If you’re interested in the opportunity mentioned above contact John directly at Jgeocaris@newfoodstrategies.com.
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According to a recent Nielsen study and a report from Progressive Grocer, consumers are beginning to choose higher quality and cost meats over more inexpensive, lower quality products.
2018 data shows an increase in year-over-year dollar sales of 3.1% paired with a decrease in volume of 1.5% It seems consumers are paying more for less in the meat department. What are consumers getting for their extra cash? An increase in fresh meat sales, paired with an increase in sales of meat alternatives. Much of the spike in alternative meat sales is coming from the frozen section.
The growth in the fresh meat section was driven by marked gains in chicken sales, with beef becoming less popular across the board. Organic meat sales gained a healthy 5.8%, while offering a $1.18/lb. premium over conventional products, on average.
These figures align with broader consumer trends, showing a gradual transition towards more sustainable and organic products. The growth of alternative meats in particular is primed to accelerate, as formulas are perfected and brand names like Beyond Meat and Impossible become household names.
Supermarkets that offer full service meat departments are seeing benefits from their investments. The majority of groceries polled feature a professional butcher and offer full-service, often to-order meat products. Specialty cuts that come with a friendly word of advice on preparation and cooking help consumers try new dishes.
The combination of greater reliance on butchers and fresh meat products, and frozen meat alternatives seems to be coming into style. Perhaps consumers see a trade off of frozen convenience for something better for the planet and their own health. Contrast this trend with inexpensive products like ground beef becoming less popular.
The improved sales in alternative meats warrant close examination. Some grocers are responding by actually stocking “fresh” alternative meats like the Beyond Burger in the meat service case. Non-animal protein power is expanding throughout the outer aisles as well as the frozen section. Savvy marketers, grocery buyers, and CPG innovators would do well to keep an eye on this trend and make their alternative meat move soon.
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At New Food Strategies we focus on food companies that are growing rapidly, from early stage to mid-size. We offer experience and knowledge in managing a high growth food company at this important moment of expansion. A brand in a sales range of roughly $1M in annualized sales, which is primed to grow to well over $100M, is at pivotal moment. This is where a company transitions from a highly flexible entrepreneurial one, to a sustainable, long-term organization.
Companies entering this stage have a product that has been accepted in the market, a marketing plan geared for rapid growth, and funding to support it. However, there is often not sufficient attention paid to the most critical element of all, which is building and staffing the organization in a way that can effectively manage a company through a challenging scale up process.
When New Food Strategies works with companies entering this stage of growth, we have them focus on three primary areas of organizational development. These are People, Process and Planning.
When bringing people into a high growth food company there are a number of critical characteristics that will allow them not only to survive but actually thrive in a high change, high stress environment. Some of these characteristics are as follows:
One way to screen for these behaviors is to designate current employees who are successful in a high change environment and use them to screen job applicants for the cultural attributes desired. They often can pick up on those individuals who say that want a high change environment but really do not understand what it requires to be successful in such a company.
The amount of change and keeping up with both internal and external demands in a high growth food company makes highly detailed operating processes both difficult, and in some cases counter-productive. However, this does not mean that everyone goes off in their own direction with no way to coordinate their activities. It is critical to develop a regular structure around the internal communications of the company. In its early high growth stage, Dell had a weekly video conference for all senior managers at the same time each week. No excuses were accepted for missing it. At this call, each manager was asked the three same questions each week. They were:
What is new? Where are you stuck? and How can we help?
A manager in a high growth company in almost every case has a job too big for them to do on their own. They need to coordinate internal and external resources to make sure tasks they are responsible for occur on time. Regular communication with their team members is critical to keeping the rapid pace controlled to a reasonable extent. In these situations, trying to cover up the fact that you are falling short of a target is the worst thing you can do. Needing help from time to time is expected and raising your hand to ask for it is encouraged.
In a high growth food company the planning cycle is highly compressed. Looking out more that 18 to 24 months is not a very valuable exercise in most cases. It is necessary to have a general picture of where the company is headed long term, but the execution plan is often no more than 12 months. 90 day, rather than annual objectives, make more sense in this environment, with a new set of objectives being created on a quarterly basis. 12-month financial budgets do make sense here, but they must be updated on at least a bi-annual basis, if not quarterly.
Building a food company from an early stage to a mid-size company requires skills that are not generally found in the average person. The ability to deal with ambiguity, while at the same time making decisions with limited information or resources is as much an art as a science. There is not a check list you can pull out and follow to ensure success. However, by hiring the right people, maintaining a regular communication structure and planning often and for short time frames will give you a great chance for success.
These three keys, People, Process, and Planning, can set you on the right track for rapid growth in the food industry. Subscribe to our newsletter or contact John directly for more tips on growth in the food business.
New Food Strategies Founder John Geocaris was on hand for the 2018 Naturally Boulder Pitch Slam, held on October 18th and 19th in Boulder Colorado. The annual event draws hundreds of natural foods enthusiasts from across the Front Range, and features both a pitch competition for up-and-coming natural foods companies as well as an annual award ceremony honoring industry leaders and break out brands.
For those that have not heard of Naturally Boulder, it is a membership non-profit based in Colorado’s Front Range that helps nurture conscious growth, leadership, and innovation in the Colorado natural products community. Sponsors and members include some of the nation’s leading natural product brands including Justin’s, Danone, Boulder Brands, and Ardent Mills.
There were over 20 companies competing in the pitch slam for the grand pirze, worth over $100,000 worth of cash prizes and free services from a variety of sponsors and agencies. The centerpiece of the prize was a booth at next year’s Expo West Natural Products trade conference. The competition was fierce with each company making a quick pitch and taking rapid fire questions from the panel of judges. After the dust had settled the 1st place prize was awarded to Picaflor, a fermented hot sauce company founded by a local family farmer.
In addition to the competing companies, there were 70 regional natural foods companies showcasing the newest and best products the natural foods industry has to offer. After the pitch slam winner and innovation showcase, Naturally Boulder gave out its annual awards, including the Industry Leader award to Justin Gold of Justin’s Nut Butter.
Overall this was an amazingly dynamic and action packed event. The natural foods community in Colorado’s Front Range is active and highly successful. Leaders and visionaries abound in Naturally Boulder. This event is great place to get your start in the natural foods industry or find great resources to build your business.
Being the leader of a fast-growing food company is truly a unique experience. Nothing really prepares you for the pace of decision making in an uncertain environment. I learned this lesson myself in running a food company that saw 30% year over year growth for 25 years.
When to be flexible and when to build structure? Do I hire executive talent or good executors? Do I make my products myself or use a co-packer? These are among the many questions that need to be answered as a leader of a fast-growing food company. The main challenge is not only that these questions are difficult to answer, but that the answers are also changing constantly.
Here are a couple of key concepts that may help: Continue reading
Often a Founder of an early stage food company gets so focused on raising money they lose sight of what they need to do to efficiently manage the funds an investor is putting in the company. You have convinced an investor in the value of your product, management team, and marketing plan. Now you need to hit your growth objectives with the funds provided.
There are a few simple tools that will keep you on track towards increasing your company valuation before an exit or the next round of funding without running out of money. They include: Continue reading
Developing an effective Sales Strategy to grow your company from its early stage $1,000,000 annual sales level to $10-25,000,000 and beyond is not an easy task. As you grow you will greatly expand the number of competitors while simultaneously entering new markets and channels of distribution that often have conflicting requirements. You will also be building out a sales and marketing function within your own company as the requirements in this area quickly outgrow your ability to manage them. Continue reading
A member of a prominent family who has bought and sold many companies over the years once told me that there are only two times that you should sell a business. The first is when you are not really trying, and someone comes to you with an offer to good to refuse. The second Continue reading
What does an early stage investor look for in a growing food company when they attempt to put a value on a potential investment? Many food entrepreneurs think it is the rate of growth in sales that drives valuation. That is partially true but does not tell the whole story. I have found the following to be the key factors in valuing early stage high growth food companies.
Managing your supply chain as your food company grows from early stage to mid-size is both
complicated and a great opportunity. As your volume increases you can reduce your product costs as much as 30%. Purchasing raw materials at higher volumes along with production economies of scale drive this reduction. However, if not managed well your supply can kill your business quickly. Running short on raw materials, quality issues in finished products, and uncontrolled costs from out of code product are some of the many issues that can cripple a growing early stage food company. These issues can come up whether you use a co-packer or make the product in-house When planning your growing supply chain, you should consider the following: