At Vitafoods Europe in Geneva this month, New Nutrition Business director and market analyst Julian Mellentin outlined the keys to start-up success, even when Big Food comes calling with Kellogg's about face on its Kashi acquisition a prime case-in-point.
Being smart about distribution and picking your markets were key, he said, along with the will to defend real innovation.
"If you're a start-up in Europe, if you sell through health food stores you're gonna have very small volumes and you can probably only do it one or two countries and it will be very hard to graduate to a supermarket and then the supermarket's got big expectations of your sales results..."
"A really smart European start-up entrepreneur would perhaps begin in one country...but then you almost immediately have to think about carefully targeted exports."
Mellentin said a Big Food buy-out could be beneficial if the right players were involved, or the right business culture balance found.
"You see case after case both in the US and Europe of innovative companies being killed by a corporation's very rigid way of doing things...a good example of that is the Kashi breakfast cereal brand in the US which was highly entrepreneurial - bought by Kellogg's.
"Kellogg's basically messed it up by trying to force it into their mould and what they've done is move it out of their head office and move it back to its entrepreneurial roots in California and cast it adrift and said you're still part of the corporation but you do things your own way. Smart companies have learned from that."
“Culture is the root of successful innovation,” Mellentin said.
Obesity and Weight management
Mellentin will discuss the fast-changing weight management market at our online Obesity and Weight Management event on June 3 at 14:00 Paris time.
Click here for more information about that.