[Music] Hello everybody, my name is Bruce Montgomery and this is my colleague Tracey Pries. Hello everyone. And where with the Road to Retail? On our podcast Tracey and I hope to offer insights and ideas for how emerging small and challenger CPG consumer package goods brands can establish and grow their business. Bruce and I have been working in CPG commercial operations for over 30 years, working on brands of all sizes. By commercial operations we mean all aspects involved in establishing and growing brands across channels and platforms. On our show we bring on guests that are brand founders, leaders, investors, as well as all kinds of suppliers to these emerging brands that are subject matter experts to share their unique insights with the audience. To keep up with the show please follow the Road to Retail podcast on Apple Podcasts, Spotify or YouTube. Leave us a review and consider sharing the show with a friend or colleague that may benefit from the content. You can also check out our website at www.roadthenumber2retail.com and follow the Road to Retail on LinkedIn. Let's get to today's episode. Let me tell you a little bit about Agency Habitat. Agency Habitat is your one-stop shop for emerging brands. From packaging design to Shopify website development, from organic social content to connected TV spots, from brand activations to influencer programs, they offer everything your brand needs to succeed, all under one roof. Contact them at www.agencyhabitat.com. Hello everybody and welcome to the latest episode of the Road to Retail. My mind no matter how hard I lock the door, look who's here. It's Tracy Priest. I'm like a bad ten. I'm good. I'm like a bad ten. I'm always showing up somewhere, Bruce, but great to see you. I think we've got a fantastic episode today. No doubt we do. We met this gentleman at the SFA Winter Fancy Fair. Why don't you introduce our guest today, Tracy? Absolutely. We've got James Pippen and James is the VP at Good Now CPG. James, welcome to the show. Thank you so much for joining us this morning. We're excited about this episode. I think our small emerging brand audience is going to love it. You've got a lot of good insight and a lot of good experience. Why don't we kick it off a little bit, James? Tell us a little bit about yourself and how you came to Good Now CPG. Awesome. Well, thanks, Tracy. Thanks, Bruce, for having me. It's certainly an honor and I appreciate it. Yeah, it's been, you know, like many people, it's said long and twisted road filled with false starts and successes and a little bit of everything. But I got my start in the industry really working in New Belge and Brewery. I was a marketing person and a certified level to organ elliptic beer taster. So you might think that as a 22-year-old drinking a pint and a half a beer every day at 10am is exciting. I certainly did. I had actually never had a beer before I started working there. So I got into the second round of interviews and I thought, "Oh, my goodness. I better try this. I've been an athlete in college and just didn't partake." So I got a six pack and I got a pizza and quickly learned what alcohol tolerance was when I did that for the first time. But it was a great experience and since then I've had the opportunity to work on numerous small business growth companies. I've always been in small business. I've always been in business planning and launching of new enterprises. I've been the first employee at multiple companies including self checkout systems, vending, wine sales, beer sales. And in 2018, my ex-wife, Holly Goodnose, still runs a small company in the industry as well. And I started good-now foods, which we've since renamed Goodnose CPG. She had been in the industry for a long time. She was the DPI rep for Sprouts. She had worked in overseas sales around the Pacific Rim. So I had the chance to experience what it meant to be a broker from someone who was hiring them frequently. And then we saw an opportunity to perhaps improve on that model. So we did that. I've since bought her out of the company and we're happily moved on. She has a great wife down in Southern California. I have a family and kids. But we still stay in close touch. In fact, they saw her at Winter Fantasy a couple of times as well. So that's the story. That's great. So wait a minute, James. There's very few jobs that I'm positive. I would be excellent at. But if you could send me a link to that beer tasting job, I'm pretty sure I would excel at that. And I have a lot of witnesses that would cosine. Well, that's great. Take referrals. That's great. Obviously you have no risk tolerance. If you've been the first employee at many companies. So good, good for you. That's a, that's a rare breed. So as we dive in here, James, tell, tell the audience of the, our emerging brand audience. They'll be interested to know the types of services. Good now CPG offers. So kind of level sets like, hey, this is what myself and my firm are doing for, for brands and companies every day. Yeah, thank you. That's a great question. We, we really have four businesses. So we have what we call our agency. And this is an encompassing sales partnership with our brands to help their business grow. And so that means everything from participatory discussions where we're talking about pricing and margin or target accounts or distribution strategy or trade show strategy or multi vertical strategy. How do I break into the airline industry? It could be anything. We can just share lots of topics. But it's also sales. It's pitching into accounts. It's doing the paperwork. It's distribution growth. It's, you know, graphics support. So the agency is really an all encompassing service to help brands grow. And everybody's unique. So everybody has a different, you know, growth path. It's very different. If you have a couple million in the bank from private equity versus, you know, 10,000 from, you know, your, your cashed out 401k or whatever it is. So we just tried to meet people where, where they're at and offer support for the stage of growth that they're in and the goals that they have. We also have an inside sales group. So we call out to independent accounts. We call several thousand month. So this is a great service. If you are looking to build out distribution and a region, you know, maybe you launch with K. He and Dallas. And, you know, you don't know who all the K. He accounts are you an fire. Not like Andy or any any one of a number of different distributors. We can help you by calling these independence and saying, hey, this is James calling on behalf of harmless harvest coconut water. He's been one of our customers for a full-time. You know, we have a new blueberry coconut smoothie that we're introducing now. We're offering it by one get one deal for all of the accounts that are buying from the K. He. B. C. and Dallas. That's something that you'd be interested in. So it can help you grow out the independent base. We also have a demo company, which has 15 or 20 great random ambassadors mainly around the Western US, but growing. And we can support it accounts like Central Market or Metropolitan Market or Market of Choice or Erwin or you know lots of these accounts where some of the larger demo companies do a great job. Maybe they're not going to do eight demos for you or six demos for you, more we can help with that. And then last we have a technology division. So we've really tried to embrace technology as part of the evolving industry. It's not the old days where people just use the telephone to call their friend the buyer at the store. It's new buyers are changing all the time. They want their forms done properly. They want the process followed. They want the portal filled out properly. So we've evolved our technology to support that with what I think is the industry is only CRM tool that comes pre-packaged with contacts account information forms and a whole suite of tools category review calendars so that you can do the submission part of this industry properly. The first time you don't have to bug a buyer weekend week out for a whole year. You can know who the right person is. No when they're reviewing the category what the right form is fill it out properly, send it to them. Now the industry is a lot more efficient and professional. So that's that's our business. So one follow up before we dig in even deeper with Tracy can you just give folks a sense of just how much paperwork there is we had we had Greg we had Greg veteran just recently the founder of Tessama salad dressing. and he and his brothers just kept charging forward through it.
every red light, but he's like, man, when when whole food said they'd give us a shot, they handed us like 200 pages of stuff to fill out. And we had no idea what we were doing, but thanks to Google, they stumbled through it. So talk a little bit to people that might be thinking of, you know, expanding or looking for a firm like yours. Maybe they're having success in a few stores where they can hand deliver things or a DTC website or the local farmers market. Talk about what happens when you go from single A baseball, maybe up to to triple A, which is a great way to start. And I think that's probably one of the things that scares me the most when I look at a new brand and they haven't done that sort of ground work yet. And they're telling me how great everything is going to be, but they haven't actually field tested it with their local market or their local stores. And this is especially true if you don't have a big budget to work with. That local market, your local farmers markets, your independent stores, your local chains, that's where you should make your mistakes. That's where you're going to get the most favors. That's where you're going to learn if your product has a place in the market or not. So I think that's that's a phenomenal place to start. Your question again was I just I think that's that's a that's an overlooked important step in this process that you just hit on. So I just wanted to re emphasize it. Well, I think I think you touched on most most of it there, James, it was really just to give people a sense that portals and new item forms, etc are complex. It's not like one one page front and back in your in business. Right. Right. And I think the other side of that is that, you know, retailers are busy, you know, we're busy brands are busy distributors are busy everybody's busy, right. So one of the real challenges is that there's almost nobody has enough time to sit down with everybody and explain step by step. How do you submit into seasons? What's the what do you do on the new season? What do you do on the on this whole food form? What does this call them mean? What are you supposed to put here? So there's an advantage to understanding how to prepare just the paperwork because a lot of accounts, your paperwork won't get through the process if it's filled out incorrectly or if it's missing something that needs to be there. So, you know, it's it's a huge part of this industry and, you know, there's no there's no substitute for having a great relationship with the decision. Right. If you're if you have that, that's that's phenomenal. You're going to get some extra care, some extra patience, which is which is great. But at the end of the day, this is an industry that's based on data. It's based on numbers. It's based on information. And there's a million things that you have to do all throughout the process so that everything works. And that's that's the that you have. The whole industry has to be efficient or as efficient as possible to work properly. That's that's great insight. And a couple of things I want to bring. I want to highlight that you said, James, that I think are are small emerging brand audience needs to hear. And one is when we first started, we interviewed a bunch of buyers. And I remember one of the buyers telling Bruce and I, you would be surprised how many brands don't make it to the shelf because they can't fill out the paperwork correctly or on time when I need it to to make the decision to set those items up. Yeah, that's right. Yeah. It's 100% 100% because you, you know, think you think about it on their side. You know, this buyer, let's let's take an account like in my neighborhood up in the Seattle area, there's an account called Pagan. It's a specialty division of Albertsons. It's 15 stores. Well, they have four or five buyers. So they have some some staff covering these things. But you look at the long list of categories that each of these people have. They have thousands, thousands of products that they're responsible for. And their job isn't just to find new products. You know, their main job is to make sure that their shelves are filled, that there's promotions running, that stores are executed. That's their main job. So their part time job is to review the thousands of submissions that come into them each year and make decisions about it and taste it and think about it. That's their part time job. So if you're not filling out the paperwork correctly, if it's, you know, if your UPC is wrong, if you don't have the right pricing, if you don't have that buttoned up for them to move efficiently through the process, they just don't have time, you know, even if, even if, you know, that's just, yeah. And the other thing you don't want to do small emerging brand audience is be needy. Bruce talks about this a lot. So, you know, you don't want to be calling the buyers assistant 10 times a day or a week saying, I don't not sure what, you know, this GTAN number is, can you explain to me what that is? You're doomed, right? Yeah, yeah, absolutely. Yeah, it's, it's, well, you think about any, any, any relationship based business, right? You tend to spend time with people who, you know, make your life easier and better and, and you work well together. I mean, I like working with people that I like. Buyers are the same, you know, like they, like working with people who make their job easy by taking steps to learn about their, their store, you know, to ask other people how to fill something out first, you know, so that's, it's, it's fundamental, you know, absolutely. And the third thing you said that I really liked, and I'm going to play on this as your inside sales offering because if I'm a small emerging brands, and this is what Bruce and I recommend, and I know you'll agree, if you're a brand in the Northeast in the Boston area, you've got a great offering to say, let's start with these independent stores. You're already going to the farmer's market or doing local events, start small, get into some independent stores, get into 10, 15, 20 stores and make sure your brand is successful. And so I think your inside sales offering is, is fantastic. Thank you. Thank you. And you know, we're not doing anything. This isn't like we've invented a new rocket ship here. This is not, this is, this is blocking and tackling fundamentals of sales, talking to an independent store and placing your product in. And this, this gets to also, you know, does it make sense to work with a partner like us? And there's a lot of brands that don't, you don't need to, you don't need to hire a company like us. If you can do the sales steps of this industry and you understand that and that's something you're good at, you can do it. You don't need to hire somebody. But a lot of people don't like cold call it, you know, they're just not comfortable with it or they haven't trained to do it. It's not something that they've, you know, maybe you're an operations specialist, right? And, you know, that's where your comfort is and that's where your knowledge is and that's where you're bringing unique value into the industry. But maybe the idea of going out and pitching your product to somebody that you don't know is terrifying. And that's where that inside sales group, that can solve lots of these problems. You know, there's all kinds of ways to use that. We've done this with local brands that just want sample introductions in their local markets. So we'll call out to them some stores and we'll say, Hey, we've got this awesome new CMOS gel. It's local to you. You know, could we drop off some samples sometime next week? A lot of stores just say, Yeah, that'd be awesome. Yeah, come on, buy. We'll be free on Tuesday and Wednesday mornings. We don't have any deliveries. So those would be great days. Awesome. So we can tee up that that opportunity and all of a sudden the founder who's terrified of sales, but maybe knows all about CMOS gel and all the benefits and they have this great unique formula and new flavors. Now they have this warm introduction that they can walk into a store that's expecting them. They know, you know, there's that's not going to be so cold anymore. They're going to go in. They're going to ask for kin, the buyer and and he's going to say, Oh, thanks for coming by. Yeah, I talked to you're, yeah, this is awesome. I wanted to bring in a CMOS gel and the fact that it's local is true. You know, so we can just sort of there's all sorts of ways to use that that group and it can be for accounts, you know, brands big and small. And I think the other the other side and then all that Bruce jump in is we've met founders who think that sales is easy and that they can do it. And that's and that's certainly not the case. Bruce and Julie. Again, before we dive into the whole area of representation, a couple of other things you said, James, I mean, while while selling and dealing with buyers is not reinventing fire, you have to be good at a couple of things. You have to be incredibly detail oriented. You have to do what you say you're going to do. You need to do it on time. You need to troubleshoot like crazy and make fast decisions because if you're small and difficult to do business with, you're dead. You're dead because you're not big enough yet to move the needle. So that by it's not sitting there. I'm going to be a drama queen here. They're not sitting here going, oh my god, I'm not getting any liquid tide this week. That's going to really hurt me. They're like, hey man, Bruce's awesome skin cream is out, but I guess I'll miss those eight pieces per store per month. And they don't need me. Tracy, let's dig into representation. Yes. So James, talk to us about when a brand should consider hiring a broker or a sales agency. At what point in the growth process does a founder really need to say, I can't I need help. I can't do this. I really do need to hire somebody. Yeah. I think the greatest gift is really. truly knowing yourself, know your strengths and know your weaknesses. And I've found that very personally to be very hard to do. It's taking me a long time to come to grips with my unique strengths and weaknesses. And I was insecure and awkward as a kid, took me a lot of time to reflect honestly about what I was good at and what I'm a terrible hireer of people. You know, I just believe people. I just think like, oh, this person is awesome. They told me they're great salesperson. This is great. We found a great salesperson. You know, it's like, so now our hiring process has evolved because I know that I'm not good at that. That's not my gift. And I think that's where you have to start as a brand thinking about representation is you really have to know, am I good at sales to your point. Like, there is a lot to it. Have I sold successfully in the past? Do I understand this industry and it's unique differences and a lot of people don't. A lot of people think they do. You know, so it's really starts with that honest reflection because truly, if you are good at sales and you understand the industry, you maybe don't need to hire a broker so early on. That might be the area that you operate within your business very successfully. But if you're coming to this industry from fashion or finance or technology or operations or any one of a number of different industries, I would say that there are arguments to be made to hiring some level of sales support even very early on. Whether that's somebody to ask questions up, a fractional salesperson who's a trusted partner who you can, you know, pay a little bit of money for some expert advice that's going to steer you around the landlides. But then when, you know, when you look at a company like ours, like our inside sales group might make sense also at a very early stage. You might do 25 or 30 what we call connects among. The connect means that we talk to the decision maker at an account about your product, which are $13 per connect. So it's a few hundred dollars. You could test out to see if hotels are a good fit for you or if natural grocery stores are a good fit for you or if sea stores are a good fit for you or if acupuncturists are a good, you know, so there's, you know, we can call fair accounts. So you might do something like that after you get to 50 or 100 or 150 doors and you maybe have a local chain that you set up and maybe you have a local distributor, that's where I think it starts to make sense to hire a true fractional salesperson or partner like us. You sort of want to have a personal experience of like, where does your brand play in the market and have some local success. And that's where I think then we can start to grow that. But also when you've had that experience yourself, you understand a little bit about what it takes. You understand the timelines. You understand that, you know, if you hire a partner like us, we're going to work hard. We're going to do our best, but that's still not going to change the fact that Whole Foods Might review your category every two years. You know, so that's, there are certain things that a sales partner is not going to solve. But I do think it really depends on who you are and what your strengths are when you bring in sales. Yeah. And I think the other thing that you said that's good about, you know, starting small and starting with inside sales is you can test and learn a little bit, you know, on a small scale. So if you do fail or stumble, it's not a big deal. And the big thing that Bruce talks a lot about is you're testing out your logistics because you may have never shipped cases to a retailer and you don't want to start with Walmart or Target. You want to start in your local area and start with a Hagen's or, you know, somebody like that and make sure that you can, you can actually do it. It's not as easy as people think, correct? Yeah, that's right. And you want to make a good first impressions, you know, especially with these key accounts. So, you know, there's so many things that a brand has to think about and I empathize with them, you know, to ingredients and packaging and design and sourcing and logistics and production and pricing and all, you know, promotional strategies, all these different things. But from a fundamental standpoint, you know, your business relies on cash flow and it relies on sales. You have to figure out what works. It's your point. It's much better to make your mistakes and you will make them on a smaller account that's local that's going to say, you know, gosh, you have a 24 pack. I just, you know, we don't have room on shelf. You think you could switch this down to maybe like a six or a neat pack like we could get six of these on shelf. You know, you learn that early on, you're not going to wonder why, you know, you're not getting a response from Kroger on something that should have been solved long ago. Right. So, a follow-up question is, how is good, talk to us a little bit about how good now is maybe different from a broker? Yeah. And, you know, and my old joke, my dad joke has been, you know, broker's make you broker and, you know, there are stories of that. The big difference, right, is, you know, the broker model tends to be pretty much one-size-fits-all, right? Like, if you're a Kroger broker, you are there to present items into Kroger and you're there to know Kroger systems and you're, you know, you're insensinadiant, you're going to go and you're going to see them, you're going to do all the things that with Kroger specifically, right? But, you know, a company like us, which is a bit more of a broad-based generalist sales partner for you, is going to look at your business and say, you know, gosh, have you thought about like going into the fitness space a little bit because I could see, you know, rock climbing gems and university gems being a great fit for your product, you know, and we could, we can have a sort of a consultative partnership approach, which is a very high touch point. I meet with all of our brands, you know, every two, three weeks at a minimum. So, we're just talking constantly. We're all sharing updates about things that we're working on. We're hearing about new products. We're suggesting ideas. We're talking about pricing, talking about the results of the last trade show. So, a consultative partner like us is going to help you grow your business from a much more comprehensive space versus the sort of laser focused, we work on this one account. Now, if you just want to get into Meyer, you know, by all means, you know, hire a Meyer broker that's embedded there. They're probably going to have more knowledge about, you know, Meyer and all the individual people than we are, you know, but, but if Meyer is just maybe one of a hundred accounts that it could be Meyer, but you might also be interested in London's and Meyer. So, you might also be interested in, you know, HB and Central Market, or you might be interested in, you know, parks up in the Vale Valley or natural Grocer's Videlin Koch. So, we can sort of take a more holistic approach to your business. And I think offer a more, a more well thought out overall retail strategy. Right. So, you're really recommending and kind of a follow up to that. There's accounts specific brokers out there, Target, Walmart, CVS. And so, if you're a brand thinking about that, but then you have, you know, you guys and good now. Yeah. What council would you give somebody? I would say, I would say we're always about whatever is going to make you most successful as the brand. So, I'm going to be totally transparent about where our strengths and weaknesses are. You know, our biggest strength is the natural channel. There's not a natural retailer that we don't work with in the country of any significance. So, you know, we're going to start there. But, you know, if you've already got, you know, a great partner who calls on the fresh market and earth there and you've worked with them for years and really liked them and trust them. Great. You know, we'll just work around that. There's a million other things that we can be doing with our time for you. So, my approach is always to say like, let's, let's meet you where you're at, you know, and that's the nice thing about our company where, you know, unlike a standard broker, we don't take in competitive products. So, we only work with really one brand. I would say one brand per category. Sometimes there's a couple brands in the category if they're differentiated, you know, and so I'm very transparent with our brands about that. I'm going to say, hey, we're taking in the Southern brand into our portfolio. It's somewhat similar to you. I want to show it to you. We're thinking you were different because of this and this. How do you feel? So, I could tell you then the whole story behind any of our brands. I could tell you their founding story. I can tell you about the products. You know, I just know them more intimately. And so that I think also versus a standard broker, especially the bigger brokers that have hundreds of items, they tend to have like a brand manager who might be your one point of contact, you know, the rest of the team might know some things about you that might not. We just have a different sort of smaller number of total brands so that we can really be your true partner. And I think the thing that I liked what you said is it's not one size fits all. So you're very customized in your approach. Would you agree? Yeah. For the brand. Yeah, absolutely. Yeah. We have brands that are, you know, our largest brand is a couple billion dollar company that's owned by many tens of billion dollar companies.
and on down to the smallest of the moment pops, right? So people are different. And at the end of the day, everybody in the natural channel wants to probably get eventually on some level into whole foods and sprouts and natural groceries and fresh market and maybe croaker and maybe publics. So some of our brands were working on those actively because they're ready and it's the time for that. And some of our brands were working on Earth fair and maybe the smaller ones. - I want to do it, growing it up. - Yeah, so Bruce? - Yeah, so James, tell us a little bit about this new platform for brands you've launched called Harvest Hub. What is it and how does that help brands? - Yeah, I'm really excited about this. - Yeah, one of the real challenges for a company like us is that we have staff and we have to pair our staff. So we have to charge something and even, we don't charge a whole heck of a lot. $2,000 a month is a lot for a lot of brands, right? So for emerging brands, folks that don't have even that bandwidth yet, how do you do this professionally? So our answer to this is harvester. harvester.cpg.com. And so what we're doing is we're taking publicly available information. You can find all of this on Zoom info or Apollo or if you're on the new seasons vendor portal or if you know where to look, you can find this information. But what we're doing is we're putting it all together. So if someone wants to submit into natural groceries, they can go ahead and they can look at the form that what's the submission form? Who do I send it to? Oh, here's the new item email. What are all the fields in it? Oh, I'm gonna email and ask for some support in filling this out. So we can help brands at a very reasonable cost do submissions to the right person at the right time in the right way with the right form during the right category review efficiently and professionally. And if you have questions, you can ask for support. You can pay for an hour or two of consulting, if you need it to do your Whole Foods form properly and have somebody who knows, look it over and say, yeah, this is right. But you forgot your prime affinity here. And I noticed that you said you do three demos a quarter. What happens if you get into 60 stores? Are you ready to do 180 demos every quarter? Like, that's what you're saying right here. So that's what harvester is. It's an online tool where you can go and you can access this information. We have 150,000 accounts in it. We've got 70 or 80,000 contacts. You can look up UNFI accounts in Florida or you can look up, you know, Crown Pacific accounts in Seattle or any number of things from pet food to acupuncturists, to hotels, to retail stores. It's the great tool for being able to do your sales outreach and efficient way. - So folks, a couple of things here, and you've heard it before, if you're new to CPG and you're thinking of going to brick and mortar or expanding from where you may already be, every retailer has a review schedule. If you really knew you're asking, Bruce, what is a review schedule? Each part of the store is divided into categories. Each category has a buyer. Many buyers have more than one category, but these different categories, whether it's analgesic or canned soup or, you know, a better for you snacks, they usually will review their set, own their set, their category, only one time a year. And as James alluded to earlier in the discussion, some retailers, if they don't think there's been enough innovation, they won't even review it every year, okay, 'cause it's expensive to have all your stores reset. Again, if you only have six stores, you have less money to pay people to reset six stores. If you're Walmart with 4,000 plus, that's incredibly disruptive. So the value of knowing when these reviews is, is really important, because when you go in there, you need to have your deck buttoned up, you need to have retail ready packaging, you need to have your supply chain identified. And if you're not quite ready, they're not gonna see you, you know, and consider cutting you in, which means moving you onto the shelf off schedule, unless you're like a proctor or a Nestle, and you're willing to pay a uber premium to have them reset off schedule. And they will send you that entire bill, not part of it, they'll send you all of it. So I just wanted to make sure, James, that people understood, especially the newer folks that the review schedule is critical, not only the timing, but knowing exactly who to reach out to. - That's right. - Yeah, so I want it, I'm sorry, Tracy, you're up. - Yeah, absolutely. So you've seen a lot of brands, James, come and go. So what are the mistakes you've seen brands make? What are the top three mistakes that you see brands make in the sales process? Whether that'll give you a little hint, maybe where to go first, understanding what it takes, like we've been talking about to go to brick and mortar, pricing, you know, what's your, what's your, give us your top two, oops, that you've seen just many brands make. - Gosh, that's a tough one. I think the, you know, not understanding your product market fit is number one, you know, and the product market fit is a big word. This is like basically where your product belongs on shelf, you know, if you have a product that has really conventional looking packaging and no certifications, but you're pitching it to Aeroone and all the top natural retailers, you know, that's sort of, they're gonna look at that and say, you don't really understand, that's not a product for us, that's a product you're, you know, Albertsons, maybe, or somebody else. So it's really not understanding that product market fit and that starts, you know, with going into the stores that you're looking at pitching in, especially your local stores, you know, you go in and look at the shelf, look at what your competition is, if you're asking a retailer to put in your product, you're asking them to take off something else. So what is it? What are you better than? How are you bringing incremental, additional revenue to that category? Because stores, it's, they're gonna make $10 a week off of one product and you're gonna slot in and make $10 a week off of your product to the store. That's not, there's not really any value in that. That's just a bunch of work for no additional value. You know, are you gonna give-- - Incrementality. Incrementality is what the buyer wants. Bruce always gives an example of, if you're a premium skincare brand, you probably don't wanna go to Dollar General. - Yeah, exactly. - Even though they have 18,000 stores, and you think, oh my gosh, this would be awesome. Look at all the distribution I can get, but you're not gonna sell anything. - Yeah, yeah, I think that's right. And I think it ties into another thing that I see a lot, which is not having a different strategy for different stages of your growth. You know, a lot of brands come in and they hear about the successes and they hear, oh, I need spend data, right? I need, you know, something that, yeah, you might need that in two or three years when you're looking to go from 300 stores to 2000, or something, maybe you do need some data at that point to tell a story to go outside your region, but you maybe don't need that right up front. You know, you maybe just need to get your product into some local distributions, local accounts, and that's a different strategy. That's a different approach. And I think probably the other thing, you know, that I really stress a lot is having a multi-legged stool if you can. In this industry, you know, we saw what happened with food service when COVID hit, you know, there was a really good time to hire a food service rep. I'll tell you that. And if your whole strategy was based around food service, then you had to rapidly retool or lose your business. So if you can have a, you can have a retail format, but then you can sell a food service format or you can sell, you know, what's your D to C strategy? What's your online strategy? Do you have a bulk strategy? Are you producing product yourself or are you having it copacked? If you're producing it yourself, can you do some local privately? You know, a lot of like smaller chains want to work with their local partners for that. So if you can have some different sort of legs to your revenue and your growth, that can really, really help a lot because a lot of brands don't even see retail as their main focus. It's just sort of their additional leg of their stool that supports their D to C in their online business and, you know, who knows what else. But they like to be in retail because they have customers that shop online happen every now and then to walk into a store. They want to, they want to see it there. So that multi-legged stool is another thing that I think is neglected by some brands and that's the definition. - And one of the other things you mentioned was what I call alternate channels, whether that's airlines or, you know, bodegas in New York or things like that. - Yeah. - And I really, I think that's something that allows you to.
of brands overlook. You don't want to have too many strategies, but I think people overlook some of the things that can be meaningful. Yeah, yeah, absolutely, absolutely. And I think maybe the last thing that's really foundational is your financials. A lot of brands don't understand their margins. The difference between markup and margin, you'll hear these terms toss around a lot. You have to have a healthy margin on your manufacturing side so that you can support all these steps throughout the process. And so if you understand your financials within your company, and you have a solid allocation for marketing, for growth, for promotions, for free fills, that sets you up for a lot of success. That if you're just guessing, you could be losing money with every additional store that opens up. And so I think that's something. No, those are all great points. And to build on what James is saying, folks, you've heard on other episodes, you have to understand all the if you're going to brick and mortar, you have to understand all the people that are going to touch your product and they're going to take their bite. Right? So if you go through it, you might think here, my product costs three bucks. I'm going to sell it for six and the retailer might mark it up by two dollars. Well, one, every retailer has their own margin structure by category that people like James can help you understand. So it's not a surprise. And the other thing Tracy and I talk about is building a super simple spreadsheet, which I'm sure James and his firm have in their toolbox. It's your cost with the margin you want to make. Then a distributor markup plus the retailer margin requirement. That equation will drive what the price is at the shelf when your shopper goes in. And if that lands you in the ballpark of your category, you might be okay. But if your category average selling price is like seven ninety nine and yours is now eleven seventy nine. Oops. Yeah. Or you better have one hell of a story. The other thing James touched on this and Tracy did too. All the buyers, they're interested in their category performance much more than your brand performance. So James's example of they put your product in and it was and the one they're replacing was ten dollars per store per week. And that's what you do. They've just done a ton of work for nothing incremental and extra for them. So just lots of things to keep in mind. And the other error Tracy and I have heard you guys have all heard it listeners from other founders. A mistake they all wish they could have a do over on is when the entrepreneurs getting started, they're so psyched to start selling. They end up they wake up one morning and they've got like six or seven different pricing deals. And they have and they have a mess on their hands. Because it's like why does James get one price Tracy has one and Bruce has one when we're all buying you know the 12 dozen gluten free cookies. What did you do to yourself? So really taking the time to think through your pricing is critical. All right James. So Tracy who usually wears his grim reaper outfit when he asks for errors and mistakes. I'm going to ask you are there some common maybe they're not common because then everyone would do it. What are some excellent early moves that you've either seen emerging brands make or you've coached them and they've listened like what are a couple of things that gosh if you can just get out of the starting gate by doing these two or three things well. Like will be at least a little easier. It's never easy but it'll be a little easier. Yeah yeah. I love that saying slow as smooth and smooth as fast. And so a lot of emerging brands are planning around a faster execution than what the industry is likely to support. And so those brands that have instead a slow approach Elliott that beggining talks about this a lot in his newsletters where tardigrades are his example and tardigrades are these creatures that can like survive for eons floating in an asteroid in space. They're extremely resilient and so it's a friend of the show James. He's been great. Yeah. He's got a great great great position on this. And I think I think you spot on with the resilience designing your business for resilience. And and that means saying no a lot that means you know looking at an opportunity squarely understanding how it fits in with your priorities and if it doesn't say no to it. And that's hard when you've got a business that you're trying to grow maybe you're paying a company like us right. And like we bring an opportunity to you and it's like the big opportunity this month and you know to say no to that hurts because you're forcing yourself to wait and pay more money. Somebody else like us to hopefully bring another big opportunity to you next. It's a better fit. But but say no is is important and planning for resiliency planning for planning for slower growth because if it happens fast that's great. It tends to happen fast when there's a perfect product market fit. So you know we've been part of a lot of these where you know we worked with high key snacks back in 2018 and 2019 and I think John Gibbs said that we were we were part of growing $65 million worth of business over 18 months. You know which is great. You know I can't say that was because we used a secret sales handshake or said the magic words to the buyer. It was because you know we did we did our job but the product was a great fit and so it really comes down to you planning for resiliency planning for things to go slowly and retail maybe goes faster and direct to consumer maybe it goes faster and food service that's great. But if you plan for it to take a long time and retail and you're delighted when it happens faster than you were expecting that's a much much stronger place to be. The other the other thing is is building a velocity story. You know brands that are focused on driving velocity you know making your product so well have it have a great retail partner that's thrilled with your brand. Now the other retailers in your market and beyond are going to look at that and say oh I want that that product's doing really well that that's that's great velocity. Now all of a sudden you're desired and they're asking to bring you on rather than us pushing them to try and take you on to demonstrate it. So you get that account going you get that velocity going put your energy into that get spend six months spend a year spend two years building a great velocity story with some key accounts so that all the next steps after that are easier. Yeah that's a really great point. Some of the sales teams I've had the the privilege of of leading or working with we used to call those pull accounts. If you could do a good job with accounts that have influence they will pull others along because they'll be like they'll be like why is James doing so well there I need some of that action over here. Yeah. So to your point you know without you know doing things that you can't replicate on a national theoretical level or regional level like you can't overpay James to carry your account and drive it if you can't do that everywhere else because you'll you'll bankrupt yourself or you'll look really good in an orange jumpsuit picking up trash along the highway. So gosh those are that's really great counsel. Tracey. Yeah absolutely so kind of rounding third and heading home here James with our time together but tell us who's had the greatest influence on your career and why. Yeah that's a great question. You know I've I've like many people I've had the chance to work with a lot of really phenomenal people so it's a long list including people that I work with today within our company. I I learn as much from our team as probably I hope they've learned working here and through their experiences but I've had some great bosses over the year but I think I think honestly and this is this might be a little cliche but it's my parents you know my parents you know I have always supported me they've always encouraged me to take risks they are they believe I can do anything and I think that especially for this type of business like small business startups where you fail I mean I failed I went bankrupt you know in 2019 I had to move back in with my parents like got a job washing dishes at the local pine cone cafe and my home I hyped my high school friends got me and the heat breakfast there I am like two years before I had you know everything in life and and suddenly didn't and you know they still believe did me they still supported me through that and I've been able to come back and so I think the the it's got to be my parents you know they're the ones who made that happen well that's a that's a great answer that we hear a lot which is frankly refreshing that you know we've had we've had no one say well I looked at what my parents did and I knew I had to do the opposite all right James so this is a critical question yeah who is your favorite sports team band or brand and and why do you support them I realize you probably can't say brand it would be bad for current and future business. So work with us on the other two maybe.
We love all of our children. We do love some of them more than others, but we love all of our children. I mean, that one's, it's the talking heads, just 'cause I'm a child of the 80s and their music is awesome. So that's a simple one for me. - I love that. - You can find yourself representing lots of brands. (laughing) - That's exactly right. - So James, why don't you tell the folks a bit about how they can reach out to you, how they could learn more about your firm, and maybe it would also be helpful to just save some time. Talk about the geography you serve. Do you do badegas on Key West or are you kind of a West Coast guy? - So we've got about 25 people on our team. So we're neither the largest, nor the smallest company. I would say we do a good job of offering a tremendous value for small to midsize brands. A lot of our brands are sub three million, sub five million in value. We have something bigger, but we really do work with it. You couldn't name a natural retailer of any significance that we don't actively work with. And that could be, again, from like Earth Fair and the fresh market, all the way up here to PCC and Met Market to Airwonde, to Lassons, to Nugget, and a lot of the conventional ones too. Rayleigh's, Kroger, Albertans, we had the fancy food, fancy fair show. Just last week, we have a booth where we exhibit lots of our brands. And we had 280 individual buyer meetings at the show. And that was everybody from, you know, we had about 25 or 30 people from Whole Foods. We had several of the Sprouts leadership folks. We had, you know, united in Texas. We had Lassons with, you know, lots and lots and lots of retailers that we come through. So I would say, you know, our coverage is really national, but again, 25 people were not in every little bodega and every store every week. And this is, we, I would say, we're doing a good job of covering the key accounts, but then we have the inside sales team. So like, if your goal is to like pitch end to like 50 bodega style markets in Miami and Port Lauderdale, we can call those, you know? We might not be walking into the store, but we can talk to the store level decision maker and say, hey, this is, you know, James from ABC Key for Water. We're, we're growing into the Miami market. We're local Florida brand. I'd love to, you know, send some samples to your way and see if it's a good fit for your store. Are you, are you interested in trying that out? And, you know, build the business that way. So you can contact me at
[email protected]. My cell phones to 06, 250, 7, 7, 2, 2, both are on our website. I will meet with anybody and answer questions and talk. And, and I'm, you know, I'm a big, I want to see this industry continue to grow with lots of new brands, lots of new innovation, lots of clean products. We're very passionate about natural, clean, ingredient products. So the more that we can support that in any way, whether that's you hiring us or whether that's just a question that we can answer, we're happy to do it. Well, that, that's great. And in the soon to be launched, road to retail apparel store, one of our, one of our t-shirts after, especially after going to a show like last week about entrepreneurs, the t-shirt just says road to retail and on the back it says all gas, no breaks. I mean, to meet all these entrepreneurs is so exciting. I mean, regardless of the potential red flags, they know stuff's going to be hard. They know it's going to be, you know, not a layup. And they're just like, yeah, last week totally sucked, but this is a new week. And here's what I'm doing. And you should probably get out of my way. And I'm, all right, James. Well, this has been fantastic. Tracy, bring us home with the big finish. Absolutely, James, you were awesome. Thank you so much for joining us today. We really do appreciate it. Thank you audience as well. Please continue to follow us on our Spotify and Apple podcast. Also, we have a website road, www.roadtoretail.com. And all of those links are in our posts. We post every Tuesday on LinkedIn and then all of those other podcast channels. So thank you again, James. I really appreciate it. And thank you audience. And Bruce, as always, great to see you in another great episode of Road to Retail. Thanks again, James. That was great. Good luck out there folks. Thank you.
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