Today we’re excited to publish a blog written by guest author, F&B industry guru, and PacMoore friend, Steve Gaither! Learn more about Steve in his bio at the end of this blog.
The common advice is you have to think big to be big. But what if I told you the smarter play was the exact opposite when it comes to winning the manufacturing game? Instead of only trying to work with the large food companies, you may want to consider that there are real opportunities when you work with smaller, up-and-coming companies. They’re the ones who are going places in the future, and the ones who are likely to get bought for millions of dollars by the big guys.
Think of it this way. A multi-billion dollar company is like a huge ocean liner. Sure, it’s worth a lot of dollars and it’s, without a doubt, luxurious, but it’s also going pretty slow, hard to turn and isn’t exactly known for innovation. Start-ups and new companies are like speedboats. They’re smaller and you may not notice them at first, but they’re able to cut through the noise and make serious waves in the manufacturing business.
So here’s my pitch. There’s no shortage of small companies that need funding even if they’re rich in ideas, so you have to find the ones who truly have potential, serve a specific niche, and are driving innovation in their industry. Pick one or two that you believe in and then address one of their primary concerns – working capital. Because retailers take up to three months to pay these companies for their product, this is often a difficult period for them. By charging your normal prices and extending a 90-day line of credit for a percentage of equity in the company, you’re helping them get off the ground while also cementing your working relationship. Then down the line, you can earn additional equity based on any distributors or retailers you bring to the table.
Consider playing the long game and realize the smartest bet isn’t always on the big company. The smartest bet may just be the small innovator that’s going to get bought by the big company once it’s thriving. So foster those relationships now, because you never know which speedboat is going to turn into the next ocean liner.
STEVE GAITHER
President, JB Chicago | Partner, Spiral Sun Ventures
Steve Gaither is the founder of JB Chicago, an integrated marketing agency whose clients have included DMI, Tetra Pak, and Hershey’s. A mentor at the Good Food Business Accelerator, ICNC and The Hatchery, his relationships with the food and bev sector led him to cofound the Windy City Troublemakers, an early-stage food entrepreneur group in Chicago. Steve is also a partner at Spiral Sun Ventures, a food advisory and investment group focused on healthy food, where he and his fellow CPG experts provide the operational know-how and go-to market strategies that help brands accelerate their growth. Steve graduated from Ball State University (1994) with a degree in Architecture and Planning. He resides in the Chicagoland area with his wife and three children.
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