While the pandemic and subsequent recession have pushed many consumers into comfort and value-added baked goods, HighKey’s long-term focus hasn’t changed.
“Our job is to continue to help consumers evolve their eating habits and drive carbohydrates and sugar out of their diets,” said Joe Ens, co-chief executive officer, HighKey, an Orlando, Fla.-based cookie, snack and food company. “We are increasing our pace of innovation because we see ourselves as an ally to consumers pre-, during and post-COVID.”
Shopping habits will also change, such as buying direct-to-consumer, using click-and-collect and exploring a greater number of online options beyond Amazon. Online selling has also become easier and more affordable.
Linsey Herman, vice president, product development for Factory LLC, routinely relies on Instagram to scout out the latest in new product activity from incubators and emerging brands. The Bethlehem, Pa.-based firm invests in and helps scale up high-potential food, beverage and pet food brands that have achieved more than $2 million in sales along with proof of consumer and retailer traction.
“If you’re a startup and not burdened with a ton of debt or not worried about comanufacturing, you can buy an ad on Instagram, rent some commercial space and sell direct to consumer,” Ms. Herman said. “There’s obviously a lot less of that than there was 12 months ago, but it’s there. It’s exciting to see that there are still entrepreneurs with energy who are creating opportunity even during this time.”
Eventually, old-fashioned trade shows will return where buyers can meet and sample products in person.
“This face-to-face interaction is vital for smaller companies trying to gain a foothold in the market, and this has been wiped out due to COVID-19,” said Tom Vierhile, vice president of strategic insights, North America, Innova Market Insights. “Virtual trade shows have become a substitute, but this substitute does not seem to be nearly as effective in closing sales.”
Steffen Weck, president, Food Business Consulting, suggested that entrepreneurs do a little soul searching before plunging into the market.
“If your happy selling your product to a farmers market and to friends and family, that’s one thing,” he said. “If you really want to penetrate the market, that’s a completely different scenario. We want to make sure the key principals are ready for what they are about to undertake.”
Mr. Weck added that’s how new brands can take the time today to prepare for the better times ahead.
This article is an excerpt from the September 2020 issue of Baking & Snack. To read the entire feature on incubators, click here.