So, the idea sounds so simple right? Instead of Harry and David, why not sell local gift-able foods? And, while we’re at it, let’s incorporate nonprofit fundraising too. Yes! A great idea!
As with all things that sound easy and obvious there’s usually more than you expected. It turns out, there is a lot more! This helps explain why others aren’t doing it already. At least not in the gourmet foods fundraising specific model.
The puzzle of it has been a fun one though. Finding, meeting and hearing the stories of our craft food creating fellow Minnesotans has been so energizing. They are, universally, people who have the chutzpah to follow and invest in their passions. They have been excited to talk to me too and seem to immediately understand the opportunity this represents both for their companies as well as for the nonprofits who need support.
From starting up to scaling up…
I have been looking at the issue of scalability for Minnesota food startups for a while (mostly because I’m interested in all things entrepreneurial. And food…yep, love food!) I’ve learned there is a big hurdle between selling every bag or bottle directly to the end consumer (aka the farmer’s market model) to being a recognized brand on a regional grocery store shelf. If you want to make a living selling your product, you generally need to be able to sell in volumes greater than one-to-one. Coops and small boutique retailers help, but that is a limited market and doesn’t ensure viability.
Even if a company is able to acquire the capital needed to manufacture and fulfill larger scale orders quickly (as is required in large retail relationships), there is still significant risk. The relationship may dissolve at any time as larger, more connect suppliers edge you out on store shelves. Or the stores themselves decide to sell their own store label version instead after testing the market with your product first (risk-free).
Other issues also exist and limit innovation and grow of cottage producers, such as the lack of co-packers in Minnesota who will work with small volume companies (see the Share Local Love Facebook page for an article discussing this issue and why we don’t have locally produced ketchup).
Share Local Love hopes to help bridge that gap and create a new way for innovative local products to gain exposure, brand awareness and loyalty in the local market. Having local nonprofits participate in the selling and promoting of their products creates a multiplier effect for micro businesses. Instead of the producer selling every bottle directly, they now have a sales force of motivated local folks promoting them. Everyone who receives a SLL gift box now associates the products in the box with a high quality local product.
Also, running on a batch sale basis and giving producers some time to fill orders, rather than requiring large amounts of on-hand inventory, gives small startups some breathing room to grow in a healthy and sustainable way that is more comfortable.
Healthy and sustainable… This sounds like a good topic for a future blog post! Until then…
Locally Lovingly Yours,