Food Revolution Market Entry Strategy

It occurred to me that I did not fully address FR’s market entry strategy in my previous post. Traditional wisdom says that when a newcomer attempts to take on a well entrenched incumbent, the newcomer should initially focus their efforts on gaining a strong toehold in a market niche, ideally one that is not well served by the incumbent.

Going by that logic, Jamie should have picked a school district where the parents were already reasonably health conscious, whose kids did not eat at the school cafeteria because the offerings were unhealthy and it would have been preaching to the choir to talk to these parents about the importance of healthy school lunches. This would have been a great slice of the market to go after because:

(a) Barriers to entry would have been lower - he would have enjoyed widespread parental and potentially educator and administration support

(b) Results would have been relatively easy to show (say the percentage of students bringing lunch from home went down from 50% to 10%, it would have been an impressive statistic)

(c) Given the correlation between income and healthy heating habits, these schools would have been located in wealthier neighborhoods where fundraising to support his goal would have been easier

However, Jamie went after the “fattest city” in the “fattest country” in the world - Huntington in West Virginia in the US - irking many people right off the bat with that characterization. I speculate he may have chosen this market entry strategy for a couple of reasons:

(a) Forgive my cynicism in listing this as #1, but the drama makes for good TV. Think back to the tear-jerker episodes where he interviews the overweight families and takes them to the doctor who tells them their daughter will die before the parents if she doesn’t lose all that extra weight... To be fair though, if a TV show was generating your paycheck, helping you sell more cookbooks and gear, and making you a celebrity while you’re at it, this is a pretty astute and strategically sound decision. People who are not in nearly as bad a situation will see it as if-they-can-do-it-we-can-do-it. Works either way.

(b) If the goal is to make something widely adopted, it’s a much more compelling story with a greater impact if it was applied on the worst possible case, and that case was turned around to produce results. It’s a combination of couple of Cialdini’s principles of persuasion. A greater authority is conferred upon Jamie if he succeeds with the “fattest city” making it much more likely his suggestions will be accepted elsewhere, and people in a similar situation will see it as social validation.

(c) It nips arguments such as “they could do it because they lived in a wealthy school district that was not in a cash crunch” type of arguments in the bud.

(d) In some ways, raising money from the administrators of the local hospital is a shrewd move in that it forces the more educated, health conscious section of the Huntington community to commit to effecting a change in their community. It also enhances their public image in the minds of those who view the hospital as benefiting financially from the poor health of those living in the community.


Overall, I can see why FR adopted the latter strategy when theory says the former might be the way to go. Goes to show that theory and practice are not always congruent, but there’s a good reason behind it in this case at least!

Jamie Oliver’s food revolution and business strategy

I was catching up on Jamie Oliver’s TV show “Food Revolution” last night, and my mind couldn’t help but draw parallels between the entrepreneurial nature of what Jamie was trying to do and launching a new start-up or a new product. If you have not heard of the show, details can be found here and you can also watch the episodes online for free. I thought it would be fun to do a strategic analysis and compare theory to practice.

The challenge: Take on entrenched incumbents (processed junk food), change consumer behavior (eat freshly cooked unprocessed foods) through marketing (customer education and raising awareness) and eventually capture the American market (every school in America should offer their students nutritious food choices).

When entering a new market, one of the first things to do is to determine the state of the current and future markets. In this case, the current market is the total number of schools in the US, with schools being classified as elementary or secondary (high) school. Per this data from the National Center for Education Statistics, the market consists of 132,656 schools. The future market is expected to grow since the census predicts that the US population will reach 392 million people by 2050. This is mildly reassuring from a business perspective. I say mildly because although the US population is growing in terms of absolute numbers, the growth rate is expected to slow down significantly as the population ages and dies in the coming decades. Assuming that the market entry strategy of food revolution (FR) focuses on schools and is not an end in and of itself, one recommendation might be for FR to next target the other end of the age spectrum since that demographic is growing rapidly and may I dare say, experiencing first hand the effects of years spent eating junk food.

The second thing to look at is competition. In this case, the competition is the processed food currently being served in school cafeterias. They have an advantage over the newcomers in a couple of different ways (a) it’s cheaper (b) less work for the school cooks (c) it’s easy to buy in bulk and (d) they have a longer shelf life than fresh food. Here, it’s important to look at how competition will respond to the entry of a new competitor. In this case, I suspected competitors will react by dropping prices even further making it hard for cash strapped school districts to financially justify replacing processed food with fresh ingredients. I was proved right in the latest episode where Rhonda was considering introducing processed food in the school cafeteria on Fridays to work through the stock in the warehouse. Even more alarming, she had already placed an order for the 2011 school year with the processed food suppliers, citing “cheap” as a reason...

The third thing to examine is the barriers to entry. I see the following as barriers to entry for freshly cooked food in school cafeterias: (a) fresh ingredients are more expensive (b) have a poorer shelf life (c) need more resources to process (people and time) (d) need cooks to be re-trained to use them and (e) students’ palates need to be retrained to appreciate this food. I liked how Jamie systematically tackled each of these issues. The big market risk in this case is that the students may not like this new food and may clamor for the old menu.

The fourth and final thing I would think about when introducing a new product or entering a new market is a strategy for entering the market. In this case, it’s rather obvious that neither acquisitions nor joint ventures are options, and FR must start from scratch.

In my next post, I will attempt to analyze FR’s marketing strategies and their effectiveness.