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Tagged: “Best Insights Newsletters of 2018”

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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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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Why Private Label Might Be A Great Business Decision

Why Private Label Might Be A Great Business Decision

The average full grocery store has nearly 40,000 SKUs i.e. products that it offers to consumers. Consumers have more choices than ever about what food they buy and where they buy it. But, it is becoming more difficult and expensive for new food brands to build meaningful relationships with them as the marketplace becomes more saturated. To capture more customer value, grocery stores have introduced their own branded products alongside others that they bring in on their shelves, often referred to as “private label” products. While private label products’ market share has held steady at about 18% in recent years, private label brands are now growing faster than traditional manufactured food brands. If food companies have manufacturing capabilities, making private label products can be a valuable part of their business model as they build their customer relationships, maximize production efficiency and diversify revenue streams.

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Should I Manufacture Food In-House Or Use A Co-Packer?

Should I Manufacture Food In-House Or Use A Co-Packer?

It can be a big leap to think about producing larger quantities of food when entrepreneurs are used to home production or commercial kitchens, where the batch size and financial outlay are relatively small, and operational processes are simple. However, if food businesses are considering going into wide-scale distribution in grocery stores and they want to be profitable (hopefully, they do!), they will need the capacity to produce their food at scale. The inevitable question these entrepreneurs face then is “should I manufacture food in-house or use a co-packer?” This question can be difficult to navigate for new food producers, especially because there is not a hard and fast answer. The food entrepreneur’s business model, stage of business, financing capacity (i.e. how well they can raise money) and the availability of co-packing capacity for their specific needs all make a difference in deciding how to answer that question.

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