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Where Does My Food Brand Need To “Be”?

Today’s food consumer has constantly evolving tastes and preferences, which can make it difficult to meet people where they are at and provide them with a product that solves their problems. There are many aspects of the changing consumer to consider. The growing impact of online marketplaces (like Amazon), direct-to-consumer sales (through brand owned websites), third party delivery services and in-store pickup/delivery at traditional retailers has made where these consumers expect to find, consume and purchase food is a growing conundrum for food brands.

Generally, growing food brands have needed to go into distribution at physical traditional grocery stores to be available nationally. To be financially viable, these food brands have to raise usually a combination of equity and debt to finance the marketing activities necessary to get trial in today’s crowded marketplace and float long payment periods with large grocery stores and distributors that are generally slow to pay food brands. However, sometimes food brands can stay local if they open their own retail location and their local market is big enough. The question of which path to take has to with the intersection of the entrepreneur’s goals and the answer to the question “where does my target customer expect to find me?”

Food brands should also “go deep” in the areas they have distribution to achieve enough sales velocity rather than spreading themselves thin. If their core consumer segment lives in a certain state or region, it is best from a cash flow and sales velocity perspective to launch first in that place until the business establishes a significant footprint and generates sell-through. Then, the food brand can target a new geographic area or partner with a new retailer/distributor from a position of business strength.

On our podcast this week, Trueman McGee, Owner and head “Roll Master” of Funky Fresh Spring Rolls talks about how his business’ first points of distribution was selling at farmers markets, sporting events, festivals and through catering, all relatively low-risk ways to reach consumers and conduct valuable market research through customer feedback. Since using these channels to build a customer base and a brand, he recently opened up a temporary retail location with plans to launch a few more retail locations and a “Funky Fresh Fun Factory” to mass-produce rolls before going into distribution in grocery stores. Trueman had wanted to go right into retail distribution but chose to start with building his business where he could easily reach customers, hone his product and build his brand.

There are wide variety of tools and marketplaces to reach customers for today’s food brands. And, sometimes the ideal distribution path looks different than the entrepreneur intended when they started the business. The brands that survive today’s marketplace will be making decisions about distribution and channels of delivery with their customers’ expectations and preferences center stage.


And now, our roundup of the best food and beverage finance news, events and resources from around the web…

Food and Beverage Business Models

Business Model Insights

Raising Capital

Raising Capital

Grocery Store Shopping

CPG/National Brands

Grocery Store Produce Section

Market Trends

 Regenerative Agriculture

Farming and AgTech

Deals/M&A

Industry Events

Categories: Insights Newsletter