How You Know It’s The Right Time To Pivot

By
Edible-Alpha®
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When Is the Right Time For Your Food Business To Pivot?

Being told you need to change something fundamental about your product can feel somewhat akin to Ross from Friends yelling at you while you are helping him move a heavy couch up a narrow stairway. And yet, there are times when you really do need to pivot.

Many traditional food and beverage companies have been slow to respond to changing consumer preferences around food innovation, clean ingredients and transparency, loosing market share and profits in the process. They are trying to make up for this lack of action by rapidly acquiring or incubating new brands. In essence, they are trying to pivot to a portfolio of products that aren’t just about price or convenience.

Mary Pelletteri with Top Note Tonics shared on our podcast about how she originally thought she was going to start a beer company since she had a lengthy career in beer operations, including at Goose Island and Miller/Coors. But, she and her team decided not to because the beer category was already very crowded. That led her into mixers (a growing sub-category of beverages), and it took experimenting with different types of products (like syrups) before landing on ready-to-drink sparkling tonics as Top Note Tonics’ key business opportunity. She and Top Note pivoted in response to where the market and the consumer was headed.

Like anything in food and beverage businesses, decisions to pivot or change should based on your target consumer’s preferences, your product category’s growth (or decline) and other general market trends. If you put your customer and their preferences in the driver’s seat in this way, you can ensure decisions about when and where to pivot will be guided by where the key business opportunity lies, and not other things.

And now, our roundup of the best food and beverage finance news, events and resources from around the web…

Food and Beverage Business Models

Business Model Insights

Raising Capital

Raising Capital

  • 5 things to know before trying to secure a line of credit (New Hope Media) – “Expansion takes capital, and most businesses will need to borrow or raise equity to finance these expenditures. There are a variety of lenders in the market today that offer an array of financing options. With all these options available to consumer packaged goods companies, there are strategies these companies should consider when seeking a loan: Know your lender’s all-in annual percentage rate (including fees and charges); read the loan document carefully; shop around; don’t wait until the last minute to seek financing; and ask for references.”
  • Saffron Road CEO Talks Financing Mission (Project Nosh)
  • How to Fund Your Business Startup: 5 Fast and Popular Options (Small Business Administration Blog)

Grocery Store Shopping

CPG/National Brands

  • How to design a successful in-store promotional program (Smart Brief) – “Both grocers and manufacturers can benefit from in-store promotional programs, which offer fresh exposure to brands. Shoppers can see new or existing products as they’re already on the hunt for groceries, making the opportunity ripe for purchases. Promotional campaigns can be presented in a variety of formats, including sampling events, demonstrations, displays, endcaps, price cuts, BOGO offers and many more. After running an in-store promotion, always calculate the return on investment to ensure that the money spent was earned back via purchases. Once a company has a baseline of performance, it can more strategically project how to reinvest its marketing dollars rather than stabbing in the dark at trying to lower prices to bring in consumers.”
  • 9 steps to set up a top-notch category management strategy (New Hope Media)
  • Glossary of Wholesale Terminology (Shelf Life)

Grocery Store Produce Section

Market Trends

 Regenerative Agriculture

Farming and AgTech

  • Grower or Tech Company? Indoor Farmers Must Make Up Their Minds (AgFunder News) – “If they continue down their current path, the future competition in the industry will consist of brands of indoor produce growers competing against each other based on (among other things) who has developed the best technology and horticultural know-how in-house. This obviously puts a huge strain on any ambition of profitability as the company must earn back not only the cap-ex of the construction of the system but also of the immense (and continued) R&D investments that preceded and follow it. With limited margins, we argue that that is not a realistic expectation. If we compare with the more mature greenhouse growing industry, the future is likely to have technology providers on the one hand and growers on the other.”
  • As Trump Appeals to Farmers, Some of His Policies Don’t (New York Times)
  • As Consumer Demands Shift, Wisconsin Ag Experts Encourage Innovation (Wisconsin Public Radio)

Mergers and Acquisitions

Deals/M&A

Events

Industry Events

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