We recently hosted the Food Matters Live industry briefing in conjunction with HSBC and Produced in Kent. Attended by a range of professionals working in the food and drink sector, the briefing focused on how businesses can increase their sales and profits.
Speakers included Rachel Rowntree (Managing Director, Wide Eyed Owl), Nimisha Raja (founder of Nim’s Fruit Crisps) and Bob Gorton (Managing Director, Old St. Andrews), with each of them sharing their experiences and tips for growing a successful food or drink business and how they overcame various challenges.
Amit Hindocha, Investment Director of Mobeus Equity Partners (a leading investor in UK-based SMEs) then ran through the six key things equity funders look for when considering funding, using their experience investing in restaurant chain Tapas Revolution.
The presentations were followed by a Q&A panel, one-to-one sessions with a number of experts, invaluable networking and a product showcase from a variety of local food and drink producers.
Here are some of the top tips and themes:
1. Know your consumer and your brand
Rachel (Wide Eyed Owl) who specialises in helping entrepreneurs get their products into supermarkets and multiples, stressed that while it seems simple, often businesses do not appreciate the importance of understanding their target customer. When pitching to supermarkets or other large retailers, their first question is always ‘Who is your target market?’ Understanding the perceptions and habits of your core audience will help determine which retailers or distributors are most suitable for your product and where they should place your product.
Nimisha who has had much success with Nim’s Fruit Crisps, the award winning range of air dried fruit and vegetable crisps, said that ‘Made in Britain’ is a part of its success and that food provenance matters to its target market.
2. Scaling up
If you’re looking to scale up your business there’s a lot to consider. Rachel took us through the practical issues her own business faced after the excitement of receiving orders from Tesco for its gluten free puff pastry product. She said businesses should consider whether their product is really ‘retail ready’. Can the packaging be palletised? Are there sufficient bar codes on the outer packaging? What about logistics and other practicalities with the supply chain if you receive a particularly large or small order? Will the price and payment and delivery terms actually work for you?
Bob Gorton, of Old St. Andrews which supplies distinctive alcohol brands, stressed the importance of understanding your business’s ‘critical resource limit’ which he says is the one thing that will put a brake on growth – in other words, what will break first if you try to double sales? After acquiring the Old St. Andrews business as a turnaround project, he soon realised that the whisky selling business and profits were restricted by the limited supply of whisky, so he explored the gift market requiring smaller volumes of product, and later diversified into gin and vodka.
3. Working with others and getting support
Nimisha said that joining Produced in Kent was one of the best things she has done, as it has provided her with additional support and many useful introductions. She also recommended setting up in business with someone else if you can, so that you’re not trying to do everything yourself. However, Bob warned to choose carefully as “the wrong investor is worse than the wrong wife…divorce is easier!”
Rachel warned to look out for an ‘entrepreneurial slump’ – after some initial success it can be difficult to maintain the excitement – keep your team motivated and manage periods of less activity.
In terms of financial support, Amit Hindocha, (Mobeus Equity Partners) talked about the six key things equity funders look for when considering funding, following Mobeus’s £2.5m investment in Tapas Revolution. Unsurprisingly, a ‘good management team’ was top of his wish list.
Nimisha said that Nim’s Fruit Crisps has benefited from government grants and her tip was for businesses to find out what might be available to them.
The panel agreed that Brexit is likely to have a significant impact on the food and drink sector. Bob described it as the “biggest risk we have at the moment”. He warned businesses to be prepared for ‘outrageous misfortune’, irrespective of Brexit, and to have a war-chest and a fall back plan.
5. Amazon is on the horizon
The panel discussed the impact of Amazon on the industry. Businesses were advised to consider whether their brand would benefit from being associated with Amazon. Possible benefits would include increased market presence and awareness and greater sales, but the risks include a lack of control and potentially unfavourable contract terms.
Nimisha said that QVC is fantastic for food and she considers it to be one of the best kept secrets, being particularly good for innovative products. Nim’s Fruit Crisps have had good sales results from this.
6. The ‘eating out’ experience is growing
Amit said that in the UK, 33% of calories are consumed outside of the home – in the US this is as much as 50%. The trend is predicted to continue, particularly in shopping centres. Currently 52% of consumers who go to a shopping centre eat out and they are increasingly looking to combine shopping, food and entertainment as an experience.
For further insights, the Food Matters Live Conference and exhibition will be held at ExCel on 21-23 November 2017. Click here for more information.
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