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Stefano Urbani Of Ross Chocolates: 5 Things You Need To Create a Successful Food or Beverage Brand

… Product: first and utmost you need to have a valid product. You can sell almost anything to people once, but if you want to be successful you need a product that consumers will buy again, and this will happen only if your product meets market expectations with a reasonable price point. In our case we have spent a significant amount of time selecting the best ingredients to creating the right mix and to obtain a unique and delectable taste profile which, at the same time, would not spike blood sugar in people with diabetes. Our process involved a significant number of blind tests tasting and a randomized controlled study at UBC which proved that our chocolate doesn’t spike blood sugar in people with diabetes. This study has recently been published and makes our products stand out in our category.

As a part of our series called “5 Things You Need To Create a Successful Food or Beverage Brand”, I had the pleasure of interviewing Stefano Urbani.

Ross Chocolates was founded in 1995 by Bob Ross. Ross Chocolates firmly believes that everyone should enjoy eating chocolate, including people striving to eliminate sugar from their diet, they pursue excellence in the taste and variety of our premium no sugar added chocolate while promoting a healthy lifestyle for all

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?

Born and raised in Italy, I’ve always been interested in solving puzzles and to date I still consider my biggest achievement to have solved the Rubik’s cube in 16 hours without any help, direction, suggestion, instruction.

Can you share with us the story of the “ah ha” moment that led to the creation of the food or beverage brand you are leading?

Ross Chocolates was created by Bob Ross, a chocolate lover who was diagnosed with diabetes and was able to put together the right ingredients to replace sugar to make a product that was not only friendly for people with diabetes, but which taste was second to none even within the best regular chocolate brands

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I don’t recall any “funny” mistake; mistakes happen all the time, it’s how you deal with them that makes the difference. What I can say is that you gain very little in finding out who is responsible for the mistake while it is rather very important to find out why a mistake happened and introduce measures to avoid that the same mistake happens again. This is also part of any quality assurance system in place.

What are the most common mistakes you have seen people make when they start a food or beverage line? What can be done to avoid those errors?

The food and beverage industry are dominated by big multinational companies, and it is theoretically impossible to compete with them. A big mistake would be to come up with a product that is in direct competition with other products already available on the market.

To start in this industry the only options are either to find a small niche and create a product that fulfills the needs of a limited number of consumers, or to re-think an existing product and find a way to change something to make it appealing to fulfill new market trends (e.g “better for you” products).

Let’s imagine that someone reading this interview has an idea for a product that they would like to produce. What are the first few steps that you would recommend that they take?

Not necessarily a product that you and your family and friends like will find the acceptance of the market, therefore it is important to have the product tested with a wide number of people (within your market target) and it is also important to understand how much they will be prepared to pay to buy it.

Once you are confident that the product will sell at a certain price point, you can work backwards and check if there are sufficient margins to cover costs of production, distribution, your general and administration expenses and don’t forget your marketing costs.

When you hear that you need a business plan, it means that you need to see your business idea translated in numbers and you need to have your numbers in order.

In making a business plan, it’d be wise to consider that: “revenues are always uncertain, and they are often overestimated, costs are always certain, and they are often underestimated”.

Many people have good ideas all the time. But some people seem to struggle in taking a good idea and translating it into an actual business. How would you encourage someone to overcome this hurdle?

Nobody knows everything. An entrepreneur needs to understand very well in which area has competence and strengths and in which other areas needs help. If you need help, seek help early, create a team with a variety of expertise that will allow you to take educated decisions.

Always remember that a decision taken by a panel of people by agreement (not by majority) is always better than a decision taken by one person only.

There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?

Consultants may be helpful to make you see things from a different perspective and force you to push your analysis to explore details that you didn’t think about. With that respect they may be useful and add value, but they will not do the job for you. As I mentioned earlier, it is important to realize in which area you need help and make sure you include someone with that specific expertise in the team.

What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?

It really depends on your business plan, your personal finances, and the product/market you’re dealing with.

While using your own capital allows you to have more freedom to make your own choices, access to venture capital may bring added value like networking and expertise.

Some product’s success is very sensitive to lead time as they need to be deployed in large volumes in a short period of time to surf the occasional market wave. In that case, access to significant capital is paramount to the success of the product unless you want to see copycats flood the market before you can get there.

Can you share thoughts from your experience about how to file a patent, how to source good raw ingredients, how to source a good manufacturer, and how to find a retailer or distributor?

A patent is very technical, and I would highly recommend using specialized consultants to do it. Trademarks could be easier and the current systems available may allow ordinary people to learn the rules and apply. Sourcing goods and services is today relatively easy through the internet, although checking and picking the right one is more complicated. The expertise of people who have already worked in the industry is very valuable and that again reinforce my suggestion to put together a team with a wide variety of skills and experiences.

Finding retailers and distributors may be challenging especially when a new product has not been proven in the market. In this case, adding to the team a reliable and respected sales broker would help significantly

Here is the main question of our discussion. What are your “5 Things You Need To Create a Successful Food or Beverage Brand” and why? (Please share a story or example for each.)

Product: first and utmost you need to have a valid product. You can sell almost anything to people once, but if you want to be successful you need a product that consumers will buy again, and this will happen only if your product meets market expectations with a reasonable price point. In our case we have spent a significant amount of time selecting the best ingredients to creating the right mix and to obtain a unique and delectable taste profile which, at the same time, would not spike blood sugar in people with diabetes. Our process involved a significant number of blind tests tasting and a randomized controlled study at UBC which proved that our chocolate doesn’t spike blood sugar in people with diabetes. This study has recently been published and makes our products stand out in our category.

Team: The challenges of introducing a new product into the market are multiple and require a wide set of skills. Putting together a team with expertise in different areas is essential to a successful rollout. In our team, we have experts in Marketing, Sales, Quality assurance, Manufacturing, Logistics

Marketing strategy: You need to have a harmonious marketing strategy. Product, Price point, Points of sale and Advertising/publicity need to be consistent with each other. For example, with our brand, we wanted to sell chocolate to people with diabetes. We made a product using ingredients that are safe to eat for people with diabetes. We made single serving bars of 34 grams, which is a portion that a person with diabetes can eat at once without leaving the wrap open; our price point is maybe a little more expensive than ordinary chocolate products, but this is justified by the significant higher costs of the specialty ingredients that we are using; we pushed the sale of our bars mainly through pharmacies or the pharmacy section of big retails stores, and this places our products exactly in the area where people with diabetes are most likely passing by often; last we are focusing our advertising in those channels where people with diabetes are most likely going to get our message.

A sound business plan: It is obvious to most people that you need to invest initially a significant amount of money to start manufacturing your products, building up some inventory and start selling your products. Many people would also understand that in the first few months/years you may sustain losses that need to be financed too.

Not many people realize that, even when you get your business to profit if it continues to grow it will still require a progressively increasing amount of working capital to run. In this case, if the internal cashflow is not sufficient to fulfill working capital needs, you will as well experience a slowdown and eventually a failure. Remember that not having orders is bad but having orders and not having the products to fill those orders is also bad.

A good business plan will give you sufficient warning to address the issue and give you the chance to seek additional financing before the time comes and it’s too late to find the needed resources.

Can you share your ideas about how to create a product that people really love and are ‘crazy about’?

If I had a good, viable idea I wouldn’t openly disclose it in an interview. That’s another important clue for a new entrepreneur, protect your ideas. In the world there is shortage of good ideas but there is an excess of people who are trying to take advantage of others’ ideas. Always use Non-Disclosure Agreements to protect Intellectual Property rights and, as soon as possible, use the patent and trademark offices to protect the key features of your inventions

Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?

Our products allow people with diabetes to enjoy a treat without the need of taking insulin. In making our products, we source our ingredients through those supply channels that guarantee that cocoa farmers are paid a fair price, cocoa farming is carried out in a sustainable, carbon positive way and under no circumstances children are exploited.

Our key employees are invited to participate in an Employee Stock Option plan to make them feel part owner of the business they contribute to develop.

You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

“Trust” is a direct reflection of who you are in the eyes of those who interact with you. I would like all people, and primarily all entrepreneurs who go into business, to always remember that “trust is earned by the gram and lost by the kilogram”.

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.

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