
Bringing a Production to Market
By Lisa Readie Mayer
In the reality television show “Shark Tank,” entrepreneurs pitch their new product concepts to a panel of potential investors. If one of the celebrity investors – a “shark” – bites, the entrepreneur receives the financial, manufacturing and marketing support needed to get the product off the ground.
But what if you don’t have a celebrity benefactor and you hope to bring a new barbecue-related product to market?
“Rule number one: don’t quit your day job,” says Brad Barrett, president and CEO of GrillGrate, an aftermarket barbecue cooking grid that boosts cooking temperatures, evenly distributes heat, and vaporizes drippings, adding moisture and flavor to foods.
Like all jokes, his has a grain of truth in it. As Barrett and anyone from small start-ups to big corporations will tell you, it’s not easy to launch a new barbecue product. But while there are plenty that have failed, there are great success stories as well.
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Ron LaRocca, consultant. |
Behind some of those successful products is Atlanta-based independent sales and marketing consultant Ron LaRocca. Before he began helping others bring products to market, LaRocca was vice president Sales and Marketing for KC Masterpiece, and successfully engineered the roll-out for this once cottage-bottled barbecue sauce to a nationally recognized premium brand (it was later bought by Clorox, parent company of Kingsford Charcoal). In addition, he launched the Jack Daniels line of charcoal and wood chips while an executive at Hickory Specialties.
LaRocca, who also served as chairman of the Barbecue Industry Association before it merged with the hearth industry to become the HPBA, knows his way around the barbecue industry, and what it takes to nurture and navigate a product from concept to consumer.
He says no matter the type of product or the size of the company, a successful launch must have the six “Ps.”
- First, the Product must be unique in the marketplace, solve a problem, add a flavor benefit or improve the barbecuing experience. It can’t be “me too,” says LaRocca.
- Production must be in place, with manufacturing infrastructure to support growing demand.
- Pricing should be reasonable and competitive.
- Packaging must be attractive and clearly convey product benefits.
- Promotion to the trade and consumers through a combination of trade shows, advertising, public relations and social media is key.
- Finally, and perhaps most importantly, Proper Financing is critical.
“This last one scares start-ups and established companies alike,” says LaRocca. “But the reality is you must have the financial footing to make it happen. It can take up to three years to get a new product established. You have to ask yourself if you have the passion, the guts and the money to stick it out. Actually, I guess there should probably be another ‘P’ added to the list – for Perseverance.”
Barrett, in fact, is a study in perseverance. “There’s a saying regarding new products that it takes three years to know, and five to go,” he says. “It’s so true.” It took three years of trial and error and, in his words, “screwing up” to perfect his cooking grid, including one memorable misstep right after winning the Vesta Award for most innovative barbecue accessory product in 2008.
“We got orders, figured out shipping, and thought we were set. But then we had our first quality issue: The coating on the grates was peeling off while still in the box.” Barrett had to replace all those units, and then revamp the coating process. “It slowed us down about 10 months and cost us money,” he recalls.
“There’s another saying that when you invent a better mousetrap, the world will beat a path to your door. That’s a lie,” Barrett adds. “As soon as you perfect your mousetrap, you are no longer in the mousetrap business, you are in the path-building business.”
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Brad Barrett from GrillGrate. |
Barrett initially focused on specialty brick-and-mortar stores as the path to sell his product. But a successful appearance on QVC made him change directions. He began selling direct to the consumer with the help of TV infomercials, YouTube videos, and other social media. In addition, connecting with barbecue cook-off teams – an increasing number of whom credit the product for wins on the competition circuit – also has helped spread the word.
Sales and recognition have grown so much that brick-and-mortar retailers are now calling Barrett about carrying GrillGrates and the 20 other skus he has added to his product line. “It’s come full circle,” he says.
While Barrett, in large part, blazed his own sales path, other start-ups rely on distributors and independent sales reps.
“We have relationships that can open doors and get an audience where an individual entrepreneur couldn’t,” says John Xedus, an independent sales rep specializing in grills and accessories at Advantage Sales & Marketing. “Most entrepreneurs wouldn’t even know where the key dealers are.”
According to Xedus, distributors and reps play different but important roles. A distributor estimates the quantity it can sell, purchases the product from the manufacturer, then marks up the product and sells it to its network of dealers, who add their mark-up before selling it to consumers.
Independent reps work solely on commission, usually a higher percentage for small companies with small volumes, and a lower percentage for larger companies with high volumes. Either way, Xedus says a start-up company should seek out a rep or distributor who is open to pioneering, or developing a territory for new products.
Likewise they should work with reps or distributors who have other complementary lines. For instance, if the new product is a charcoal-lighter, it’s beneficial to be with a rep or distributor who also handles charcoal grills and fuels.
Xedus says that because specialty dealers have the sales staff who can explain and demo a product, they are usually more willing than a Big Box store to try an innovative new item from a small company. A mass retailer typically will consider only a mature category with established consumer demand, and may only review a category once annually, so it might be months until the next buying cycle. Mass merchants also may require that packaging conform to their displays.
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John Xedus, an independent sales rep from Advantage Sales & Marketing. |
Xedus suggests fledgling entrepreneurs ask a respected dealer or two to recommend a rep or distributor. A consultant such as LaRocca also can help companies identify and secure distributors or outside sales reps, as well as connect with professionals to help with everything from packaging to promotion.
While a consultant is not mandatory to navigate this process, hiring one could be beneficial, especially for small start-ups with limited knowledge of the industry. Depending on the project, a consultant may charge a flat fee, an hourly rate or a monthly retainer. It’s critical that the consultant has experience and connections in the category; otherwise time and money will be wasted on the learning curve.
LaRocca says another successful strategy for a start-up to gain distribution is to secure one retail customer and track the in-store sales turns. If these figures are positive, they can be used with prospective reps, distributors or retail buyers to forecast success. “This can reduce the time and cost of the sales execution phase of a product launch,” says LaRocca.
That was exactly the strategy Gena Knox unwittingly executed when she started selling cedar grilling planks in 2003. An avid cook, the newlywed Knox was frustrated when she couldn’t find cedar planks locally to make a salmon recipe she saw in a food magazine. After ultimately ordering them online, she was amazed at how flavorful and easy to grill the salmon was. “I thought it was crazy that this product was not being sold in grocery seafood departments,” Knox recalls. She and her husband, Davis, decided to give it a go themselves.
After researching plank grilling and finding a source for Western Red Cedar, Knox came up with the brand name Sautee Cedar, hired a local designer to create a label, and paid a sheltered workshop to package the planks, which she priced two for $5. She took a booth at the Atlanta Merchandise Mart’s cash-and-carry show and sold $6,000 worth of product in two days. “I began to think, ‘maybe there’s something here,’” she says.
A friend introduced her to the Southeast regional buyer at Whole Foods, and Knox, armed with her Merchandise Mart sales figures as evidence of the potential for planks, convinced the buyer to give it a try. Her next stop was the local Fresh Market; they also said yes. Knox demonstrated her product frequently at the stores, and got lucky when Williams Sonoma put cedar planks on the cover of its cookware catalog. Although the brand was not hers, Knox says the exposure (and the fact that the Williams Sonoma planks cost twice as much!) helped her product take off.
Two to three years into the launch, Knox learned her first hard lesson. It was becoming evident that Sautee Cedar – based on a Native American word – was not a good name for the brand. “It was hard to pronounce, and the term cedar was limiting,” she explains. They scrapped the name, logo and packaging, and rebranded the company Fire & Flavor to better represent their business and allow expansion into other areas such as seasonings, brines, charcoal and woodchips.
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L to R: Davis and Gena Knox from Fire & Flavor. |
“It was like starting over,” Knox says. “Luckily we were still small and didn’t have a lot of product in the pipeline, but we had to change out our entire inventory. These kind of mistakes are expensive.”
The hiccups didn’t last long, and with the help of an independent sales rep, Knox was soon expanding into specialty barbecue, specialty food, supermarket, and home improvement channels. In 2007, Inc. magazine named Fire & Flavor one of the country’s fastest-growing private companies.
Knox is not the only start-up to experience growing pains. The most common mistake, according to the experts, is not giving the process enough time. It can take years to get a concept off the ground, so it requires a long-term commitment of time and resources. “People often run out of enthusiasm or money,” explains LaRocca.
That has not been the case with the launch of Saber Grills, a brand of quality, innovative, value-priced, infrared grills sold exclusively in the specialty channel. Saber’s general manager, Rob Schwing, is long on enthusiasm, and with backing from parent Char-Broil, the new company has the financial security other grill start-ups only dream of. The Char-Broil brand already has a significant presence at mass merchants, so the Saber brand was developed to grow the specialty arena, according to Schwing.
A wholly owned LLC, Saber can leverage Char-Broil’s freight rates, insurance, IT systems, credit and payment terms, inventory capability, and multiple warehouse locations, to create better pricing and service for its customers. Other areas, such as brand management, sales, marketing, product development and engineering are kept separate.
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Rob Schwing, general manager from Saber Grills. |
“This synergy helps us create our value proposition and gives us a competitive advantage,” explains Schwing. “It’s very difficult and complex for a stand-alone company to break into the grill business. It’s a big deal that we can pass along these benefits to our customers.”
This has come into play with the launch of Saber’s newest grill, the Edge, a contemporary-designed, 304-stainless, infrared, “smart” grill with the ability to remotely monitor fuel levels, surface temperatures, preheating, and food doneness, priced below $2,000. “The economies of scope and scale of our parent company allow us to enter the specialty market with a quality-constructed, technically advanced grill that offers great performance at a value price point,” Schwing says.
Chuck Adams, president of Companion Group, a barbecue accessory products manufacturer, did not have the benefit of a parent company when he started selling charcoal chimney lighters in 1984. Novel at the time, his Charcoal Companion chimney lighters offered a fast, easy, chemical-free alternative to lighting a charcoal fire.
“It’s a great product, but initially it took a lot of convincing that you didn’t need lighter fluid,” says Adams. “It was a lesson in consumer resistance.”
When the chimney finally took off, Adams needed little convincing to expand into other barbecue accessories, ideas for which he conceives by following food and restaurant trends, bloggers and thousands of Instagram and Twitter users. “You can’t just have one product and have a business,” he says. “Dealers prefer to work with fewer suppliers.”
The company has introduced hundreds of products from woks to grill humidifiers to pizza-making gear, to its latest high-heat ceramic grillware. “Not every product will be a homerun, but it might be a double or a single,” says Adams. “Niche products help keep our position as market leader and innovator.”
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Chuck Adams, president of Companion Group. |
His innovative products have spawned a lot of competition over the years. Although Adams says they do have patents on some products, most do not. “Patents are expensive and easy to get around,” he says. “When I was younger this copycat stuff really bothered me, but now I’m a lot more accepting of it. You have to keep trying to find a way to do it differently than everybody else or it becomes a commodity and all about price.”
While the company straddles both the specialty and mass merchant channels, it typically introduces a product in the specialty arena first, according to Adams. “Specialty dealers are more willing to try new things and take a risk with new products and start-up companies,” he says. He adds that while the specialty channel represents a small percentage of his sales, from a marketing strategy, “it plays a big role and is very important to us.”
Adams credits packaging as having a “gigantic role” in the success of new products. He says packaging must be colorful, visually attractive, convey the product’s flavor-enhancing benefits, and trigger impulse sales.
The HPBExpo is the perfect opportunity to check out the barbecue industry’s latest batch of new product introductions. Whether it’s a new grill being launched by an established company in a big booth, or a cool accessory by a start-up in a 10-by-10-ft. booth, manufacturers have invested blood, sweat, tears, and sometimes their life savings, to shepherd these products from concept to consumer. The trade show is a good time to find a few new products to add to your store.