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.
Issue link: https://www.e-digitaleditions.com/i/567722
pensation package, I'd encourage you to engage four to five part-time, young Gazpacho Guardians (brand ambassadors) for $20K–$25K, whose primary responsibilities would be to work local markets, do sampling at retail, and make everyone a believer in the brand. That team should report directly to you. Part of the compensation would be hourly; the other part would be based on overall results achieved. Like many specialty products commanding a super-premium price, this product demands to be sampled. Word of mouth and an effec- tive social media campaign will also help reach critical mass while building a loyal following, too. How do you connect with sources of capital when you are too big to ask friends and family for money but you are still a startup? J.A.: Currently, there is a good amount of money available to high- growth food companies. As in any relationship, it is always preferable to be the one being pursued. Thus, unless the need for capital is immediate, here are some suggestions on how to gain the attention of potential investors. First, make sure you have a prominent position in key retailers such as Whole Foods, Sprouts, The Fresh Market, and any other of the larger conventional grocers. Being visible in this kind of retailer will get an investor's attention, especially if you are able to get spe- cial displays that make your visibility that much greater. Also, by securing this kind of distribution the brand will probably garner strong sales and growth. Most all of the private equity groups will have access to syndicated data, and your sales growth will be key. Lastly, attending major trade shows like the Fancy Food Show and Natural Products Expo offer a great opportunity for the investors to approach you. Many potential investors attend these shows and will be looking for high-growth companies. Having an attractive and attention-grabbing booth will make sure that you are noticed. and independent retailers in more than 400 locations primarily in the Northeast. As he grows his business, Specialty Food Magazine gave Allan the chance to pick the brains of his industry peers. When buying ingredients in small quantities, how can you ensure you are getting a good deal? M.O.: That's hard to do. Smaller companies are at a disadvantage because they do not have the purchasing power to get volume dis- counts. Here are some suggestions: • Develop multiple sources for the ingredients you need and get multiple quotes. There can be a lot of variability in the prices charged for ingredients. The Internet is a great tool to find alter- nate sources for your ingredients. • Ask the vendor for their breakdown of price breaks, so you know exactly where you need to be in terms of volume in order to get a lower price. • Ask vendors if they will give you a price break if you commit to a certain volume over a specific timeframe. Often, with this com- mitment, they will ship the product and allow you to pay for it as needed. However, you will be obligated to take the agreed-to amount at the end of the time period. • Purchase ingredients from one distributor. Freight-to-ship ingre- dients can be a big part of the cost especially when you are shipping a small amount. By working with a distributor, you can get many ingredients shipped from the same location and minimize your freight cost. As you purchase more from one source you may be able to hit some of the price breaks or special deals or allowances a distributor offers. • Use a co-packer that purchases some of the same ingredients you need and tap into their buying power. You can only afford to hire one key employee. What role would you have him/her fill? T.M.: With a $9 to $10 retail price point and a two-month shelf life, you need to concentrate on your target audience and not stray from your core retail base. You are fortunate that the premium natural- juice marketers have already paved the way for consumers to accept a premium pricing model. But a challenge is that any short-term success may invite competitors to come in under your pricing umbrella. Normally, I would lean toward hiring a national sales manager, but not here. Assuming a key employee will require a six-figure com- Denise Purcell and Susan Segrest are editor and contributing editor, respectively, of Specialty Food Magazine. THE STARTUP Tio Gazpacho tiogazpacho.com Founder: Austin Allan Products: Chilled bottled soups in gazpacho clásico, gazpacho verde, and gazpacho de sol Launched: 2014 Location: Miami Employees: 4 Rather than a national sales manager, engage four to fve part-time, young Gazpacho Guardians or brand ambassadors. FALL 2015 87