Successful food entrepreneur Doug Foreman, best known for Beanitos, knows a thing or two about how innovation plays a role in the food business. If you're wondering how he gets those innovative products out of the test kitchen and onto the grocery shelves, it starts by looking at food trends and being different enough to convince the retail buyer to give you shelf space in the supermarket.
Starting with the Guiltless Gourmet, Doug's line of low-fat, baked tortilla chips, Doug is the guy to listen to for all things innovation. The entrepreneur started with $200 and created an entire snack category worth over $500 Million before cashing out (making millions more) when he sold the brand to Barq's Root Beer in 1994.
Doug made Beanitos Bean Chips (according to SPINS, Nielsen Data) the number one ranked Growth Brand of Natural Chips in the U.S within a huge multi-billion dollar category. This is no small feat and for all entrepreneurs, it's worth heeding Doug's advice, which follows.
Cold Calls and Cold Cash
According to Doug, the first step to take when making an initial sales pitch to a retail buyer is to "take it to the back door of the store." And while that may not be a literal suggestion, Doug did exactly this with his first Whole Foods store pitch. Better yet, go to your independent store first and speak to the owner directly and (at the very least) get feedback.
After your first cold call, monitor your efforts and slowly "stair-step" your way up. In other words, take baby steps and make subtle changes to the food item as you go along. Once you have a track record, find safe chains like a Whole Foods or cooperatives like Wakefern Foods that are more likely to give smaller brands shelf space.
How to Go From Your Kitchen to Kroger
Your kitchen is your laboratory and while you can easily make small batches for your friends, that's not enough. You need to scale up your recipes and understand the Good Manufacturing Practices outlined by the FDA. You also need to test for shelf stability and safety.
Doug says, "You have to make sure the product you make today tastes great in six months down the road in order to have enough shelf life to withstand the entire supply chain." Start by documenting everything you do with your product in a notebook because over time your product will evolve and you need to capture every change. Once you've observed all the necessary steps you're ready to successfully take the next step and scale up. This is particularly important if you are considering a co-packer to produce your brand."
Packaging Is Everything
At the end of the day a consumer has to literally pick your product off the shelf to make a sale, so think about what will make you stand out on the shelf. Go into a store and take a mental picture of how your product stacks up (on the shelf) in relation to your competition. This exercise is a lot less expensive than creating expensive packaging only to find out the packaging does not jump off of the shelf.
While there are companies that can help you with the design concept, this idea is low-cost and you become more familiar with the retail environment you will be in. It also allows you to pitch the retail buyer with a lot more confidence.
To hammer this point, look to the Guiltless Gourmet Salsa example. "At Guiltless Gourmet, we were launching a new salsa and we had a national, award-winning ad agency designing the label," Foreman said. "They designed a black-and-white label which they said was cutting edge but we felt it was rather anemic looking. So we tested it on the shelf at the store. When we all stepped back to take a look, this cutting-edge label amounted to a small patch of gray and was easy to miss. Needless to say, I'm a believer in testing on the shelf, at the store."
Four Tips From Doug Foreman
1. Be an innovator
You need to start with an innovative food product. If you are the 10th whatever product on the shelf, don't waste your money and time because most likely you will not get shelf space. Go back to the kitchen and find something else to sell that is different.
2. Know the market and your differential
Walk through the supermarket aisles and focus on categories you like or know well. Ask yourself if there are products that are missing that you can make to fill the meal preparation void or make snacking more fun, healthier, or easier.
3. Work your way up the food chain
It's simply a numbers game. Small cold calls (and a lot of them) will lead to big cold cash. Start small and work your way up the ladder until your comfortable (and prepared) to make sales presentations to the big guys like Whole Foods.
4. A picture's worth a thousand words
Determine what will make you stand out on the shelf and test before you leap. Don't spend thousands of dollars on packaging just because friends and family tell you it's the only way to go.