A Note From Dom Celentano, The Foodpreneur
I like having real food entrepreneurs tell their story on how they got their food product on retail shelves… profitably! The Critical Retail Buyer Sales Pitch Elements include slotting allowances, in-store promotional support (like end displays and shelf talkers) and the like. Many startups come to my business, The Foodpreneur to get help expanding beyond farmer’s markets and festivals… we help them sell their products to retail stores. A critical element is distribution or the fancy term, the Supply Chain.
The challenge with expanding distribution is it can get complex and expensive. Early stage food entrepreneurs try to do it on their own… packing their car and delivering themselves. This is not good use of your time and I want all of my clients to be focusing on new product development, launching their products and focusing on their social media outreach to build word of mouth and brand fans.
I always reach out to real foodpreneurs like Michael Adams, founder of Green Mountain Mustard. He has written about his experiences on How Green Mountain Mustard Got on the Grocery Shelves and Better Food Manufacturing Business Management. So know he has 5 tips on better wholesale distribution.
Use a Local Delivery Service to Distribute Your Food Product
Remember when you drove all the way across the state to your newest retailer? It was great the first time, but re-stocking the shelf with your second order was a lot of gas and time. That’s where local delivery companies come in hand. For just a couple bucks, they’ll likely pickup and deliver your product for you - and you don’t have to go anywhere. In Vermont, there are several companies who do this. It’s $15 for up to 50 pounds - and for us, that’s a normal order. Beats driving two hours for one delivery!
Increase Your Minimum Order
During Green Mountain Mustard’s first two years in business, we had no minimum order… just to grow. Now, we are smarter and have a minimum order – it’s two cases (24 units) - not too big, but it makes sure we’re moving volume - the key to any food business. If you travel across town just for a purchase order of 6 jars and you’re going to lose money. With a minimum order, you’re able to make money with each delivery.
Consolidate Deliveries on Certain Days of the Week
Doing deliveries every day throws off your schedule. That’s why you should consolidate your deliveries on certain days of the week. Maybe one county is Mondays and the next county over gets deliveries on Fridays. That leaves the middle of the week for producing product, doing office admin work, and calling on new retailers. Why don’t you consider drawing a route out that helps you get all your deliveries done faster?
Learn How to Sell Food Online
Back when I owned an energy bar company, I delivered to 20 different stores every week. It took a ton of time and not making much money. Green Mountain Mustard has both direct accounts food distributors. But, food distribution eats into your gross margin. Food websites are growing and there are popular easy to use ecommerce platforms like Storenvy, Shopify and Etsy all focused on small artisanal businesses.
Partner with another Food Producer
You probably know at least a dozen other small food producers just like yourself… all delivering to the same stores, right? Consolidate deliveries with each other… such as “everyone delivers to a certain store on Mondays”. If you start doing this more often with the same stores, you may want to look at working with a food distributor (how to find a distributor for your product will be a topic for another article).
Take My Advice… Please!
Distribution is its own animal when it comes to running a food business, but there are several ways to make it work for your food company. Get more product to retailers, but do it smarter with these distribution hacks!
Author Bio: Michael Adams runs Green Mountain Mustard, found in over 100 retailers across New England.