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Ryan Caldbeck , CONTRIBUTOR
Welcome to our annual Consumer Catalyst Awards, where we honor the top dealmakers, leaders and influencers in the consumer industry.
There is no question that the early-stage consumer market is reshaping every aspect of the broader industry, with new brands stealing market share and exciting new entrants launching every week. Monster exits like RXBAR’s and Blue Bottle’s seem to drop every other month, while numerous smaller, yet strong exits like Native Deodorant’s, Sir Kensington’s and Yasso’s are consistently peppered in between.
What’s less obvious is who the dealmakers and leaders are behind this boom. We generally know the brands, as their sleek Instagram ads pop up in our feeds and they line shelves of Target and Sephora. However, many often don’t know who’s working behind the scenes and at the crux of the business and operational functions keeping the brand innovation at pace.
Similar to how CircleUp25 shines the light on the year’s top brands, Consumer Catalysts shines the light on the other side of market—on the investors, CEOs, merchandisers, editors, reporters and bankers helping make emerging brands pop.
To determine this list, CircleUp distributed a survey to over 1,000 entrepreneurs to gather nominations and feedback, and gathered our team’s insights based on the hundreds of investors, retailers and influencers we work with throughout the year. Because we have worked with thousands of investors and companies, we have a unique view on which investors, retailers and experts are most influential in the space.
Without further ado, here’s the list of Consumer Catalysts this year.
Unilever Ventures has upped it pace significantly this year, making several investments in unique beauty brands where is can pair its operational and distribution expertise. Of note, we’re especially excited about her and the firm’s investments in Beauty Bakerie, Nutrafol and LXMI.
While Arif’s firm, Blueberry Ventures, only came into play in 2015, it already has a portfolio of some of the latest and greatest companies in Food and Beverage. Arif has led investments into Rhythm Superfoods, REBBL, Ripple Foods, Barnana, Revive Kombucha, Fishpeople Seafood and several other breakout brands.
Bill Weiland has grown Presence Marketing into the largest independent natural and organic products brokerage in the U.S. In working with leading national brands as well as successful startups, Bill has a keen eye for the trends driving the rapidly growing healthy lifestyles market. Bill also is a big advocate of consumer transparency and GMO labeling, using his expertise to have a positive impact.
Brad Barnhorn sits on the boards of some of the most exciting food brands of today. Kevita (sold to Pepsi), Chameleon Cold Brew (sold to Nestlé), Health Warrior, Rhythm Superfoods, Biena and Fishpeople all turn to Brad for consultation on brand strategy and growth.
Few other consumer industry firms have seen so much early success as CAVU Ventures, which despite being only 4 years old, was early to invest in Bai, Kite Hill, Health-Ade Kombucha and Thrive Market. After leading CAVU’s investments in Hippeas and Vital Proteins this year, Brett is sure to have big things in store for 2018.
Carol is one of the undisputed leaders in natural foods media. She has deep access to entrepreneurs and investors alike, coupled with a profound understanding of how all angles of the industry work. In addition to writing compelling stories, Carol helps manage Project Nosh’s flagship event Nosh LIVE, which has quickly grow into one on the industry’s most influential conferences.
In the food world, Food Navigator is a primary destination for trends and analysis on the products, brands, and leaders shaping the industry. This is largely thanks to Elaine and the rest of her team, who demonstrate incredible depth and critical thinking in interviews and articles. Elaine is also heavily involved in Food Vision, Food Navigator’s flagship event, which is recognized as one of the food industry’s most influential.
Simply put, Janica Lane is one of the most important figures in the business, behind most major investment banking and M&A deals for consumer companies spanning healthy, active and sustainable living, with a focus on food and beverage. Additionally, she is widely regarded as one of the most respected and well-liked in the industry, from her conference presentations to 1-1 meetings.
Brand is very hard to get right, but if accomplished effectively is extremely powerful—and arguably no one knows that better than JB. JB and his team at branding firm Red Antler have refined the craft of building incredibly sleek, empathic and modern brands, which people everywhere fall in love with. It’s no coincidence that JB and Red Antler are behind the genius branding of Brandless, Allbirds, Casper, Burrow and more.
Jeannette knows what people love – and what people are sure to love next. Her blog Shut The Kale Up has amassed a cult following of conscious consumers looking to discover emerging, craft products that are healthy or satisfy a unique need. For the early-stage consumer brands lucky enough to be included on the blog, Shut the Kale Up is a powerful way to reach highly engaged audiences.
Jeff Klineman, alongside his teams at the three publications, has built a media powerhouse that leads industry conversations around beverage, natural foods and beer. Under his editorial leadership, the teams consistently produce thought-provoking analysis that keeps the pace of the fast-moving categories. Between the publications’ news coverage and events, Jeff has had an invaluable impact on the industry.
After more than 35 years in strategic sales, design, branding and marketing, Jeremy has been a boon to early-stage consumer brands getting off the ground. He now runs LaunchPad, which is reshaping the traditional retail food broker network as a full service business strategy, branding and representation group for emerging food brands, highly specialized in Costco representation and strategy.
While Josh initially climbed the ranks in consumer investing while sitting on the boards of Suja Juice (acquired by Coca-Cola), Babyganics (acquired by SC Johnson) and Shake Shack (NYSE: SHAK), he’s shown no sign of slowing down, and continues to lead deals in category-defining companies. At consumer-focused private equity firm ACG, a few of his most recent include fast-casual salad chain Tender Greens and popular natural skincare line Tata Harper.
While corporate consumer venture may be a relatively new phenomenon, General Mills has long been leading the movement, as one of the first big CPG company to launch a venture arm. To the this day, it’s still the most active of the bunch. Under John’s leadership, General Mills 301 INC has become a powerful hybrid of capital and legacy industry insight for emerging brands to tap into.
Recruiting is a challenging, pivotal area for any business field. Those in CPG turn to Josh and his recruiting firm Force Brands for expertise in finding and acquiring top talent, ultimately helping get businesses off the ground with the right minds and experience on board. Currently working across food, beverage and beauty, Josh is the top resource for hiring needs across sales, marketing, finance and operations.
Encore Consumer Capital is widely regarded as one of the top consumer industry firms, from the success of its portfolio to the hands-on, strategic guidance of its investors. Kevin has helped his companies become market leaders since joining Encore Consumer Capital in 2005, serving as Chairman/Director for LONDON, Fantasy Cookie, Juice Tyme (acquired) and tarte (acquired).
Kirsten Green hardly needs any introduction after her and her firm’s investments in runaway successes like Glossier, Outdoor Voices and Away, as well as massive exits like Jet.com and Dollar Shave Club. Kirsten continues to bring to market some of the most fascinating consumer brands straddling e-commerce, beauty and wellness, fashion and technology. Of note, we’re particularly interested in watching how her latest investment, men’s care brand Hims, develops.
Nick Giannuzzi is the most prominent early-stage consumer industry lawyer, and an indispensable strategic partner to those executing M&A deals, manufacturing contracts and fundraises. Several of the most exciting early-stage CPG brands turn to Nick’s expertise, including Malin & Goetz, Califia, Dang, REBBL and more.
After pioneering a new wave of innovation in the previously dormant popcorn category, Pam Netzky and Andy Friedman sold SkinnyPop to Amplify Snack Brands, which later IPO’ed, taking the popcorn brand from zero to $1.35 billion business in just five years. That success was just the beginning for Pam and Andy, who are now dedicated angel investors helping usher in the next wave of exciting early-stage food brands.
Despite his firm only being a few years old, Pat has led investments into fast-growth, dynamic brands like Barnana, Tatcha, Ripple and Marine Layer. Pat focuses on the lesser-served, very early side of the market, specifically companies doing less than $10M in revenue with healthy margins, which is an approach that has so far served him very well.
Sephora has become more than just the most comprehensive retailer for skincare and beauty. The makeup and skincare giant’s refreshed dedication to carrying early-stage brands – everything from natural, Korean, to clean beauty – has made it a playground consumer discovery and powerful channel for incubation. Much of this is thanks to Priya, who helms Sephora’s merchandising in skincare and haircare.
Tom, along with the rest of the team at his early-stage investment firm Boulder Food Group, is ushering in a new wave of better-for-you food products breaking grounds in their categories. Some of the top investments include Malk, Fourth & Heart, Caulipower and Quinn.
Good PR is hard to come by in any field, and the CPG industry is no different. Luckily, brands and media have the benefit of getting to work with PR mastermind Sabina Gault, and the rest of the talented team at her firm. Sabina and Konnect are behind the storytelling of some of the most exciting brands, including 4505 Chicharrones, Rhythm Superfoods, Kite Hill and more.
When it comes to investment banking in the beauty industry, Vennette is a key leader, working with companies at a crossroads and either looking to sell, find a partner or fundraise. Vennette is known for her expertise in maximizing value for brands, whether it’s improving valuation, contract terms, or partner fit. As indie beauty brands continue to gain speed at an alarming rate, we’re sure Vennette will become even more renowned dealmaker.
You’d be hard pressed to find a CPG entrepreneur who doesn’t know of Wayne Wu. Despite his seniority and utmost expertise, he dedicates time and effort to meet with many, and get to know people in a meaningful way. The approach has certainly paid dividends for him—he and VMG led some of the most exciting deals of the year, such as Drunk Elephant and Spindrift.
CircleUp has relationships with some of the organizations in this article.
Ryan Caldbeck is the founder and CEO of CircleUp, the investment platform that provides capital and resources to early-stage consumer brands.
About the Author: Stu Strumwasser is the Founder and Managing Director of Green Circle Capital, a leading boutique investment bank focused on the natural products space. He spent the early part of his career at firms that included Paine Webber (now UBS AG) and Oppenheimer & Co., and has been a licensed investment professional for over twenty years. He was also the founder of a natural beverage company which he ran as CEO for six years. Stu is also an author whose novel, “The Organ Broker,” was named a finalist for the Hammet Prize. Securities transactions are conducted through StillPoint Capital. LLC, Tampa, FL. Member FINRA & SIPC. Stu can be reached at email@example.com and www.greencirclecap.com.
Part I: Evaluating Valuation
As an investment banker in the Consumer space (focused on natural products) who often talks with the CEOs and owners of early-stage and growth-stage companies I am frequently asked, “What’s my valuation?” My short answer is: “Whatever the market will bear.” It rarely satisfies.
The long answer is some version of a conversation that all entrepreneurs, business owners, executives, investment bankers, accountants, corporate and M&A attorneys, investors and others have had countless times—a discussion of the methods and metrics utilized to arrive at valuation for investment transactions involving businesses with limited operating histories and/or at a stage in their development where they have not yet generated consistent positive cash flow. The productivity and tone of those conversations depends on the experience, sophistication, and personality of the participants, but also includes a myriad of other factors such as the temperature of the respective rooms they sit in, the “breaking news” on CNN, the direction of the NYSE that day (or minute), whether Mercury is rising (and/or in retrograde) and possibly the early-morning tweets of our elected officials…. As any forensic accountant will explain, the most important data point in any assessment of the “fair market value” of a private stock is what an objective and unaffiliated party has actually paid for shares. (In the parlance of my Brooklyn neighborhood: “Money talks; bullsh*t walks.”) In the case of a large, publicly-traded company on a major exchange, one might only need to look as far as the closing price on a particular day in history. For a private stock, it is more complicated. If that private stock hasn’t been transacted recently (or ever) it can be far more nuanced. I’ve had these conversations more times than I’ve seen a new plant-based, protein-fortified, organic, meal-replacement bar at Expo West, and they often devolve into unproductive philosophical musings or even awkwardly contentious debates. I am sure that every investment banker who works with early-stage or growth-stage companies has asked themselves, on many occasions, “Do I tell this guy the truth and risk losing the opportunity?…. as well as another twenty minutes of time?…” After all, in the end it isn’t up to us (the intermediary investment banker); it’s what the market will bear. Or bare.
“What’s My Line?” was a panel game show that originally ran on the CBS Television Network from 1950 to 1967. The game required celebrity panelists to question a contestant in order to determine his or her occupation by attempting to learn new information and narrow down the options. “What’s My Valuation?” is vaguely similar. The more early-stage the business, the less the valuation is a function of traditional metrics (such as multiples to EBITDA and/or revenues) or “math,” and the more it becomes a function of artistry. It’s actually one of the reasons I like working with smaller company clients (for us, typically $5MM-$50MM in revenues) as it is more creative, we have a greater opportunity to make an impact, and we can add value for our clients by deftly creating the right environment for a transaction and by generating competition for the asset which we endeavor to sell. Unfortunately it also often sets the stage for those meandering “What’s My Valuation?” debates, so I thought that it might be helpful to some CEOs/CFOs, business owners, investors, and my colleagues, to jot down some of the thoughts I have shared many times on this subject over the years in individual conversations.
When I meet leaders of growing businesses I ask them to, “Tell me about your business.” What I often get in return is a thirty-minute dissertation on their product, often replete with some hyperbole about future (and uncertain) sales opportunities, and very little about what I was actually interested in: the existing distribution, sales velocity (the “mother of all metrics”), gross margins, gross and EBITDA margin goals that are achievable with the evolution of scale, go-to-market strategy, capitalization to date and…. the company’s future financing needs and plans. “Important Paradigm Number One” for founders: If most startups that fail do so because they run out of cash, maybe you should spend even more time focused on understanding and securing the financing you need (and less time dreaming up marketing campaigns that you can’t yet afford). I became a vegetarian when I was fourteen (and I have now turned 39 twelve times, so that was quite a while ago) and I founded a natural soda company in 2005 partly because I genuinely wanted to help save consumers from harmful chemicals contained in traditional CSDs. So I get it if money isn’t your sole priority. However, if it isn’t near the top of the list perhaps you should live on a self-sustaining family farm (albeit an organic one) and not be asking other folks to invest millions of dollars in a for-profit business venture.
Why are so many founders/executives/owners of growing businesses deeply concerned—or even obsessed—over valuation? I don’t know, but it really can be counter-productive. When I raised capital several times I was of course committed to getting a fair market value, but I was never clutching some hypothetical and somewhat-arbitrary figure with cold, dead hands. I made countless mistakes as a founder and operator (for a summary list just take a look at the playbook for Zevia, check out everything that they did correctly in terms of execution, and then just assume that I did the opposite)—but getting stuck on a valuation goal was never one of them. It leads me to Important Paradigm Number Two: No one ever went out of business due to dilution.
Some business owners think, “Well, can’t I just start real high and know that I can always come down in price if necessary?” Um, not necessarily. When you are trying to make a deal with someone who you think is asking for something unreasonable, do you always make a counter-offer and try to work it out? In the case of a prospective investor assessing a potential investment, bear in mind that the biggest factor in his or her decision will often be their evaluation of you, the entrepreneur. Appearing unreasonable or, perhaps, potentially uncompromising or difficult to work with, is not a good way to begin.
Here’s one other thing to consider: If you think that your deal, inclusive of proposed valuation, is “fair,” is that really enough? When you go shopping, whether it be for a car, a skateboard, a stock…. A private stock in an early-stage natural products company…. Do you find yourself looking for a “fair deal” or “the best deal?” It is sometimes lost on Founders and CEOs that the investors they are pitching (sometimes with the help of a firm like mine) see a lot of investment opportunities. In fact, most institutional investors or serious angels look at a few hundred each year. They might make perhaps one or two investments each fiscal quarter, and some even less. So, whether one acknowledges it or not, you are competing with hundreds of other investment opportunities, some of which are surely also attractive. You are soliciting investors who may “pull the trigger” on around one percent of the opportunities they see, so anything that may give them a reason to pass on a deal is actually helpful to them in managing their time and dealflow, and narrowing down their choices. Don’t let getting stuck on an above-market valuation be the reason you miss out on getting the cash you will certainly need to grow a capital-intensive CPG business, or lose a chance to connect with some folks who might have been excellent value-added partners. Closing on a timely financing or acquiring great partners can turn out to be a critical component in your success, and giving up a few extra points in dilution will never be the reason you fail.
In Part II, Strumwasser examines the methodology for actually arriving at fair market value for growth-stage natural products companies using comps and other tools. Check back next week.
Listen to the podcast here.
Written by Matt Aaron / June 29th, 2017
For Steven, it’s all about patterns. He has spoken to over 1,000 founders and has developed a sense for which startups are going to flourish.
He focuses on sourcing and evaluating premier brands and coaching entrepreneurs through the fundraising process at CircleUp.
CircleUp is the platform providing capital and resources to innovative, early-stage consumer brands, and opportunities for sophisticated investors to participate in their growth.
From machine learning data to predict CPG success to the do’s and don’ts of fundraising, we cover a lot:
Listen Here for the full Podcast.
Jeremy Smith is back. If you haven’t heard the first interview, listen here.
There is trouble brewing in the food broker space. Whole Foods sales are down. The market has changed dramatically.
Based on listener response to the first episode and Jeremy’s intuition, we continued the conversation on Costco, brokers, and how to adapt to the evolving food space:
This week’s guest: Jeremy Smith from Launchpad. Once a week we broadcast open office hours to address questions that you have regarding cannabis startups. Every week, we gather questions from the community here on Facebook, and via Twitter or Instagram @gtwyinc. Just use the hashtag #GatewayOH and we’ll give you a shout-out if we select your question.
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LaunchPad Lifts Off to Help Emerging Food Brands Win at Retail
SAN RAMON, Calif., January 19, 2017
Brand strategy and representation firm set to fuel sales and distribution for tomorrow’s leading food and beverage brands. Just in time for the 2017 Winter Fancy Food Show, brand consulting firm and Costco Broker LaunchPad is opening its doors to food and beverage companies looking to build their brands, grow sales nationwide, and grab the attention of consumers and retailers.
LaunchPad is a new full-service business representation agency focused on market entry and long-term success for emerging food brands. Specializing in delivering strong sales performance at Club Retailers, LaunchPad offers brand strategy, package design and logistics expertise for tomorrow’s leading food brands.
LaunchPad founder and chief executive officer Jeremy Smith brings strong industry experience to his latest venture. As co-founder and chief operating officer at Level One Marketing, Smith nurtured sales and distribution growth for established brands like Bob’s Red Mill and early-stage challengers like Chobani Greek Yogurt, EVOL Foods, Promax Protein Bars and Hope Hummus. He is also currently an advisor to the investment firm VO2 Partners, which specializes in companies in the active & healthy living sector.
LaunchPad has partnered with MarketBrand, an award-winning Creative Strategy and Design firm led, for package design consulting. MarketBrand principals Eric and Deb Read’s decades of food industry experience include developing market entry strategies and impactful packaging for upstart brands like Red’s Burritos, Pure Foods, Promax, Padma’s Easy Exotic, Azuma Foods, Snack to Basics and organicgirl.
“There can’t be progress without questioning the ways things are done, which is why LaunchPad will be like nothing else in the food industry – an anti-agency, a rebel with a cause,” said Smith. ”Our deep business strategy mindset, vision and passion make us the perfect partner for entrepreneurs who approach business with the disruptive mindset of a technology startup.”
Smith continued: “The rise of shrewd retail buyers and savvy consumers means that the old rules of brand building no longer apply. Sadly, the traditional brokerage networks have not grown with changes in the industry and still offer the same old plug-and-play solutions. Their clients are missing out on a big opportunity.
“New businesses that can engineer the right combination of product and execution will have as much clout with retailers as the big CPG brands. The future of the food industry belongs to the dreamers, doers, troublemakers, disruptors and mavericks who are willing to break industry norms to make things happen. LaunchPad will help them think differently, win at retail, and attain sustainable success.”
LaunchPad is available to meet at the upcoming 2017 Winter Fancy Food Show in San Francisco, January 22-25. Please call (925) 329-6425 x100 or email mailto:firstname.lastname@example.org for an appointment or more information.
LaunchPad is the food and beverage industry’s only full service business strategy representation and branding agency focused on market entry and long-term success for emerging food brands. We are experts on the retail environment, packaging, manufacturing and distribution, with a highly specialized focus on the Club Market. We collaborate with dreamers, troublemakers, disruptors and mavericks to break the rules and accomplish the impossible. We promise to guide you, inspire you and never BS you.
LaunchPad® and the LaunchPad logo® are among the trademarks of LaunchPad Group USA LLC. Other trademarks belong to their respective owners. LaunchPad reserves the right to alter product and services offerings, and specifications and pricing at any time without notice, and is not responsible for errors that may appear in this document. ©2017 LaunchPad Group USA LLC. All rights reserved.
Press Contact: Shawn Roberts
“Big Food is a Big Problem.” Spend time in Urban Remedy’s Richmond, CA, headquarters, and you are bound to hear this phrase. At Urban Remedy, “Big Food is a Big Problem” is more than a conversation; it is a call to action for our small organic food company. It is the belief that food should be healing to people and the planet, and it inspires everything we do.
On first glance, club retailers might not look like a good sales environment for younger food and beverage brands.
You may have an image of remote cinderblock warehouses, pallets stacked high with mainstream brands, or buyers that don’t want to work with smaller brands.
But take a closer look: and you’ll see enormous potential. Club members’ have an extremely high average household income and are almost always families buying in bulk.
By Nicole Potenza Denis
Selling in volume and having a successful SKU in a warehouse environment can generate millions of dollars in potential annual revenue. For some food companies, having a product placed in club store like Sam’s or Costco is a major step toward big sales and product efficiencies. The potential revenue opportunity and product exposure a club represents is tempting. But how do you know whether you and your product are ready for the transition?
Specialty Food News spoke with Jeremy Smith, COO of Level One, a full-service sales andmarketing group located in San Ramon, Calif., that helps companies and their products break into club markets like Costco, Sam’s Club, and BJ’s. Smith shares some insider tips on the warehouse environment and what placement can do for you.
What kind of vibe do the clubs give off?
Jeremy Smith: From the moment the doors of a club open and their members push their way into the warehouse, there is a level of excitement you do not see at a typical supermarket. There is just something exciting about being in a club warehouse. It’s the combination of the “treasure hunt” atmosphere along with the inviting energy coming from the demos and road show personnel welcoming all of those who enter each warehouse.
What does it mean for a brand to have club potential?
JS: Club-potential companies are on the verge of taking the next step into the club market. Most club-potential clients have strong local distribution but are usually lacking national distribution. Club-potential companies have budgetary considerations and often are best suited for local-regional launches. Clubs like Costco can be advantageous for many club potential food companies because they provide the ability to help expand distribution outside of their local areas. Or if they stay local with club, the potential for high revenue growth is huge.
A company that is what we call “club ready” will offer a high-quality, growth-oriented product for the club environment. They are interested in high-volume distribution channels and profit that meet goals within their corporate planning.
What does a company need to know to be successful in the club environment? JS: A company needs to make sure they have enough cash flow to fund the initial costs of doing business at club. Costs associated with clubs can include specific packaging as well as demo funds, an essential part to launching most brands at club level.
The more retail distribution a company has prior to launching at club, the better odds they have of succeeding. That’s not to say you cannot have success at club without distribution at other retailers. However, we have seen a direct correlation between higher sales at club when a brand has well-established points of distribution in advance of club placement. What are three attributes a product should have to help make it ready for club placement?
JS: While most food products work well at club, not every product may be right for club. That said, three traits are key:
1. Well-designed packaging that inspires and elicits the consumer’s desire.
2. Be DUE-worthy: Disruptive, Unique, and Exclusive to the category. We coined this term at Level One and believe it gives a definite competitive advantage for any company’s brand.
3. Clean and better-for-you ingredient decks. All natural. No high fruit corn syrup. GMOfree or organic, if possible.
Are the clubs a hard sell?
JS: In business there is no such thing as an easy sell, but I would define selling to clubs as hard. If you have the right broker partners, the process of selling to club can be made much easier and less time-consuming. There are some aspects to selling to club that by nature can make club more challenging than selling to traditional retail. Club retailers do not normally add SKUs like traditional retailers do. For some companies, this can make the challenge of getting into a club a bit more challenging.
What determines if an item is a winner or a loser?
JS: Buyers always are the final decision makers as to whether an item is a “winner” or “loser.” We usually do not look at items as winners or losers. I have a strong belief that most often the reason an item does not do well on a retailer’s shelf is due to poor packaging design. Quite often companies forget the first interaction a consumer has with your product is your packaging.
What do clubs look for? Do they want niche or products with established track records?
JS: Club buyers have sales targets they need to hit and they have to make sure they have the right set of items in each category so they achieve this. This may mean they will carry a mix of both niche/regional items and national brands with an established track record. Private label is also part of the mix as well. There are other factors that come into play from time to time, too. For example, Costco is currently expanding their organic SKUs and this offers organic companies of all sizes an opportunity for placement on a much larger scale.
Should brands stay local in club stores, go regional, or go international?
JS: Usually the decision whether to launch in a single region and stay local or go to multiple regions is dependent on the maturity of a client’s brand and their manufacturing capacity. We usually do not look at international until we have maximized our client’s opportunities in the United States. However, depending on our client’s needs, we would never rule out looking at the international opportunities. This also depends on the food category. Yogurt manufactured in the in the United States is extremely difficult to get in to Canada due to their customs and regulatory issues with dairy.
Why are some companies hesitant to go into clubs?
JS: Once in a while potential new clients will tell us they believe if they sell to club they may lose one of their existing traditional retailers. We have heard from some food brands that Whole Foods is becoming more aggressive in threatening to remove products from those food companies who sell to club. The most successful companies always find ways to overcome these minor obstacles.
What would you tell someone to help overcome reluctance?
JS: Placing products in club stores can bring enormous benefits at little incremental cost, including huge revenue, market share growth, and the ability to introduce products to desirable demographics.
One of the best rewards of placing products in club stores is that, with the right business and branding strategy, you will drive your existing business outside of club at the same time. Contrary to what buyers at other retailers may tell you, the fact is, the more successful you are at club, the more your business will grow outside of club.
How can companies leverage their existing business or potential clients outside of the club business?
JS: In our many years of working with food brands, we have seen dramatic growth outside of club due to expansion into club. Most club consumers shop outside of their clubs. Because club retailers carry a more limited SKU set than traditional retailers, it allows the club consumer to discover not only the value proposition a club provides but also the extensive product line a food company may offer outside of club. This leads consumers to purchase the additional flavors not offered at club from other retailers.
Placing products in clubstores can bring enormous benefits at little incremental cost, including huge revenue, market share growth and the ability to introduce products to desirable demographics.