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While food and beverage companies are very close to our hearts, we work with a variety startup and emerging companies that offer a wide spectrum of goods and services. From software companies to craft breweries, we regularly counsel clients on corporate, finance, intellectual property, and labor and employment matters.

In our experience, tech startups can offer some great ideas for other types of businesses. Here are five strategies we have observed through our work in the tech industry that should be applied by food and beverage companies.

1. Iterate to Improve Your Product

Tech startups frequently use the lean business model to create a business or product canvas—a system for determining your company’s unique value proposition by analyzing a potential problem, testing a solution and getting a ton of feedback from customers and potential customers.

The goal is to create a first iteration of your offering, test it, and then build another version that addresses customer concerns and improves on the original. Rinse and repeat.

In much the same way, food and beverage companies can introduce alpha and beta versions of products to the market through, for instance, sales at farmers markets or local events. In those venues, the business owner can gain valuable information from customers.

From there, iterate your product to get it ready for the next channel—wholesale, retail and direct-to-consumer sales—where you’d like to sell.

2. Plan to Scale

Almost every food and beverage company starts out selling products at farmers markets and through a handful of select local retail placements. Understanding the customer is critically important and getting as close as possible to the customer will aid in the iterative process.

The goal, ultimately, is to come up with a product that people want to buy—like really want to buy.

Even though food and beverage companies are manufacturing products, they can scale in many of the same ways as technology companies. When you get to that point—assuming your pricing makes sense, your marketing is effective and the customer experience is good (see #5)—you may start to sell a lot of product quickly.

In order to make that happen, though, your company will likely need to think about how your production and fulfillment can scale as demand grows. As with tech startups, food and beverage startups can see tremendous growth when the match hits the lighter fluid. Unlike tech startups, your marginal costs are going to remain relatively fixed—and may even go up—if you haven’t worked out how to scale production and fulfillment in a cost-effective way.

So remember to think a few steps ahead when you’re working production and fulfillment for your product.

3. Own Your Channel

In the food and beverage industry, Amazon and Whole Foods are often viewed as gatekeepers of success. And while both platforms can help companies scale and should be a part of emerging food or beverage company’s long term strategy, Amazon and Whole Foods have their drawbacks.

First, Amazon and Whole Foods can create long sales cycles for food and beverage companies. Second, Amazon and Whole Foods own all of the customer data, something a food and beverage company needs to control for itself and continually mine for buying patterns and to develop customer loyalty.

The only way to mitigate these two limitations is for a food and beverage company to own its supply chain by selling products directly to consumers. That generally means having your own website for e-commerce and using other channels to drive those customers to you, collecting e-mail address and other vitals, so that you can know more about them and have the opportunity to market to them without paying rent (advertising) on social media or Amazon.

4. Gather Data

The value of data is immense. Many technologies companies derive more value from the data they possess on their customers and their product usage than they actually derive from sales.

There are two primary forms of data that are valuable to food and beverage companies. The first is product data and information that is received through customer feedback.

The second, and more important form of data, is data around the customer profile. The only meaningful way to collect statistically significant amounts of this data is for a food or beverage company to control its e-commerce channels. (See #4.)

5. Remember That (Customer) Experience Matters

The quality of a particular food and beverage product is really only the price of admission. Companies should focus on the entire customer experience, from form to function to package design.

Technology companies have employees solely dedicated to analyzing user experience and making modifications based on customer feedback. Food and beverage customers can do the same thing—focus on the customer experience, survey extensively, and make changes to the customer experience based on customer feedback.


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