With nuts you pay by weight. You pay for all the weight, shells included. In an average bag of pistachio nuts you get around 5 to 10% of nuts which are still closed or not sufficiently opened from the roasting process to be edible. That means you’re only getting 90 to 95% of what you paid for, and less if you count the weight of the shells.

For me it’s the unfulfilled promise of unopened pistachio shells. They go straight into the food bin or the fire, even though I’ve invested in their promise of taste and nutrition, in that order.

OK, so sometimes you get a burnt piece of cereal, but it’s one of maybe a thousand or more in the pack, which I’m prepared to tolerate from a 3- or 4-sigma variance point of view. But with pistachios, it’s different. It’s 5 or 10% of the flipping things. It’s more real, more tangible. It’s like buying broccoli when you never eat the base of the main stalk.

How hard can it be for the highly sophisticated food production or processing plants to exclude the nuts that don’t open sufficiently after the roasting phase and are not worthy of making the final cut?

Is it too hard, or is too lazy, or too greedy on the part of the producers?