I started out in the organic products business when there were hardly any organic products! Now it is possible to get every food imaginable in organic format, and in ever increasing quantities. When we first had organic brown rice the world beat a path to our door. Now it’s a commodity and you can get many different kinds; short grain, long grain, basmati, red, black – all organic.
So, to succeed in the organic market now you have to innovate says the creator of Gusto, Craig Sams. Launching a new product range in the organic market is like surfing – you scan the horizon for the next big wave. Most recently it has been veganism and gut health.
Getting started
To start out in business you don’t need to build a factory and set up a production line. There is a myriad of manufacturers who are licensed to process organic food and they can do the work for you. You do still need to attend to oversee your production, but not having to manufacture frees up a huge amount of time (and capital) for other things. Concentrate on what you do best and outsource the rest. For me personally, that has been new product development and marketing. In the early stages (and beyond) well-resourced sales function is essential and you need to do the “pick and shovel” work with small retailers and online businesses – the supermarkets usually come later.
Sourcing materials
When you source materials for a product, look at the story behind the origin. Organic products often have a charismatic background, they come from interesting producers. At Gusto, we are connecting our customers to organic farmers in Mexico who grow the agave cactus that is one of the sweeteners we use. Their story has social and environmental positives that enrich the experience of drinking a bottle of Gusto Ginger and Chipotle. At Green & Black’s some US customers spent a week in the Dominican Republic with the cocoa-growing families there. They dug ditches day after day and the village now has a water supply. Those customers are brand loyal for life.
Pricing
Never be afraid to charge a realistic price. It’s very hard to operate on margins of less than 40% until you achieve real scale. Organic consumers prioritise quality and price is rarely a consideration. In formulating organic products those manufacturing tricks to increase the amount of air and water in a product just aren’t relevant. Use the best ingredients, your customers will appreciate it on a gut level.
With carbon pricing coming in the cost differential between organic and non-organic will narrow or disappear – organic farming captures carbon and locks it in the soil. Non-organic farming is responsible for one-third of our greenhouse gas emissions. So organic farmers will be rewarded for the carbon ‘crop’ they harvest and become much more competitive.
Branding
Brands and businesses that are becoming more responsible and taking part in various movements such as healthy eating, selling organic foods or recycling can ensure that their business brand is presented in the right light. Running an organic business allows you to take advantage of that and gives you an opportunity to get your story out to potential customers. Connecting with potential customers on an emotional level, through branding and emotional marketing, will help your brand become memorable and you may even gain the loyalty of those customers.
It may seem daunting and challenging to start an organic product business, however with the widely available organic product manufacturers, its never been easier. You have to believe in your product and your brand across and transfer that belief to customers to gain their loyalty.
More on having a unique selling point and your business image.
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