September 24, 2008
Planning a National Expansion for a Food Importer
My small shop has exclusive importing deals on quality food and wine from Italy. I'd like to expand my operations nationally. What are the best -- and not too expensive -- routes for expansion? -- A.D., Sunderland, England
There are many ways to expand your sales, including supplying gourmet food and wine shops, selling direct to consumers on your Web site, and perhaps putting out a catalog that narrowly targets a particular type of product or customer. For instance, you could publish a holiday catalog that features food gifts that corporate executives would send their best clients and employees. Or you could focus on a particular region of Italy and put out a catalog that targets "foodies," the high-end gourmet consumers who know a lot about specialty products from various parts of Italy. These catalogs could be strictly online or you could print up a limited run of paper catalogs and send them out direct mail.
Just having an exclusive arrangement with your supplier doesn't mean much unless you can convey that what you're selling is highly desirable, says Ron Paul, president and CEO of Chicago-based Technomic, a food industry research and consulting firm. "You must convey why being exclusive is important. Say you have recognizable products tied to a well-known chef, or an interesting piece of geography," he says. "For instance, just saying that you have an exclusive deal with a wine shop in Rome isn't going to do much" for your marketing efforts.
If you haven't already, spend some time doing market research [BusinessWeek.com, 1/9/08] to see where products similar to yours are being offered in the marketplace, says Steffen Weck, senior managing consultant at Food Business Consulting in Lenexa, Kan. This will help you gauge just how unique and exclusive your offerings really are. "You have to know your product's USP -- unique selling proposition -- prior to trying to increase national sales. It will help you tell a better story," Weck says.
Linking to a Master Wholesaler Once you have your background research in place, consider forming a partnership with online retailers that sell specialty and gourmet foods. "These retailers seldom look for exclusives, yet they are always looking for new and unique products. While their sales individually won't necessarily make a huge contribution to your revenue, collectively they will generate a nice addition to your revenue stream," Weck says.
You might also explore the possibility of working with a master wholesaler who can manage distribution for you on a larger scale, as well as do store inventories at the shops you're supplying, says Paul. This allows your products to piggyback on established relationships the wholesaler has with retail outlets and gives you an efficient distribution channel if your products can be shipped along with other foodstuffs going around the country and even into the U.S.
Of course you'll want to set up your own e-commerce Web site, if you haven't got one already, and invest in some Google (GOOG) ads to promote it, Paul says. And Weck recommends that you also set up a store on Amazon.com (AMZN). "Amazon continues to have the largest online traffic of any retailer," he says. "Your sales generated through Amazon can be substantial, and your set-up costs are minimal."
Finally, consider attending trade shows that focus on gourmet and specialty products. The National Association for the Specialty Food Trade, sponsors a number of "Fancy Food Shows" in the U.S. Although these will be costly for you to attend, the contacts you can make at shows like these are invaluable. Not only do store buyers attend, and your competitors, but you can also meet the food brokers who specialize in calling on these types of retailers and get them excited about representing your products.