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Insights Newsletter

Kill Your Darlings: Food and Beverage Business Evolution

Kill Your Darlings: Food and Beverage Business Evolution

Some entrepreneurs are uncomfortable with their business idea or product evolving as their business develops. However, most entrepreneurs start out trying to implement one idea, only to get feedback from consumers that the real business opportunity is in a different product, category or maybe even a different business model. As entrepreneurs develop new products and new business models, they are constantly learning what works and what doesn’t through rigorous testing with their target consumer. In this sense, change doesn’t have to mean compromising core values but rather recognizing that there are multiple paths to achieving the business’ goals of profitability and impact.

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Your Place Can Shape Your Food Business Model Path

Your Place Can Shape Your Food Business Model Path

Different food business models have paths i.e. divergent roads that entrepreneurs can choose to follow to achieve their business goals. Choosing one means saying no to another, at least initially, as each path has different scale requirements and requires different levels and sources of capitalization. In rural areas with low levels of population, it is especially hard to have food or beverage businesses locally produce their products for a purely local consumer base simply because there are not enough consumers to sustain the business. This necessitates finding a path that makes sense for businesses in these areas.

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Execution Matters More Than Your Big, Brilliant Idea

Execution Matters More Than Your Big, Brilliant Idea

Entrepreneurship and the “Eureka” moment where the entrepreneur has their big, brilliant idea is often glorified in the media and American mythology. “Eureka” moments are certainly important, and products need to be innovative and defensibly unique in order to stand out in today’s marketplace. But, what is more difficult is figuring out how to execute on that idea by building the right team/processes and optimizing every aspect of the business for long-term financial success.

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What’s Your Story? Speaking To Your Audiences’ Needs

What’s Your Story? Speaking To Your Audiences’ Needs

Everyone has a story to tell, and food businesses are no different. Food businesses need to cater their stories to the audience they are speaking to. With consumers, this means developing in-depth personas about your target customer and using the language that speaks directly to their unmet need. When speaking to funders, entrepreneurs need to tell the story of their business model, their revenue model, and their brand positioning i.e. the story they reinforce with consumers.

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Define It: Categories In Action

Define It: Categories In Action

What “category” means in the context of a grocery store is more difficult to define than you might think. Categories could be defined as groups of products that meet a similar consumer need or that can substitute for each other. This allows something like snacks, as a category, to cover many different types of products and have a plethora of sub-categories (salty snacks, sweet snacks, etc.).

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Innovation in Food Is Different Than Tech

Innovation in Food Is Different Than Tech

Big food companies realize that they need to innovate. Rather than innovating only in-house, many have been acquiring or strategically investing in new brands at a rapid pace. Innovation in food needs to be matched with an emotional and cultural connection to the consumer through relentless communication about food companies’ brand promise.

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Amazon’s Acquisition of Whole Foods Disrupts Distribution And Presents Opportunities

Amazon’s Acquisition of Whole Foods Disrupts Distribution And Presents Opportunities

There are many reasons why selling food online is difficult. When cognitive neuroscience folks track our brain activity as it relates to food, they find something that is intuitively obvious: the pleasure centers of our brains light up when we eat and even when we shop. This acquisition opens the possibility that consumers can benefit without degrading their shopping experience or taking it out of the hide of food makers. Optimistic, but at least possible.

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Advisors and Feedback Are Essential to Food Business Success

Advisors and Feedback Are Essential to Food Business Success

Most successful entrepreneurs have a network of support behind them, like an advisory team, board of directors and funders. These individuals provide mentorship and guidance that is invaluable for that company’s success, augmenting what the entrepreneur and management team bring to the fold. The company’s customers, whether individuals or wholesale buyers, can also provide invaluable feedback and partnerships that yield fruit.

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True “Disruption” of Food Is Difficult

True “Disruption” of Food Is Difficult

Consumer tastes, preferences and expectations around food are changing. People are demanding more healthy food while also sometimes making the foray into purchasing food items online, mostly non-perishable, potentially hollowing out the center of grocery stores. While there is a place for technology to enhance customers’ relationships with food, true “disruption” of the fundamental dynamics of the customer relationship is likely a difficult goal to realize.

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