So picture this, tladi e amusa, in our beloved Botswana and you are sipping on a glass of refreshing rooibos lemonade and an idea comes in to your mind.
Maybe, you could actually make this lemonade on a commercial scale and be millionaire overnight. I mean you have the idea and everyone knows you are ace at making it right?Well if such wishes were horses then as the saying goes, beggars would surely ride. However the actual process of taking a food idea and making it in to a successful food product is systematic, requires research that is commercially orientated that will eventually develop food products to satisfy the ever complex and ever changing consumer palate. Don’t get me wrong I do salute and truly commend food businesses that do start up in the kitchen, however the end objective is to establish a scalable business that will generate profit and comfortably compete with already existing products in the market.
Statistics Botswana released the “census of enterprises and establishments report; phase 1” and stated that the manufacture of food products was the highest contributor in the manufacturing sector amounting to 21%. However the same study stated that the overall failure rate for SME’s in Botswana is over 80%. Furthermore, The Government of Botswana published statistics on medium and microenterprises in Botswana which yielded some interesting findings. The study found out 70% of start-up companies will fail in their first 18 months and only less than 2% of them shall expand their business.
Approximately fifteen thousand new food products are developed every year in the African continent. However, the failure rate of these products is as high as 90%. So in a snap shot, out of the 15,000 food products developed, only 1,500 products will succeed and generate profit for the long haul.
The question you may be asking, is what is causing such high failure rates for start-ups and SME’s in Botswana? The answer lies in a tripartite structure comprising of a lack of technical and business knowledge, low productivity levels and poor quality outputs. This relegates companies to the back end of the market as they cannot efficiently access their own internal markets and eventually cannot meet the export markets.
Agriculture is what drives South and East African economies employing over 60% of the population in different areas of the food value chain.
However, the rich fertile ground of our mother Africa is still underexploited as billions of dollars are spent annually importing food. In 2018 statistics show that agriculture contributed 2% towards the Botswana GDP which is a whooping low in comparison to contributing 43% to the GDP in 1960. It is also recorded that the total cost if importing just beverages, spirits and vinegar in 2008 accrued a total of USD ($) 109 Million without food. With the current COVID – 19 pandemic, Batswana have learnt that self-sufficiency is of importance more especially in food production. Tsogang, tsogang Batswana, tlhaagafalang re kopanele go direla lefatshe la rona. This article should be able to assist anyone interested in going in to food manufacture on a commercial level.
Personally I am a passionate supporter for SME’s especially in food production as the value chain is so robust and still untapped to, so one can either be a raw material producer, manufacturer or a packer, the scope is endless when it comes to food.
So what must one do to make a food product idea profitable and ready for the consumer? There are so many documented processes for product development and by virtue of this article I should help to unpack the “pre – steps” required before you can sit down and start your new food development project. I like to call them the “mind joggers” that will guide you my valuable food innovator to know how and where to start making your food product.
At this juncture I want to highlight a very interesting but mandatory concept. The success of food product design development and production is a team based effort engaging various key stakeholders that will work in rhythm so as to yield fruitful results. You will need an experience Food scientist or Food Engineer, a jacked up Marketing Team, an experienced mechanical and technical engineer and lastly a good accountant. Sounds like you are going for battle right? Well the answer is; YES. You must know that your “rooibos lemonade” idea we spoke of in the opening paragraph, may sound unique at the current time, but most likely it is either already in the market, or now an idea being formulated by someone else in the pilot phase, or has already been formulated and was seen to be a costly project to start up and hence a non-starter.
Having this team of “warriors” will help you fight to get your product on the shelf at the lowest cost of production, being yummy to the tummy and above all at a good competitive price. My beloved food innovators, going through this journey alone can be a daunting task and you will need a good team to propel you to pass in to the documented 10% of successful food manufacturers. I have documented a total of four steps, but in today’s article I would to tackle step one only as it is the most crucial and requires understanding. Let us now look at pre requisite “step one” in detail.
Research, research and more research and oh yes, did I mention research. The BIG question during food product development is not WHO IS YOUR CUSTOMER; but rather WHAT CUSTOMER DEMAND are you meeting? Let’s take a classic example of good old ice – cream which is eaten worldwide and known in all continents. However, Asian to Middle Eastern continents prefer the more exotic coconut, mango, kulfi or spiced and nutty flavours in comparison to the Western and African continents which prefer the chocolate, strawberry and vanilla flavours. As you do your initial market research go all out to make sure you meet the consumer demand and not just the market.
Ask the questions such as what raw materials do I need to make this particular product, are they locally sourced and if not, how can I get them in to Botswana? Do the ingredients complement each other? Food product combinations are very
Look in to the intended use of the product; is it shelf stable, will it need refrigeration after opening? What target group are you focussing on? Do they have fridges to accommodate your product if it needs refrigeration after opening? Also if you are manufacturing, what ratio of food preservatives and additives do I need and what is the legal recommended amount. Remember preservatives keep the food safe for longer whilst additives are used to enhance flavour, appearance and texture. Potato crisps are my all-time favourite snack when I need to binge and being a fried product, they do have a tendency to go rancid where the taste and smell deteriorates over time due to chemical reactions between the oxygen and the oil in the crisps. In order to combat this, manufacturers add antioxidants as additives to slow down this chemical process, which I am sure you have experienced. The potato crisps taste like they were fried with old stale oil that leaves a horrible after taste.
One other key factor to consider is the design and purpose of the packaging, what it should be, and what does it signify. Let’s take a mayonnaise jar for example, its wide top allows easy access of a ladle or spoon to scoop out the mayonnaise without contaminating the contents in the jar. New innovations have also brought in “squeezy” bottles of mayonnaise and ketchup for ease of use and the product remains clean after several uses. Secondly you do not want your baked beans packed in a “body lotion” designed jar, which is pink in colour. Yes there is innovation and wanting to be unique, but remember, customer perception is so vital and the last thing you want is your customer to be confused when it comes to choosing your product on the shelf. This is what the marketing lingo call product positioning and you my food innovator must own a position that is clearly differentiated from competition. David Ogilvy a pioneer on marketing principles established that “positioning is the most important decision in marketing”.
Studies show colour psychology greatly influences the consumer to purchase your product. Food product Labels with red and orange will cause receptors in the brain to cause you to be hungry and develop an appetite. Yellow on the other hand triggers happiness and joy, hence as you combine red and yellow you combine happy and hunger feelings all at once.
As you read this sentence think of all food logos and brands of your favourite foods, they have at least one of these colours. So you need to research on your labels by looking at the end product at all times. We are all consumers and our minds are constantly racing and are loaded with information. In all honesty we are not really sure what we want especially us women; God bless our souls.
Consumers purchase with emotions and not logic and these emotions are all in the mind. Hence product positioning makes the logic of purchasing a food product more organized mapping the path in to the mind of the consumer. This brings me back to my “team of warriors” as discussed earlier. The marketer ensures the positioning strategy is right first time round as you may not be lucky for the second time. Always remember this; you cannot put back toothpaste in to the tube if it’s out, it’s out and that’s that. So you only have chance to make it right.
Also it is important to note that unlike the electronic and technological industry that requires constant research and development on a constant basis to stay afloat, the food industry does not really produce radical products. The consumer demands are basic ranging mainly around food safety, increased shelf life, increased nutritional value, deliciousness and above all convenience, and rarely is out of the scope of these factors. So as we go back to our “rooibos lemonade” idea, you need to ask yourself what is the distinguishing factor; is it that it has a better or longer shelf life, better nutritional value, easy to carry and is safe to drink? When doing your consumer testing, always benchmark against the best product in the category if its margarine we all know which brand is leading. This will save you from birthing a “dead on arrival food product”.
One of the easiest and cheapest ways of obtaining data for your food product would be via customer perception surveys. One of my projects whilst working as a Food Research Scientist was to conduct customer questionnaires right in front of the competitors’ products. The sole purpose was to ask the customers why they are buying that particular item; what makes it special to them and what substitute would they buy in the event the product would not be available. You see, consumers basically direct you on what to improve on and distinguish yourself from all competition, all for BWP free 99’. This becomes the birth of your unique selling point USP; a fundamental marketing key.
Please don’t miss out next week’s article as I continue to shed more light on the other three pre requisite steps you should be aware of prior to you developing your food product.
In a nutshell, you may be overwhelmed, or maybe have lost focus and feeling your project has hit a serious snag. Or maybe you are ready to take your idea to the market. We at Plethora (PC) consultants PTY LTD are here to encourage you and walk this exciting path with you. We are a 100 % Motswana owned Company, with qualified Food Science and Technologists, as well as qualified BQA Food safety trainers experienced in everything to do with food!
We are dedicated to helping entrepreneurs produce successful food products and processes through individual sessions, trainings and workshops and walk hand in hand with you throughout the food production journey. Drop us an email at firstname.lastname@example.org
SUSAN M. N. SEKGWENG*
*Susan Sekgweng is the Managing Director of Plethora Consultants