Sams told Food Manufacture that the best way to get ahead in the food and drink industry was to come up with an idea not seen before.
“Innovate, don’t copy,” said Sams. “There are a lot of people coming into the food business now, and you don’t get very far by just doing what somebody else is doing, unless you have lots of capital to grab market share with. Find a niche and then work really hard in that niche.”
Reluctance to raise prices
He also advised producers to charge what they were worth. A failing of small businesses that didn’t make it was their reluctance to raise prices in the hope that sales would make up for the hit to profits, he said.
“It’s best to protect your margins, especially if and when you go into supermarkets,” Sams added. “Too many people are tempted by the volume that’s there and they go in, they start out with a low margin and, by the time they’ve done all their promotions and deals, they’re really into negative territory.”
Arguably, the most important piece of Sams’ advice was to outsource production to larger, more accomplished manufacturers. With a number of contract manufacturers available to small food businesses, the compromise of paying a higher price for factory time was counter-balanced by the savings made in investing in equipment and manufacturing capacity, he said.
Freed up to do what you’re good at
“My philosophy has always been ‘I know what I want to do, but there are people out there who can do a lot of the things I want to do better and cheaper than I can do it, so find those people and get them to do that’,” Sams explained. “That then frees you up for whatever it is you’re good at.
“That might be NPD, marketing, social media, whatever. Concentrate on your strengths and, especially nowadays because of BRC and everything else, it’s far better to find a manufacturer who is compliant and can make what you want than to try to do it yourself.”
Craig Sams and William Fugard are co-founders of Gusto, which they claimed was the world’s first natural, organic, and Fairtrade energy drink. Sams is also the co-founder of Green & Black’s luxury chocolate, and Whole Earth Foods.