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NEW RESEARCH | How food entrepreneurs can break into a new market – researcher’s advice
Producing and selling local food presents many challenges along the way – and opportunities. Former Norsi PhD student Stine Alm Hersleth tells us all about it and gives her best tips along the way.
How easy or difficult is it for small local food entrepreneurs to sell their locally produced food today?
– The possibilities are great, I would say. Primarily because of the increased interest among consumers, market players and policy makers. But also because many farmers today use farm resources in new ways to produce other products, with higher profit margins, than their original raw materials, such as meat, milk, cereals, vegetables or berries.
– Small food entrepreneurs can provide customers with high quality products with a clear origin and history. They experience high levels of competition in the mature food market, but many have challenged this by creating and using new markets and channels where the food entrepreneur sells their products directly to consumers, through delicatessens or via e-commerce.
– Farm shops, farmers’ markets, food fairs and REKO rings are examples of direct sales channels where entrepreneurs can test new products. They cooperate and help each other rather than seeing each other as competitors, as everyone benefits from broadening the market for specialized food products.
What are the main obstacles they face?
– There are several obstacles. Above all, they are small with scarce resources and new to a sector and a market. The site-specific location is also a challenge. They have to rely on local resources and their own personal knowledge, and qualified workers are hard to find. Access to advisory bodies is also scarce.
– Getting into food processing and marketing requires new skills, and access to skills development can be difficult as people often live far from training and advisory services. Not everyone is comfortable with digital training, so this is a common barrier.
– Another challenge of operating in rural areas is that they are far from the most interesting customer markets, which are often located in big cities.
What methods do local food entrepreneurs use to build their businesses, develop innovative food specialties and enter the market?
– My research shows that they learn through peer networks, where informal learning is particularly important. It is important that entrepreneurs have a respectful approach to the industry they are entering, and are curious, open and committed. This puts them in a special learning community where they share company-specific knowledge and gain access to important industry contacts.
– Their approach to the new market and marketing methods differs if they have been running the farm for a long time or if they take over the farm with the ambition to do something new with the farm’s resources. The outsiders have more aggressive marketing methods than the others, who are more focused on creating an attractive additional industry for the farm.
What are your best tips for local food entrepreneurs who want to succeed in their sales?
– There is no quick fix to be successful. It takes time and requires a lot of personal skills and enthusiasm, and maybe also a bit of luck. But my practical tips to increase your chances of success are:
– Identify existing support schemes in your region and actively participate in networks and mentoring programs to meet like-minded people and gain new knowledge in both food production and market development.
– Share your knowledge and experience with other local food entrepreneurs for advice and networking. By learning from others, you can avoid making costly mistakes.
– Use product demonstrations to present your local food product to customers. Tasting the difference is the best selling point there is!
What did you get out of being part of the Norsi network?
– Through Norsi, I have gained access to a useful network and an academic environment in innovation and entrepreneurship. Coming from a food science research background, it was good for me to join Norsi at an early stage. The annual conference and all the courses have given me very important knowledge for writing my thesis and presenting my research.
This article is produced in collaboration with Norsi.
More about the thesis and Norsi
Stine Alm Hersleth recently defended her PhD at the Norwegian University of Life Sciences, NMBU, with the thesis Local food entrepreneurs in Norway: Case studies on successful practices for network learning and market development. During her PhD studies, she participated in the Nordic Research School in Innovation and Entrepreneurship (Norsi) research network. It is primarily a graduate school for PhD students in the Nordic countries in the field of innovation and entrepreneurship. ESBRI has a partnership with Norsi. Read more about Norsi.