From Kitchen to Cash 2011 compressed

From Kitchen to Cash Workshops!: 

From Kitchen to Cash Workshops! How to be a successful food entrepreneur http://www.thefoodpreneur.com/ http://blog.thefoodpreneur.com/ http://foodbeverage.about.com/

From Kitchen to Cash Workshops!: 

From Kitchen to Cash Workshops! How to be a successful food entrepreneur

Why The Food-Preneur tm ? : 

Why The Food-Preneur tm ? Saw a gap in the marketplace from our own experiences Want to share what the textbooks don’t tell you Learning will be experiential by using the products & businesses of participants Focus not just on food, but business of pricing, creating value, uniqueness, distribution channels, promotions. Have mindset of “Practical Passion” Focus on Repurposing prior background so not necessarily starting from scratch

The Food-Preneur tm Philosophy : 

The Food-Preneur tm Philosophy Improper execution Lack of capital to fund trade & distribution expenditures Inadequate market research against the competition Not understanding what the customer wants & how they operate Misunderstanding of trade promotion tactics Vast majority of new specialty food products fail!

Food-Preneur Philosophy: 

Food-Preneur Philosophy This is a course on Food Entrepreneurship, not just on starting a food business. We will help show you how to “Create Sales & Manage Growth” Successful Food entrepreneurship is more than just having a great tasting product… it is a business that is attractive, durable, timely… creating value to the RETAILER first and the CONSUMER second .

Class Introduction: 

Class Introduction Name & Company Name if applicable What is your product? What inspired you to start a food company? If in business, where & how do you sell your products What do you hope to learn? What topics would you like covered?

Turning a Complex Process into… : 

Turning a Complex Process into… Preliminary Investigation Detailed Investigation Development Testing Validation Full Production Market Launch 1 2 3 4 5 6 7 Launch Plan Development Adv/PR/Comm. Selection & Planning Campaign & Promotion Planning Distribution Plan Channel Mgmt Plan Adv/PR/Comm. Promo Execution Market Evaluation Tracking Research Critical Evaluation Period Ideation New Product Development New Product launch Robert Cooper New Product Development Stage Gate Model Schneider Associates New Product Launch Stage Gate Model From Kitchen to Cash Workshops!

Into a simplified 3 Step Journey: 

Into a simplified 3 Step Journey Kitchen to Cash focuses on… Getting Out of the Kitchen On to the Shelf On to the Consumers Plate From Kitchen to Cash Workshops!

Getting Out of the Kitchen: 

Getting Out of the Kitchen Ideation From Kitchen to Cash Workshops!

Slide 11: 

Productize Covered in detail in Full Workshop

Getting Out of the Kitchen: 

Getting Out of the Kitchen How the Food Business Works Ideation Market Trends Competition Retail Channels Customer Segments Capital requirements Business Model ADTV 1 & CVP 2 From Kitchen to Cash Workshops!

The FDMx Channel: 

The FDMx Channel F ood, D rug, M ass Merchandising Grocery Store/Supermarket Pharmacy/Drug Store Mass Market Store/Mass Merchandiser Club Store and Convenience Store What is the “x”?

The Food Business: 

The Food Business Retail Foodservice $500 Billion $500 Billion $800 Billion

The Food Business: 

The Food Business

Retail Channels: 

Retail Channels Conventional Supermarket 15,000 items. Superstore 40,000 square fee, 25,000 items. Food/Drug Combo GM/HBC 1/3 selling area 15% of store sales.

Retail Channels: 

Retail Channels Limited-Assortment Store A "bare-bones," low-priced grocery store 2,000 items with limited-if any-perishables, e.g., Aldi and Sav-A-Lot. Other small corner grocery store, staples, convenience goods. These stores generate approximately $1 million in business annually. Avg SKU’s 2,000

Store Brand Case Examples: 

Store Brand Case Examples Trader Joes Kroger

Store Brand Dominant Formats: 

Store Brand Dominant Formats Store brands is an all consuming strategy This approach to successful store brands makes a successful retail store

Premium Private Labels at Discount Stores: 

Premium Private Labels at Discount Stores 22

Retail Channels: 

Retail Channels Supercenters Food/drug/ mass merchandiser. 170,000 square feet, 40% of spacegrocery items, e.g., Wal-Mart, Kmart, Super Target, Meijer, and Fred Meyer.

Retail Channels: 

Retail Channels

Retail Channels: 

Retail Channels

Walmart Express Changing the Retail Food Landscape: 

Walmart Express Changing the Retail Food Landscape Walmart Express - Gentry, Prarie Grove and Gravette Arkansas

Walmart Express Changing the Retail Food Landscape: 

Walmart Express Changing the Retail Food Landscape AP Newswire Video Walmart Express Chicago Walmart Express Chicago Second Store /

Walmart Neighborhood Market: 

Walmart Neighborhood Market

Walmart Going Local: 

Walmart Going Local *Video by WalmartCorporate via YouTube

Retail Channels: 

Retail Channels Internet Convenience Store (Traditional) – (Petroleum-Based) Wholesale Club These 120,000 square-foot stores Sam's Club, Costco, and BJ's.

How The Food Business Works: 

How The Food Business Works Alternate Channels Vending Internet

How The Food Business Works: 

How The Food Business Works Alternate Channels Craft Shows Street Fairs

Farmers Market Example: 

Farmers Market Example Vail Farmers Market

How The Food Business Works: 

How The Food Business Works Alternate Channels Taste of’s … We will see how this fits into Cause Related Marketing later…

How The Food Business Works: 

How The Food Business Works Alternate Channels Williams and Sonoma Bed Bath & Beyond

How The Food Business Works: 

How The Food Business Works

How The Food Business Works: 

Distributors How The Food Business Works Brand Margin 6% - 35% Commission 5% Consumer Margin 20% - 55%

How The Food Business Works: 

How The Food Business Works Brand Margin 6% - 35% Commission 5% Consumer Margin 20% - 55% Commission 5%

Why channels of distribution are important: 

Why channels of distribution are important Effect Suggested Retail Price Promotional Pricing Your Price Your Max Cost Your Margins Your Profit!

State of the Specialty Food Business: 

State of the Specialty Food Business

State of the Specialty Food Business: 

State of the Specialty Food Business

State of the Specialty Food Business: 

State of the Specialty Food Business

State of the Specialty Food Business: 

State of the Specialty Food Business New Product Launches By Claim

State of the Specialty Food Business: 

State of the Specialty Food Business Top 10 Categories in 2010

State of the Specialty Food Business: 

State of the Specialty Food Business Categories +10% Growth 08 - 10

State of the Specialty Food Business: 

State of the Specialty Food Business

State of the Specialty Food Business: 

State of the Specialty Food Business Natural claims highest interest/will grow most, by specialty food retailers, 2010 Interests consumers most today Grow the most in the next three years % % Local 75 63 Organic 52 31 All natural 48 28 Sustainable 34 53 Eco-friendly 28 43 Fair Trade 13 22

State of the Specialty Food Business: 

State of the Specialty Food Business

State of the Specialty Food Business: 

State of the Specialty Food Business

Competitor Analysis: 

Competitor Analysis Who are your current competitors? What resources do they control? What are their strengths and weaknesses? How will they respond to your decision to enter the industry? How can you new venture respond? Who else might be able to observe and exploit the same opportunity? Are there ways to co-opt potential or actual competitors by forming alliances?

Getting Out of the Kitchen: 

Getting Out of the Kitchen How the Food Business Works Product Development Ideation Market Trends Competition Retail Channels Customer Segments Capital requirements Business Model ADTV 1 & CVP 2 Suppliers -Raw materials & Packaging Production -In house or Co-Packing From Kitchen to Cash Workshops!

Where does your product fit?: 

Where does your product fit? Shelf Stable-stored/distributed /retailed at room temperature Refrigerated Food- stored/distributed/retailed at or below 45% F Frozen Food-stored/distributed/retailed while maintained in a frozen state Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™

Recipe Formulation: 

Recipe Formulation Example of Evangelia’s Cookies Example of our fresh prepared line and initial research into frozen Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™

Co-Pack vs being the Manufacturer: 

Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™ Co-Pack vs being the Manufacturer Should you do your own manufacturing or go with a co-packer? There are a number of variables to consider for each strategy and pros & cons for each. The right answer varies per business and requires a clear assessment of which way makes most sense for achieving your sales objectives

Manufacturer: 

Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™ Manufacturer Ability to maintain higher degree of control and privacy Not as much leverage for ingredient costing since would most likely be buying in smaller quantities than co-packer Generally less flexibility to scale up quickly if growth is faster than anticipated On the flip side, if growth is slower, still need to cover fixed costs

Co-Packer: 

Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™ Co-Packer Loose degree of privacy and control since using someone else’s facility Importance of confidentiality agreements for proprietary recipes/formulas and processes Less capital is tied up May take time to get the recipe or formula right May be able to leverage some of the co-packer’s existing relationships for your product Review and have copies of all important documents- their insurance, HAACP, USDA, etc

Packaging To Inform: 

Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™ Packaging To Inform IMPORTANT!! Make sure all legal requirements are met for Labeling! Nutritional Panels Ingredients statement Net weight statement Corporate Identity (Logo- trademark) Seals, emblems (Kosher, recycled materials, organic) UPC codes Shelf Life Testing

Slide 59: 

UPC Codes

Slide 60: 

UPC Codes Costs…. http://www.gs1.org/barcodes/request/#5

Packaging: 

Packaging Client Examples Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™

Slide 62: 

Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™

Slide 64: 

Belief Benefits Features Brand name relevant to your marketing

Slide 65: 

Copyright- January 2008 Domenick Celentano and Esther Luongo Psarakis The FoodPreneur™ Highest calcium absorption of any fortified water or supplement Low calorie Sugar free Good nutrition and great taste Developed by a pharmacist for his family The Missing Link for Strong, Healthy Bones Have you had your Paani yet today? You'll love it ... and so will your family. ______________________________________________________

Slide 66: 

Before

Slide 67: 

After using Positioning and Benefits Ladder

Version 1. No Positioning or Benefits Ladder: 

Version 1. No Positioning or Benefits Ladder

Version 2. Addressing Positioning & Benefits Ladder: 

Version 2. Addressing Positioning & Benefits Ladder

Version 3 Great Positioning and Appeal to Beliefs & Emotions: 

Version 3 Great Positioning and Appeal to Beliefs & Emotions Belief/Emotion to compel trial The Story Benefits Features Benefits

Revisions that address what consumers want: 

Revisions that address what consumers want

Slide 73: 

Wellness Claims Health Claim Qualified Health Claims Structure/Function Claims Health Claims

Slide 74: 

Fresh Used in raw state Not thermally processed No preservatives Exceptions… not to be taken literally Fresh Bread Fresh Milk Natural FDA and USDA not defined FDA states Artificial flavors, synthetic substances, added colors, disqualify NATURAL Organic USDA took 12 years to develop, label claims are: Organic 100% Organic if 95% Organic Organic Ingredients if >- 70% organic content Other Claims

Slide 75: 

http://www.fda.gov/Food/LabelingNutrition/LabelClaims/default.htm

Getting Out of the Kitchen: 

Getting Out of the Kitchen How the Food Business Works Product Development Feasibility (can you make money) Ideation Market Trends Competition Retail Channels Customer Segments Capital requirements Business Model ADTV 1 & CVP 2 Suppliers -Raw materials & Packaging Production -In house or Co-Packing Retail Value Chain Viable SRP Forecasting Volume, Costs and Sales Prototype Preliminary customer testing From Kitchen to Cash Workshops!

The Retail Value Chain: 

The Retail Value Chain From Farm to Fork Farm to Fork

Where Did My Margin Go!: 

Distributors Where Did My Margin Go! Brand Margin 6% - 35% Commission 5% Consumer Margin 20% - 55%

Promotional Calculator: Contribution to Overhead: 

Promotional Calculator: Contribution to Overhead

Think Backwards: 

Think Backwards Start with SRP What is Retailer Margin? What is Distributor Margin Broker? This becomes my price to hit the SRP What margin does my business need? These are my maximum COGS

Getting Out of the Kitchen: 

Getting Out of the Kitchen How the Food Business Works Product Development Getting into Business Feasibility (can you make money) Ideation Market Trends Competition Retail Channels Customer Segments Capital requirements Business Model ADTV 1 & CVP 2 Suppliers -Raw materials & Packaging Production -In house or Co-Packing Business Structure Break Even P&L (preliminary) Retail Value Chain Viable SRP Forecasting Volume, Costs and Sales Prototype Preliminary customer testing Getting on the Shelf From Kitchen to Cash Workshops!

Getting on the Shelf: 

Getting on the Shelf Retail Ready Product Value Proposition Packaging Labeling Size Format Price Points Consumer & Retailer Outcomes Specific Measureable Favorable Product Feasibility From Kitchen to Cash Workshops!

Slide 83: 

Thinking Feeling Doing Aware Unaware Knowledge Preference Liking Purchase Conviction Trade Promos Trade Promotions are short term incentives designed to encourage patronage, incremental purchase, and merchandising support from trade customers. What are Promotions

Trade Promotions in the Marketing Mix: 

Trade Promotions in the Marketing Mix Over a third of Consumer Packaged Goods (CPG) volume is sold on promotion. They consist of feature ads displays, temporary price reductions Trade promotions are critically important to Supermarkets, Drug Chains and Mass Merchandisers Source: The Nielsen Company

Trade Promotions in your Marketing Strategy: 

Trade Promotions in your Marketing Strategy Food manufacturer's spend on the average approximately 18% of their Revenue on trade promotions Over a third of Consumer Packaged Goods (CPG) volume is sold on promotion . Promotional Spending Trade Dollars Per $100 of Sales Revenue Source: The Nielsen Company

Trade Total Contribution Comparison: 

Trade Total Contribution Comparison

Your promotion MUST support several of these: 

Your promotion MUST support several of these New store openings New product introduction Competitive pressure Inventory reduction or product swap outs Reach a customer segment Alpha Moms Retailer objectives increased store traffic higher rings increased quantity per purchase) Purchase acceleration Speed up purchase, no change in volume Pantry Loading (Competitive Blocking) Purchase bigger quantity, no change in volume Increased Consumption – Market Expands Switching Brands/Products/Stores Impulse (Unplanned) Purchase

Getting on the Shelf: 

Getting on the Shelf Retail Ready Product Value Proposition Packaging Labeling Size Format Price Points Consumer & Retailer Outcomes Specific Measureable Favorable New Product Launch Product Feasibility Retail Buyer Pitch Get Ready! Retailer Prospects Product Positioning Features / Benefits Target Audience Market Trends Competition Brand Support Retailer Action Desired The Reason to Buy Right Product Right Place Right Time Right Price Right Amount From Kitchen to Cash Workshops! Getting on the Shelf requires more than a great tasting product

Target Market Example: 

Target Market Example

Target Market Example: 

Target Market Example Potential Market Available Market Target Market Penetrated Market Those Interested Can Afford It Your Target Who Buy It

What is Consumer Segment Marketing: 

What is Consumer Segment Marketing This is it!

Retail Buyer Pitch Get Ready! : 

Retail Buyer Pitch Get Ready! Retail Buyer Pitch Get Ready! Elements Retailer Prospects Product Positioning Features / Benefits Frame Brand to other Cause Brands Retailer Action Desired Target Audience Market Trends Competition Brand Support Reason to Buy Right Product Right Place Right Time Right Price Right Amount Copyright 2011 The FoodPreneur Outlines required information needed by retailers to authorize product distribution Increases likelihood of successful Retail Buyer Pitch meeting leading to product acceptance and distribution

Retail Buyer Pitch Get Ready!: 

Retail Buyer Pitch Get Ready! Retail Buyer Pitch Get Ready! Elements Necessary for a Successful Retail Buyer Pitch Presentation Copyright 2011 The FoodPreneur Retailer Presentation Retail Pitch Presentation Key Elements Product Competition Frame Brand Market Trends & Competition Retailer Action Brand Support Features & Benefits Reason to Buy

Getting on the Consumers Plate: 

Getting on the Consumers Plate Launch Development Plan Distribution & Channel Plan Who What When Where Why Web enabled Distributors Retailers Start Small & Build Approach Getting on the Shelf From Kitchen to Cash Workshops!

Getting on the Consumers Plate: 

Getting on the Consumers Plate Launch Development Plan Affordable Advertising and PR Planning Retail Buyer Presentation Planning Distribution & Channel Plan Simulation of your Retail Buyer Pitch Who What When Where Why Social Media Event focused Email Traditional Public Relations Web enabled Distributors Retailers Start Small & Build Approach Getting on the Shelf From Kitchen to Cash Workshops!

Getting on the Consumers Plate: 

Getting on the Consumers Plate Launch Development Plan Adv/PR/ Comm Selection & Planning Retail Buyer Presentation Planning Distribution & Channel Plan Launch Execution Simulation of your Retail Buyer Pitch Plan to Manage Trial & Repeat Purchase Post Launch Elements Managing Growth Who What When Where Why Social Media Event focused Email Traditional Public Relations Web enabled Distributors Retailers Start Small & Build Approach Getting on the Shelf From Kitchen to Cash Workshops!

From Kitchen to Cash Workshops!: 

From Kitchen to Cash Workshops! How to be a successful food entrepreneur Tips for Food Entrepreneurs http://blog.thefoodpreneur.com/ See our workshop Schedule at http://www.thefoodpreneur.com/ Follow me at http://foodbeverage.about.com/