At the end of September Hello Hungry had an opportunity to participate at Drinkpreneur Live 2015, London – exclusive event for beverage industry professionals and startups. There were speakers from different fields of expertise, panel discussions on various relevant topics, startup pitch challenge etc. Amongst speakers and participants, you could find representatives of biggest retailers in UK (Tesco, Sainsbury’s, Waitrose ), investors, packaging designers, R&D specialists and more.
Today we want to share with you some insights of what we’ve learned from retailers. We believe there are more beginners like us, who would appreciate this kind of insight. Here are the 5 things, every beverage startup should consider before entering retail.
Of course you can say “it’s obvious”, but often new beverage startups concentrate a lot on a novelty factor or functionality of the drink, where the taste vanishes in the background. Yes, novelty is important, you have to be unique in your own kind of way, but do not forget the taste. Remember, novelty factor helps to make first purchase, but taste helps to build customer loyalty. And that is what retailers are looking for.
In life we all like to be surrounded by interesting people, who know things, have different interests etc. Simply you don’t feel bored around them. The same approach consumers have towards brands. Brands who are bland and boring, simply disappears amongst others. Especially within drinks market. It is not only about filling the need anymore, it’s a lot more.
You have to make sure that your brand values would met your customer’s values. That it would have a background, that customer could associate himself with it. Your product and brand must have a story, for customer to believe in.
But be careful, it cannot be fake or artificial – you will get caught. It has to be real. Be unique, be different and most important be authentic.
Before entering the retail you must have a working business model. You need to establish your product within some smaller market, for example if you producing some hydration drink, go to some yoga studios or sports clubs. You have more chances to succeed in retail, or even get listed if you have already established brand within particular market.
Retailers do not assume, so you shouldn’t either. Grow step by step, and build sustainable business – the only way to survive competition on the shelf. Major retailers in UK usually have 12 weeks range cycles for new products, so it is not that long, that is why you should already have your marketing support ready and going in full speed. Just make sure you found out what kind of support the retailer needs beforehand.
To summarize: you must have established brand equity and strong business model before going to TOP5 retailers.
Remember, when beverage companies released sugar free versions of their products and that was very different? Well not anymore, “no added sugar” is not creating any uniqueness to your product, it is mandatory. Your product must be healthy, otherwise it has no future within the market. Make sure that the recipe, all ingredients are good for people and the quality is the best it can be, because it is one of the biggest factors amongst retailers in order to get listed. Retailers are extremely selective!
The same like different products have different consumers, different retailers have different consumers as well. It is really important to understand what customers, each store have. You have to know who your customers are and where to find them. This way you could build your brand and use your resources more efficient, concentrating on where your product could be purchased. Every retailer is different, that is why you have to find the best fit for your product and brand. And do not underestimate the competitive environment.
To summarize, before even contacting top retailers, do your homework: make sure you have qualitative product, with established brand equity and working business model, with perfectly clear target market and marketing strategy. And when you do contact them, try to find the best fit for your product, don’t try to put it out there just anywhere. Only when it works both ways, you can build sustainable and successful business.