Expert: Eric Hofer - 3/5/2011

Question
Hello Eric,

We have a new natural beverage product that is in the NY high schools to help fight obesity and our innovative spin label is designed to help social causes, mentoring programs, sponsorship, advertising and promotions. www.soyubev.com to see label.

We are looking for people to help us grow into schools and retail nationwide, what would be your advice to position a new innovation in the market and best way to distribute.

Answer
I like this spin label concept.

I'm curious if the "cause" you link up with (embedded in the sub-label) works to expand your distribution network.

Have you thought of marketing that in Europe and CIS?  I think the upside would outweigh the down where country laws require ingredient and impact statements in local language and there's not enough room to print such on the main label.  Some companies have used multi-ply labels; but these would look shabby on a bottle.  Others have 0 room for advertising as they're cluttered with 12 different statements on the number of carbs.

- - -

As to growing your numeric distribution, this is the perennial question that afflicts everybody - even the market leaders - and isn't answered in a short missive.  Rather it requires an understanding of the product, market, resources available, competition and capability.  In this space, I'm able to highlight a non-prescriptive answer.

Nationwide - I suspect you're talking about the US which differs from say Hungary or New Zealand.  Regardless, you'd go for key distribution from primary SMSAs first, then expand outwards; the US is a continent - equivalent to at least 25+ countries by comparison.  

Distribution - You can either do it yourself which requires significant investment or piggy back off of others.  There are sub-options: tying in with somebody in an neighboring segment (say soft-drinks); or serving the same target audience (e.g. Catering to Schools ... though I doubt the frequency and terms would work).

Sales Force - Again, you can try to use the Distributors' staff but you'll find that a Distributor has different objectives from yours (they have capital tied up in many SKUs and care little for building brand loyalty).  Or you do it yourself.  Doing it yourself means some capital , good delivery arrangements and a back office system (see www.salessuite.net for this, they're offering a state-of-the-art system to integrate with distributors that you rent by the month - so low cost of operation).

Terms - what will be your policies on pricing, returns, etc.  This has to incentive-ise distributors and their customers.

If I were working this, my first thought would be to:-
- determine a basic strategy for getting into outlets (using the spin label)
- model sales and determine the terms that I can afford
- lock up distribution in 4 key markets
- put my "own" sales force on the streets (using all that salessuite has to offer, or finding another similar product where the tool and the knowledge of how to use it are available )
- manage the heck out of my sales force and distributors
- review performance and re-model; adjusting the strategy.

Searching for distributors is getting easier.  Let me point out first some resources that might help:-
- LinkedIn - there are numerous forums such as Drinks International, Sales & Distribution, FB
- Liquid Marketing
- FoodBev
- Export Solutions

There are some new techniques to marketing and sales that could also help:-
- viral advertising
- social media to create a buzz
- spread selling...

This is a back-and-forth sort of discussion that I'm happy to have.  Try me on skype: eric.hofer

Eric