By Tom Lock, Founder, AP Brands.
Have you developed an exciting food or drink product? To meet the (hopefully) huge demand, entrepreneurs need to approach food and drinks manufacturers to produce their product at scale. This can seem a daunting task ‒ you want to ensure the final product tastes just as good when you first made it, while ensuring that the financial aspects of the deal don’t undermine your profit margin.
Ensuring a high-quality flavour without the need for additives is the unique point of differentiation for all four of the snacks brands I’ve launched over the past five years. So, I’ve put a lot of focus on finding the right manufacturer. Here are my top tips for entrepreneurs with their first food or drink products to manufacture.
- Know who you’re talking to
There are small manufacturers and there are large manufacturers. Each require different ways of negotiating with them.
Small manufacturers will usually be more flexible, more willing to help entrepreneurs with product development, and able to handle small order volumes. They are usually more expensive, however, and could struggle to meet larger volumes.
Larger manufacturers, on the other hand, will often be able to deliver the best prices but they often need larger volumes. As a result, entrepreneurs will need to be more bullish with their forecasts. I suggest you get onto Companies House and investigate their accounts to help understand their business before reaching out.
- Reach out
One of the most important pieces of advice I can offer to fellow entrepreneurs is to speak to as many manufacturers as possible. This is particularly important if you have no prior experience in the industry.
Start by talking to smaller manufacturers to learn the process and find out how they might be able to help with product development. Then go on to speak to larger manufacturers to discover their volume requirements and the price difference.
It’s vital, especially in the early days of a startup, to be able to leverage your position to get the best pricing, and the best way to do this is to have as many options on the table as possible. By shopping around you will discover what is available, what the key points of differentiation are, and be able to plan a number of scenarios.
- Learn the jargon
The more knowledgeable you sound, the more you’ll be taken seriously. Read books, trade publications like The Grocer, and as many other trade publications as you can and try to brush up on the relevant food law as well as general industry jargon. Using the wrong word or being caught out on a piece of law may seem like a relatively minor error but companies may use that as a signal that you’re new to the industry and take advantage. A little research will go a long way!
- Avoid excessive demands
Manufacturers don’t like hassle. They are in the business of “making it” and then “shipping it”. Going in with a long list of complex demands will likely put them off working with you.
It helps to be as flexible as possible. Many manufacturers are put off by complex projects. So, at least at the start, make your project sound as simple and easy as possible, and wait until the second or third meeting to introduce complexity.
Entrepreneurs need to begin by defining the absolute essential aspects of their product, things that are fundamental to the brand. With Awfully Posh, for example, it was essential for the pork scratchings to be full of flavour without any additives. Aside from these considerations, which comprised our USPs, I could be fairly flexible. As such, it was relatively easy to find a manufacturing partner.
- Sell your brand
You need your manufacturer to believe in your vision, especially if you are a pre-launch startup. Make sure you come prepared with a detailed strategy and share as much of it as you can with your potential manufacturing partners. Obviously, there will be aspects you don’t want to share, but the mission and vision need to be clear, practical and exciting.
Most manufacturers understand building brands is difficult, but if you can get them to “believe” in your growth plan then you should be able to convince them to start with smaller volumes and help you grow your startup sustainably.
- Have a detailed forecast
It’s vital you to deliver a detailed forecast to your manufacturing partner. As an entrepreneur you may be optimistic, but make sure your forecast is positive and realistic. Manufacturers will want to know that your brand is likely to grow, that the price works with your commercials, and that the relationship has longevity. Remember, manufacturers will have a stake already, having worked out the setup and production methods for your products, so they need to know the order volumes, profits, and range is likely to grow.
Don’t divulge sensitive informative but consider breaking it down by channel and by month, and doing it at least over two years. The more prepared you are the more seriously you’ll be taken.
Approaching food and drink manufacturers is an essential step for any new brand. You can’t keep making your products at home forever!
For an entrepreneur with a startup finding a manufacturer can feel daunting. If you can help potential manufacturers see you as someone with whom they can have an easy partnership you’ll be off to a good start. They want to see that you have brands that are likely to grow and make you both profits for the long-term. I wish you success.
ABOUT THE AUTHOR
Thomas Lock is the founder and Managing Director of Awfully Posh (AP) Brands, a FMCG snacks company. Referred to by the Daily Telegraph as “the man who made pork scratchings posh”, Tom launched his pork scratching brand, Awfully Posh, in 2013. He soon launched a further three snacks brands, The British Crisp Co., The British Popcorn Co., and Create A Crisp, selling a total of over 5 million bags to date. AP Brands’ snacks are now stocked in supermarket giants such as ASDA, Tesco, Waitrose, Amazon & Wholefoods Market.