Selling your food product nationally
Prepare to sell your food product nationally by analyzing of your wholesale price, distribution costs and recruitment strategies along with the necessary capital for production capacity.
May 9, 2014 - Author: Diane L. Smith, Michigan State University Extension
If you are in the food product business and would like to increase sales and, hopefully, make more money, national sales may be your answer. However, before you start putting the ball into motion for national sales, let’s talk more about how to tell that you are ready and what national sales will involve.
Landing your family of products on the shelf of a Michigan chain retailer can be difficult. What is even more difficult is placing it on the shelves of retailers outside of Michigan. To help Michigan companies overcome this first hurdle with large in-state retailers, the MSU Product Center developed the “Made in Michigan” section with both Kroger and Meijer. This section has given several emerging Michigan food companies a chance to significantly increasing their exposure and subsequent sales. When your sales have been going well in these stores or in other large retailer locations in Michigan, you will be asked to become a long-term supplier. Additionally, and even more importantly, you will be moved off the Michigan section and into the grocery isles. When this happens, you can consider going to the national level for sales of your products.
Four steps which will prepare your business for the national scene are:
- Analyze the wholesale price of your product to ensure you can absorb the potential use of a broker
- Determine how you will deliver the product to a distributor’s warehouse out of state and related costs
- Estimate the capital needed for your first orders from national distributors
- Create a national sales sheet
Revise your current sales sheet by keeping the company history portion and adding the number of stores you are currently serving. List the names of your two major accounts (stores) along with what your cumulative or average monthly sales have been over the last six months.
When you are ready to get out there and meet national representatives, consider whether you will attend national food shows to directly recruit retailers or whether you will pay a broker to make those sales. If you act as your own broker, you will still end up making the final sale of your product to the distributor who carries products for the store account. When you work with a national broker, the broker pitches your products to their store accounts and they will point you to the distributors that deliver to those accounts.
If you decide to use a broker, it will be important to find a broker who has an established relationship with a set number of stores. Any good broker will have stores they represent and will not act ambiguous with promises such as: “we can find stores that are right for you.” It is important to consider ahead of time what store chains you want to target - whether it be because of shared values, volume, location, demographic overlap or image. This will help you determine what broker is right for you.
The MSU Product Center, in partnership with Michigan State University Extension, provides business counseling for marketing strategies that will help Michigan entrepreneurs commercialize high-value, consumer–responsive food products. For more information, visit the MSU Product Center website or call 517-432-8750.