The 3 Pillars of a Successful Food Business: A Roundtable Conversation with Industry Experts

In this special bonus episode of the Real Food Brands Marketing Podcast, host and Food & Beverage Brand Strategist Katie Mleziva sits down for a roundtable discussion with industry experts Alli Ball, of the Food Biz Wiz podcast, and Sarah Delevan, of the Good Food CFO podcast, to talk about the three pillars of a successful food business. You’ll hear them talk about how brand, financials, and sales strategy are all crucial for building a successful, stable, profitable food or beverage company. Make sure to listen to the end for a free giveaway opportunity!

Three Industry Experts at the Table

This roundtable discussion brings together three experts. Sarah Delevan is a food business financial consultant and freelance CFO who helps good food businesses build financially sustainable and profitable businesses. Alli Ball is a former Grocery Buyer turned wholesale consultant who works with producers of packaged products to develop brands, increase sales, establish or expand retail accounts, and streamline operational efficiencies in food businesses. Katie Mleziva, of course, is a food and beverage brand strategist who helps food and beverage companies understand how to set their brands apart and position themselves to stand out in a crowded market through brand strategy.

1. Brand Strategy

Brand strategy encompasses everything that you do. It’s the North Star that guides you and aligns your operations, your marketing, your sales – everything on the front and back end of your business. In short, you’re trying to answer this question: how can you meet your consumers’ needs in a way your competitors either can’t or won’t? “You know what you’re working towards,” Katie says, “and it gives founders such a sense of relief because they know what they’re laddering up to.”

According to Katie, it’s never too early or too late to work on your Brand Strategy. It’s something that can always evolve as your brand grows, but “from day one, you should be thinking about your consumers and their needs, your competitors and who’s in the marketplace,” she says. If you don’t know what’s out there and what makes you different, how will you make a convincing pitch to buyers, let alone consumers? It all comes back to the three C’s: Competitors, Consumers, and what your Company advantages are. “This is where the magic happens and how you go from having a good product to creating a really strong, great brand,” she says.

2. Financials

“There’s nothing more heartbreaking than a business that has high revenue, has high sales—they’re in lots of stores—and yet they’re not profitable,” Alli says, “I see that a lot.” This is where Sarah comes in. “What I see quite often,” Sarah says, “is that they’re selling their product at a price that produces a profitable product but it’s not going to help them build a profitable business.”

Ultimately, creating a food business that is financially healthy is about looking beyond the profit margin of your individual products to factor in rent, labor, and all the other costs of your business to understand how much you need to sell. “People are taught to look at your ingredient costs and look at your packaging costs to figure out how much it’ll cost you to create a unit of your product,” Sarah says, “but you’re not looking at the numbers holistically. Your labor costs will always be more expensive when you factor in setup, teardown, management, and more, and anything under than 30% is wildly optimistic at best and probably unachievable.”

Looking at other brands on the shelf and getting into a pricing battle can be misleading—you don’t know whether those brands are profitable or not. As Alli puts it, “there’s always a most expensive product on the shelf: why can’t it be you?” That goes back to supporting that position with your Brand Strategy though – knowing who you’re marketing to and creating a brand that justifies your pricing, which quickly demonstrates how tightly these three pillars are intertwined.

3. Sales Strategy

One thing many brands don’t factor into the cost of expanding is that new distributors are often going to make demands of you. That could be in-store events, or a special price or discount, or a UPC change, but you need to be prepared or you’ll be facing significant cuts in your margins. Alli has a lot of specific advice about how to manage relationships with clear communications, and why price changes need to be once a year and well-planned rather than dripped out incrementally.

For Alli, sales strategy can be simplified by asking one question: “Where are we going to sell our products that aligns us with our brand and our financials?” You have four main choices: direct to consumer, ecommerce, retail accounts, or food service. From there, you have some more nuanced questions, but it’s all about keeping your consumer in mind and being clear about your goals.

The roundtable conversation between Katie, Alli & Sarah discusses some specific client stories to illustrate how you put these principles into action.

Don’t forget to visit realfoodbrands.com/strongbrand to get on the list for a free 5 day training the week of 2/1/21 to help set your brand apart.

Now, let’s go shake up shopping carts!

In This Episode:

The three pillars of building a sustainable and profitable food business.
Why you should start thinking about brand strategy from day one.
The mistake many brands make when it comes to pricing their products.
Why so many businesses underestimate the price of labor.
Why you shouldn’t be afraid of being the most expensive product in your category.
The hidden costs of distribution.
The four main choices you have when it comes to distribution.
Example of a brand that is thinking about all three pillars.
Where to find details on our giveaway!

Quotes:

“The magic happens when you go from making a good product to building a really great brand.” – Katie Mleziva

“There’s nothing more heartbreaking than a business that has high revenue, has high sales—they’re in lots of stores—and yet they’re not profitable.” – Alli Ball

“People are taught to look at your ingredient costs and look at your packaging costs to figure out how much it’ll cost you to create a unit of your product, but you’re not looking at the numbers holistically.” – Sarah Delevan

Resources: