I am not sure what the collective noun is for start-ups, but proliferation will do for now. When I started our Young Entrepreneur of the Year Competition 6 years ago, there were hardly any young people starting businesses. The sector was full of middle-aged people (like myself!) many of whom had bumbled along with lifestyle businesses for many years without experiencing much growth. This has all changed now, and there are so many ambitious millennials coming into the food and drink sector. They are ambitious, and have a desire to succeed. They will not be happy with a business eking out a turnover of £250k each year – they want a business of several £M turnover and want to sell up and do something else within a few years. As far as our competition is concerned, my job is done, my aim of seeing more young people in the sector has been achieved so we are finishing at this point and will come up with new ideas for next year.
One of the many delights of our sector is indeed the variety and proliferation of new brands. But they cannot all be successful, and many will fail, or rather many will fail to develop into the kind of businesses these young entrepreneurs want them to be. The very thing that makes this sector so interesting could be a curse for the ambitious entrepreneur. There is so much competition for shelf space and so much desire from many buyers to have unique products for their town, county or region that it is very difficult for a young brand to gain large volumes without supplying the supermarkets. The days are probably gone when a new crisps brand can give free stock to 4,000 retailers and gain 1,000 of these as customers – this was a strategy used by Tyrell’s many years ago. Now there is a crisp brand for every county in the land.
Yes, I am very keen to see as many of these new brands succeed, but am also keen to ensure a reality check is going on. Having your new brand listed in say, 100 independent retailers, will not make you your fortune. Without a huge amount of time and money spent on brand awareness and tastings, the sales will, in many cases, be very disappointing. I have just spent some of the last two weeks reviewing the sales of every single product line across our business, including the 40 or so new brands we launched this January. These were selected from over 200 potential brands. They are good products and packaged well, and some have done fine for Year 1. However, there are some brands, winners of 3 star Great Taste Awards amongst them, where the sales are absolutely hopeless. Price is sometimes an issue, but the common factor is the lack of resources required to market their brand.
Yes, as a company, we are absolutely committed to supporting new brands and giving young and older entrepreneurs free advice on developing their businesses. But, at the same time, we need to make some money, to support the other work we are doing. This, is perhaps, our greatest challenge and the biggest challenge of the sector as a whole. It is important that entrepreneurs come into the world of speciality food with their eyes open and ensure that they don’t spend large amounts of money without fully scoping the market and the potential of their brand within it. This reality check also needs to go out to those investing in crowdfunding initiatives within the sector. I am not sure that many of these mini-investors are sure of the risks!
See you @bradjamfest where I will be opening eyes