Looking at the range of food and drink in a supermarket many entrepreneurs will think they have a great idea for something new and different. However, as always some key steps need to be undertaken to get from concept to shelf.
Here are the steps to follow before taking your new product idea forward:
Research your market
Find out about the competition in the category you are planning to enter. The more established a category is – for example, energy drinks – the harder and more expensive it will be to make any inroads.
Don’t just look in the UK, research the rest of the world. You can learn a lot from other brands’ mistakes and get some great ideas from the flavours they used. You can understand their messaging to their audience, how well they are selling in their market, and their retail price.
POD (Point of Difference)
Think hard about your offering and why it will stand out. For example, there‘s been masses of innovation in the drink’s category over recent years. Many small brands have become big brands and even taken on the likes of Coca Cola, so much so that the big players have spent millions to acquire them.
But to stand out from the crowd you must have a POD so that your target audience will cross the road to buy your drink.
A point of difference is not just a funky flavour or more eye-catching packaging. It is being unique. Blending ingredients that others have not thought of before, and, making sure it tastes great.
It is virtually impossible to raise money just on a basic idea, however good that idea might be. Think very seriously about where the money will come from. It can be up to two years before you make any. So, make sure you can survive and have enough money available to pay for adverts in wholesalers’ catalogues, sending out samples and possibly attending exhibitions.
It’s essential to have a clear financial budget, whether you are self-funding or going to investors. The taste, the name, the branding, the distribution, the samples, the presentation pack for buyers all need to be spot-on from day one. That requires money.
Succeeding in making your product at home doesn’t mean that it can be exactly replicated in mass-production.
This is a very specialised area, and the recipe needs to be perfect. So, you will need help from an expert recipe developer who will help you achieve a recipe that will suit your co-packer (any contract manufacturer will expect an exact recipe).
For the packaging, you will need to know all the nutritional information for labelling.
One area that many entrepreneurs overlook is ‘Novel Foods’. The regulation on Novel Foods applies within the UK and the EU. If your ingredient falls under ‘Novel Foods’ you will probably need to pay for research to prove it is safe for human consumption.
Not all ingredients are allowed to be used and this is protected by Novel Foods, so you need to be sure that all your ingredients are allowed. This will save you time in the future rectifying any obstacles you could have tackled in the initial stages.
This can make a huge difference to your cost outlay.
Let’s take the example of a drink. Glass is the cheapest option as you can do the smallest production run. But, wholesalers dislike it due to the weight, and retailers because it may break. This makes it the hardest to sell.
Second cheapest is Hot Fill PET (plastic) which is small volume as the PET bottles can be filled with high temperatures. The negatives are that the bottles are ugly with solid ridges down them and with the backlash against PET polluting the oceans mean that consumers are turning away from this type of packaging.
Next is Aseptic Fill where the PET bottles are blown on-the-line, then filled in aseptic conditions to keep all the bugs out. After this the contents are pasteurised in the bottle, locking in all the nutrients. However, the minimum runs are massive as the factory needs to completely clean the entire line in between flavours.
Fourth is cans. These are very popular now, but minimum runs are high. For example, minimum runs for printed cans are 150,000 and minimum filling runs are 75,000. There are options to fill blank cans from as low as 12,000 volume and then sleeve them afterwards. It is a more expensive option but a far better way to test the market.
Fifth, is Tetra Pak but the printed runs of the cardboard are around 100,000 and need to be used up within a year. It’s a difficult option until you have the volume to justify it.
Last but not least is HPP (High-Pressure Processing), this is great for juices as the temperature is only 4C so it preserves all the goodness, antioxidants and flavour. The runs are small, but the cost is 10-15p per bottle just to put them in the machine as they use pressure instead of heat to pasteurise. The distribution must, of course, be chilled.
Understanding the best type of packaging for your drink and your target market is important – it’s a large part of your initial outlay so you want to get it right.
READ MORE: UK food and drink exports to EU fall by £2bn
Co-packers (Contract Manufacturers)
The people who package in bulk are a very important part of the process so choose whom you work with wisely. Research and ensure that the company you select has a good reputation – maybe speak to other brands they have filled? Also make sure they have the right certification as once you start to get listings, that question will be asked by wholesalers and retailers.
By Richard Horwell, Brand Relations