AboutEric Hofer Expertise Over 27 years experience, with 17 in international FMCG in back office operations and in field sales and data collection, including design, development and deployment of Handhelds, Marketing Equipment (Service, Tracking and Return on Investment), reporting and Vending management. Have participated on the launch of operations in new markets, and re-engineered the back office in several countries.
Experience Designed and led the development and deployment internal ERP system for Pepsi used in On-Premise/Vending in 13 markets.
Designed 2 handheld systems, the latest is now deployed in 4 markets internationally.
Re-engineered the back office functions (settlements, despatch, invoicing, credit control, etc) for over 20 snack, confectionary and beverage operators.
Developing software: Progress, VB, Access, C, Sybase, SA
Organizations Innovative-Selling Solutions
Publications BudapestSun
Education/Credentials State University of New York - BA Economics
NYU - Courant - Graduate work - Computing
Past/Present clients PepsiAmericas
PepsiCola International
PepsiCola Company
British Steel
British Telecom
Britvic (Pepsi's bottler in the UK)
AT&T
BellSouth
Mars Overseas Bottling
Pepsi France
Matutano (Frito-Lay Spain)
Frito-Lay
Pepsi Foods International
Chase Manhattan Bank
Kidder Peabody
National Power
SmithKline Beecham
Mars Overseas Bottling (Pepsi Azerbaijan)
A&P Bottling (Pepsi Serbia & Montenegro)
Iberia Bottlers (Pepsi Georgia)
Question Eric,
what a find to find you here... and what an amazing resource.
My question is about launching a new RTD beverage.
Just a little background. I have been in the Specialty Food biz for about 10 years but have wanted to move toward more healthy and natural products for about 5 years now. Although I was the founding partner in a nice food business, I had sold my soul (and controlling interest) for additional funding and found that I could not move the vision and direction of the company the way I wanted to go... surprise! Anyway, I have separated and now am charging forward with my passion. I felt I could make the biggest difference the fastest in RTD bevs since, as a parent, I wanted my kids to have been able to consume a hip, delicious, cool beverage that I didn't mind if they drank tons of... my mantra sorta became "anything but soda" but alas, as I became aware of the amounts of High Fructose Corn Syrups and other sugars in all beverages, and my own concerns about the plethora of none natural artificial sweeteners I was dismayed and determined to do something about it.
I have spent a year now, and all my money developing a spectacular product and I had to develop my own low calorie, low glycemic yet all natural sweetener. For now I'll say "yes, its fda approved". What I have created is something that simply at this moment does not exist on the market today. A delicious, hip, cool, HEALTHY, all good for you, nothing artificial naturally caffeine free cool tea based beverage... but the fact that I perfected this sweetening system that opens up a hundred other potential things to do with it...
Anyway, I have been pretty successful at selling to grocery in packaged foods and my thought is that I'd go about beverage about the same but the truth is, I know almost nothing about the beverage industry, I have no idea of what the distribution system is like, what hidden hurdles or costs there may be etc. I am at the point where I can now go raise money but I am really stumped here...
Have I given you enough to begin to help me?
PS- I am aware that exiting this category is fairly easy if the product it succesfull so I am open even presenting myself to a potential buyer right up front to develop the brand and distribution perhaps with their help and have them buy it at a certain sales point in the future... thoughts?
Answer David,
If you've had sufficient experience in Packaged Foods, then you're not going to find it a huge leap to RTD.
You've solved one key issue, FDA Approval; and from your wording, it sounds to me like you have a feel for the "marketing" aspects - eg. "delicious, hip, cool and HEALTHY"...
So, key aspects are:-
- project and business plan
.. estimate costs, resources needed, when they need to come online
.. market sizing
.. goto market strategy
.. back office.
- market research
.. who would be the target; how do you reach them
.. what catches their attention
.. product specifications - serving size(s), muli-serve, etc.
- funding - capital needed, when, %ROI that you'll offer, etc.
- manufacturing & warehousing
.. will you job it?
.. can you assure yourself of quality
I'm sure you'll know all these aspects... And they're covered many times already, not only by me, but people better qualified (and/or with more time on their hands to reply).
So, to your question about Bev Bus "hidden" items - I'm now guessing here (in comparison to packaged foods - I know potato chips, chocs and cigs; so I'm comparing with these)....
- Consumption Point - there's on-premise and take-home; and these usually raise other requirements, namely:-
.. On Premise equipment (called Marketing Equipment or ME)
- needed to keep the product cold so that its palatable.
- requires additional capital investment, controls and tech staff
.. Multi- and Single- Serve - needs a variety of production runs, labelling differences, SKUs, etc.
.. Different sales rep incentives - reflecting size of sku
.. Barcode values - because of the variety of skus for the same drink served in different sizes, you end up needing more
numbers - which as you know, means more "listing" fees when organizing shelf space in a Modern Trade account (irritating!)
- Measuring the standard case - for softdrinks it's usually back to a standard measure (8 ounces) - this compensates for multi- versus single- serve
- Order Taking & Delivery
.. Usually one gets a softdrink company going with Route Sales (or going down the street); so you load up a truck and your driver just
stops each account, like an ice cream van - selling what he can - and getting the commission. (BTW he depends upon your
marketing to help draw sales/interest).
.. The SKU packaging sizes and weight leads to different trucking requirements; usually involving side loaders for faster drops;
while I don't think you'll go to your own fleet - you'll want to think about this for whoever you first enlist for
down-the-street selling.
.. if you go with a distributor or drinks company be sure that there's not already some other competitive product in the same line;
I had a experience where our company was distributing both Lipton and Rauch; Rauch was juice and tea - as expected one product line gets favoured status; but what is not so obvious, there's no clear selling story ("so" asks the outlet, "which one is better? which is the premium product? why cant you sell it for the same price?")
- Marketing
.. One might consider some key On-Premise points that would do "sampling"; while "in-store" is one way, for softdrinks sampling
in Super Markets, isn't a big idea - they tend to be your worst customers (they pay the least; and with listing fees they just
aren't your first choice); instead you probably want places that are active (like events).
.. you might tie in a particular chain - eg. that does sandwiches and doesn't have an RTD as a way to launch the product; again, it's
about getting sampling - you then need to be sure that there's at least some sales outlets.
- Product Rotation - Softdrink reps stink at this! I saw that snack guys were heaps better.... You might need to institute in the early days programs to get them to rotate.
As to selling the idea "only"... There's a lot of products out there, especially coming from Europe and Asia. The consideration that a larger company will have is, is the product already being sold and does it have a market? I think to that end, you probably have to start with some "test" sales - if only to attract a buyer.
Give me some feedback on the above and we can continue.
