Family recipes, a dish created while at uni, something sampled on holiday ‒ inspiration for great food and drink products can come from anywhere. Most of us start in our own kitchens, cooking up delicious treats and using our family as our product testers. Translating those recipes into a full-scale business, however, can be a massive change.
As demand grows, you need to be able to scale up your production. The easiest and most effective way of achieving production at scale is to engage a food and drink manufacturer. They have the equipment, experience and production methods necessary to keep flavours consistent while keeping costs down. Approaching these manufacturers, however, can be daunting.
You need to approach them in such a way that they are happy and excited to work with you. But you also need to ensure your product stays true to your USPs.
Having launched four different snacks brands over the past few years, each with different requirements and USPs, it was important I find the right manufacturer. Here are some of my top tips to help you fast-track your selection process…
1. Research the manufacturer
Different manufacturers will require different approaches. While smaller manufacturers tend to be more flexible, especially in terms of order volume, and are often keen to assist in the development of your products, they are usually much more expensive. They may also struggle to keep up with demand as your order volumes grow.
On the other hand, larger manufacturers benefit from economies of scale. So as long as you’re seeking large volumes, you’ll likely get the best prices. However, you may need to be a bit more optimistic in your financial forecasts to help entice the manufacturer.
By researching the potential manufacturer before you meet, you’ll have a good idea of their size, order volumes, and other requirements. You can gain a lot of the basic information from Companies House before expanding your search and eventually reaching out.
2. Speak to a variety of manufacturers
Engaging the first manufacturer you speak to is a mistake, especially if you are new to the industry. You will have little idea of the options available to you, the production techniques used, or the variety of costs.
I recommend starting by reaching out to smaller manufacturers. They will help you understand the processes involved and may even offer assistance in developing your product. At an early stage, this support can be invaluable even if the costs are a little higher.
Once you have a good idea of the basics, reach out to larger manufacturers to find out about their volume requirements and the difference in price. A bit of financial modelling should help your decision ‒ are you likely to meet the volume requirements relatively quickly? Does the difference in price make it worthwhile?
Leveraging your position to get the best prices is very important, especially for new businesses. Minimising cost will help your business grow more rapidly, so make sure to shop around. With a wide view of the marketplace and a depth understanding of the differentiating services, you’ll be in the best position to select your ideal manufacturing partner.
3. Speak their language
One of the quickest ways to get ‘found out’ as an inexperienced entrepreneur is not knowing the lingo. A lot of terms are commonly used in food and drink manufacturing. Using the wrong term or failing to understand what the manufacturer is asking highlights your inexperience and can lead them to take advantage.
Sounding knowledgeable and being able to confidently answer key questions will lead you to be taken a lot more seriously and you’ll likely access better deals.
Start by reading trade publications such as The Grocer as well as books and guides on the industry. Keeping up to date with relevant food and drinks regulations is also very important, both in remaining compliant and in being taken seriously.
4. Start simple
Manufacturers like to make things and ship things. Complexity and hassle confuse that simple process and manufacturers don’t like it. Engaging them with a list of complex demands will cause them to run for the hills.
Instead, try to be as flexible as possible, especially at the start of the relationship. If the manufacturer is excited by your simple vision, they will more readily accept a bit more complexity later on.
So, define what your product categorically needs. For example, we wanted to market our pork scratching as totally free from artificial additives ‒ a specific demand without too much complexity. As the relationship developed, we introduced the idea of making the packaging 100% plastic-free and compostable. While this was a much more complex requirement, it was one they were happier to accommodate once we were selling good volume.
5. Have a detailed forecast
Manufacturers aren’t simple producers. They are the businesses that will help you develop your production methods, refine your flavours and ingredient choice, keep costs down, and help you grow. With all that skin in the game, they will want to see a copy of your sales and financial forecasts.
They want to know that your business is growing, the relationship has longevity, and that you’ll increase your order volume over time. Otherwise, from their perspective, there is no potential to grow the account and they will be reluctant to contribute any more than the basics, if they take you on at all!
As such, you need to offer detailed forecasts that position you in a good light. I don’t suggest being unrealistic but simply optimistic. Break your forecast down by month and your various sales channels to help give a full picture. I also suggest taking it over at least two years to show immediate growth potential. Any longer, for a new business, is likely to be unrealistic and be treated with scepticism.
Realistic numbers and a good level of detail will help manufacturers take you more seriously and provides the basis of a great ongoing relationship.
Taking the next step by engaging a food and drink manufacturer can be a daunting, yet essential, task. However, it’s important to remember that a good long-term relationship is the backbone of any successful food or drinks brand. They’ll support your growth and even the development of new products. Just make sure you are as prepared as possible!
