The key to success, said Peeled Snacks director of strategic channels Ian Kelleher - who has secured shelf space for his firm’s fruit snacks in leading grocery stores, top coffee chains, natural stores, airports, hotels, gas stations, and scores of other locations - is to focus on what buyers in each channel are looking for.
“The #1 complaint of buyers? That sellers do not take the time to understand the buyer’s needs,” Kelleher told his audience of food and beverage entrepreneurs.
You put a bunch of money on the table and then it’s gone, and you have to try and claw it back
Many new market entrants also fail to appreciate that you have to speculate to accumulate in the food industry, said Kelleher, who said that in the natural channel in particular, you must be prepared to "open your wallets".
He added: “A lot of people come in thinking it’s going to be like Blackjack, where you put a bit of money on the table and you get a little back. But the reality is that it’s more like craps. You put a bunch of money on the table and then it’s gone, and you have to try and claw it back.”
So what are the different retail channels looking for, and what do early stage companies need to bear in mind? Here are some choice quotes from Kelleher’s presentation:
THE NATURAL CHANNEL:
“It’s an utter pain to sell to, but it’s the place where you can get to the right consumer. Take Whole Foods. They are so crucial, but so much work for so little profitability. But the exposure it can give your brand and your story is huge, and it’s just an incredible place to get the word out. Just don’t assume the natural channel will be profitable. They review categories once a year, but if something really important comes along they will change on a dime.”
THE SPECIALTY/GOURMET CHANNEL:
“Planograms are not a big issue, they are constantly changing, and on trends, pretty much anything goes - it’s a great place for trial and error. If you can get your story straight in specialty you can graduate to grocery where you can scale up.”
THE GROCERY CHANNEL:
“The center of the store is well-planogrammed, but the rest is like the Wild West…They usually expect broker support…they also expect to see a finished product, so you shouldn’t go in there with a mock up, whereas other channels can be more flexible… The kind of marketing support buyers expect is huge…They usually review categories once a year but there are exceptions. On trends, they are not first, not at the cutting edge, but if there is a big wave trend they will wake up to it.”
THE CLUBSTORE CHANNEL:
“There is big potential to scale up in this channel and you don’t necessarily need a broker. The trend scale for club stores is also changing. Some like to surprise consumers with how cool they are [in terms of ranging decisions].”
THE CONVENIENCE CHANNEL:
“This can be a very profitable channel, very cost effective, but you need a strong pitch that focuses less on trends than on data, your track record, and the timing for category reviews can sometimes be only once every two years.”
THE FOODSERVICE CHANNEL:
“The foodservice world is looking at packaged foods more and more so I am very excited about this channel, but it’s very broad and the planograms can sometimes be too mutable.”
How to choose a broker
As for choosing a broker (Peeled Snacks works with 30), first ask what other brands they sell, and then call up those brands and ask if that broker is delivering, he said.
Brokers that understand the channels will also know which levers to pull for your brand, when it comes to marketing support and trade spending, he said. “Because you can’t afford to pull them all.”
Click HERE to read our interview with Peeled Snacks founder Noha Waibsnaider.
Click HERE to see our trendspotting gallery from the Winter Fancy Food Show.