News Feature | May 16, 2014

How Small Food Producers Can Sharpen Their Competitive Edge

By Isaac Fletcher, contributing writer, Food Online

Food Manufacturing Competitive Edge

Small food producers oftentimes already have an advantage in local markets, but there is always room for improvement

With growing concerns regarding where food comes from and how it is produced, many consumers are turning to locally made food products and those made by smaller producers. For many, there is a perception that smaller, local producers are more trustworthy and more likely to offer higher-quality foods. Growing demand for local products is a great start for these producers, but there are some other important considerations that can give smaller players a competitive advantage in the marketplace.

Offer Something Different

It is no secret that product differentiation is one of the best ways to set a product apart from the others. Consumers are always on the lookout for new products to excite and engage them. If small producers emulate what others are doing — whether it be big brands or other local producers — there is not much motivation for consumers to switch brands. In many cases, without an extra element to attract and entice customers, the average shopper is more likely to go with whatever product has the lower price tag. Large manufacturers will almost always have an advantage in this area thanks to economies of scale and wider access to inputs.

Quality Often Trumps Price

Keeping in mind what was stated in the previous paragraph, small producers will most often not be able to contend with big producers when it comes to price competition. In the absence of being able to offer a lower price, small producers can find a competitive edge by offering a product that is of superior quality. Many consumers are driven more by quality than by price, and when a product is produced locally, it is already more appealing. The appeal of high-quality ingredients, better taste or texture, and superior nutritional value is often great enough to attract customers regardless of a higher price tag.

Don’t Forget About Branding

When consumers know and trust a brand, there is a greater likelihood of them buying that brand’s products. The strongest brands often tell a story that better engages customers and establishes brand loyalty. Many producers have great stories to tell that would create a connection with potential customers, and this is especially true of smaller producers. Without working on their brand, producers will have a difficult time reaching customers and getting their products stocked in major stores. Effective branding can also mean having the ability to set a higher price, as customers know what to expect in terms of quality.

Invest In Packaging

Packaging is like a product’s handshake, it acts a sort of introduction and is the first impression a consumer will get about what’s inside. Packaging design decisions should be made very carefully, as the type of packaging, graphics, wording, etc. can be the difference between a customer stopping in an aisle or continuing on their way. Small producers will do well to invest in research, development, and design for the packaging of their products. Additionally, packaging and branding go hand in hand, and the right packaging can help a producer tell its story.

Adapt To Change

It is easy to continue on a set course, especially when that course has resulted in positive results. However, for producers, both small and large, to stay relevant, they need to be aware of ever changing consumer tastes and preferences. When a producer is too slow to adapt to a new trend, it may lose existing customers to its competitors and will be less likely to attract new customers. Of course, there is a fine line, as loyalty is built upon customers knowing what to expect, so producers need to adapt to change in a way that doesn’t alienate existing customers.