Food and beverage · Startups

Anyone can guide me on how to develop a frozen food product?

Ariel Silahian Entrepreneur |Technical Quantitative Finance | Quant | Blockchain

November 16th, 2018

We already have the product and it's being sold in our local community.

I want to go further and try to sell this product to local grocery shops

I understand that packaging is key

Is there any advice on how the process should be? how to get into local grocery stores and even supermarkets?

Any business plan you can share in this regard?


BTW the product is turn-overs (or empanadas)

Andrew B MacDonald Founder & CEO B2BizMeet (formerly VendorAir). Entrepreneur, Sales Leader, Dartmouth

November 16th, 2018

Ariel, I'm new to CoFounders and this is my first answer/participation! Very excited to be here. I owned a landmark gourmet butcher shop for 5 yrs in an affluent community north of Boston, so I have some perspective from the buy-side.


I had a constant stream of local foodrepreneurs coming in to give me samples and elicit feedback and possibly sell their items. I LOVED helping them get started. One of my favorite assists was being the first retail store for Chococoa Baking Company. Great stuff. The point is, smaller boutique owner/operator shops are a great, empathetic place to start. They won't make you a millionaire, but they'll buy some, get it out there and talk it up, and then give you honest feedback. For example with aforementioned Chococoa, their packaging didn't stand up to the temps in my commercial freezer, along with a lot of handling and shifting. The wrappers kept ripping. They made changes, problem solved before going big.


To get to the next level, also use the smaller shops to find out what food distributors they regularly use. There are many from large basic, to small specialized and everything in between. The key to get started is to find a few distributors that cover most of your new small biz target market, and see what their appetite is for bringing on new product lines. Just be sensitive to the fact that warehousing in the food business is a science and an art. EVERYTHING is on the clock, so proving it can sell helps a ton. You might also need to initially sell on guarantee if you can afford it. Once you find the Distributors you want to work with (and remember, more isn't necessarily better, all those guys are in competition with each other so some exclusivity will motivate them), then you become the Sales team and get out ahead of them with samples and any literature/signage at each store you want to target. Seed the market.


If you can build a loyal following with the boutiques and smaller grocery stores, you can then think about talking to larger distributors, but make sure you're ready to scale. I had a woman with the greatest frozen mac-n-cheese. Great gourmet varieties, great price point. She went right for a top women's daytime talkshow as part of her marketing strategy. She made it on if I remember correctly, and got overrun with demand that she couldn't meet for at least 6mos. The momentum wave passed by which didn't kill her, but it was a big missed opportunity.


One final note. Ask for advice from every business and distributor about how they see your specific product being successful in stores. I used to be hesitant at first to offer advice because I could see/hear how passionate and convinced the owners were in their vision. they were super convinced, so how could Im possibly offer advice? What I found out was their vision was excellent, but almost all of them benefitted from understanding how "like items" do well, and how they fail in my actual store.


Best of luck! Empanadas are excellent! Andrew

Dan Light Farther faster with Dan Light Consulting

November 27th, 2018

Contact SCORE. They have a councilor for everything and it's free.

Andrew B MacDonald Founder & CEO B2BizMeet (formerly VendorAir). Entrepreneur, Sales Leader, Dartmouth

November 20th, 2018

Yes, Whole Foods is good with new/innovative products, but honestly, I never had any direct experience with them. I do know that although they are perceived to be more specialty and can hold a higher price point, they are still held to the same cost structure of the food business as some other contributors have suggested. It is a thin margin business at the end of the day, so WF will want you to have skin in the game, and probably demonstrate how you plan to deliver on contracts.

Rachel Forillere Founder of UprisingAcademy.com

November 24th, 2018

WFM works with small brands on their local program, but frozen foods is one of the roughest sections to get in in my experience - due to the limited space and lack of opportunity to build displays.

Having said that they are indeed one of the rare retailers that will give you an opportunity to see if your product is viable, so turn up at a store near you and meet with the frozen buyer!

Wishing you the best in your venture

Thomas Fraser Entrepreneur

November 28th, 2018

Ariel,


Regional managers can generally make decisions on products sold in their stores. Their success is measured by profitability so they might try you out, but they're going to drive a hard bargain. You'll need some introductory loss leader pricing or something of value to them otherwise they'd be calling you. So in the bigger picture... How do you sell through Walmart? https://corporate.walmart.com/suppliers/apply-to-be-a-supplier


I'd point out a simple question for thought. Why do you want to sell your goods through a grocer? If you only want to be involved in manufacturing, I'd get that and say it's a proven model. But! If you think it's more profitable, or less of an investment, then you'd be wrong. It's a convenience for you and your company.


Having your goods sold in a grocery store inherently drives prices down and cuts your profit margins. The goal is to get paid, not get someone else paid. They will expect goods on net 45 or net 60 terms and they'll expect things like buyback options. So if they buy $500 of merchandise each week, you need to float at least $3500 worth of product per store for 45 days. A regional manager from Walmart might give you placement in 10 stores. Can you float $35,000 in goods for 45 days without interrupting your operations?You also have to expect a percentage will come back damaged or spoiled. They want you to make that right somehow.


Ultimately the best advice you'll get is to call all of your potential clients and ask what they want from their vendors. Local grocers might be small vendor friendly to differentiate themselves from the BORG stores. A lot of them support the "strength in numbers" concepts/strategies. You can find that you're making new allies, not just a retailer. You might be able to find JV partners/opportunities to help invigorate their establishments.

Paul Garcia marketing exec & business coach

November 16th, 2018

No, packaging is not key. Distribution is key. Grocers choose products based on throughput. And many food companies PAY grocers for shelf space. Your problem with a frozen product is always going to be the limits and cost of cold distribution. Next will be shelf-life, how long can it wait to be bought without losing quality. Is your product so good that it would easily displace a product they're already selling by dramatically more money? Because that's what it's going to take.

Ariel Silahian Entrepreneur |Technical Quantitative Finance | Quant | Blockchain

November 16th, 2018

Andrew, thanks for such a great input. Let me ask you something I've heard that whole foods support small producers like us. Is that correct? Do you think we can have a chance with them?