Launching Products into Foodservice: The Consolidation Challenge/Opportunity

In the last three months I have had the opportunity to work with 3 outstanding entrepreneurial companies who want to enter into foodservice distribution. All 3 have products with unique attributes. They all bring to the table the latest trends highlighted by the top chefs and foodservice magazines. The quality of their products are certainly beyond what is currently available in the market. So why are they not a "slam dunk" easy entry into foodservice?

The wonderful world of foodservice allows a manufacturer to tap on many different avenues to gain profile for distribution either via distributors or operators. However; continued movement towards consolidation and larger customers and manufacturers make this increasingly more difficult. Here are some reasons:

• Distributor Opportunity: As distributors continue to consolidate (as with SYSCO Ontario) they will reviewhat they have in their warehouses. They will want to seek out redundancy and look for ways to make more money on what they put in their warehouses. This will be positive for manufacturers that have unique products with customer demand, but there is also the tendancy to want to support the larger manufacturers who are already preferred in the category and drive their purchasing revenue.
• Customer Opportunity: There are fewer customers who can drive listings and those who have this power are overwhelmed by manufacturers who see them as the key to their success. Many of these customers do not have the time respond to the constant barrage of manufacturers vying for their attention.
• Manufacturer Opportunity: Yes manufacturers continue to consolidate. This can make it more challenging for smaller entrepreneurs as their products often represent part of the larger manufacturer's category and the larger manufacturer could duplicate their product easily if they made it their focus. But there lies the challenge. Big manufacturers cannot turn on a dime. Most have to complete arduous protocol before they can change, tweak or launch a new product and few will be the first to "launch" innovation.

So what are the learnings for the smaller entrepreneur wanting to enter foodservice right now:

• Target the key customer(s) who will list your product and understand the volumes needed to secure listings.
• Think "out of the box" to grab the attention of your target customers. This involves using your contacts and ingenuity to find out more about the customer--their focus and priorities. Figure out how your product can meet their objectives. Now grab their attention by using your product to show them how they can meet their objectives.
  
• Be perseverent. The customers you are targeting all have their preferred vendors. It is difficult to become part of this circle, especially as most of these preferred vendors are already manufacturing items in your category. It may be a matter of timing and circumstance that will eventually get you their ear and their business.
  

Remember very few successes come easily. Keep committed to your goals.