Strategy

Early stage food production - keep testing or start batching?

Anonymous

May 11th, 2016

I have a dessert product that's getting great feedback early on. I'm only a few weeks into testing and people are asking me to stop testing so they can begin purchasing. I think it could be a great product but it's also a spin off of a more traditional, cultural dessert (think Tiramisu with an American spin) so maybe not for everyone. I'm wondering if I should be spending my time slowly finding customers one at a time and making batches on my own on a per order basis or do I find a larger producer and make a large order and hope to find customers later?
A great idea is 1% of the work. Execution is the other 99%. In this course, we’ll teach you how to conduct market analysis, create an MVP and pivot (if needed), launch your business, survey customers, iterate your product/service based on feedback, and gain traction quickly.

Andrew Martz Andrew F. Martz: Ideation, Strategic, Maximizer, Futuristic, Self-Assurance

May 11th, 2016

Take and fill the orders. Build from there. Get feedback from customers. Make improvements. Perfect your product ,package, pricking, production methods and delivery. Understand your customers. Who are they. What is important to them. Why do they buy your product ? How often?

Brian Powers Co-Founder of Blue Ocean Logic Group, (COIN, Chatham Tech, Hy Lo Market Pros & Blue Ocean Logic)

May 11th, 2016

Testing is always good...and it never stops...even after you are in production. Until you fully understand who your "real' market is, their palates "today" and your "lowest" costs for production while satisfying that real market you will be A/B testing. While testing, you can always go into limited production and distribution. This approach supports the equivalent of your test market. Offer customers incentives for their feedback and use the data collected to tune your product. Manufacturers often utilize public focus groups in this manner to ensure demand for new formulations. Remember to consider your costs for this type of testing...the data you receive might not be valuable enough to justify the investment.    

Vikas Sharma Director, Practice Development at dentalcorp

May 11th, 2016

Host an event. Invite 50 people who care about good. Gather written feedback. If it's largely positive, shop it around to local gourmet shops and gather a following.

Kenneth Friedman Sales & Business Development Executive: CSO/EVP/SVP ★ “Corporate Invigorator” ★ Expertise Selling into 20+ Industries

May 11th, 2016

It's a double edged sword. Too many start ups go full throttle into the market, only to discover they can't deliver a quality and timely product due to production and ingredients hiccups. You have 1 chance to make an impression with accounts and in turn it's the company reputation at stake. Retrofit the home base company 1st priority as you implement talking points to prospective accounts/partners. Be truthful with targeted accounts and position them as strategic partners with a realistic time line to execution. Then rollout as appropriate. Never over promise!

Margot Biehle Legal, Risk & Business Strategy Consultant; Planning Commissioner

May 11th, 2016

Agree re checking with local cottage food laws and eventually moving to co-packer to shore up risk management and compliance with food production laws. as you are refining, check out zukeeni.com. it's a site that connects food growers and producers with people in their local communities to sell/trade food stuffs. it will help you move outside of friends and family and get good feedback. and may be enough for a while. they are still growing but it's a great place to start.

Shelley Delayne Founder of south Austin's entrepreneurial epicenter

May 11th, 2016

Clarifying questions:
 Is it a perishable fresh product, frozen product, or shelf-stable?
Are you currently making test batches in a home kitchen or a commercial kitchen?
Would you see grocery stores being the natural outlet for it, or in restaurants/catering, or direct-to-consumers? 
Do you have any experience in food labeling, FDA compliance, testing, etc.?

(And I think a spin on tiramisu sounds delicious.)

Gary Kleinman Strategic experiential marketing executive creating measurable initiatives connecting brands and consumers.

May 11th, 2016

Making desserts at home and friends liking them is a far cry from being a business. You can certainly have a hobby selling to friends but there are lots of health and safety laws that apply to the commercial sale of food products. I would absolutely suggest you find a ‘co-packer’, a facility that can work with you and making small batches as you attempt to scale your business. This will obviously change the financial dynamics of the business as well. Gary Kleinman 818-744-4493 www.yardstickpartners.com

Chuck Bartok Social Media Consultant, Publisher, and Contrarian Curmudgeon

May 11th, 2016

Successful long term Businesses grow in concentric circles.
How many can you easily make and sell locally?
Then increase market circles.
The advice above form Andrew Martz is excellent

Peter DBA Managing Partner at Pomegranate International

May 11th, 2016

The question has to do with what do you want to become...

Do you have the capability to scale up?

Of course you will do small batches as you go along and acquire customers since it validates your product and in the meantime you are looking for a larger partner to work with.

The key is what do you want to achieve and is your end goal. Are you going to be a full line desert line? Will you be supplying locally? Nationally?

This would be somethign that you would need to think through as well so you do no regret your decisions later.

Joshua Adams Instructor Saint Leo University

May 11th, 2016

Cultural desserts are more of a niche market. With that said your thinking is correct, your market could be small. Food is a difficult product to sell. You have to convince the buyer why they should buy your product over another desert. As a suggestion, you can continue locating customers but try local grocery stores and markets to try and build a base. Larger producers will want larger orders, that's where part of the savings come in for larger food companies and you as you grow. Try selling locally first, look at tracking the total product you are producing, start calculating the cost benefits and then make a determination on how much it costs you to make versus a producer with the minimum order they require. Remember, with a small market it might take a while to build to a larger market.