The Top Ten Mistakes Food and Drink Businesses Make When Reaching Out to Retail Buyers

1. You don’t know your costs.

2. You have no budget to support a listing.

3. You don’t know your profit margin.

4. You have no idea what margins the buyers want.

5. You are ineffective at negotiating.

6. You have no awareness of GSCOP (The UK Grocery Supplies Code Of Practice.)

7. There is no plan to support the listing.

8. You haven’t analysed in the first place if retail is the correct route for you.

9. You haven’t forecast how volume demands could impact positively or negatively.

10. You think a retail listing is the one stop answer to your prayers.

It is so important to be clear on your cost of goods (COGS). These are your raw ingredients, the cost of production, packaging and the logistics to get it to the retailer.

What margins do retailers want? Retailers (supermarkets) will want 35-40%. Specialist retailers like Sourced Market in London will want 50%.

If you are dealing with a retailer, unless you deliver direct, you will need to pay an additional 30% margin to wholesalers.

Ocado will want roughly £5K in the first year of marketing support from you. For example, it will cost you £500 per SKU (product) plus the cost of goods for for new SKU reviews on Ocado. Supermarkets will likely want a similar spend and a clear plan of how you will drive customers into store and what promotions you will use.

Wholesalers will charge you £500- £1K a year to be in their catalogue twice a year.

You need to be aware of each and every one of these areas, and have costed out promotional plans before approaching UK grocery retail buyers.

Pip & Nut founder Pippa Murray's tips: How To Build A National Brand On A Shoestring

1. Be a purpose-led brand. They out-perform the competition 14 times over.

2. Spend time making sure your product tastes fantastic.

3. Invest time and money in getting your branding right first time.

4. Word of mouth is one of the most powerful forms of marketing. Get your brand in the hand - sample. Try office drops near the stores in which you are stocked.

5. Partnerships provide great platforms for your brand. Pip & Nut’s Toast bars got them gigs at Nike events.

6. Surround yourself with good people who are experts in areas that you are not. Find a mentor.

7. Focus on winning key accounts before rolling out to more. Pip & Nut started in Selfridges & Planet Organic, building rate of sale case-studies for more convincing buyer presentations in the next set of stockists.

8. Raising investment is one form of funding but sweat other areas of your finances and agree longer payment terms with your manufacturer. Raise only what you need to get to the next stage; raising money is very time-consuming.

9. Never forget your core range. Don’t launch into a million different categories.

10. Have fun!