News - LSU AgCenter FOODii

HALF THE GAME

Making and selling products are different endeavors, says Charles D'Agostino, executive director of the Louisiana Business & Technology Center and LSU Innovation Park. "You may have a great product, but that's only half the game," he says. "To be successful, you have to get your product in the hands of consumers. That's the difficult part." Although separate from the LSU AgCenter Food Incubator, the LBTC allows clients at the food incubator to tap into its expertise for business development and strategic planning. For example, Fresina Pasta Company, owned by Robert D'Agostino and Daniel Thompson, makes spaghetti sauce and gets technical assistance at the food incubator. The LSU Food Science Department helped with nutrition and ingredient labeling, shelf-life analysis, pH and other food chemistry. Meanwhile, the LBTC provided business advice. The sauce is now sold at local food stores, and delivery is scheduled to Whole Foods and Fresh Market.

Sandoz, who has created other products, such as a Cheesecake Kit and a Big Cookie Cookbook, acknowledges the difficulty in getting a creation to market. "You can make the greatest product, but that doesn't matter if you can't market it," she says. "I always say it's easy to get it on the shelf; the hardest part is getting it off the shelf." Market research is critical. For example, for Sandoz it was essential to know that QVC only accepts products geared toward its viewership demographics.

"The competition to get a product on QVC is tremendous," says Sandoz, who first began working with food incubators at Edible Enterprises in Norco and started her own company, Sandoz Marketing Specialists, to offer consulting services in marketing and food product development. "They only take products they think will sell and that solve a problem."

To date, Sandoz - who came up with the idea for the chicken roaster when she was a single mom and didn't have a grill—has sold 60,000 of her Clever Kitchen Microwave Barbecue Chicken Roasters through QVC. "When starting a business, knowing your strong and weak attributes is key to bringing a product to the market," Sandoz says. "Hire someone to do accounting if that is not your strong point, or you get bogged down in trying to do it all."

EDIBLE HURDLES

Most entrepreneurs want to get their product on the shelves of local stores before even contemplating a national market like QVC. Although this process can be daunting for any entrepreneur, those with food-related products face additional hurdles.

Idea to plate

What are the steps to getting a food product to market?
"The major difference in marketing food products is that small, specialty food-product producers are facing the challenge of getting shelf space at a grocery store that requires advertising, slotting fees and other costs," Charlie D'Agostino says. "Food entrepreneurs learn very quickly that the markup is extremely low and that to get your product on the shelf next to Kraft and Wishbone, which spend millions in advertising, is difficult." Additionally, stores have limited space and thus want items that sell quickly. If a product's wholesale price is too high, it raises the retail price, which can force the product out of the market. "What I'd advise is, get into specialty, high-end stores, where you're more likely to get shoppers looking for local products and who aren't as price-conscious," Charlie D'Agostino says.

J.H. "Jay" Campbell Jr., president and CEO of Associated Grocers Inc., says that many grocers are interested in carrying local or specialty products. But he confirms that competition for shelf space is fierce. "There are so many products which are introduced each year, with each one trying to secure shelf space at any one point in time," he says. "In our area, there are so many seasonings' which claim to be Cajun,' and each one is made by a different party hoping that their product is the one that gets on the shelf." Not all decisions about what to stock are made by each retailer. At stores that are part of a larger chain, such decisions are typically made at the corporate level.

"Usually products are carried because the grocer believes that a customer might desire it because of its size, shape, flavor, taste, or because it is unique, specialty, ethnic, gourmet, or has some other type of characteristic that might appeal to their customers. Space limitations in the retail store can also play a role as well as the perishability of the item," Campbell says. "The retailer tries to assess the viability of each product and usually relies upon our distribution network to make the selection decision for them. We desire to get advance sales of each product before allowing that product space in our distribution center."

Campbell adds that entrepreneurs often do not understand the need to get advance acceptance of their product or to hire a professional sales force or broker to represent them and advocate for getting their product accepted into the supply chain. One tactic that Re: uses, and that local producers find helpful in marketing, is to sell their product at local farmers' markets, where they can provide samples and recipes. Bateman and Vincent take Re: to the farmers' market in downtown Baton Rouge. "We can speak to customers one-on-one," Bateman says. "Even if they don't buy it then, they'll see it at a store on the shelf and they'll think, Oh yeah, I've had that.'"

Similarly, Sandoz sold her chicken roasters at the Red Stick Farmers' Market as well as at gift shows. Doing demonstrations at local stores also provides an opportunity to get the product directly in the hands of consumers and create demand.

REGULATION TIME

Another challenge for food products is that they are subject to extensive health, safety and licensing requirements. The LSU food incubator helps clients with such regulatory issues, including Homeland Security food safety requirements.

GETTING GUIDANCE

Resources for aspiring food developers (click for links) --

-- National Association for the Specialty Food Trade

A nonprofit business trade association promoting the specialty food industry

-- U.S. Food and Drug Administration

-- LSU AgCenter Food Innovation Institute (FOODii)

Offers access to university food and business development experts

https://lsuagcenter.com/portals/our_offices/departments/food-science/extension_outreach/incubator

-- Edible Enterprises

A food incubator in Norco

Says Sandoz: "We set up the LSU AgCenter Food Incubator to guide entrepreneurs through each step of the process, including permitting and licensing, safety and processing." The food incubator's kitchen is inspected and approved by all required government agencies. With the help of LSU's Food Science Department, the ingredient list, chemical testing, shelf life and shelf stability, and food safety issues are monitored to comply with regulatory requirements. Food entrepreneurs also must secure product liability insurance, lest anyone fall ill from ingesting their product. Such coverage can be expensive, but is required for any products destined for grocery store shelves, D'Agostino says.

Both D'Agostino and Sandoz say owning a food-related business is not for everyone. "I'm very truthful with our clients," Sandoz says. "We're not doing our jobs if we don't give them guidance." Bateman adds that running your own food business "is not a hobby—it requires a lot of work." With the food incubator staff's help, she and Vincent have gotten faster at bottling their salad dressing—especially after they started making large batches. Still, she says, "all of our free time is spent on Re:." Bateman suggests that anyone considering creating a food product seek help from industry experts—and take the process of bringing a product to market one step at a time. "There's a lot required to get on a shelf at a store, and the whole process can be overwhelming," she says. "You'll run into roadblocks and get frustrated, but with each obstacle you learn something. At the food incubator you can learn from other people's experiences, and that is very helpful." Those products that do make it to market benefit from—and represent—Louisiana's culinary reputation. "Louisiana is known for food, and our local food market is very strong," D'Agostino says. "A lot of consumers want local and sustainable products." Bateman, who notes that each bottle of Re: is stamped as a certified product of Louisiana, agrees: "People are interested in quality, natural products. There's a market for that."