There is a shift in our preferences of food. More than fancy restaurants and a 5-star service, we want comfort, taste and Netflix. When a Michelin Star chef in New York was asked in 2019 who his direct competitor was, he replied Netflix.
How is an online video streaming service competing with fine dining, lavish restaurants?
Answer- People want comfort. They want ease. They want taste. They want quality and they want it all, sitting at home, watching their favourite shows. They don’t mind paying the price for it too. (which is, of course, less than a fine dine)
Technology has made it easy for small businesses to reach out to people. You can order anything from one app and they guarantee quick service and hygiene!
We had the honour of hosting Kat Cole, COO of Focus Brands at HelloMeets for a meetup on ‘How to start and grow a new food brand in 2020’. Kat is one of the most humble, kind and at the same time charismatic and resilient people we’ve met. She has the experience of building successful brands like Cinnabon, Auntie Anne’s and Jamba.
In this blog we’ve covered all the actionables Kat shared along with lots of food industry examples.
How to build a unique brand from scratch?
Pick your core customer whom you will target. This will affect your logo, colour palette, story and voice. In the beginning, target one group. This will help you in clearly forming your story and brand identity.
Building a brand starts with a story. Customers get attracted to the stories and experience. Not to the product itself, but the emotions it ignites in the customers when they consume it.
You are selling emotions which are translated into the product.
If your product has uncommon and unique ingredients, you need a beautifully told story that revolves around the benefits of the ingredient. The benefits of the ingredients should be very strongly communicated in your story.
In order to make your ingredient become relevant to the current market scenario and appealing to customers, apply a bridging strategy.
If you have an uncommon ingredient, add it to a popular dish. Ingredients that people won’t eat otherwise, will get hyped when they are added to popular dishes.
For example- Turmeric, an ancient Indian superfood got popular because the Golden Latte broke the internet. Millennials around the world were making it, coffee shops started selling it, bloggers were posting tutorials and writing blog posts.
Here the uncommon ingredient- turmeric was paired with a popular dish around the world- Latte. People were intrigued by its colour, aesthetic appeal and appreciated the health benefits.
When you have decided what appealing dish you want to add your ingredient to, start testing it. Make people try it and ask for feedback. Do they really like the way it’s presented? Measure the responses and understand what people want. Do proper research. Make sure you understand the customers’ psychology and culture before presenting your product to them.
Keep the menu short
The best way to get into the market is to start with a small menu. Tell your customers what you are best at. A smaller list of menus stick to the consumers and tend to be more profitable.
Strategy when launching a new product?
The strategy is divided into 2 segments
- Product Development Stage
- Launch Stage
Product Development Stage
In the product development stage, focus on clearly defining your product, target audience and operations. Particularly focus on the name of your product. The name of the product should convey a clear message about what the brand is and at the same time, the name should be attractive.
For example- Jamba Juice came up with a super pretty Vanilla Blue Sky Smoothie (which went viral). The ingredient that made it blue was a natural, superfood called Spirulina. It is a blue algae (also has a green form) grown in fresh and salty water. It’s flavourless and has various health benefits. People who aren’t aware of what Spirulina is, wouldn’t have understood if the drink was named Spirulina smoothie. Calling it Vanilla Blue Sky, got more people interested and conveyed a clear message. The drink tasted of Vanilla (from the flavoured plant milk) and looked like a clear bright blue cloudless sky.
Product testing is crucial for the product to be successful. And one of the smartest techniques to test products is through consumer research. The best way to understand consumers’ reaction towards the product is to show them the product name and ask them ‘What does it remind you of?’
This simple question will bring back whatever memories (if any) they can relate to the product or name. You will understand if the product evokes positive or negative emotions or no emotions at all. Our aim is to drive positive emotions from the products we offer to customers. And knowing what people feel about our product during the testing stage saves time, money and a lot of effort.
After you are clear with what you are going to sell. Figure out how you are going to sell it. Where does your core customer go? How do they buy their food? What channels do they prefer? Analyse their preferences and see what is suitable for your product. In terms of logistics, affordability and availability.
After your product testing, consumer research and operational testing are sorted, we come to the next stage.
Launch Stage - 3 approaches
This stage follows 3 foundational approaches. These approaches set the right processes and awareness amongst internal and external stakeholders.
- Internal launch. Training and educating the employees about the brand and product. Making sure they like it, appreciate it and become advocates of the product.
- Pre-launch. Creating a hype by bringing in influencers, bloggers and media. Here you give the product for free to exclusive people who will spread the word about your new product.
- Finally, the external approach where the product is marketed on a bigger scale. Partner with third-party aggregators, give out offers and promotions. Launch online and offline marketing campaigns. Create ads for the delivery platform so consumers to see your product first. Remember, while marketing, convey the emotions through the product.
People don’t buy products, they buy emotions and experiences that the product is going to give them.
While mass marketing, keep a check on your supply & demand. Though ‘sold out’ sounds really good, it’s harmful to small businesses. Having a healthy difference between supply and demand is natural but when one shoots up, you need to fix your operations fast.
Here’s an example of how Swiggy launches its products in the market.
When should one start Franchising?
A brand shouldn’t move towards franchising in the initial stage. As a franchiser, you are asking people to invest their life’s savings in an idea you believe in. The brand should be strong enough and profitable enough to convince these people.
Until you see consistent profits and have experimented enough with your brand, locations and products, don’t start franchising.
5 Questions to ask yourself before selling your franchisees
- Is your food production model easily replicable?
- Will the unit-level economics be able to handle the licensing and royalty fee?
- Have you experimented in different locations?
- Have you experimented with different channels? Example, dine-in, take out, delivery only, drive-throughs.
- Is your brand strong enough to make profits on its own even after paying royalties, build-out cost and licensing?
The brand itself should be so strong, that the franchisee should do good on its own.
The Founder is a great movie that shows how McDonalds designed their Speedy System and built their empire.
Is it possible to reach out to multiple age groups and segments with one brand?
When you start out, it is always recommended to target one segment. As you grow and observe that more than one consumer segment is appreciating your product, you can categorize your products to send clear messages.
For products- Make different product categories for different age groups.
For brand- Make sub-brands for each category under your parent brand.
For example- You will find separate kids, vegan, kosher and halal menus in a lot of restaurants to cater to different consumer segments.
How is the landscape of the food industry changing?
With technological advancement, smaller, independent, chef-driven brands are coming up. Now chefs don’t have to work towards every element to build their physical or online restaurant. Cloud kitchens are providing the operations while online third party aggregators provide the delivery logistics. Through technology, independent brands are becoming more affordable to build.
Companies are taking Zomato and Swiggy model and applying it for home cooks. Before the pandemic, Swiggy started partnering with home chefs and called it Swiggy Daily. They provided these home chefs with delivery logistics and advertising.
There are companies like Dunzo, WeFast and Pidge that work towards providing the transport logistics for independent small brands to reach out to people.
On the other hand, people also want brands that are well known and whom they trust. That’s where franchises come in. They provide experience, consistency and a promise to people. They reach out to the mass market and provide all this at an affordable price.
Affordability is a benefit of scale.
Independent brands and franchisees have a different set of customers. With the growth of technology, the opportunity for independent brands is also growing.
Consumers have more options to choose from. The differentiator will be the experience they get and the emotions they feel for the price they pay.
Few questions to ask :
Where is the customer going?
How are food choices changing?
When small businesses are powered by tech, what does it mean for big brands?
Does a digital-only store front end up changing the economic model?
Are cloud kitchens the future of the food industry?
Cloud kitchens are viewed as disruptors in this industry. Independent, chef-driven brands will see a boom as they will have more opportunity of getting in the market.
For cloud kitchens to be successful, they need locations that are densely populated because they are designed for delivery only. Countries like India and China seem to be the right locations where cloud kitchens can earn profits. On the other hand, locations that are less dense, where it’s easy to move around, people prefer to go out or pick up their meals rather than paying the delivery cost.
When building a brand on a global scale, how much control does one need to have from top to bottom?
More than focusing on control, focus on consistency. What areas of your franchisees you want to keep consistent and what you can change. The list of things that should be consistent is shorter than the things that can be changed. The question is should you change it?
Three areas that should stay consistent:
A brand is more than a logo. It is a promise to people made in the early days by the products and what you say.
It’s what you stand for and do overtime.
It is a combination of the logo, tag line, experience, product, the promise and the emotions that people attach with your product.
Cinnabon is present in 60+ countries. The brand is consistent all over. The menu is limited and well known. It's basically cinnamon rolls. The brand is so powerful, people call the product by its brand name.
If we microanalysis the brand in every country, you will see small nuances in every region. In China, it’s less sweet. In Canada, they’ve added a Maple leaf to the logo as people there are committed to Canadian brands. Some countries have export laws and ingredient regulations which is the reason for the product not having the exact taste in every country.
What is consistent in all these countries is the experience people get. The logo, the aroma of freshly baked goodness that is being made in front of them and the quality of the product. Each batch of Cinnabon is handcrafted. Prepared with the freshest of ingredients that are baked to perfection. Topped up with a generous amount of cream cheese.
People don’t buy products. They buy emotions and experiences. People buy products because it makes them feel good.
When Auntie Anne’s (famous for it’s soft, warm Pretzels) launched in Turkey, initially people were not very keen on trying them. The store location, product quality, branding, everything was perfect. All the market research and data showed the brand should do phenomenally well.
On investigating, they found out Pretzels look very similar to a local bread called Simit. A street food priced 500 times lesser than what Auntie Anne’s was offering.
Auntie Anne’s came up with a new tag line- ‘Like Simit, but different’ which acted as a bridge for consumers to try a new Simit like product.
Before getting into a new market, do thorough research of the market and target consumers. Understand how they resonate to your brand by asking the fundamental question- ‘What does this remind you of?’ This will show you how people are relating to your product and brand. The answers you get will give you a direction towards what you should change according to geography and culture.
And when you get the answers to what you can change, ask yourself- Should it really change?
Hope you enjoyed reading this article.
If you are building a new brand, you might like- Go-To-Market Strategy for New Age Premium Consumer Products and Services