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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"Unique can be a one-of-a-kind ingredient, or the only clean- label version of an item, or brilliant packaging that makes life easier in the kitchen." 1. Products must solve a problem. When assessing your viability in foodservice, "'my product is delicious' is not going to cut it," says Susan Eriksen of Char Crust, a dry rub seasoning producer based in Chicago. "At the bare minimum, it has to be delicious, but it must also solve a problem for a chef." Chefs want high-quality, labor-saving items, but also are eyeing trends and innovation. "Unique can be a one-of-a-kind ingredient, or the only clean-label version of an item, or brilliant packaging that makes life easier in the kitchen," she continues. "While most foodservice decision makers are very cost conscious, they recognize trends and strive for meaningful points of difference," says Tim Metzger of Stonewall Kitchen/Tillen Farms, maker of premium cocktail garnishes. "The foodservice world is highly fragmented, and you need to carefully define your niche within myriad categories." Metzger suggests asking whether you have a unique selling proposition that will provide an added value to what's already out there. "Being a 'me-too' is the kiss of death, as you're easily replaceable," he asserts. Everyone is looking for a signature presentation to distin- guish them from their competition, he notes. "Ask yourself, 'am I providing a viable solution to a problem that needs to be solved? The answer had better be yes.'" 2. Margins are lower but so are marketing costs. If you've determined your product has merit in the foodservice space, be sure you can meet the needs of clients. You need the capacity to produce and ability to hold inventory if you land a significant cus- tomer. But, says Metzger, don't assume you have to be a low-cost provider to get the business. "Build in sufficient margin to make sure you're profitable. Gross margins in foodservice tend to be lower than retail, but the promotional expenses associated with marketing a product into the foodservice sector tends to be lower than retail, too," he says. Typical expenses associated with retail like slotting fees and demos usually don't apply at foodservice though large, national foodservice distributors may require some growth programs or pric- ing promotions. Costs in foodservice tend to be in transporting the product. "One of our biggest challenges, aside from perishability, is the cost of shipping, which goes up every year," says Paula Lambert of the Mozzarella Company in Dallas. "The shipping companies make money but small people like us have to pass along that cost." Her advice: "Shipping costs are going to keep increasing, so factor that additional annual cost into your business plan." 3. More foodservice channels are opening, expanding opportunities. Beyond restaurants, producers cited hotels and universities as among their biggest successes in the "2017 State of the Specialty Food Industry" report. Additionally, sports stadiums, museums, corporate dining halls, and airlines are just a few other venues placing increasing emphasis and higher quality on their food and beverage offerings (see Foodservice Innovators, p. 26). "Fine din- ing is the natural assumption, but think of cruise ships and hospitals and healthcare facilities, which have become a big customer because of the aging population," says Lambert. And, channels continue to open. "The home meal replacement movement spurred by companies like Hello Fresh and Blue Apron offer a promising new outlet," she adds. 4. Packaging requirements differ from retail. Foodservice packaging doesn't need to be eye-catching on a shelf. Kitchens have their own set of needs and most revolve around sturdiness and ease of storage. Packaging that is easily damaged, too complicated, or takes up too much room, won't work. Your product must be easy to apply, save time, and fit space requirements. "Time is money, and not every member of the kitchen team has culinary talent," says Eriksen. Plus, "no chef ever has enough space in their kitchen. Work space, storage space, both dry and cold, are at a premium." In addition, says Jack Dahlheimer, vice president, Sapna Foods, a specialty food importer in Atlanta, Ga., "Packaging needs to be food safe and tamper resistant, and labels need full nutritional information." You're going to have to provide different sizes and volumes to meet different needs. "Our foodservice packs have evolved. We started with 25# restaurant buckets, and changed to 25# boxes, gallon-sized handled plastic jugs, and quart-size plastic jars. We also added bilingual labeling to help kitchen staff use the product properly," Eriksen explains. "Ask yourself, 'am I providing a viable solution to a problem that needs to be solved?' The answer had better be yes." (continued on p. 76) article bug SPRING 2018 71