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The inspiration to start a food or drink business comes from one of two things. Either you are driven by a crazed passion for a particular product (your granny’s cloudberry jam, the bubble tea you discovered in Bangkok) and this is the catalyst to take the gamble. Or you spot a clear commercial opportunity – a new trend or a gap in the market – and you start your business to exploit it.
Sometimes you’re lucky enough to find both. For my own new food start-up the stars have aligned: I’ve been a passionate vegetarian for more than 40 years and love protein-rich plant-meat burgers and sausages. And right now one of the biggest food trends is meat-free (set to reach £1.1bn in sales by 2023, according to Mintel) meaning a huge opportunity for great tasting meat alternatives. So hooray for smug me, my new vegan-meat brand Planet Jason has every chance of success.
Or has it? Well not necessarily, because the inspiration for a product is just the start. When Thomas Edison claimed that “Genius is 1% inspiration and 99% perspiration”, he could have been talking about being a foodpreneur. The challenge far greater than dreaming up that first concept is turning it into reality. “You not only need a great idea, but also single-mindedness, resilience, with some business acumen thrown in, to actually make anything happen,” says Andrew Walker, founder of TEA REX who make fresh fruit infusions.
So what is on the list of essentials for building a successful food business? A bottomless pit of cash? A bulging contact book of retail buyers, maybe? The sort of silver-tongued patter which would have you selling coals to Newcastle? Or, as Andrew says, “incredible, demented determination”?
I have the privilege of observing hundreds of emerging and emerged food and drink brands, because alongside my fledgling vegan businesses I run Bread & Jam, which puts on all sorts of events for new food and drink brands. Through our workshops, bootcamps, mentor walks, founder dinners and the epic two-day festival in October I get an amazing overview of the whole food brand ecosystem. Some people talk to me about the challenges that they – and nearly all food and drink start-ups – face, and from others I learn how the successful businesses overcome these obstacles.
Show me the money
“Starting your own business is a risky thing,” according to Jess Salamanca, founder of banana-based ice cream brand Banana Scoops. “You need a lot of investment, and this has meant I’ve kept a full-time job whilst trying to start the business so I can still invest in the brand and pay rent.“
In fact, many start-ups underestimate the cost of launching – branding, packaging, NPD, ingredients, trade shows – and this is all before you’ve brought in a penny of revenue. As Jessica Harris, who is launching a range of kid’s coconut yoghurts called Little Bandits, says, “The early days have been so much more expensive than I first envisaged and it was tough to decide when to give up the day job to focus on growing the business and balancing that with earning enough to pay the bills.”
The majority of start-ups manage to get off the ground using a mix of personal savings topped up with money from the three Fs – friends, family and erm, fools. At this stage the dastardly banks are rarely keen to help, but there are other pots of cash available. “Virgin Startup not only gave me a loan of £25k over six months to start my business, but have also been instrumental in the business plan-writing process,” says Caroline Knight, founder of Herbaceous Blends, a caffeine-free herbal tea start-up. Other options include growing organically with revenue initially coming from markets and stalls, crowdfunding and even invoice financing.
Making the darned stuff
So now, armed with a tank of financial rocket-fuel to power your great idea, what’s the next hurdle? “Finding a manufacturer,” says Jess Salamanca. “No one wants to talk about this and it’s one of the best-kept secrets in the industry which has meant a lot of networking and late nights searching Google.”
Most brands these days tend to look to outsource manufacturing as the capital outlay to build your own kitchen is prohibitive. The challenge here is finding the right manufacturer who will make the product the way you want it made, and in small enough quantities at the start to mean you’re not left with pallet-loads of unsold product.
But outsourcing manufacturing isn’t the only option. You can of course make it yourself and scale up from the kitchen table to a commercial kitchen if you are lucky enough to live near well kitted-out shared kitchen space that can be rented by the shift. Karen Walker, co-founder of The Nowt Poncy Food Company who are based in the North West of England, has not been so lucky. “Finding a kitchen that we could rent on an ad hoc basis was nigh on impossible and we ended up renting a kitchen space which was really expensive and that we had no control of.” They are now resorting to kitting out their own kitchen space which they, in turn, will rent out to other food producers.
Once you’ve sorted the manufacturing out, and you have a good supply of well-made product, you need to actually sell it. Direct to consumers (at markets or online) is a great first step, but most producers have aspiration to sell through retailers. This is rarely a simple matter. “It’s so hard to get to speak to retailer buyers. When I started out, my emails and phone calls went unanswered and I didn’t know if it was because they weren’t into my products, they didn’t see my emails, or I contacted the wrong person,’ says Andrew Walker of Tea Rex.
And when you manage to corner a buyer and give them your three minute pitch, it’s not always clear whether they like your product or not. “Buyers need to give honest feedback,” says Amy Moring, co-founder of Hunter & Gather who make an award-winning avocado mayo. “Maybe they should send out product ‘requests’ for when range reviews come up rather than the suppliers constantly emailing and chasing them.”
Daniel Humphrey, founder of Humphrey’s agrees, “It’s a disjointed and fragmented industry, and it can be difficult to find an effective route to communicate with indie retailers.”
Nevertheless, independent retailers play a crucial role in launching a business. As Koosha Kowsari, co-founder of Cantina puts it, “Independent retailers have given us the platform to showcase our Chimichurri sauce to their customers. They tend to be very welcoming and allow us to do regular in-store sampling which is a huge bonus. This helps us gain brand exposure while having fun and meeting interesting people along the way.”
But, if I’m honest, I think they could do better. I hear lots of complaints about late and incomplete payments, ad hoc ordering and poor communication. “Let us know whether we are a yes or a no after trade shows and be honest if you think our products will work or not,” is a simple request from Sanjay Aggarwal, owner of the Spice Kitchen.
Caroline Knight of Herbaceous Blends suggests that indies need to “take a chance on small brands. I’ve noticed that many retailers and cafés go with an established brand rather than an emerging one. I get this, as they want to ensure they can sell their goods, but it does mean that the incumbents remain incumbents.” After all, a shop’s point of difference is what separates it from its competitors.
You can’t do it on your own
“This list of challenges is just the start. What’s obvious is that it is not easy, and no one entrepreneur has all the skills and knowledge to do it on their own. “You can’t do everything yourself and sometimes it’s best to get professional help, as in the long run it will save you time and money compared to how long it would have taken you,” according to Karis Gesua co-founder of natural ice lolly brand LICKALIX.
Jane Sanderson, founder of the Dukkah Company, has a suggestion for where to look, “The biggest source of help has been talking with many other producers, both locally, across the industry and online. The FoodHub Forum is a chatroom of entrepreneurs on Facebook which is a fabulous source of advice”.
There is no doubt that the food and drink community is collaborative and supportive, and entrepreneurs with a few miles on the clock are willing to share their experiences with new businesses. This was what inspired and allowed us to create the Bread & Jam Festivals, where over 100 food and drink founders share their knowledge and know-how with entrepreneurs on their way up.
“Bread & Jam was instrumental in giving me a basic understanding of where to start. At the festival I ran around like a headless chicken taking notes on suppliers, manufacturers, upscaling, social media and marketing. And I was able to cherry pick what was relevant to me for where I am now in order to build and grow,” says Shadia al Hili, founder of Cuzena who are currently launching their fava bean dip into independent retailers.
As the founder of Bread & Jam, that’s music to my ears. But with all this insight I need to somehow put it all into practice to launch my own start-up, Planet Jason, into orbit. Gulp. Commencing countdown. The pressure is on.
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