There has been no better time to start your own protein bar business than now. This $20 billion market is continuing to grow (and is expected to hit $32 billion by 2025) and consumer behavior is shifting in favor of small, innovative business owners.
Entrepreneurs who are ready to design their own protein and energy bars have several things they need to do first before their business can take off. Below are the key steps to building the framework of a successful protein bar company.
Do Your Market Research
There's good news for small brands right now. Big Consumer Packaged Goods (CPG) brands are losing market share (think Dean Foods bankruptcy or Kraft Heinz' seemingly bottomless share price free fall). This is allowing agile, small protein bar businesses to swoop in and gain market share. CPG brands are losing their hold of the packaged food industry due to two core factors: 1. An age-old lack of investment in innovation and, 2. Consumers moving away from grocery aisles to the online marketplace. As these CPG brands continue to fumble, there is plenty of room for entrepreneurs to enter.
So, with this knowledge, where do you go from here? A good place to start is researching the market and determining the type of protein bar that is most in-demand, growing in demand, or completely missing. Another idea is to look at your interests and design a protein bar that may enhance these niche areas. In other words, don't try to compete with the established brands by repeating what they're doing. Instead - do the next big thing first.
Perfect Your Delicious Recipe
Once you know the type of protein bar you want, it’s time to develop the perfect bar for your customer’s palette. The recipe formulation process is often both exciting and overwhelming at the same time.
For assistance in the avalanche of small details, consider collaborating with a manufacturer instead of trying to manufacture yourself. The right co-man will be able to produce your product in a certified facility, be able to scale up with demand and provide services from FDA compliance to insurance assistance.
Partner with the Right Manufacturer
As we mentioned before, working with a manufacturer allows you to bring your product to life faster while maintaining the product’s quality. But what do we mean by the “right” manufacturer?
For entrepreneurs entering the packaged food industry, finding the best protein bar manufacturer for your specific company can be a long and intimidating process, especially if you don’t know what to look for. Below are some tips to assist you in evaluating your options:
- Are they the right size for you? What are their Minimum Order Quantities (MOQs)?
- It is ideal to choose a manufacturer located in the country you plan to sell your bars in. This means that if you are planning on selling to a U.S. market, then a U.S. based manufacturer is ideal, and vice versa.
- Explore the other services they provide as only some co-packers offer things like lab-based micro testing, packaging compliance (per the FDA's guidelines), and quality assurance (look for SQF certification).
- Prepare a launch timeline to properly understand the amount of time to produce your protein bars.
Outline a Marketing Strategy
From the market research you conducted at the very beginning, you should have an understanding of your target audience, your direct and indirect competitors, and the benefits your product will bring to the market landscape. This information will help build the foundation of your marketing strategy. With the rise of eCommerce and social media, getting your message to the right person at the right time is crucial to increasing brand awareness. Here’s how you can do it:
- Be customer-centric
- Utilize social media
- Innovation and versatility are key to strong advertising
- Promote your product with fans and influencers
- Identify cross-promotional opportunities
Launching your brand to market is arguably the most exciting moment for a new food company. Make sure you have the perfect team in place to be primed for success. Most importantly, this team will include:
1. The Co-Manufacturer / Co-Packer (or your in-house team of operations if you plan to manufacture yourself, including head of operations, head of QA, kitchen staff, cleaners and legal team for insurance and compliance).
2. The Head of Marketing. This is even more important than a CFO for a new brand
3. The CEO - to position the brand direction and outline annual goals. Often serves as CFO until the company grows in size.