What If… It Was the Right Time to Open a Food and Beverage Supplier Network?
The food and beverage sector seems to be buoyant: the European devote a large part of their budget to food, driven by the health recommendations which follow one another to guide European households towards a healthier diet, and the practice of “eating well.” Which is present in the media.
In this context, opening a food and beverage supply business can therefore be an excellent idea.
Only here, we do not improvise grocer. Before you start, it is therefore vital to do market research and set up a solid business plan in order to obtain financing.
If you are not familiar with these concepts, this article should help you to see more clearly.
The food and beverage market World-Wide
Households spend a large part of their budget on food and beverage!
The first good news is that the people across the world spend a large part of their budget on food, on average according to INSEE, food represents 20.4% of their annual consumption expenditure.
In 2014, European households thus devoted 232 billion euros to food, which gives us an average annual budget of 3,600 euros per year in drinks and meals.
Second good news for you who want to open a grocery store, 76% of the food budget relates to food at home, the remaining 24% being spent in restaurants, canteens, cafes, etc.
If the crisis pushed households to reduce non-essential expenses such as leisure, it had virtually no impact on their food purchases. Food expenditure increased at the same rate before and after the crisis (0.4% on average per year).
This is partly explained by the place of meals in our society. Indeed, the meal constitutes for the French one of the most pleasant moments (almost as much as reading or listening to music). Shared meals are the most popular.
Open a food and beverage manufacturing unit.
The need to study the local market well before launching!
Doing a local market study is an essential step with opening a food and beverage supply.
This one aims to help you answer the following question:
Is there a potential to create a grocery store in the city where you live?
Your local market research will allow you to analyze in detail the demand on your future catchment area, to discover the expectations of your future customers, their budget, but also to discover what is lacking in your competitors, and so to create a unique concept on the market.
Carrying out this market study will therefore allow you to validate the viability of your project on the commercial level and to collect the information necessary for the creation of your sales forecast.
Once the market research is done, you can move on to the next step: writing the business plan.
What is the business plan of a store for?
The business plan has several objectives:
· Allow you to check that your project holds up financially: that you will generate enough turnover to be profitable.
· Allow you to identify the project’s financing needs initial investment, and over the next 3 years.
· Serve as a reference document to present your project and its financial potential to banks or investors.
Regarding the content of the grocery business plan, schematically, it consists of a presentation file detailing your concept, your market and commercial strategy, and your financial plan. For more details on this subject, you can consult this business plan.
What are the key points of the business plan for a food and beverage supply store?
The choice of the location is the major element for your food and beverage store: you must therefore put this point forward in your business plan. Demonstrate that the place has good exposure and that it is close to a heavy traffic flow. Also remember to check that there are no redevelopment projects in the area or the surrounding area that could affect your catchment area.
The second key point is the management of supplies: it will be necessary to highlight your ability to obtain a significant commercial margin and to quickly sell stocks (especially regarding perishable products).
Then it will be necessary to pay attention to the investments: both at the level of the initial financing plan, but also in the long term. The company will have to generate sufficient cash to allow regular renewal of professional equipment (cold room, refrigerated display case, etc.).
Finally, it will be necessary to highlight your competitive advantages and the elements that differentiate you from your direct competitors (food trade) and indirect (catering), such as the quality of the products sold or that of the advice given to customers.
How can I easily carry out my business plan?
A good way to easily make your business plan is to use online business plan softwares. This type of tool facilitates the creation of the financial forecast (the software takes care of the calculations for you), and saves you time on the drafting (you are guided by instructions and examples, and the software takes care of shaping for you).