An MBA student wrote to me, “wondering if you might have time to chat so that I could pick your brain about the most pressing issues facing new food startups.”
As someone who grew up learning grammar (before there was Grammarly) and researched with books (before there was Wikipedia), I had a sneaking suspicion the results of this brain-picking was going to make it into his project much like an automated spell check.
So rather than share my thoughts with this individual student, I thought I’d make a quick list here which may be no different than the many other articles people are writing these days especially after Amazon acquired Whole Foods.
- Competition from lower priced private-label brands with better distribution and services such as Brandless and Whole Foods 365 as well as Trader Joe’s and other offline and online stores. Mark Cuban even told a tea entrepreneur, pitching on Shark Tank, that Amazon would eat her lunch. (So you need to really think about the why’s and how’s of what you want to do.)
- Labor shortages (And you should think about this even if working with a co-packer).
- High cost of ingredients (So you have to carefully plan what you’re making, your cost of goods, and the price the market will bear.)
- Lower prices, forced by Amazon’s power and reach. (Prices at WFM are now even lower for Prime members.) MBA students, see unfair advantage. (But price isn’t everything if your customer cares more about the value and brand.)
- Other competition from other similar startup products, which may find it harder to get into / sell through at Whole Foods (But great, clean / natural, sustainable brands may find it easier to get into other stores that want to differentiate themselves).
This post intentionally has very few links to make you work harder.
After all, when I was young we had to play with sticks and strings, and re-type papers over and over. More importantly, by having to search you may be stumble upon new knowledge you might now have gained by clicking a link.