In the world of startups and scale-ups, the journey can be thrilling, daunting, and at times, utterly perplexing. Michel Acda, StartLife Mentor, understands this rollercoaster ride all too well, having dedicated over two decades to building consumer brands that resonate across Europe at multinationals such as Philips, Sara Lee, Unilever, JDE Peet’s and Nomad Foods. In this article, Michel shares his secret for unlocking growth for food startups with the 4 Laws of Growth.
As a mentor actively engaged with Startlife at Wageningen University, I’ve learned that while the path to growth may seem uncertain, there are four fundamental laws that can steer your food venture toward an exciting future. These principles apply particularly to those of you focusing on B2C ventures. So, fasten your seatbelts and join me as we explore these four laws of growth.
Law 1: The Power of Distinctive Assets
In the bustling landscape of Food and FoodTech, creating a brand that stands out is paramount. Your potential customers will often have just a few fleeting moments to make a purchase decision, be it while scanning store shelves or scrolling through an online marketplace. It’s crucial to build distinctive assets that are not just unique but also consistently reinforced over time.
One glaring pitfall to avoid is the temptation to “re-energize” your brand prematurely. I’ve witnessed the unfortunate saga of brands losing their way due to ill-advised rebranding and redesigns, like the Tropicana relaunch. As a startup, dedicating time and energy to crafting a distinctive and future-proof brand proposition is an investment in your future success. Remember, once you’ve created it, stick to it unwaveringly.
Law 2: Mental and Physical Availability
Here’s an open secret often underestimated in the world of food: availability, both mental and physical, is your key to success. Physical availability means ensuring your products are accessible at as many stores or platforms as possible, making it convenient for consumers to buy from you wherever they shop. Mental availability, on the other hand, is about being top-of-mind for consumers, etching your distinctive assets into their memory.
Think about how Coca-Cola maintains its dominance. They’ve masterfully used the shape of their bottle, the sound of their jingles, and their iconic logo to etch their brand into our collective consciousness. In the process of building your venture, keep a careful balance between mental and physical availability. Rushing into distribution without cultivating sufficient mental awareness can doom early-stage businesses.
Law 3: Buying Frequencies Are Given
Consumer behavior research shows that most of your customers will make only a few purchases per year. Surprisingly, this pattern is similar for both large and small brands within a given category. Attempts to drastically influence purchase frequency, such as convincing consumers to buy your product six times instead of five times a year, are typically futile.
What’s far more impactful is building penetration, which leads us to our next law.
“Consumer behavior research shows that most of your customers will make only a few purchases per year.”
Law 4: Loyalty vs. Penetration
Byron Sharp provocatively said, “If you want loyalty, get a dog.” This statement underscores the importance of understanding that brand loyalty alone is not the golden ticket to long-term growth. Penetration—expanding your customer base and market presence—is often a more potent driver of growth than increasing customer loyalty or purchase frequency.
As a strategic decision, make sure your investments are channeled towards continually acquiring new customers. Remember, penetration is the gateway to growth.
For all you early-stage FoodTech startups and scale-ups, I know the chaos and urgency that can accompany your entrepreneurial journey. In this dynamic environment, having a few steadfast rules can provide clarity and direction for you and your team. Embrace these four laws of growth and let them serve as your North Star as you navigate the intricate universe of food entrepreneurship. If you’re interested to learn more, consider reading the book How Brands Grow by Byron Sharp.
May these laws empower your venture and pave the way for remarkable growth. As a mentor at StartLife, I am eager to see you apply these principles and witness your startups thrive and transform the food industry.