Your sauce started off as a unique idea and you don't want it to get lost in the crowd. How are you going to produce, market, sell and make yours stand out to consumers who can select from thousands of BBQ sauces?
Research and Development:
Taste as much of your competitors' barbecue sauce as your stomach and time will allow to learn what you're up against. Examine each brand's marketing approach and figure out what each product's competitive edge is and what consumers think of it?
Draft a compelling story on which to rest your marketing efforts and you'll be off to the start. Remember that there are all kinds of Championship sauces and rubs on the market, but very few are quantifiable when it comes to actual prestigious awards that the sauces or rubs have won. How will your sauce compete against those that are backed by a host of awards?
Evaluate your audience to see if your background story will stand up to the scrutiny of specialty stores--for example the high-end or gourmet market--or whether it's a better fit for mom and pop stores.
Develop---or hire someone to develop---collateral to support your sauce, including a great package design, a catchy name and an unforgettable slogan or tag line that is capable of following your barbecue sauce from bottle to shopper’s cart. Also, consider not only how you will get your product into the store but more importantly off the shelf and through the cash register.
The Economics:
The economics of the ingredients you're going to use in your sauce as part of the recipe phase is important to understand. The price of all the ingredients times 3-4 are likely a gross estimate of the retail price. You can have the best sauce in the world, but if it costs you $7.00/bottle to make, you're not going to be able to sell much at $21 to $28 per bottle. Converting your recipe to 500 gallon batches is more than just simple math. There are often an assortment of “scale up” issues. And it can be rather expensive to mix up 500 gallons of something that turns out to taste bad.
Expensive Ingredients:
§ Honey
§ Fresh Vegetables (Onions, Peppers, Jalapeños)
§ Fresh Fruits(Apples, Raspberry’s, Blue Berries)
§ Liquors (Bourbons, Wines)
§ Custom Syrups
All the above ingredients require refrigeration, special handling or processing by the packer which adds cost to the overall end price of the product. Some co-packers will not pack sauces that have any kind of liquor added due to local and state liquor laws regarding % of added liquor.
A good starting point is $20K as a standard figure just to get the first bottle onto a shelf. Add in the cost of your time for 3 years of blood, sweat, and tears to get a small business built. And in the end, you will have pennies in your pocket.
How do I market the New BBQ Sauce?
Local markets, not the chains and sample it out on one of those table stations at the stores on Fridays or Saturday, that's your best bet, but I'd add a few things.
1) You may have to offer consignment terms to the local market. They're taking a huge risk by giving you shelf space (which they don't have much of), and there's no way they can afford to pay you up front for the sauce. Think about the economics of putting out a free case in every market you want to be in. If you can't afford that, it's not going to work.
2) The best way to sell an unknown sauce is to sample it. The label won't sell it for you. People will buy new products from companies they know, but must test things from new ones It's not about taste—Think of how much Apple Computer spent trying to market the Mac only to be beat in the marketplace what many consider an inferior product.
3) Sampling is very hard work. You'll be giving up your Saturdays, working an eight hour shift to expose your product to 200 people, 20 of which may buy the sauce, and 2 of which will become repeat customers. And that's if your sauce is really good. With a margin of $1/bottle, you're making $2.50/hour. You won't quite cover your gas to get to the store if it's not close.
Internet, you cannot sell a sauce that people haven’t heard of on the internet. If they won't buy it in the store by just picking up the bottle and reading the label, there's absolutely no way they're going to purchase it on the internet. It makes a lot more sense to market through someone like Amazon.com, but even they can't perform magic if there isn't any demand for your sauce. The service the internet marketer is providing is the framework, distribution, and fulfillment end of things. They can quickly dominate the SERPs (Search Engine Result Pages) for a given produce because they're an authority site.
Word of mouth is the best way to advertise. Try entering bbq competitions in your area. People will get to talking and then maybe that will help spread the word to someone who has a connection.
That will get you a few hundred loyal customers that purchase a bottle every month or so, if you're lucky. Can you live on $100/month?
Just remember, there are 1,000 other people that have the best sauce that any of their friends have ever tasted trying to launch their sauce this year. 2 of them will be around in 3 years.
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