On Thursday, May 18, 2017, Meridian Capital partnered with Chicago Booth to host a panel discussion with C-Suite panel members from some of the Pacific Northwest’s most innovative food and beverage brands. The topic for the night: “No Longer Just a Matter of Taste: Strategic Innovation in the Food and Beverage Industry.”
The panel, moderated by Meridian Capital’s Managing Director Michael Barber, included:
- Manny Chao, Co-founder and CEO, Georgetown Brewing
- Kurt Dammeier, Founder and CEO, Sugar Mountain (Beecher’s Cheese, Pasta & Co. and The Butcher’s Table)
- Kevin Klock, Former CEO, Talking Rain (Sparkling ICE)
During the discussion, each of the panel members presented the unique challenges they face in their particular parts of the food and beverage industries to build a lasting and recognizable brand. As members of the artisanal and better-for-you food and beverage categories, each faced the challenge of constant adaptability to stay competitive in their specific vertical.
Outside company-specific discussion from each panel member, the major themes that came out of the discussion are:
- Timing is Everything
- Controlled Growth is Key
- Be Creative as You Adapt
Timing is Everything
Recognizing a gap in the market and jumping into that opening is key to success. Before launching their specific products, each panel member identified underserved segments in their industry before jumping into a brand launch.
“There’s a time and a place,” said Kurt Dammeier, Founder and CEO, Sugar Mountain, “There’s a time in an industry’s evolution that there is an opening where everyone realizes that they need to get there because the window is going to close.”
Testing the waters with niche consumer demographics to gauge product success is a major key to launch. Dammeier continued to say, “Artisanal labels are lifestyles…we are just trying to live it better than the next guy.”
Recognizing when that window opens and knowing where the product will see success with consumers is key before jumping in.
Controlled Growth is Key
Consumer brands often focus on growth and mainly rapid growth. Once a brand starts to pick up traction, controlling that traction to ensure brand loyalty and a strong company culture is going to be essential to future company success.
“It’s hard because we constantly believe we need to grow or we’ll lose good people, because there are going to be ambitious people in our company who’ll want to pursue other things,” said Manny Chao, co-founder and CEO, Georgetown Brewing “I think what we are trying to find is that middle ground. It was a purposeful decision to not can Manny’s because we didn’t want to blow the company up, but control growth, especially in the Seattle market.”
In the food and beverage industries, rapid growth can also present logistical and supply chain challenges that can have a big impact on customer loyalty and new customer acquisition.
“When you grow rapidly [your product] could be out of stock and that gives the consumer an opportunity to look elsewhere,” said Kevin Klock, Former CEO, Talking Rain (Sparkling ICE), “You might also have a tough time if you don’t get control of distribution because you are shorting retailers, so there are many benefits with keeping a steady pace, even more so when you start getting into private equity and venture capital.”
Building a brand in the food and beverage industries demands attention to how rapidly you are growing to ensure you keep and acquire customers along the way so they will become your biggest advocates down the road.
Be Creative as you Adapt
Once a brand has grown to a stable customer base and they understand the “why” of its existence in the market, it’s key that the brand continues to adapt and grow creatively into the future. Never ceasing to innovate is pivotal to the long-term sustainability of the business.
“I think every good owner needs to check their ego every once in a while, and understand it’s okay that trends change,” said Manny Chau. “Owners that have the willingness to try competitor products and notice the differences, adapt to those differences and change or alter their product will have tremendous success.”
For brands in the food and beverage industries, especially the artisanal and better-for-you categories, it’s necessary to look to the big players in the industries to see how innovation is key when you are facing a changing consumer and other brands in the space that aren’t as nimble.
“What’s killing bigger companies like Kellogg’s and Pepsi is that they are too focused on financial returns when they should be focused on innovation,” added Kevin Klock, “The problem is, their shareholders might not back an innovative idea, which is a huge advantage for independent companies like ours. We have the ability to create and alter products at our own will.”
Keeping an eye on items beyond taste is going to be crucial for food and beverage brands as consumers continue to look for options that match their own identity and belief systems. Brands that know how to jump into the market at the right time, grow at the right pace and innovate as things change around them are going to be set up for success to create a brand that doesn’t just taste great, but also uses strategic innovation to get a leg up on the market.
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