Q: Hi Dr. BBQ,
I’m a student at the University of Nebraska in an agribusiness marketing class. We are assigned to do a marketing plan for a company. We were assigned Hollman’s Foods BBQ Sauce. We have to present a marketing presentation to our class this coming Tuesday. Do you have any suggestions? What do you think the sales trends and forecast are for BBQ sauce?
A: Hi Cheryl,
BBQ sauces have taken on three major lives lately. One is a mass produced retail item with bottom line pricing and targeting the big food stores. Two is as a specialty (fancy) food market item. Three is as a food service market item targeting schools, caterers and restaurants, etc. You don”t necessarily have to pick just one but you probably won”t be able to target all three.
The mass production route will require a big investment in production, labels, stock, time and money spent trying to get in some doors and maybe even slotting fees to get shelf space. This can be very expensive and often you will have a clause where you have to buy the product back if they don”t sell it. You will have to work very hard doing demos etc. to ensure that you don”t get it back. You can also try to get a food broker to take it to that market but they are overwhelmed with requests and most don”t make it. Of course they would also require part of the profits.
The specialty food market is very easy to get started with. You can even “can” your BBQ Sauce at home for a while and print your own labels too. The long-term prognosis for a start up like that is not good though. You need to beat the streets getting in every little store you can. You can use better ingredients and be a little more pricey in this market but you”ll need to stay away from the big retailers. Once you show up there the little stores will all lose interest.
Packaging is critically important in both scenarios but should be different. Mainstream is mainstream and I wouldn”t go very far from center. The specialty market seems to welcome different and interesting things. Same goes for the actual product. I wouldn”t try a strawberry habanero sauce if I were going to Kroger. The specialty market would like that.
Last but not least is foodservice. This can be paired with either of the two others. The mainstream route will have you competing with low priced stuff that has been around forever. Cookies is probably a good example in your area.
But a good and unique specialty sauce has a shot at getting some attention. Price is always an issue in this market but you may get away being a little higher if your product is very good and unique. The specialty food stores won”t care and probably won”t even know. These foodservice guys will let the customers assume it”s their in house creation. Best place to sell this way is door to door and at food shows.
Good luck with your marketing plan.
BTW I am coming out with Dr. BBQ Sauce in a couple months. Can you guess which route I”ll be taking? Check out www.drbbq.com