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In Edible-Alpha® Podcast Episode #15, Tera talks with Brad Rostowfske, the Director of Industry Growth at FaB Wisconsin, the state’s food and beverage industry cluster organization. Brad worked at Oscar Meyer, Palermo’s and other companies in engineering new and existing food manufacturing plants before helping those companies develop new products in line with their brand promise.
Big food and beverage companies start the new product development process by focusing on their target consumer and the value proposition they are offering that consumer through their brand promise. Bigger food companies know that if a new product idea doesn’t resonate with that consumer, they would either need to develop a new brand to sell that product or drop the idea. For example, Kraft made its name in cheaper processed dairy products and it is difficult for them to shift consumer perception of their brand.
Brad talks about how making a food product is relatively simple; discovering and defining a consumer driven product is much harder to do. For big food companies, the new product development process includes “screening people in” i.e. finding people who already your target customer and have the right attitude toward your potential new product but are still finding their needs unmet in the current marketplace. Then, through focus groups and shop-alongs, various concepts about the product, including its packaging and placement, are tested with those target consumers, leading to a ranked order of ideas for the new product launch. This is then researched against other similar product launches in the target category. The best entrepreneurs try to gain as much customer feedback as they can by formalizing their product development process, and demoing their product with consumers at farmer’s markets and grocery stores can help them gain valuable feedback.
Brad cautions that the best places to “rollout” your new product in distribution are those places your target consumer said they expected the product, again, in the product development process. Entrepreneurs have to deliver for all of their “customers”, including their sales broker, distributor, and the retailers of their products themselves, in addition to their target consumer. Because buyers for grocery stores deal with thousands of brands/potential brands and most grocery stores barrage consumers with 50,000 SKUs, entrepreneurs are competing for time, energy and space constantly. Having a consistent brand promise that is reinforced by the 4 Ps (Product, Price, Place and Promotion) helps new national food and beverage brands stand out, be remembered and hopefully get off-shelf. As Brad says, “you have to earn their respect.”
Brad’s closing advice: there is a process and unless entrepreneurs have industry experience, it is difficult to know what corners are safe to cut when developing your brand, new products and getting those products into distribution and off-shelf. The best entrepreneurs are like sponges and utilizing FaB programs in combination with a trusted industry mentor and other resources will help those entrepreneurs learn what they need to be successful.
FaB’s various programs (FaB Starter, FaB Accelerator, and FaB Scaler) provide a proven process that can help companies become profitable and stay profitable. Applications to be part of the next cohort of the FaBcap Accelerator are due on August 21st, 2017. Find out more and apply here.