Whether you’re producing for ten locations out of a local shared kitchen space, or for ten thousand locations in partnership with a 3rd party food manufacturer, one of the biggest challenges food brands and food startups face is to consistently grow distribution channels. We interact with food brands of all sizes on a daily basis, and it’s abundantly clear that having as many products, on as many shelves, at as many stores, in as many homes as possible should be a top priority. Why?
Let’s break it down:Have as many products, on as many shelves, at as many stores, in as many homes as possible. Click To Tweet
Why Food Brands Should Grow Distribution Channels
More Product Exposure = More Sales
Even if you’re just dipping a toe in the retail space and testing the waters, having your packaging out in front of customers is a lot like putting up a billboard. Depending on the stores you’re in, many hundreds of people per day may walk past your product. Of course, we’re hoping they stop and pick up a bag/box/bottle before they check out. Whether they notice your product or not has a lot to do with your brand image, and how well that’s resonating with the customers of that particular store.
Growing and Diversifying Distribution Channels Creates a Safety Net
Let’s imagine that 30% of your revenue comes from one store. What happens if that location closes, drops your product, or gives you unfavorable shelfspace? That’s a big hit for any business to take all at once, which is why I believe there is safety in growth and diversification. The more diverse your revenue sources are both inside a single channel and across multiple channels, the easier it will be for a food brand to handle those patches of bumpy road.
Cost Per Unit Goes Down as Distribution Goes Up
At least, this is ideally what happens. The greater purchasing power your food brand has, the more leverage you’ll control in the negotiation process with suppliers and 3rd party packers. And when selling at higher volumes, saving just 3-4 cents per unit can increase profit by tens of thousands (or more!).
Boots on the Ground: Myth vs Reality
In the early stages, a food brand often relies on “boots on the ground” or “pounding pavement” for their growth strategy (i.e. in-person visits and sales meetings with individual stores managers or purchasing managers). This makes perfect sense! At the beginning, having a large marketing budget often isn’t realistic and most food startups find themselves completely at the mercy of retail stores, packers, and suppliers to create growth.
This is not an ideal scenario!
Of course, there’s nothing revolutionary in the above statement. The fact is, most food brands are starting out at a massive disadvantage, because of one key success factor: Demand, or more accurately lack of demand. What can we do to change this dynamic? Is there a way that food brands can regain the upper hand?
I believe that having a solid brand identity and an effective digital marketing strategy are the equivalent of hiring an extra sales team that works for you 24/7. Food brands that are still relying on “pounding pavement” as their only growth strategy are putting themselves at a massive competitive disadvantage.
5 Ways Your Website Can Grow Distribution Channels
Remember: Your website is a tool. It should be doing something useful you or your target audience (preferably both) every hour, every day. Here are five ways that your website could help you grow:
#1 – SELL YOUR PRODUCT ONLINE
Assuming you or your packer can direct ship to residences, putting up an online store with attractive photos of your products and packaging, detailed product descriptions and a great user experience will do two things: First, having all of that additional product information will help you show up in search engines. And second, you just added another distribution channel and revenue source to your business!
#2 – HELP YOUR CUSTOMERS FIND YOU
Work with your web developer to put together an interactive store locator page, like we did for this client. This is a great way to make sure that customers know where your products are sold in their local area and is “free advertising” that retail stores will appreciate. This is especially important for larger brands that have distribution in multiple states/cities.
#3 – SHARE GENERAL MANAGER OR STORE OWNER TESTIMONIALS
Add an area to your website that is dedicated to retailers and distributors. There is nothing more powerful than seeing a product or service come highly recommended by your peers. Know a store manager or general manager that loves your products? Ask them to write you a short testimonial.
#4 – SHARE CASE STUDIES FOR SALES AND PRODUCT PLACEMENT
Presenting any data or case studies to store owners and purchasing managers can help create more favorable results on the ground. If your product does favorably in certain locations, next to certain items, or at certain times of year, share that in a retailer/distributor section on your website. Nine times out of ten, this will help you grow!