What does sales success at farmers’ markets mean to the growing food entrepreneurial segment? Local and naturally grown ingredients attract consumers; however, farmers’ markets are very labor-intensive. How do you leverage your marketing savvy and new-found sales success to broaden your geographic reach?
Making the Move to Sales at Retail Outlets Involves Two Important Elements:
– A Strategic Framework – Your Organizational Structure and Vision
– Labels – Especially those with Nutritional Statements
A Strategic Framework. First things first. You will need to establish a strategic framework long before you address issues of packaging and labeling.
Food Entrepreneurs often wonder what the value is in investing all the time and energy required to develop a strategic framework – vision, mission, values/beliefs, and key result areas. Once created, it is only occasionally seen in business documents. Leveraging this document to optimize your performance and the performance of others throughout your enterprise will result in you and your staff having a sense of fulfillment, while building a strong united culture.
What Is A Strategic Framework? Think of it as a ‘roadmap’ for the journey you want to take. Before taking the trip with a group of like-minded people, you have to ask yourselves: “Why do we want to go on this journey? What is our common purpose?” It is important, if you want to travel together, that all participants focus on “Why this particular caravan? Why as a fledgling food entrepreneur?”
As you explore these questions, take into consideration the particular values and belief system of your team.
It is this set of values and beliefs that help you decide how productive you will be on your journey with others.
It is this set of behaviors that forms the culture of your team.
It is this culture that helps you establish your expectations for yourself and others. This way you know how to work and play together.
Your Dream. You can now envision the whole picture of what your journey will be like, with whom you are traveling, what to expect of each other, and why you have chosen to travel together. This vision is what you will communicate to others if asked why you have chosen to travel in this caravan.
Each part of this strategic framework – the mission, values and beliefs, key results areas, and vision – plays an important part in guiding a successful journey for us all.
Labels make the difference in transitioning to retail store sales. Now that you have a strategic framework, you are ready to move into the broader venues of retail distribution.
Requirements to make sales in retail stores do not differ from those made at farmers’ markets; however, there is at least one key difference: Labels.
A Matter of Size. To begin with, sales at farmers markets are generally made by small, new-to-market firms. As such, most of them fall under the FDA exemptions for labeling conformity.
Label Exemptions for Small Business. The Law. FDA details the small business exemptions for nutrition labeling at www.cfsan.fda.gov/~dms/sbel.html. In brief, the food entrepreneur may use the exemption if the product will be sold only by retailers that have total annual gross sales of not more than $500,000 or annual gross sales of foods of not more than $50,000. A low volume exemption might apply if the food entrepreneur meets certain requirements for number of employees and number of product units that are sold annually in the United States. For some exemptions, a notice must be filed annually with FDA.
Exemptions Must Still Conform to Other Labeling Rules. When considering an exemption for nutrition labeling, it is very important to understand that product labels must be in compliance with all other FDA labeling regulations such as, but not limited to, ingredient statement and allergen labeling.
Nutrient Claims. Also, if any nutrient content claim (e.g., “low fat”), health claim, or other nutrition information is provided on the label, or in packaging or advertising, the small business exemption is not applicable for the product.
Nutrition or No Nutrition. Food entrepreneurs who choose to forego the small business nutrition labeling exemption, and instead opt to include Nutrition Facts can:
• Better meet consumers’ expectations for product information. Consumers want to know such things as servings per container and serving size, calories, sugar and fat grams per serving, etc. The lack of nutritional information on the label will cause them to lose interest in the product.
• Position the new product as one that is intended to have a serious market presence.
• Enable the company to highlight nutrition information in labeling and advertising.
• Open more doors for product distribution; many retailers will not be able to carry products that are not labeled with Nutrition Facts.
• Make a smart up-front investment; once the Nutrition Facts label is developed, it is good for thousands of product unit sales.
Now you know the “secrets” of making the transition from sales at farmers’ markets to sales at specialty food retail stores. There are many other requirements, such as product taste and packaging; however, these are not unique to the type of distribution you select. You can learn more about specialty food marketing by joining our free forum at: www.SpecialtyFoodResource.com.
U. S. DEPARTMENT OF AGRICULTURE RESOURCE: http://apps.ams.usda.gov/FarmersMarkets/
Stephen F. Hall, Specialty Food Resource