Sidework

Wandering the aisles of supermarkets, specialty groceries, and curated provisions stores, you’d be justified in concluding that we’re in another golden age of food product development. Consumer packaged goods in the food sector—known by the shorthand CPG—are exemplified by most everything in the center aisles of supermarkets, e.g. the chips, crackers, sauces, snacks, cereals, sweets, oils, beverages, and more. The new products of today combine different threads in food culture from the past couple of decades: sustainability and traceability, healthier ingredients and formulations, chefs and restaurant brands as stars, culinary traditions beyond France and Italy, good graphic design, and social media and influencer marketing.

In the go-go 2010s, money was overflowing into start-up food brands like so much hot agave nectar, and at times the CPG category seemed dominated by lifestyle bars and juice grifts. Today, the money flow is tighter and the financial expectations more realistic, which may make for a more disciplined sector. The products showing up and staying on shelves tend to have more culinary grounding and a better argument for why they exist. Not uniformly, of course; there are still plenty of could-does-not-mean-should products out there (looking at you, wall of indistinguishable stevia-leaf-sweetened beverages).

In this environment, it makes sense that restaurants and chefs would see an opportunity for themselves. Carbone and Rao’s have taken over the once somnolent pasta sauce shelves. Momofuku is aiming to own the East Asian noodles and condiments section. Why not try to put your own uncommonly delicious sauce/condiment/snack thing into a package and sell it? Well, there are a few great reasons and ways to go about it, and many more reasons and ways not to. That’s where attorney Teepoo Riaz comes in.

Teepoo spent twelve years as general counsel to FreshDirect and today heads up the CPG Group at the law firm Helbraun Levey, where he works with a number of start-ups and established brands. Some of these have been launched by chefs and restaurants, while others have come out of more traditional, non-food business backgrounds. From his vantage, the number one mistake that chefs and restaurants make in trying to launch CPG products is not allocating enough resources to the development process, both in terms of people and capital.

On the people side, Teepoo says that successful teams “basically wall off some people or bring in somebody who has nothing to do with the restaurants and they are literally dedicated to building this out.” On the cash side, chefs routinely underestimate how much funding it takes to develop a product, imagining no-to-very-low capital investment will get them there. A minimum realistic figure is probably $100,000 of dedicated funding to get through the first couple phases of development, market testing, and a first run of product, after which it might take hundreds of thousands of dollars more to get a few SKUs onto store shelves.

The Five P’s are the tough-love part of it: Proper Preparation Prevents Poor Performance. Teepoo has good news too though: “Consumers are always looking for new product…novelty never goes away in food.” And the resources and roadmaps available to help start-up brands succeed are more abundant than ever. Teepoo recommends that people new to the CPG world make themselves aware of category trends and planning accordingly, whereas people coming to it from the restaurant world may already have a product they’re known for and want to develop.

But there is a good argument for not chasing trends. Shoppers buy a lot of food and do so at high frequency. Delicious products made by teams that can put them onto shelves and market effectively often seems to be what creates the trend, not the reverse. Was olive oil trending before Graza burst onto Whole Foods shelves? Not really, notwithstanding lifestyle-ish brands like Brightland. Was tinned fish chic before Fishwife made theirs look as cool as 1960s psychedelic album covers? Maybe, but only in a small, aperitivi-sipping set of cognoscenti.

As Teepoo puts it, “you have to have some type of point of view.” So go forth, make something delicious, make sure it has a point of view, test it and improve it, and raise a couple hundred thousand bucks to get it to market (Joking! We know it’s not that easy!) And hire smart people to help you out along the way. Like Teepoo — you can reach him at teepoo.riaz@helbraunlevey.com.