Business management

SME Tools: how to get your product to supermarkets

We hear from the owners of flourishing food and drink businesses about their journeys from small-batch production to large-scale manufacturing for the masses.

So how can a small-batch production SME go to the stock list of a high-street superstore? We hear from three small business owners about their journey.

Morelli – award-winning Italian ice-cream

Northern Ireland might not be the first place that comes to mind when you think of ice-cream-making, but the Morelli family have been working hard to change that since 1911.

Back then, Morelli’s traditional Italian ice-creams were sold from independent cafes in Ballymena and Coleraine, before the brand gradually expanded to reach locals and tourists across the north of the country. By the 1960s, Morelli’s cafes and ice-creams had become culinary institutions of the famous Causeway Coast.

These days, supermarket support means it’s easier than ever to find Morelli’s ice-creams in Ireland. “We’ve supplied Tesco in Northern Ireland since 2004 and now also supply Tesco in the Republic of Ireland,” says owner Arnaldo Morelli. “We launched our newly designed 950ml retail packs in 2018 and that summer they became Tesco’s fastest growing lines in the ice-cream category in Northern Ireland.”

Morelli and his company entered the wholesale world in 1997 with just two production staff, but demand has grown that team to 20. “In the last few years, as the business has expanded, we’ve needed more space for storage of packaging, raw materials and all the sundry products that we also supply to our customers alongside our ice-cream,” Morelli explains. “In 2016 we managed to secure the unit next door to our factory, in 2017 we expanded our office and storage space and in 2018 we set about expanding our production space. We now have space totalling 15,000 square feet.”

Morelli’s advice to other business owners searching for supermarket success is to focus on quality, just as his business has over the years: “It’s important that you stick to your principles and don’t compromise on quality,” he says. “You can always source cheaper ingredients, but there’s usually a reason why they’re cheaper.”

Fiovana Drinks – premium cordials

Some invaluable big-brand experience gave business partners Craig Jones and David Folkman the confidence and industry insight they needed to make their product a supermarket success. Having both worked at Innocent Drinks, the pair spotted a gap in the UK squash and cordial market.

“It might not be a very sexy category but it’s big,” says Folkman, who estimates the space to be worth around £600m. “There has been little innovation and products we saw on the shelf were full of either added sugar or artificial sweeteners – the things health-conscious consumers are switched off by.”

Getting started involved testing different squash recipes in Jones’ kitchen before eventually producing a small batch of stock and launching a pop-up stall at London’s Old Street station. “We sold out in the week we were there,” Folkman says. “This was proof that consumers would buy a new healthier cordial with no added sugar and no artificial ingredients.”

After moving online, Fiovana was noticed and picked up by London institution Harrods. Ocado then followed, before Jones and Folkman successfully pitched to Sainsbury’s at food founders’ conference Bread & Jam (taking place this year in October). Through these outlets and various leading independent stores, the company now sells 15,000 bottles a month – a figure its founders want to triple before the end of 2019.

Folkman’s advice for other food and drink manufacturers is to do what it takes to get noticed. “Buyers at supermarkets are busy and have people approaching them all the time,” he says. “We had a situation at Ocado where, despite having a good first meeting, the buyer wasn’t returning our calls to agree to stock Fiovana. We tried calling every day, and emailing but got no response. Eventually, we resorted to sending the buyer a giant toy pigeon with a note attached explaining that we’d resorted to old-school communication since we couldn’t find another way to get through. The buyer called us straight away. It’s all about standing out from the crowd.”

Free From Fellows – sugar-free vegan confectionery

The ‘free-from’ market has grown rapidly in recent years, with the meat-, gluten- and sugar-free sections of most supermarkets gradually acquiring more and more shelf space. Lisa Gawthorne has played a key part in that shift over the past eight years, having launched businesses that both distribute and manufacture specialist foods.

“We’ve been in business as [Bravura Foods], a vegan and vegetarian food distributor since 2011, but we took the leap to have our own brands manufactured in 2018,” Gawthorne says. The first of those brands, Free From Fellows, is only just approaching its first birthday but can already be spotted in over 2,000 outlets in the UK, including branches of Holland & Barrett, Boots, Whole Foods Market and Sainsbury’s.

We had mock-ups made and we presented them to the retailers for consideration. Once we’d won the new chunks of business, we increased the internal team to assist with the expansion

Lisa Gawthorne
Free From Fellows

The brand might be in view of UK shoppers now, but Gawthorne had plenty of work to do before the supermarket shelves could be a realistic target. “We had to identify a good third-party producer and an external packer,” she says. “We then had mock-ups made and we presented them to the retailers for consideration. Once we’d won the new chunks of business, we increased the internal team to assist with the expansion.”

Asked what advice she’d give other food and drink businesses looking to follow in Free From Fellows’ footsteps, Gawthorne recommends keeping three things in mind: “passion, planning and people”. “If you’re passionate about what you do, others will see it and join on your journey,” she says. “Make sure you plan carefully too, and keep a good team around you.”

Growing supermarket sales

Making it to the supermarket shelves is one thing – now you’ll need to compete with a host of bigger manufacturers, and that won’t be easy. “There are many brands out there who think that they can take a product that succeeds in independent stores, where people will often pay more, into supermarkets without any major change,” says Tessa Stuart, author of Packed: The Food Entrepreneur’s Guide. “But in supermarkets there are multinational brands, well established in the mind of the shopper, that use constant promotions to get attention. What’s more, they can afford to buy eye-level space on the shelves.”

So how should new, smaller brands overcome the obstacle of competition? Stuart suggests playing the household names at their own promotional game: “In my experience of thousands of shopper interviews in-store, shoppers almost expect opening deals nowadays to try a new brand. In customers’ minds, there is a risk in buying an entirely untried product; and that risk is mitigated by discounts.”

Five expert tips for supermarket success

  1. Stick with your principles and use quality ingredients – Arnaldo Morelli, Morelli
  2. Make products you’re proud of and passionate about – Lisa Gawthorne, Free From Fellows
  3. Do what you can to stand out from the crowd when pitching – David Folkman, Fiovana Drinks
  4. Keep a team of good people around you as you grow – Lisa Gawthorne, Free From Fellows
  5. Play the big names at their own game; use discounts to lure new customers – Tessa Stuart, retail expert

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