Business Bites Resources: How to Unearth Your Sources

For restaurants and food business owners, sourcing quality ingredients and importing products unique to your brand play an important role in setting you apart from your competitors. Your patrons become loyal customers for the quality you retain—and your prices can reflect that. Today, the expansion of global trade and ease of digital communication allows for access to exotic, hard-to-find ingredients from around the world, making it possible to introduce products direct from their origin.

With consumers moving towards ethical buying habits, higher standards for quality and equality are vital in day-to-day business operations. In our latest installment of our Business Bites series, Unearthing Your Sources, our panel of experts shared how they operate profitable food businesses without compromising on quality or fair trade practices. Check out the three things to know when sourcing your products below!

Know Your Farmers

In today’s global market, consumers want to know where their ingredients and products are coming from. Whether it’s intended to support fair-trade practices or identify single-origin goods, it’s an important aspect to the buying process. Being able to connect your customers with the farmers you source from can be both a storytelling and brand building opportunity that results in loyalty and trust.

But, that isn’t the only reason food businesses want to know where, and who they’re sourcing from. Developing a relationship with your farmers can mean the difference between getting the right products for your business, and the best quality for your customers.

Burlap and Barrel stresses this sentiment. During the panel discussion, Ethan Frisch, co-founder of Burlap and Barrel, shared a story about a farm in upstate New York that he has been working with for the past two years. Over this time, Ethan has fostered a strong relationship with Norwich Meadows Farm, opening the door to new opportunities. After much discussion, they have decided to work together to develop a special project, which wouldn’t have happened without Ethan nurturing this relationship.

Know What Your Consumers Want

It’s important to identify what motivates your customers to buy. Is it your uniquely sourced products? Is it your commitment to fair-trade, sustainability or single-origin? Is it your packaging? Figuring out the most meaningful way to communicate to your customers is a time old challenge, but the rewards can be integral to your success.

When Raaka Chocolate rebranded in 2018, they invested time and resources to figure out what their consumers really wanted to know on their bar of chocolate. In order to make the reintroduction of their brand successful, they tested everything from taste to packaging, and even rewrote their brand story. After all, much had happened in the eight years since they had founded their company. Their new packaging is vibrant and bold, much like the chocolate that it encompasses. Although subtle, it is also modeled after the landscapes from which their cacao beans come from. Instead of using common buzz words like fair trade, when you open their bar of chocolate, you’ll see their term “transparent trade” to exhibit their commitment to be transparent in everything that they do, including sourcing.

Know Your Ingredients

Sourcing quality ingredients, especially in a restaurant, market or food business that’s just starting out, can make or break the business. Whether you provide access to a hard-to-find product, a uniquely curated selection or incorporate it into a signature dish, specialty ingredients help to grow a loyal following of customers that return time and time again. They can even create demand when an ingredient has limited quantities. But, relying on specialty ingredients can also pose a difficulty for new companies.

When Vega Coffee was starting out, they knew that they wanted to import coffee from Nicaragua. In order to receive the ingredients they desired, they had to create a system with the governments in both the US and Nicaragua to import the products through customs. Although this is an extreme example, navigating import laws is an important part of sourcing your products, so you must be prepared to do your research as a business owner.

One of Rishi Tea’s best selling drinks is a masala chai drink. A key ingredient to this drink is a delicious Madagascar vanilla, but because of climate change and a few other factors, the price of vanilla has sky rocketed in recent years. As a business owner, they weighed the benefits of raising the price of their best selling drink, but possibly seeing sales decline, with the cost of sourcing the vanilla. In order to keep the price the same, they decided to source vanilla from another country—something that is not easy to do, as vanilla is grown in few places around the world. In the end, they found an amazing quality vanilla in Mexico and were able to continue their masala chai offering without raising the price or compromising on quality.

ABOUT BUSINESS BITES

The BUSINESS BITES, brought to you by the Culinary Entrepreneurship program at ICC, is a series of workshops, discussion panels, networking events and resources designed to support entrepreneurs in the food industry.

Business Bites Resources: Storytelling For Your Business

Every business has a story behind its origin, and restaurants and food businesses are no exception. For some, it’s the desire to showcase the food they learned to cook with their grandparents at an early age. For others, they were inspired to create a product they couldn’t find on store shelves. In ICC’s Culinary Entrepreneurship program, we teach chefs and aspiring food business owners to take their inspiration, and motivation, behind starting a business and develop it into a defined concept and actionable business plan, all in just 6 weeks! But, in order to get started, you first have to think about what makes the story you are trying to tell compelling, what makes your brand unique, and what you have to accomplish to start your business.

So what does it take to start crafting a compelling business story?

Justine ClayWith a little help from Justine Clay, Speaker & Business Coach for Creative Entrepreneurs and Freelancers and ICC Culinary Entrepreneurship instructor, you’ll develop your story and be ready to pitch your food business idea at the end of our 6-week Culinary Entrepreneurship program. If you missed enrolling in our January session, you still have the chance to start thinking about your concept and how to tell your story before our next session in September. Check out these three steps to help you tell your story and beginning your journey to launching your business!

Establish Yourself as a Likeable Hero

Begin by thinking about what you could share about yourself that would engage your customer and have them rooting for you. The story of how you founded your business will show your customers who you are and will allow them to develop an emotional relationship with your business. By incorporating your background into the story, you can develop your customer base and establish that you are trustworthy.

Share Your Roadblock

Next, establish the moment that was daring and defining to your life. You want your customers to be tuned into your story, so show them how you overcame your obstacles to create the business that they have grown an emotional connection to. However, it’s important to remember that this is not the point where you should create a long and drawn-out story–this is where you should set yourself apart and show your customers what motivates you.

Share Your Transformation

Finally, describe how you overcame these obstacles to establish yourself as a business owner. Share your business’ mission and what you set out to accomplish in creating it. Involve your customers by expressing your excitement for your growing brand and the solutions you’ve created that will impact them!

In the end, establishing a compelling story about your brand makes for great pitch content to secure investors, customer loyalty, media attention and more!

ABOUT BUSINESS BITES

The BUSINESS BITES, brought to you by the Culinary Entrepreneurship program at ICC, is a series of workshops, discussion panels, networking events and resources designed to support entrepreneurs in the food industry.

Tips to Make 2019 a Financial Success

2019: A Successful Year for Your Food Business

As 2018 comes to an end, food entrepreneurs get a chance to sit down and look over their financial performance for the year.  The food business is fickle; some operators seem to have it so easy and others seem to always be struggling.  If you’d like to do better in the new year, here are 3 ways you can make your business more efficient and ultimately enable you to take home more money.

What’s Your Gross Margin?
Your gross margin is the most important ratio to know about your company. It’s the percent of sales left over after you account for what your product cost you.  If you sell $10 six packs of soda and your product costs you $4, your gross margin is 60%.  On your company’s profit and loss statement, find your gross profit and divide it by your total revenue to get your gross margin.  Here are a few things to think about once you know your margin:

  • Do I operate a high gross margin or low gross margin business?
    High margin businesses (those with gross margins over 50%) benefit the most from a sales push, or working on your pricing and food costing. Low margin businesses (those with gross margins under 50%) benefit the most from finding ways to make the business more efficient by lowering overhead costs like kitchen utilities and employee overtime.
  • How does my gross margin compare to other companies in my sector?
    Once you have your gross margin you can use it to make an apples-to-apples comparison to your competitors’, or industry’s gross margin. Is it above average?  If so, make sure you keep giving your customers a meaningful reason to pay more for what you’re offering. Is it below average? Then maybe you need to consider changing your pricing and quantity structure.

Track Your Refunds and Discounts.
No other businesses face as many refunds and discounts as food businesses do.  Whether it a restaurant comp’ing a meal after a service error or free samples being given away to promote a new food product at a grocery store, discounts and refunds can seriously affect your business’ ability to make a suitable profit.   At the same time, they’re a fact of life for this industry.  The solution is to benchmark, track, and set goals for your refunds and discount.  Many bookkeepers just lump discounts and refunds into your sales figure.  Encourage them to separate these costs out into discrete figures that offset your total revenue.

Work With an Expert to Optimize Your Labor.
Foodservice labor is complicated, and the rules are changing all the time.  It’s never OK to cut your staff and overburden your team just to save a dime, but there are many ways in which your scheduling, overtime, and calculation of base wages net of credit card fees can add small costs to your payroll every week that translate into big expenses each year.  A good payroll processing technology that’s specialized for the foodservice industry is good, but in this case we recommend that you talk to an expert: preferably someone who runs human resources for other food companies.  Here are a few labor costs to think about:

  • Do your customers tip your employees via credit card? If so, make sure you are deducting credit card fees from the amount of tips you pay out to your employees.
  • What is the tradeoff between adding a shift and working your current staff overtime? Comparing these two scenarios might make a big difference in your total annual payroll costs.

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ABOUT BUSINESS BITES

The BUSINESS BITES, brought to you by the Culinary Entrepreneurship program at ICC, is a series of workshops, discussion panels, networking events and resources designed to support entrepreneurs in the food industry.