Thinking of Starting an Organic Products Business – Tips for Success

Created: Thursday, July 25, 2019, posted by Geetesh Bajaj at 10:00 am



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By Craig Sams, Gusto

When I started out in the organic products business, there were hardly any organic products! These days it’s possible to get virtually every food imaginable in organic format, and in ever-increasing quantities.

The world beat a path to our door when we first had organic brown rice. Now it’s a commodity and you can get many different kinds; long grain, short grain, red, black, basmati – all organic.

Rice 3506194
Image: Pixabay

So, to succeed in the organic market now you have to innovate. Launching a new product range in the organic market is like surfing – you scan the horizon for the next big wave. Most recently it has been veganism and gut health.

Here are my three top tips for making your organic products business a success:

1. Start Small

You do not need to build a factory and set up a production line to. There is a myriad of manufacturers who are licensed to process organic food and they can do the work for you. You do still need to attend to oversee your production, but not having to manufacture frees up a huge amount of time (and capital) for other things. Concentrate on what you do best and outsource the rest.  For me personally, that has been new product development and marketing. In the early stages (and beyond) well-resourced sales function is essential and you need to do the “pick and shovel” work with small retailers and online – the supermarkets usually come later.

2. Make Sure the Price Is Right

Don’t be afraid to charge a realistic price. It’s very hard to operate on margins of less than 40% until you achieve real scale. Organic consumers prioritize quality and price is rarely a consideration. In formulating organic products those manufacturing tricks to increase the amount of air and water in a product just aren’t relevant. Use the best ingredients, your customers will appreciate it on a gut level.

With carbon pricing coming in the cost differential between organic and non-organic will narrow or disappear – organic farming captures carbon and locks it in the soil. Non-organic farming is responsible for one-third of our greenhouse gas emissions. So organic farmers will be rewarded for the carbon ‘crop’ they harvest and become much more competitive.

3. Source Carefully

When sourcing materials for a product, look at the story behind the origin. Organic products often have a charismatic background, they come from interesting producers. At Gusto, we are connecting our customers to organic farmers in Mexico who grow the agave cactus that is one of the sweeteners we use. Their story has social and environmental positives that enrich the experience of drinking a bottle of Gusto Ginger and Chipotle. At Green & Black’s some US customers spent a week in the Dominican Republic with the cocoa-growing families there. They dug ditches day after day and the village now has a water supply. Those customers are brand loyal for life.

Schopenhauer said: “All truth passes through three stages.  First it is ridiculed, second, it is violently opposed. Third, it is accepted as being self-evident.” I’ve been at it with healthy eating, organic food, and regenerative farming for 50 years and feel like we’re nearing the third stage. So, what better time to start your organic business?


Craig Sams
  
Craig Sams is the creator of Gusto, and the co-founder of Green & Black’s luxury chocolate, and Whole Earth Foods. Craig is a key player in the organic/wholefood movement and is crediting with helping “to kickstart the vegetarian food market in Britain”.

Craig also launched the UK’s first-ever vegan and macrobiotic restaurant, cured himself (macrobiotically) of a life-threatening illness and advises the UK’s major supermarkets on how to go organic. Craig invented Gusto for a party at the Groucho Club celebrating Whole Earth’s 20th anniversary – and it immediately became an insiders’ hit with the rave crowd of the late 80s. Gusto is a game-changer for the drinks market, as consumers increasingly look for healthy, natural and ethical alternatives to traditional fizzy drinks.


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