Cultured commerce: Why your food marketing talk should match your business walk

Taking a longer view of the impact on the food and beverage industry of startups and emerging companies when providing funding is critical for their and our success, according to Jon Marshall, vice president of VMG Partners, a firm working with founders and leaders of branded consumer product companies by providing resources, investment and guidance needed to propel them to their next level of growth and value.

He told North Coast Specialty Food & Beverage Industry Conference attendees VMG's philosophy commits the firm's deep experience, strategic guidance and passionate focus to help its partners accelerate growth, brand awareness and achieve their own definition of success. It also involves sharing a strong alignment with a partner's ethos, culture, and focus when counseling them about how to approach consumers who wish to make better decisions about what they put into their bodies.

“The process involves advising partners on ways to achieve success through incremental changes, and what we can do to support and add value as we see them perform over time and evolve into a functioning, big model that produces profits and delivers long-term returns for investors,” Marshall said at the Business Journal's Feb. 28 event in Santa Rosa.

He said these principles were applied when investing in Bare Snacks in 2014, a firm producing naturally baked, crunchy apple, banana and coconut chips, plus a line of veggie chip products.

“From the beginning, we wanted to know what kind of positive change we could bring to them in five to ten years,“ Marshall added. “We also wanted to bolster Bare Snack's 25-member team and leverage CEO Santosh Padki's ability to drive change.”

VGM took a deep dive look at the business, which was highly concentrated in Costco, and offering advice on how they could diversify, adjust pricing, and communicate why this product should be on consumer's shopping lists.

Padki has 30-years of consumer product packaging experience, the goal was to stress the product's simplicity, all-natural qualities and few ingredients marketed with a new package architecture.

“VMG shared our passion and vision to produce healthy foods, along with our economics and team approach to running Bare Snacks. They were also aligned with our philosophy, culture, and authenticity, as well as our talent pool. As a vegetarian, I know today many people want to consume less sugar and fats and replace them with plant-based products. This is the change and shift in behavior that we are bringing to the food industry.”

Padki said Bare Snack's business model was unsustainable in 2014. Its brand had to become more relevant. With VMG's help, the company transformed its business model, rebranded itself and diversified into different retailers, while also developing strategies for entering the natural food, club, grocery and mass market channels with a variety of packaging formats.

Ten months ago, Bare Snacks was acquired by PepsiCo and integrated into its snack line as a healthy alternative to Frito-Lay, Doritos, etc.

Serafina Palandech, president and co-founder of Sebastopol's Hip Chick Farms, a producer of flash frozen organic chicken nuggets, realized that most people today love 100 percent organic, non-GMO foods – especially for their children. She innovated the production process and transformed a simple recipe into a mass consumed product distributed through Krogers, Walmart and other food retailers.

“A significant realization for me was learning there was demand for a frozen product with no added preservatives that could maintain the integrity of texture, taste and flavor using new technology. This was something that could disrupt the main food culture, while maintaining integrity and price point.”

Besides managing cash flow, having access to a stream of capital is not easy for a woman -- or lesbian -- to achieve. However, Palandech did receive an SBA loan, a microloan and a funds from a convertible note. She also found a lead investor and partnered with Advantage Capital. The turning point for her business came with the development of creative packaging with a new ethos and philosophy directed at main stream consumers.

“My goal was to create a business that is regenerative, not just sustainable, while maintaining the bottom line, and not biting off more than we could chew,” she said.

Palandech also received support from network of contacts eager to help.

“I came from a non-profit background where everyone participates. I started calling people, such as Jon Marshall, Amy's, and many others admitting that I didn't know how to do things like design a package that would survive in a freezer. I learned what I needed to know from others.”

George Kuhn, founder and principle of Sonoma FoodBev Solutions, said food revolution foodies are influencing three key macro trends in the $5 trillion-plus food and beverage industry. The first is called Better For All – a new value system rooted in transparency and innovation, such as alternative proteins, regenerative Ag and sourcing, and nutrient-dense solutions.

The Holistic Wellness trend emphasizes the gut-brain relationship that is playing a huge role in health, such as with fermented foods, and seeing the evil of excess sugar, while emphasizing personalized tech applications that will become more deeply linked to consumer's DNA. This trend focuses on the gut microbiome, good carbs vs. bad carbs, tech and individualized nutrition.

The third trend is toward Discover and Delight, how modern eating habits are shaping our eating patterns, impacted by global influence, simple indulgences (Smashmellows) and modern conveniences fueling active lifestyles.

He said five disruptors are driving the food revolution including consumer fragmentation: A hunger for innovation, 24-7-365 lifestyles (ready-to-go solutions), a diversified retail format and the rise of technology.

Kuhn said. “Consumers want transparency and clean labeling and are considering ethics and sustainability, along with the carbon impact of meat vs. plant-based proteins.”

He said implementing a strategic sales roadmap is key to building focused and sustainable growth. This involves having performance indicators, the necessary investments to insure success and determining how much complexity will be required to manage your strategic plan.