Specialty Food Magazine

JAN-FEB 2012

Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.

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Page 122 of 159

To find its initial customers, Lotus Foods focused on high-end retailers and chefs. "These are premium rice varieties from around the world, and no one knew about them," Levine explains. The company approached specialty stores, which jumped at the chance to carry rice varieties that were exotic and new to the U.S. market- place. Further, Levine and Lee knew retailers would be prepared and willing to educate consumers about heirloom rice to sell them. Williams-Sonoma was Lotus Foods' first retail account, followed by other big players such as Andronico's, Berkeley Bowl, Eat, Dean & Deluca and Zabar's. "These were such unique items, which is why the specialty food market was, and still is, so important to us," Levine adds. Today, retail represents 75 percent of their business. Foodservice accounts for the other 25 percent, and chefs were equally important in introducing these exotic grains to consumers and, ultimately, building the business. The pair knew that chefs would embrace the distinctive products—and be able to swal- low the slightly higher prices to sustain the company's fair-trade goals. To reach these professionals, Lotus Foods sent letters to a dozen of San Francisco's top chefs, such as Gary Danko and Todd Humphries, and got immediate responses. "Forbidden Rice is a true center-of-the-plate rice with great texture and cooking qualities that everybody fell in love with," Levine says. The duo continued to grow with high-quality, innovative products with the introduction of Forbidden Rice Flour in 2000, and Carnaroli Rice in 2002. Sustainability Efforts In 2005, the way Lotus Foods sourced rice changed when the busi- ness was approached by Cornell International Institute for Food, Agriculture and Development (CIIFAD), which had been teaching farmers how to grow rice more sustainably for 15 years. It was a cause Levine and Lee were devoted to since their initial trip to China, where they discovered that the biodiversity of rice was in dire straits; the tons of water needed to cultivate rice was a scarce resource in many growing regions. CIIFAD invited Lotus Foods to become its private-sector part- ner with the goal of enabling rice farmers to enter the global market. PROFESSIONAL ASSESSMENT: WHAT YOU CAN LEARN FROM LOTUS FOODS Food and beverage brand-marketing expert Tammy Katz of Katz Marketing Solutions in Columbus, Ohio, evaluates some of Lotus Foods' strategies and discusses ways other companies can strengthen their own brands. DIFFERENTIATE YOUR BRAND: Lotus Foods created a new market space in the highly competitive rice category. The owners sought out and developed exotic rice, with a compelling story of social responsibility. The brand's points of distinction—flavor, nutrition and variety—are benefits that are important to consumers. By carving out a new niche, they created a brand that is more memorable, insulated from competition and able to command premium pricing. What You Should Do: Strive to identify and compete in "category white space," those pockets of unmet customer needs where no one is providing a great solution. Conduct market research and harness your internal sources of feedback (salesforce, customer service, brokers, key accounts, in-market observations) to understand the most important benefits consumers seek in your category, and which ones are underserved by existing competition. That white space is where your brand can best distinguish itself and develop the most lucrative potential new products. Avoid areas that are cluttered and better served by "the big guys." DEVELOP STRATEGIC PARTNERSHIPS: Lotus Foods grew much faster than it would have alone, by leveraging strategic partners. The owners extended their internal capabilities through production (farmers), R&D (Cornell and Louisiana State University) and public relations (Natural Kitchen Cooking School) partnerships. What You Should Do: Don't go it alone. Not every new issue or skill is best handled internally. For areas that are vital to your success where you don't have sufficient expertise or resources, seek out mutually beneficial partnerships with the best you can access. Clearly identify the expertise you seek (e.g., health and longevity claims on exotic rice) and use personal, supplier or industry resources to network with partners who can do it faster, cheaper and better. TELL YOUR BRAND'S STORY: Lotus Foods has done an excellent job of explaining its nutritional and sustainability story through marketing touch points: public relations, packaging, consumer promotions, taglines, website and social media. By reinforcing the simple, consistent story, the owners further differentiate their brand to consumers and garner precious media attention. What You Should Do: Develop your brand's positioning and craft a simple, clear and compelling story that reinforces your unique brand promise. Focus the brand story on issues that touch consumers' hearts and minds. Make sure your story is relevant and resonates with your audience; get their feedback as you refine it. Use consumer language, rather than "company speak." Food and beverage brand-marketing expert, Tammy Katz, CEO of Katz Marketing Solutions, is a food & beverage marketing consultant who has led numerous Fortune 500 and specialty food brands from concept through global expansion. She has launched more than 100 new products with cumulative sales of $2 billion. Katz serves on the board of directors of several food companies and is adjunct instructor of brand management at the Fisher College of Business MBA Program at The Ohio State University. JANUARY/FEBRUARY 2012 121

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