Securing listings and investment are some of the most significant challenges facing food start-ups attempting the jump to the mass market. Market research and proof of concept are required to allow your product to stand out in a crowded marketplace.
Entrepreneurs Franziska Schetter and Ola Klöckner experienced this first hand when they launched their own start-up, Liquid Matter, and its Matcha You natural energy drink.
After a lot of “hard work” Matcha You is now carried by German supermarkets, restaurants and cafes. The company, based in Munich, is currently working to set up a nationwide sales force.
The experience enabled Schetter and Klöckner to identify another need. “From our own experience, the need has arisen to simplify the entry for young companies into wholesale. Leading [us] to create a place that is a first stop for young entrepreneurs, motivates them, helps them, provides feedback, allows to optimise things and make adjustments,” they explained.
The seeds of KaDeTe, short for Kaufhaus des Testen – or 'store of testing' in English – were sown in a “random conversation” about the topic.
“Ola said: ‘There should be something like...’,” Schetter recalled.
A series of coincidences pathed the way from casual concept to concrete reality.
Shortly after the idea of a start-up supermarket came up, Berlin mall operator Wilmersdorfer Arcaden contacted Schetter “quite suddenly” and offered a location.
Another coincidence followed: Schetter met an old friend from school, Oliver Skopec, and told him about the idea. Together with his wife, Dr. Anke Skopec, Skopec runs the Berlin Institute for Innovation (BIFI), a market research firm focussed on new market entries.
“[We] quickly came up with the idea not only to create a dedicated store for new products, but also to help start-ups with market research to gain important insights about their product in order to build up credibility for investment or listing related negotiations. From an accidental moment, without the intention of starting a business together, the idea for the KaDeTe emerged. A conglomeration of a vision, the right people and random events. Now the first KaDeTe will open on March 17th.”
More than a marketplace
The Kaufhaus des Testens is the first store that focuses on products which do not enjoy a comprehensive presence in retail and trade so far.
But selling products is just “one component” of Schetter and Klöckner’s vision. “KaDeTe is a marketplace that provides market research at the same time,” they explain.
KaDeTe aims at these three target groups. Customers will be able to buy and test innovative new products and participate in market research studies to help shape the final product. Retail and trade will gain access to sales statistics and market research results to improve the basis for selecting the right products to appear in their stores. While start-ups will be able to sell products, access market research under “real conditions” and gain additional publicity.
“KaDeTe’s main goal is to offer a marketplace for new products, a quicker and easier entry to the retail market plus a helpful market research analysis for further negotiations with retail partners and even investors.
“We believe in diversity and in products made by passionate people, with good ingredients and with a great story. Mostly, products by start-ups do offer this. That is what we want to support with KaDeTe.”
In some respects, KaDeTe is about building networks and linking businesses. But Schetter and Klöckner stressed, the concept would not have been actualised without the support of a “large awesome network of other businesses”. These include Wilmersdorfer Arcaden, the mall where the store will be located, and “other experts” from the fields of PR or store design. “The realisation of the idea wouldn’t be possible without this network.”
KaDeTe continues to grow its network: “We are also looking for further partners and are very happy about our new strategic partner ProSiebenSat.1 Accelerator. The Accelerator of the Munich Media Group is an investment fund for companies in the growth phase, which invests in selected startup media budgets in the form of TV, online and digital out-of-home advertising.”
Could KaDeTe develop into an incubator in its own right? “We don’t know yet - if so it would be cool.”
The response from food and beverage start-ups has been positive. Schetter and Klöckner have already been contacted by more than 200 companies looking for their first big break.
"Our store offers enough place for about 150 different start-up products. We handle each request individually, because every start-up is currently at a different stage in their development. This has an impact on their goals regarding the market research."