08 Dec 2016 How to scale up an artisanal food or drink business

The past decade has seen an explosion in start-up businesses specialising in food and drink. Here’s some cogent advice and insights from Jeremy Torz, co-founder, Union Hand-Roasted Coffee in the UK, on growing such endeavours the right way.

The focus of artisanl producers is not just ethics – attracting those who are willing to pay more for something independent and locally produced – but also about aspiration, selling a certain lifestyle.

While this is great news for the industry, the dream can quickly turn sour for entrepreneurs who fail to scale their businesses the right way as they grow.

For craft food and drinks businesses, where commitment to quality and artisan principles is paramount, achieving scale can be a longer process. Due to the necessary maturation, it requires passion and persistence – but is all the more rewarding for it.

Growing and scaling a craft business is something we know about at Union. What began as a hobby became an obsession and then a business that’s enjoyed strong and steady growth for the last 15 years.

We’ve stuck avidly to the principles of high-quality, sustainability, provenance and exceptional customer service but we realise that these values need safeguarding as we continue to grow. So from our experience so far, I wanted to share a few reflections on successfully scaling and growing your artisan food and drink business.

Define specific business goals

In the tech sector, many businesses are launched simply to secure a sale within a few years. The craft food and drink sector, on the other hand, is about the passion and drive to continually improve quality and experience.

Sticking to this means putting your ambitions into perspective and assessing exactly what you want your business to achieve.

Prepare to scale your service operations

As the name suggests, at Union Hand-Roasted Coffee we hand-roast our coffee and you might imagine that at some point in the growth process this would no longer be viable.

But provided we are growing sustainably, there’s no reason we can’t continue to do this – it just means that we have to think ahead and work out how to scale production in a sustainable way that doesn’t compromise the founding values.

You may sacrifice some economies of scale to maintain these so be prepared to be able to explain why your prices don’t fall as you grow.

Get the right people on board

Having the proper infrastructure for growth is vital and this starts with having reliable team members throughout your organisation. Because they are talented and completely engaged with your business, when the opportunity to grow arises, you – and they – will be ready.

Communicate and consult with your team

Similarly, it’s crucial that you communicate the importance of, and desire for growth, with your team. They need to be absolutely clear of the direction the business is going.

Weekly meetings, internal newsletters, and team events are good ways of achieving this.

Increase efficiency in tandem with your original values

Provenance and craft businesses go hand in hand. A key part of our founding vision is Union Direct Trade – a sustainable way of sourcing coffee that sees us paying at least 25% over the Fairtrade minimum while working extremely closely with farmers and cooperatives in coffee-growing countries.

A fair and good deal for them, it also results in an ever higher quality of coffee for our customers.

Finding new and deeper ways to use your founding principles enhances your understanding of your market. After all, markets and competitors evolve together – not staying ahead in tune with your business landscape can put your competitiveness at risk.

Learn to say ‘no’

Sometimes turning down new business – however significant – is the right thing to do if they do not buy into your passion and ethos.

While declining large orders can be difficult, if your craft food and drink business is in good shape, you can be sure that the right opportunities are just around the corner, allowing for the right kind of growth that doesn’t entail compromise.

Remember to still think small while thinking big

As you grow, there’s a good chance you’ll start doing business with larger companies who want to tap into your craft credentials. As you do this, you’ll also need to ensure that you’re continuing to engage with your existing customers and followers.

Smaller customers want to know you won’t forget about them, while larger customers want to know you can handle their needs. This means carefully considering how you are perceived by each group and ensuring you are communicating with both sides openly and effectively.

Do look a gift horse in the mouth

In the age of crowdfunding and angel investors, attracting funding has never been easier. But approach with caution.

If you choose the wrong option, you may quickly find your craft food and drink business going down an undesirable path. Crowdfunding is one way to retain control, but can be hard work and with no guarantee of success.

If you are tempted by investment from an angel, or from private equity, I’d urge you to carefully consider their motivation and to interrogate how closely their ethos aligns with your own.

Manage growth on your own terms

Simple really, but this is the golden rule. Weigh up decisions carefully, and do everything you can to keep your company true to its values. That doesn’t mean fearing change, but it does mean changing for the better.

Remember: there’s no such thing as the point of no return

Confession time. Long ago, our first coffee company was bought out by a small coffee shop chain, which was subsequently bought out by a now well-known global coffee company. After this happened, the lure of growing a business on our own terms was an infinitely more exciting prospect.

So we left, launched Union Hand-Roasted Coffee and never looked back. Union is in rude health with growing revenues, expanding premises and an ever larger team. So even if you do sell your company, it’s just the end of one chapter, and the beginning of the next.

With the UK’s food and drink industry contributing £21.5 billion to the economy and enjoying 3-4% yearly growth, at least 6,300 craft food and drinks producers are driving the increasing demand for craft and artisan food and drink products. With such fantastic potential for artisan businesses, it’s our hope that these tips and insights will help you successfully scale your business and savour the rewards.

Source: FoodBev.com