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Food Businesses Need To Pay For Space And Attention, Even on Amazon

Food Businesses Need To Pay For Space And Attention, Even on Amazon

“This product sells itself!” Have you ever heard that expression? It’s one of those clichés that is unfortunately not true. While there are things you can do to gain awareness, interest and trust in the marketplace, no product, food or otherwise, sells itself. People’s time and attention are limited, and often the biggest challenge with acquiring new customers for food businesses is getting those customers to try the product. Because the food space is competitive, online and off, emerging food companies have to spend lots of marketing and sales dollars to get people’s attention by paying to have their product in the right place with the right positioning.

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Grow Your Food Brand On Amazon, If You Constantly Optimize

Grow Your Food Brand On Amazon, If You Constantly Optimize

The Amazon platform provides a means for small and emerging brands to find an audience and generate sales if they dedicate time and resources to ensure discoverability on the platform by constantly optimizing product pages with the right keywords and features once the user is on the page, in addition to paying for keyword-based advertising. Many food and beverage brands have found that they need to sell variety packs or other bundles to get their products to the $10 – $20 price point that is optimal for both what consumers are looking to pay while balancing achieving profitability on each unit that is not possible with selling individual products for less than $10. While there are some perishable products available through Amazon Fresh or Amazon Prime Now, the brands that have the most traction today in selling through Amazon tend to have shelf-stable products.

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Shifting Farm Business Models

Shifting Farm Business Models

Agriculture is a tough business to be in. According to an analysis by the Farm Bureau, median on-farm household income has been negative for the past 20 years. This means that every year for the past 20 years, more than ½ of all farms in the United States were unprofitable! Many of these farms have kept their cash flow positive by increasing their debt load, and individual farms might be profitable one year and unprofitable the next. Finding new business models that allow farmers to be profitable while meeting changing consumer demand will require high-quality technical assistance and coordinated effort on the part of farmers, brand-builders, lenders, investors and consumers.

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How A Bank Can Strengthen Farming Communities Through Innovative Lending

How A Bank Can Strengthen Farming Communities Through Innovative Lending

Ephrata National Bank in Lancaster County, Pennsylvania is a $1 billion community bank with 25% of their portfolio funding agricultural entrepreneurs. The bank’s staff have found that changing the price the farmers receive via new business models or premium offerings through things like organic production or value-added processing helps farmers deal with high land prices and avoid commodity agriculture’s low return on assets. Lending is a “high-contact sport” and relationships with lenders can help food businesses solve key business problems. Partnerships with government programs from the FSA, SBA and USDA that encourage food and farm lending are essential to make many of these lending relationships work. But, there is a lack of technical assistance nationally to help more lenders understand (and underwrite) cross-disciplinary business models (ex. a farming operation with a cheese plant that resembles food manufacturing). There is also a lack of training on how entrepreneurs and lenders can leverage all of the different sources of capital and programs available to entrepreneurs to make more deals happen.

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Food Companies Grow In Stair Steps, Not Incrementally

Food Companies Grow In Stair Steps, Not Incrementally

While established food companies can grow slowly and still be profitable, this is much harder, if not impossible, for emerging food companies. Food companies, because they deal in physical products often produced from a long and complex supply chain, grow in stair steps, not incrementally, in order to reach the right scale to be profitable. And, these companies often have to quickly leap up each step so they don’t run out of money, often with the help of outside capital.

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How This Hard Cider Business Is Learning From “The Struggle”

How This Hard Cider Business Is Learning From “The Struggle”

Brix Cider is a hard cider company in southern Wisconsin with about 1,000 trees, many of which were hand-grafted from local cultivated and wild apple varieties. After initially home brewing for many years, the hard cider company eventually connected with a local winery that had extra production capacity and began producing in small batches and self-distributing throughout southern Wisconsin. Their ultimate goal is to open a cider tasting room (increasing margins and cash flow); however, there have been many elements preventing them from getting their own facility. Through this struggle to find the right space, they have learned business problem solving skills and financial literacy. The combination of pragmatism and passion they have demonstrated has allowed them to work through and overcome “The Struggle” as they look to growing their business in the future.

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Shared Financial Management Builds Alignment For Food Businesses

Shared Financial Management Builds Alignment For Food Businesses

Entrepreneurship is a really difficult enterprise. There are a lot of things for one person to learn how to do well. Imagine if you as an entrepreneur tried to help everyone understand what needed to be done to make the business succeed. How do you even go about having that conversation and leading that charge? One strategy that some food entrepreneurs employ is open-book management. Open book management is essentially sharing the company’s finances and key financial drivers openly with managers to increase their buy-in and understanding of the company’s performance. By sharing company finances and expecting financial literacy of managers, open-book management allows multiple leaders to use the same language and work towards the same goal.

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Growing A Successful Retail Food Co-op By Meeting Your Member’s Needs

Growing A Successful Retail Food Co-op By Meeting Your Member’s Needs

The Great Basin Community Food Co-op serves the Reno, Nevada area. The co-op started as a private buying club and was initially located in the back of a punk record store, but continued to grow their sales and members. In 2008, they opened to the public in downtown Reno with 500 feet of retail space, eventually hitting $1 million in sales in one year. In 2012 they moved to another 3-story location of about 3,000 square feet (on the main floor) even closer to downtown. In 2017, the store had about $4.5 million in sales after rapid growth in previous years. The best way for aspiring co-ops to be successful is by reaching out to their community and meeting their members’ needs. In addition, co-ops should focus on their honing their core priorities so that so they don’t get off track, building capacity and buy-in with a core group of people.

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Focused Prioritization Helps Good Food And Farm Businesses Reach Break-Even

Focused Prioritization Helps Good Food And Farm Businesses Reach Break-Even

Food entrepreneurs will always have lots of goals competing for their attention. Given that food entrepreneurs have many “big, hairy, audacious goals,” it is worth noting that certain goals should have more priority over others, depending on the stage of the entrepreneur. For example, many food entrepreneurs want their business to reflect their social impact goals. But they shouldn’t do this to the exclusion of the brand building necessary to tell that impact story (and capitalize on it with a premium price) or the long-term financial viability of their business. The good entrepreneurs know how to prioritize goals and optimize their efforts for the goals they are pursuing as priorities. This allows them to build financially successful companies and, over time, pursue many more “big, hairy, audacious goals” than they would have otherwise.

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The Farmer Education Continuum In The Colorado Mountains

The Farmer Education Continuum In The Colorado Mountains

The Old Fort at Hesperus’ team sees farming education as a continuum where different people are best served by discreet programs, depending on their interests and stage of development. Their sustainable agriculture program includes an educational garden internship, a farmer-in-training program, and market garden incubator. The incubator program provides educational classes, mentorship, access to land, water, infrastructure (irrigation, harvest sheds, cooler and root cellar), and marketing assistance to aspiring farmers who are either in business or ready to start their own farming business. Their Education Garden is a ½ acre production and demonstration garden devoted to giving Fort Lewis College interns an introduction to small-scale sustainable farming through about 120-150 hours of hands-on work. In addition, their Farmer-in-Training (FIT) program is a stepping-stone between an internship and owning an independent business selling produce.

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