Cook Wrap Sell. Bruce McMichael
Plumb’s food business, Edible Ornamentals, has gone from strength to strength after market research provided through IGD helped convince her to make a small but significant change to her strategy.
This case study comes from IGD. IGD provides information, insight and research for the food and grocery industry including conferences with retailers, market research reports, workshops. Joanna started the business while she was at home looking after her young son.
“In 2010, Joanna attended an IGD’s ‘Sell more – waste less’ workshop at Newmarket to learn more about the idea of ‘value’ and how it drives shopper behaviour. In particular Joanna wanted to better understand which products to promote at her farm shop at Cherwood Nursery, Chawston in Bedfordshire. As well as the farm shop the nursery includes a greenhouse and a commercial kitchen where sauces and other gourmet chilli-based products are prepared.
“IGD prepared a shopper insight report for Joanna, using information from a Kent Business School survey:
“The weekly sales for chilli sauces fluctuate over the year but it could be seen that sweet chilli sauce sales always peak during January, which coincides with the Chinese New Year.
“Sales of chilli sauces overall had grown 10% in value over the last year, but volume sales remained unchanged. Shoppers had switched from sweet chilli sauces to normal chilli sauces.
“People buying chilli sauces were also likely to buy other types of sauces, such as other oriental sauces and dipping sauces.”
“We know what we like, but when we’re developing new products to sell to the public, it’s important for us to know what the customer actually wants. Having accurate market information that has been properly researched can be invaluable to small companies like us so that we can add exciting new products to our range of sauces that people really will buy, and won’t just sit on the shelf,” says Joanna.
Edible Ornamentals | www.edibleornamentals.co.uk
IGD | www.igd.com
Kent Business School | www.kent.ac.uk/kbs
Your USP
USP, or unique selling point, describes the one thing that distinguishes your products within a crowded market. It’s a touchstone for just about everything to do with you business. Ultimately, it’s your voice in the marketplace.
Work out your USP using the following steps and then let your customers know about it.
Understand why a customer would use your product or service. What benefits does it offer them? What do they get out of using your product?
How might your product or service be positively different from your competition?
Listen to your customers! What you consider important may not interest the people buying your food. Look for gaps to see where you can really differentiate from the competition.
TIP: One way of working out your USP is to put together a so-called ‘elevator’ pitch. Imagine you have just two minutes (the average elevator journey) to describe your business to a potential customer. What would you say?
Finding and keeping your customers
You’ll need to research your potential customers, the competition and a price point by visiting competitors’ sites, foodie sites and forums, reading reports and seeking intelligence from experts. Look for information that will answer the following questions:
What is the number of potential customers you can serve, and how do these customers like to be served?
What are their characteristics, spending patterns, and who are their key influencers?
Who is currently serving your market?
Where are your potential customers going for their ingredients and food?
What do they like about what they’re getting and, more importantly, what do they dislike (as this opens up opportunities for you to improve on the status quo)?
In view of the above, is there a business here? Is there room in the market? Is there genuine demand?
CASE STUDY: Innocent Drinks
When three university friends – Adam Balon, Richard Reed and Jon Wright – opened a smoothie stall at a local jazz festival, they asked the music fans to vote on whether or not they should give up their day jobs and sell the drinks full-time.
The response was overwhelmingly positive. After resigning from their jobs the next day, Innocent Drinks was born.
A decade later, Innocent was turning over more than £100m. It is now majority owned by Coca-Cola.
As Innocent’s Richard Reed says:
“What itch are you scratching for your customer? What problem are you solving for them?”
Innocent | www.innocentdrinks.co.uk
Running the numbers
Statistics can be hard to come by, but there are some key sources offering numbers and data about who’s making and who’s buying food and drink.
Food Farm reports | Government gathered food and farming statistics can be found here: www.defra.gov.uk/statistics/foodfarm
The Food Statistics Pocketbook | This resource contains a wide range of statistics on the production and consumption of UK food: www.defra.gov.uk/statistics/foodfarm/food/pocketstats
Family Food reports | These look at levels of consumer purchasing of food and drink: www.defra.gov.uk/statistics/foodfarm/food/familyfood
Chilled Food Association | Market data for chilled food from Kantar Worldpanel: www.chilledfood.org
Key Note | Hundreds of free executive summaries of food and drink reports published are available at www.keynote.co.uk
Mintel Oxygen | Although you’ll have to pay for detailed Mintel reports, for basic research it is worth reading accompanying brochures which summarise key findings and statistics: www.oxygen.mintel.com
The Food and Drink Federation (FDF)
The Food and Drink Federation (www.fdf.org.uk) says it is the voice of the UK food and drink industry, putting the industry’s point of view to the government, regulators, consumers and the media.
FDF has dozens of food-producing companies as members. Several industry groups also belong, including the Association of Bakery Ingredient Manufacturers; the British Coffee Association; and the UK Herbal Infusions Association.
For small and medium-sized companies, the FDF offers support ranging from technical to networking groups.
CHAPTER 2. Types of Food Business
THERE ARE TWO basic