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The Trick to Becoming a Successful Food Entrepreneur Many food entrepreneurs jump on to the bandwagon with innovative ideas and a passion to create but fail due to lack of preparation and assessment of risks

By Mithun Appaiah

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Today, the food sector is one of the few that is witnessing buoyancy. It will not be wrong to say that this sector has witnessed a paradigm shift, which is evident from the growth of the food delivery firms. Rising double incomes, stretched working hours and above all evolving tastes to try new cuisines have witnessed a spurt in many foodpreneurs looking to make it big in this space.

Having said that, a significant number of food ventures still do not succeed, despite having a great product or offering. Now, why do many food startups fail? How can the challenges be overcome and mistakes be avoided at the initial stage itself? Here's an insight is drawn taking in various aspects that will serve as food for thought for food entrepreneurs.

Absence of Mentoring

Many food entrepreneurs jump on to the bandwagon with innovative ideas and a passion to create but fail due to lack of preparation and assessment of risks. Authentic information on market and customer insights are crucial for building a robust business strategy. Market data, insights and proper guidance from well-established entrepreneurs in food businesses will provide a good understanding of the prevailing market conditions. By understanding these aspects, one will be able to launch and sustain a new product or service better in an otherwise saturated market.

Lack of Financial Resources

Food business much like the brick and mortar companies should be financially healthy with adequate funding. A smooth and uninterrupted supply of quality ingredients, monthly salaries for employees, the latest kitchen and packaging equipment and other operational expenses demand sufficient funds. The financial aspects related to food preparation and delivery, besides processes, should be well understood by entrepreneurs, along with their ambition to succeed. This will ensure there are no incidents of cash flow shortage at any given point in time.

Market Strategy Failure

Founders of food startups should be fully aware of various brands competing with theirs and doing reasonably well. Moreover, a thorough knowledge of unsuccessful brands will help beginners to score better. Marketing strategy for F&B outlets revolves around influencer marketing, food reviews, recommendations, food blogs and the like. This will proliferate the conversion rate than regular advertising. Online listing, food-related apps, social media marketing build and sustain the brand reputation.

Faulty Business Models

Food startups should evaluate all risks involved and take them into consideration, ensuring it is profitable and scalable before designing the right business model. In the absence of these, owners will be stressed and their passion will be burnt out, eventually leading to shutting down of the venture. Business models could be different for a processed food startup and an F&B outlet. Whatever the type of business, it should include the value proposition, customer base and preferences, marketing plan, competitors' details, financial projections among other relevant and specific elements.

Packaging Design Mistakes are Common

A great food product that is nutrition-packed that tastes great and has longer shelf life may not mean much if the packaging is not safe and appealing. As huge investments go into product development, one should also not ignore the importance of good packaging designs. For example, the colour blue used heavily for detergents will be a disaster when used on a food product using only organically grown ingredients. One cannot underestimate the benefits of having a well-designed packaging that is safe and hygienic with appealing visual impact, enhancing the product's brand image.

Poor Leadership and Management

Ineffective management is one reason which is not easily detectable but nonetheless very essential for a food startup to thrive in a highly competitive environment. More often than not, food businesses fail due to poor leadership. Leadership failures could be due to a lack of vision and corporate values not being in place. Sometimes, the founders themselves do not possess the necessary skills to deploy and manage various resources. They may also have put a failed marketing strategy in place, thereby decreasing the sales revenue and profits. A good leader should be ready to adapt to market changes and take responsibility to all that happens in his organisation and beyond.

Unexpected Lifestyle with Good Time Management

If one is otherwise used to 9-6 work hours on week days, carefree weekends, long family holidays and active social life, she/he should be willing to let go this relaxed lifestyle in the initial budding years while opting to start a food venture. It is 24X7X365 job with few hours of rest in between in the first few years of business. Moreover, you will see yourself doing tasks you never imagined. One has to be willing to push oneself beyond one's comfort zone. In the early years of starting the business, a lifestyle change is a must to ensure it success.

Inconsistency in Food Quality and Taste

Good taste and high-quality food attract repeat customers leading to increase in sales. With manpower attrition rates going up, the service will suffer if standard processes and procedures are not in place. Even in the absence of the head chef, other cooks should manage the kitchen without disturbing the taste. A standard procedure in place with a measured set of ingredients—both in quality and quantity—will ensure consistency in the quality of food. Maintenance of hygiene at all times is a given. Food startups need to invest time and effort to ensure customers are happy and willing to come back for more.

Technology Savviness is Overlooked

Food startups should invest in technology for food processes, supply chain and marketing to enable them to cater to a high number of customers. Technology also is able to provide insights on market trends, including competitors. True, digital disruption has touched almost all industries, including food, which is why entrepreneurs should be able to leverage the technological advancements from food preparation to services to ensure repeat sales.

Like in other fast-changing and high-growth industry sectors, challenges are many for the food entrepreneur too, especially in the initial years. Once the founder/s learn to manage well, there will be no hurdles in consistent growth year over year. Food startup entrepreneurs should ensure a good balance with healthy business model, marketing strategy, product development and delivery, communication and brand management besides promotion to ensure success of the food brand.

Mithun Appaiah

CEO of Innovative Foods Ltd, Brand Sumeru


Mithun Appaiah is the CEO of Innovative Foods Ltd, makers of the brand Sumeru. He is an expert with F&B industry expertise across the spectrum of sales, key account management, customer marketing, logistics, business development, P&L management, developing new business channels, e-commerce and start-up acceleration.

After passing out from IFIM Business School, Mithun joined Nestle India Ltd, handling urban and rural markets and building the rural market footprint, with distribution expansion into feeder towns. He was also instrumental in driving innovative in-store execution and execution templates.

He has won multiple awards and accolades, including Urja CEO & MD award with Britannia, Innovator of the year award at United Spirits-UB group,  National winner of premium brand contest with Nestle, Best outgoing student award in business management, and an the award for topper gold medal in Marketing during his MBA.


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