Five secrets to compete for, and win, shelf space.
If you have a great product that you believe is ready for retail store shelves, I have some good news and some bad news for you. The bad news is that major retail stores are not designed to bring success to startup food manufacturers. Retail wants to make long-term relationships with companies that can quickly ship product that flies off the shelves and generates high profits. Many small food entrepreneurs cannot produce the minimum quantities required by these stores at a profitable margin to make a business opportunity worthwhile.
The good news is that while you may start small, you can grow to be ready for a successful national retail debut! To compete with the grocery and wholesale giants for shelf space, you need a deep fan base and brand recognition to keep retail sales high over an extended period. The only way to do this is through strategic brand marketing, some basic knowledge of retail placement and these secrets to preparing your food business to secure shelf space.
Secret #1: ‘Everyone’ is not your target market.
When people ask who enjoys your delicious pastries and desserts, stop saying “everyone”. It’s good practice for future meetings with category buyers and sales managers when they ask, “Who does your product serve?” and “Who is your target market?”. If you stop focusing on “everyone” as your intended customer, you can begin to build a fiercely loyal fan base.
Every retail store is not a good fit for you, either. You want to be selective of which stores carry your product, because the demographics of retail store patrons may vary. Is Walmart the best place for you to place handmade scones or artisan chocolate? I also encourage you to reserve your efforts because...
Secret #2: Right now, there’s no space for you in retail.
Think back to the last time you visited a grocery, wholesale or major department store. How many products would you guess covered the shelves and display cases? Did you remember seeing any open spaces with a sign that read, “Your Product Here – Ask Store Manager for Details”? Probably not. There is already no space for your product. You’re going to have to roll up your sleeves and get strategic enough to push someone else’s product off the shelves to make room for yours.
Does this sound harsh? It should. Retail is a battle royal for prime placement and steady sales. You have to be ready to compete with not only the other small retailers in the mix, and you have to be ready to go up against the Kraft, Nestle and Unilever brands on the shelves and racks. There’s only one way you can convince a buyer to allow you to compete with the billion-dollar brands...
Secret #3: Establish customer loyalty very quickly.
It is crucial that you begin marketing your products online, at industry shows and actively work to secure some media attention early in your food entrepreneurship career. These activities allow you to build awareness of your products to an engaged customer base that will frequently purchase from you. They will follow you wherever you are placed to buy your products and increase your longevity on the shelves. You don’t want to wait until you secure shelf space to rely on price discounts (they will hurt your margins) and one-off promotions (they don’t sustain long-term interest). You have to raise your products to a standard that is not influenced by the economy, personal budgets or any other outside factor. You should...
Secret #4: Envision your product as a non-negotiable.
We spend money on necessities and non-negotiables. Food is a necessity to sustain life, but is dessert a necessity when people shop for groceries? More importantly, is your dessert or confectionary creation a necessity in the eyes of your target market? If not, you must become a non-negotiable. No other product compares to yours in the eyes of the people who are most loyal to your brand. These individuals will buy your product whether it is on sale or not, whether they have to drive for miles out of their way to find it and will be willing to take other items out of their cart to afford it. And, they will buy it regularly. Remember, it is less expensive to resell an existing customer than it is to acquire a new one, so first, work on branding your product as a non-negotiable to your existing customer base. They will return the favor when you...
Secret #5: Allow your customers to become your viral sales force.
If you understand who your target market is, you are easily able to convince people to buy from you. And, if you understand why people buy from you, then you have all the information necessary to convert them to your viral sales force.
If you don’t know why your product is great, it’s time to ask somebody! Asking your current customers what they like most about your products or why they have referred your treats to others is important for you to know. The most effective messaging comes from your market, not your advertisements and promotions. If you ask questions early and often, you will start to gather keywords and details that resonate with existing customers because it originated with them!
Lauren Young is the CEO & Founder of Freshly Baked Communications, a brand marketing strategy firm in Chicago. Her branding workshops for food manufacturers and restaurants that want to make it onto retail shelves, Get Shelf Made, begins in November 2014. For more information, visit www.GetShelfMade.com.