While it’s not quite summer, we’re almost there. Heck, it’s 91 degrees in Vermont right now. So, practically summer. And for me, that means I actually start to sell some mustard. (Who’s with me? I’m talking about those awful months from January – April if you live in a wintery climate).
Anyway, I digress….
This year has been an interesting time for Green Mountain Mustard. Year-to-date, my sales are down three-fold. Yes, 300% down. It’s incredible, actually.
The drop in my sales comes from three things:
1. Loss of focus due to the commercial kitchen we opened in January.
2. The recent loss of our largest distributor, who is closing up shop in June. Rather than buying, she was clearing out her inventory.
3. We didn’t have two huge orders from TJX this year (more on those sales here).
On the plus side, we invested in raw materials. That means we were able to boost our margins, making for a not-so-awful net profit margin.
With all of this happening, I’ve been left with the question every small food business owner faces:
“How do I grow my sales if current strategies aren’t working?”
We all struggle with it, whether you’re brand new to the food business or you’ve been at for 30 years. As one of my friends in the business says, “These days, it’s easy to get on the shelf. Your challenge is to get off the shelf”. It’s so true. And as you can imagine that grocery store shelf is COMPETITIVE. So, what’s a food entrepreneur to do?
Five strategies I’m using to grow my food business:
1. Entering food service (for the FOURTH time)
I’ve been ignoring this incredibly lucrative channel for a while now. But, now that I have hundreds of pounds of seeds, powder, and vinegar, I might as well do something with it! Enter food service gallons of mustard. Over the past few months, we’ve worked on perfecting an allergen free, cold-fill maple wholegrain mustard. And now, it’s available in plastic gallon pails with handles.
Before we brought this to market, we had a few hurdles to jump: We needed to make it a cold-fill product so it could be filled into plastic. We had to find affordable plastic containers. And lastly, we had to hit a price that was affordable. All of this took longer than expected.
Cold-fill: To make the cold-fill product, we needed to force our pH down to below 3.3. Our typical pH hovers around 3.65. For this, we simply used stronger grain vinegar.
Plastic packaging: After shopping around for the standard “mayo gallon” which ran anywhere from $1.58 – $3.00+, I needed to find a cheaper source. Enter one of the largest maple syrup packaging suppliers that just happens to be 30 minutes from my house. #WIN. I found gallon pails with tamper-evident lids for $1.25/piece. With a label printed off my label printer, I was good to go.
Affordability: Believe it or not,my food service margins are better than my retail store margins right now. That’s mind-blowing. It also means I can put my gallons on sale and still make a little money. Now, the industry sells gallons for $9-12/gallon – or less, but the quality suffers. I was using maple syrup (not cheap) and still working in small batches. We’re entering the market at $14.95 which I believe is competitive.
We just made 19 gallons last week to test the market. Within two weeks, those will be gone. By the end of the summer, I hope to be moving 100 gallons of food service mustard a month. Where am I selling? Schools, corporate cafeterias, delis, restaurants, other food producers. All avenues I’ve never been able to sell to before. We’re already looking to launch two more food service mustards only available in gallons. The additional flavors are still up for debate.
2. Selling to private label customers
For the first five years of my business, I said “I want to build my own brand and not do any private label”. In hindsight, I find that silly now. Last week, I said yes to my first private label client. We’re in talks right now to sell over $20,000 of mustard annually. And that’s from one client who emailed me. I didn’t reach out to her.
There are plenty more private label opportunities. There’s a Private Labeling Tradeshow in Chicago in November if you’re really curious. I can private label for country stores, convenience stores, catalogs, food coops, hotels, restaurants. The list goes on. Similar to entering food service, private label is unchartered territory for me. I’m excited to see if it will help grow my business.
Now, many of you may argue private label dilutes your brand. Yes, but it sells your product. To build up another $20,000 in retail sales would take me months. Now, it takes scheduling a couple productions. You have four options in the food business:
- High margin / Low volume (most small food companies fall here)
- Low margin / High volume (most major brands who make pennies per unit on 1Mil+ units)
- Low margin / Low volume (you’ll go out of business)
- High margin / High volume (super ideal)
When you move more product, you sell more product. When you sell more product, you grow your business. If you can do this while lowering your food product cost, you’re golden. This is what I’m trying to do. I’d love to be in the high / high quadrent. Wouldn’t you?
3. Giving away more mustard / Sampling & demos
At this point, I give mustard away to anyone who wants it. (Don’t get any ideas :p). This simply gets my name out there more. For example, I bring entire cases to my gym because the trainers know hundreds of affluent people in the area. I donate to many raffles and silent auctions as well.
We also have stepped up our sampling game for stores out-of-reach for an in-person demo. When I do get around to doing demos, I bring brand new jars and use what I can. Then, I go to customer service with 4-6 partial jars and tell the employee to put them in the break room fridge. Now, your product is top-of-mind for the employee (who gets a discount if they buy your product) and gets to tell all kinds of customers which mustard is the best while they’re doing their shopping.
4. Moving major retail players to “house accounts”
The closer of our largest distributor means several things. For one, I have to find a way to get product to all the little stores in the tiny corners of Vermont. Some of them are covered by other distributors. And others? THEY’RE ALL MINE! It’s time to take back my best accounts and make them “house accounts”.
This means I handle the distribution.
Sure, I may have to make a couple more deliveries, but I get control back. I control the shelf price, the demos, and the promo schedule. Plus, now retailers will have access to my entire product line — not just what the distributor carries. Oh, and I forgot to mention – the margin goes way up: $12 for every case I sell. 100 cases = $1,200 back into my pocket.
Finally, I learn more about what is going where, what flavors are selling best, and whether or not to cut retailers off who simply don’t sell enough mustard. Read: Going after a store that sells 24 jars of mustard every year is an absolute waste of my time — oh, and yours, too.
5. Ignoring the majority of social media channels
Let’s be real, ok? Social media is the biggest time suck in the history of small business owners. You could spend the whole day on Facebook scrolling through cat videos and pictures of tacos, but that’s not growing your business.
Example: I posted an online promotion on our Facebook page (2,000+ fans), touting 20% off for Memorial Day Weekend. At the time of this writing, one person liked it. You know who that one person was? Someone I’ve been friends with for 13 years. I can drive to their house.
Facebook is doing nothing for me. That’s why I focus on email marketing. The last email blast I sent out generated over $500 in sales for me. Why? Because people who are on your email list care about your product enough to give you their email address.
Spend your time on revenue-generating activities.
I’ll write about social media strategy at a later date, but for now, my eggs are in the email marketing basket. Forget Twitter and Facebook. Instagram is still fun because I like looking at pictures. Plus, we’ve landed at least $750 in sales from it in the last year. Money talks. Likes do not.
There you have it — my five strategies to grow Green Mountain Mustard. I’m sure you’ll hear more about them once I get some numbers back — especially the food service strategy. I’m most excited about that plan. Wish me luck!
Do you have any strategies you’re implementing to grow your business? I’d love to hear about them in the comments below. And please do share. Your comments & experiences help to create a stronger community. I believe we can all learn from each other.
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