Guide 5: Food Money Machine Product
Food Money Maker Issues: The Food Product
The Food Money Maker is the foundation of all growth. A Food Money Maker is a specific market opportunity combined with your company’s approach to capturing it.
A Food Money Maker Consists of Five Key Components:
1. A target consumer that recognizes she or he has a problem or need.
2. A promise that your company makes to prospective shopper.
3. A distribution channel for reaching and transacting business with the target shopper.
4. A product that fulfills the promises made to the consumer.
5. A sustainable competitive advantage.
In this article, I’m going to focus on potential issues surrounding the food product you are planning to manufacture. Creating Food Money Maker growth requires your company to produce food products that your customers love and that are easy to sell through your designated distribution channels.
If you noticed, this attribute is #4 on the list and of far less importance to creating your Food Money Maker than the other more relevant and important points to your shopper. It’s all about consumer needs as compared to your recipe formulation and product development. It’s about delivering on your promise.
Consumers love products that fix a problem or provide for some need. The key is creating products that fulfill the promises made to the shopper to generate the sale. In other words, your product needs to actually solve the problem you promised your shoppers you would solve.
The first stage of developing a successful food product is generating ideas and brainstorming on problems you can solve for consumers. When framed in this manner the creation and development of a food product is much more involved than preparing a unusual dish, product, or sauce for friends and family or utilizing a new technological food ingredient.
Sounds simple—and you’d think it is—but it’s shocking how often food products do an incomplete job of solving customers’ problems. I’ve seen countless food products introduced and fail to gather market traction since they never actually solved a consumer’s problem. The product was all about a great tasting and incredible formulation or some new ingredient and the artistry in the product itself.
Luck and outright copycat products are more common than you might ever imagine in the food business. It is not the path to Food Money Maker success and continued growth over time. Your business will require repeatable ongoing processes.
To assist with the product creation process, here are my top questions to ask as you progress on your food product development:
1. Does your product answer an unmet need?
2. How will you creatively brand your offer for this unmet need?
4. Which channel will consumers want to purchase this item?
5. Are your consumers searching for a solution or will you create impulse purchases?
6. How will you develop consumer awareness and connections?
7. How does your product perform against others in the current likely category?
After you’ve generated ideas, you will need to cull and prioritize the various problems you hope to promise a solution with your product. It will also be appropriate to begin considering how many people your solution will appeal to in the market. The goal is to avoid too small a market while finding a niche that will not lose money once you commercialize the product.
Your outline of markets and consumer problems will provide guidance to feasibility studies and the economics of each product. There are other general areas that you will review at this stage: production and technology concerns, any pertinent state and federal laws, and the financial plans and objectives.
In addition to asking questions, you should spend time auditing various retail locations along with researching online what is occurring in your specific category.
This article is not about how to build a product management and development organization—I’ll have to save that for another time. It is, however, an article that describes the “big picture” principles that are absolutely essential for getting food product development and introductions “right.”
Tim’s Law of Food Product Development:
“Don’t Create a Food Product unless it solves a Problem.”
Here’s a simple story that illustrates my point on product development: Keurig and the K-cup pods have found tremendous success and growth since their introduction over 20 years ago with their coffee products.
Their product development folks got busy and thought it would be great to develop a similar product for the cold carbonated beverages too. With Keurigs pedigree, it’s easy to assume success with this winning opportunity.
Product development and consumer needs do not begin with engineering or even pre-built models. It’s about solving problems for the market consumer and supplying an answer to their needs.
Keurig Kold cost $370 for a big clunky counter unit. The Coca-Cola modules cost $4.99 for a 4-pack that made 8 ounce glasses of Coke and the unit required constant running for hours before it was useable. It made loud humming noises while a 2 liter bottle of Coke retails for about $2 and off-brands sell for $1 per 2 liter bottle. What problem did the unit solve for consumers? It’s an obvious failure when reviewed through the lens of consumer need that the product offers no solution but not so obvious when viewed as a technological advance and equivalent to the wildly successful coffee market.
Before building a food product, begin with the problem you are going to solve and how you are going to make life better for consumers that believe your promise and purchase your product. This start is the most productive and functional method to build terrific new food products for markets. The way we do this is beginning with our target consumer and their problems that we intend to promise a solution.
There is a lesson here. It’s not about the new technology, culinary excellence, or product development know-how; it’s about solving a consumer’s problem. And you can’t do that unless you and your team fully understand the problem in great detail and show empathy for their situation and consumers result.
The Food Product Development Process:
Simple Acid Tests:
How to Tell if Your Product Development Team Is Doing It Right
Here are some simple acid tests to determine if your product development team is doing things right.
Ask your development team these questions:
On this last point, you’d be shocked at some of the ratios I’ve seen in food companies. It is not uncommon to find zero hours interacting with real bonifide consumers and customers to actually understand their problems and how a food company might address and add value to their lives.
Product Development Tips
If all you do is follow “Tim’s Rule of Food Product Development—Build Products that Solve Consumer Problems,” your company will have better product development processes than 90% of other food companies.
Every incremental hour, day, and week spent to really understand the consumer and the consumer’s problems is exceptionally worthwhile. A keen understanding of consumers and their problems will enable you to focus your product development resources on solving the problems that matter most. This leads to greater shopper satisfaction, market success, and better sales results.
The following are other common product development problems and how to fix them.
Product Development Tip #1:
Features Should Be Aligned with Food Money Machine growth.
Product development’s role is not to produce added features; it’s to enable Food Money Machine growth in a way that happens to involve building features specific to a consumer promise and channel need.
It is better to deliver all of the requirements for one channel opportunity than to fulfill half of the requirements for two channels. While both approaches use the same research and development resources, the first approach has a higher revenue growth impact.
For each food product launch, start by prioritizing the distribution channels (not the features). The number one priority revenue growth channel should be complete before we begin building products for the number two priority growth channel.
By shifting the focus from product development to prioritizing revenue growth channels first, you’ll find that food product development is much more aligned with driving revenue growth.
Product Development Tip #2:
Do the research. Is the product already on the market?
You would be surprised how many people approach me each year with a product or what they considered an innovative food concept and it’s already on the market. Worse, the product has been introduced to the market and it failed.
Visit tradeshows, seek out specialty stores, visit supermarkets and other food retailers, visit online food retailers, and investigate with store audits and Google searches. It’s important you understand the category and any success or lack of success in your category for a similar product.
If you find the food product is already on the market or has experienced a failed launch, the information is valuable. You can seek out data for how you might change or manage the food product introduction process for your product. It may reflect a new sensitivity to pricing and business models. It also might suggest your product is innovative with a potential loyal consumer following but the market is too small and you will lose money trying to introduce your product.
How to Tell if Your Product Development Team Is Doing It Right
In my food consulting career, I’ve been involved in literally 100’s of new product developments, launches, test markets, and line enhancements. I’ve also had the enormous advantage of working with the largest food brands in the world and help launch multiple zero revenue food concepts to million dollar winners – so, I’ve seen an incredible volume of food product launches and the resulting impact.
This has allowed me to see how a simple decision in food product development ripples through the to the sales and marketing organization and, ultimately, to the channel and consumer.
In addition, my diverse experience gives me the ability to listen and research for what I consider the key points in product development that make for a successful Food Money Machine.
As an example: within the first seven minutes of speaking with a food entrepreneur I can often figure out if his product and company will have what is necessary to achieve massive food success. At that point, it’s a natural feeling that I can interpret based on the questions and answers in our discussion. I can do this because good and bad food development processes are readily apparent in discussion and in the product itself.
Usually, my first question is “How did you arrive at creating this food product?” I also like to ask food entrepreneurs “How did you get into the food business?”
Then by listening, looking at any product information, and the company’s website I’ll gain additional information or support of my observations. Just by looking at the label and visiting their sites you can tell an awful lot about a food product organization’s collective beliefs, habits, and processes or lack thereof.
A customer-oriented food team will create a product package that’s intuitive to the end user’s needs. They often come to me with small individual market success stories, consumer interviews and descriptions of how the product serves a need for consumers in a channel.
In contrast, a research and development oriented product development organization will design the food product in the exact opposite way. The underlying food product will be created first, often by a research chef, and a brand or label will be slapped on as an afterthought.
Use these food product development guidelines and you will create food products that are easier to sell and that your consumers will really love. Don’t forget that all of these tips stem from my golden rule of product development: “Don’t Build a Food Product unless it solves a Problem."
© FOOD MONEY MACHINE 2019