When standing before a crowd of jittery entrepreneurs, speakers commonly resort to hyperbole. Saying something like “this is the most exciting time for the [insert industry here]” has become somewhat of a stock line for mentor types hoping to rile the pioneers.
But when these words are focused on the food and beverage industries, and they’re told by Tom First, a managing partner with First Beverage Group and the co-founder of Nantucket Nectars, it doesn’t strike you as bombast.
For a long time, First said, he had heard about the development of the healthy food and beverage movement. His earlier products had moved the needle as well. But he questioned the movement’s strength when he looked in cafeterias and saw everybody drinking Coca-Cola or Pepsi.
At last, he’s starting to see a major shift, which inspired the words.
“This is the most exciting time to be in this business,” First said.
Now that retailers and distributors are giving increasing attention and shelf space to better-for-you brands, a growing group of entrepreneurs are polishing their pitches. And while a can’t-fail brand could take shots in the dark and emerge unscathed and triumphant, it’s probably wise to enter these industries with a dedicated plan and a tolerance for mistakes.
If attendees walked away with anything from FBU Boston, a business education and networking event held by BevNET on Thursday at the Artists for Humanity EpiCenter in South Boston, it’s that entrepreneurs are best suited to endure mistakes as early as possible and to fully commit to an idea.
Packed for much of the day with nearly 200 people, mostly food and beverage entrepreneurs, the event featured from-my-shoes speeches by Clayton Christopher, the founder of Deep Eddy Vodka and Sweet Leaf Tea, Shane Emmett, the CEO of Health Warrior, a chia bar brand, and Pete Lescoe, the founder of Food Should Taste Good, a versatile snacks company.
Christopher said that when he was launching Sweet Leaf in 1998, his biggest challenge was a lack of capital. However, he put a positive spin on a difficult situation, referring to the shortage of resources as a blessing.
“It taught us resourcefulness,” he said. “It taught us scrappiness.”
It also enabled him to learn from early mistakes, before he even had the chance to lose enough money to terminate his brand. What was once a broken model — a self-distributed tea with a two-week shelf life — progressed into a thriving brand, which he later sold to Nestlé Waters. Christopher attributed much of the brand’s success to his willingness to participate in the brand’s growth: meeting store owners, shaking hands, experiencing the brand on a daily basis.
“You can’t manage your business from an office,” Christopher said.
The event showcased a range of investment options, from early stage capital investors such as Ben Lee, the director of business development for CircleUp, a crowdfunding platform, to growth fund investors, such as John Burns, a managing partner with Raptor Consumer Partners, who hopes to “compress space and time” for already successful brands.
Lee spoke about CircleUp’s ability to fund entrepreneurs searching for smaller investment figures ($500,000 to $1 million) in a world full of investors chasing $5 to $15 million deals. Lee also echoed Christopher’s thoughts on commitment with a consideration of the future. He said that every moment spent away from a company influences what the company will look like one year later.
Janica Lane, a managing director of healthy, active and sustainable living with Piper Jaffray, an investment bank, said that investors want to buy innovation, which they can’t create internally. An entrepreneur who treats an idea as a full-time job, not just as a hobby on the weekends, increases the odds of a partnership.
“A financial investor is often betting on a bus driver at an early stage,” Lane said.
Opportunity awaits not just in the form of interested investors, but also in the evolution of channels. Joe Hazma, the VP of sales and marketing for Tedeschi’s Food Shops, spoke Thursday and illustrated the progression of convenience store inventory. To give the event’s attendees an idea of the potential gains, Hazma analyzed the ubiquity of convenience stores.
There are more than 152,000 convenience stores in the country, 50,000 more than any other retailer. Last year, convenience store sales amounted to $682 billion and 167 million transactions per day. The majority of that sales figure derives from gas, however, that doesn’t undermine the channel’s potential significance for entrepreneurs.
As cigarette sales decline, the channel is undergoing “a metamorphosis,” Hazma said. When he considers a product for Tedeschi’s, he wants to know a company’s strategy. He wants to know the business plan. However, before those points, he mentioned something else.
“First,” Hazma said, “we want to know your commitment to the product.”