How To Grow Your Food Business With The Help Of An Inventory Management Software

Running a food manufacturing business is no easy feat. There’s a lot of competition out there. And profits are often hard to come by. There's also the not-so-small matter of the Food and Drug Authority (FDA) strictly implementing policies and checking for any violations made by food businesses. Basically, food manufacturing can be really difficult.

Despite all these challenges, food manufacturing companies continue to pop up. A lot of people rely on the food processing industry for daily meals and livelihood. If you believe in your product, focus your efforts on doing the right thing and use best-practice tools like an inventory management system, and there’s a great chance that your business could grow and flourish—you can be the next Chobani, Just Mayo or Sir Kensington’s.

So, let’s say you already have your food business going with a few recurring customers; however, you’re still far from what you expected when you started. Maybe it’s time to take a step back, review the basics, and see what you can refine in your processes. But what exactly are the basics? Let’s tackle those first:

1. Create a unique, differentiated product

The market is full of different options, so standing out from the competition is important. You need a strong foundation when growing your food business, which means your product or products need to present both quality and marketability.

2. Tell a great story

Ever heard the saying: "People don’t buy a product, service, or idea; they buy the story that’s attached to it"? According to narrative strategist Michael Margolis, people look for stories they can relate to when they purchase.

It's no longer just a matter of your product being good. So, ask yourself: what story can you tell so that customers will remember you? Is your product from your mom's recipe book? Is it your small town’s staple? A great story adds more value to your product, and it's your job to let people know what that story is.

3. Grab attention with awesome branding

Now that you have the goods and a story to tell, you need a way to give your product the attention it needs. As you already know, people are attracted to visually appealing and well-packaged food, and this often translates to more sales.

Branding also doesn’t stop with just packaging; it should also extend to your online and traditional marketing efforts. It’s important that your identity is something potential customers take notice of and remember. This raises the likelihood of them moving into a sale.

4. Build a capable manufacturing operation

Any food manufacturing or processing business should be cost-effective, with an operation process that increases profit with little to no additional cost. You can achieve this through a number of ways: partner with a co-packer, use shared space, or even set-up your own production site. And while you're at it, consider an inventory management software to keep track of goods from raw materials to finished products.

5. Sell your product

It might sound simple, but sales is challenging for a reason. You need to choose the right market, customers, and locations to make a successful sale. There are plenty of things to consider: type and proximity to customers, pricing, your means of distribution, and of course, competitor analysis. It also doesn’t end there. The sales process is a cycle and it’s natural to make adjustments as you grow your business.

Now that we’ve reviewed the basics, it’s time to grow your food production business. Here are key areas to help you reach your growth goals:

  1. Accelerate your sales and marketing
    1. If you're already selling well to customers in a specific channel—like a food delivery service or a grocery—keep going! Delight your existing customers with promos, discounts, and excellent customer service. Hitting the right notes in these areas can yield return patronage or even referrals to friends and family.
    2. Launch targeted marketing initiatives to raise awareness for your brand. Know who your target customers are by creating a buyer persona and reach out to them through ads and other content offers which can convince them to buy from you.
    3. Find trade shows focused on your channel. Although less common these days, trade shows are still an effective avenue to market your products. At these events, you can find prospects who are ready to know more about you and your product, and are willing to form partnerships.
    4. Partner with distributors that sell within the same channel. This promotes a steady flow of trade between you and your partner/s. Teaming up with another distributor also helps to make you more competitive and stable.
    5. Consider a broker. Hiring one could save you a lot of cash and help expand your network.
    6. Go direct to the bigger customers in your chosen channel by whatever means necessary, i.e., work your networks, direct on social media, etc.
  2. Explore partnerships
    • Consider partnering with other brands for marketing, distribution, and warehousing. This opens you up to their network and allows your business to grow while you secure steadier income.
    • Partner with customers to launch exclusives or other initiatives that will win your brand more consumer awareness. Remember that your recurring customers are your most valuable assets as it’s cheaper to get current customers to make a repeat purchase to make a repeat purchase than it is to find new ones.
  3. If your existing channels aren’t working, consider new sales channels
    • Wholesale - Maybe retail isn’t working since you don’t have an actual store. If so, selling wholesale may be the best option for you.
    • eCommerce - Not gaining new customers? Try reaching out through an eCommerce platform. These are websites that specialize in selling products directly on their pages. You can set it up so that your site  catalogs every item, provides payment options, and conducts shipping and tracking of orders.
    • Online marketplaces - You can also choose to team up with the bigger online marketplaces like Amazon, eBay, or Walmart. These marketplaces will give you a more stable platform to sell your goods.
    • Others - There are also other channels that you can explore to widen your range. It’s best to consider this option based on the size of your production, or if you don’t have a dedicated production area. Choose a private label where you brand your product with another retailer’s packaging, or sell your goods in smaller packages.
  4. Make sure your operations allow you to scale
    • Stay in touch with your customers and keep an eye out for issues or areas of improvement where it concerns your product. Your customers need to be at the heart of your operations. Each action taken from your end must have with the customer’s well-being in mind. Be active in social media and be versatile with the trends that are popping up. Don’t let yourself get left behind. If needed, hire a social media team or manager to make sure you are well-represented online.
    • Make sure your pricing is right and you’re profitable on a unit economics level. While the goal is to put customers at the center of your business, also need to earn profit to keep your business afloat. Study the market and explore customer-driven pricing. Strike the perfect balance between being generous and profitable.
    • Plan ahead and avoid stockouts. You need to study the pulse of your customers’ purchasing behavior in order to forecast demand. Stay lean and also avoid tying up your cash in excess inventory. This is where inventory management software can help.
    • Don’t make it hard for yourself and for your customers. Implement a good order-to-cash process. Streamline order and delivery fulfillment and strive for error-free inventory management. Applying an automated sales process saves you time, money, and energy which can be spent on other more important tasks like coming up with a new product or strategy.
    • Keep an eye on your accounts receivable and collect on unpaid invoices. Missing out on these could result in heavy losses for your business. Consider the tools out there—like an eCommerce website—which simplifies this process for you.

There is a saying that all a company needs is a great product and everything else will take care of itself. But while setting up a company and launching your product is most definitely a milestone, that’s just “Day One” of your business.

Hard work, sound planning, strategy, cost-efficient tools like inventory management software, and luck are also necessary to achieve your desired growth. Also, remember to stay open to new ideas and opportunities as you get out there and talk about your product.

Sweet is a cloud-based inventory and order management platform specifically designed for wholesale distributors. We've built Sweet to help you keep up with the non-stop nature of running a business in today’s market. We can help you sync orders that come in through email, calls, texts, and then ensure your production, accounting, and customer service all have the same information throughout.

To learn more about how Sweet can help you improve your customer experience, sign up for a free trial here.