What Makes You So Special? The Cost of Entry to Compete in the Natural Products Industry

We’ve just returned from Natural Products Expo East 2014, four days filled with meetings, food and supplement sampling, bear hugs, great restaurants, and thousands of very passionate people who truly believe in what they are doing and selling.

To be a part of this tribe, there is a cost of entry — several actually. And this is a constantly moving target. What we see more and more is that what used to be a differentiator can quickly become a cost of entry into the category. This became clear to me in a meeting we had with a startup company.

Cost of Entry #1: Passion

This start up was passionate about their new product. It was not important that there were many other similar products in the market. Their founder felt passionately that theirs was different, that it answered a need that no one else was providing.

The problem is that I could go to all of their competitors and they would be equally passionate about their similar products.

So the cost of entry is passion. It’s not the differentiator.

Cost of Entry #2: Science

Walk up and down the aisles of Expo, especially in the supplement area, ask them what differentiates their products and get ready for a science spiel. Even in the food area you will hear the terms “proprietary”, “clinically-proven”, “unique processing” and so on. It’s mind-numbing and surprisingly repetitive. Imagine how the poor store staff has to retain all of this highly important information.

Our start up was equally scientific, even though their product was pretty basic. Their delivery system, their source, their processing all were the latest in environmental eco-tech. Impressive, yes. Different from the competition? Only by degrees.

Cost of Entry #3: Purity

I don’t think I’ve ever heard a natural products company say that their ingredients are not the highest quality. But ask them about their competitors, and more often than not I hear that their ingredients are inferior. They can’t both be right.

Our start up naturally had found the finest source for their product. And guess what? They did not trust the sourcing of their competitors.

Cost of Entry #4: Mission-Driven

This is a newcomer to the cost of entry category, but it’s everywhere now. It’s no longer enough to have a great product. It needs to be tied to some cause or movement. The most effective of these are the ones that are intrinsically built into the product — fair trade ingredients that go back into helping the economy of indigenous cultures, a cause that impacts the company’s local community, or a national platform that impacts the company’s participants, to name a few.

If you don’t think mission/cause marketing has influence, just look at some commodity products. Recently I noticed that Whole Foods Market had switched brands of a type of soap they were offering in bags. The actual texture, scent and price point of the first brand of soap was hardly different than it’s replacement. So it wasn’t the quality or price of the product that was causing the change. The only difference was that the new soap was attached to helping an indigenous community in Africa.

Our start up also had a mission. It was a nice one and more domestic in nature than others — helping hard-hit urban communities. A few years ago that might have been enough to differentiate. However, support is not enough. How they entwine the cause with their product will be how they begin to distinguish their company.


What is striking about these costs of entry is that they are all about “us” — “our company,” “our science,” “our sourcing.” The only one that is not really about “us” is the cause.

What will differentiate companies is how they interact with their participants. As we all know, being natural, organic, fair trade, and GMO-free are important attributes, but are no longer unique. Finding what is truly unique about your company, finding those participants in your brand who resonate with who you are, and knowing how to communicate and relate to them is what will help you differentiate your company’s products from its competitors and set the stage for growth. And determining that takes conscious effort and diligence.

So what other costs of entry have I missed out on? I’m sure there are others, and we’d love to hear what you have to say in the comments.