06: Sales
Conventional Grocery
This chapter is sponsored by Ahold Delhaize USA’s Supplier Diversity Program
This chapter is sponsored by Ahold Delhaize USA’s Supplier Diversity Program
Selling your product to grocery stores can feel like cracking a complex code, but it’s absolutely doable with the right approach. Conventional grocery stores have been the backbone of the food retail industry for decades, and getting your product on their shelves can significantly boost your brand’s visibility and sales. Let’s dive into the nitty-gritty of how to make it happen.
Understanding the Market
First off, let’s break down what we mean by conventional grocery stores. These are the big players where most people do their weekly shopping. They offer a reliable, one-stop-shop experience for a wide range of products.
Think big names like Food Lion, Safeway, Publix, and Albertsons. These full-line grocers are usually situated in bustling areas like downtown districts or sprawling suburbs. They cater to middle-income consumers looking for a vast array of products at competitive prices. Supermarkets are all about volume—they want products that fly off the shelves.
Two conventional grocers, Mariano’s and Jewel-Osco took on TeaSquares in a few hundred locations in Chicago, our home city. I was incredibly excited to expand to over 200 stores, but it would also be our biggest retail launch to date. Two lessons I learned:
- Have a 90 day launch plan built out including promotions, merchandising, sampling, and marketing support.
- Understand that being profitable in a store may take over 1 year because of your initial marketing investments.
I naively thought that my job as the brand was to get the product to the shelf, and then it was the store’s job to sell it. That’s the wrong approach. As the brand, you’re responsible for the product from manufacturing, all the way until it gets into the customer’s home. Knowing this, it’s important to be very proactive as you enter into retailers.
Meeting Buyer Expectations
To succeed in this channel, you need to get into the heads of grocery store buyers. These folks are looking for products that not only meet their criteria but also stand out in a crowded marketplace. Here’s what you need to consider:
Packaging: Your packaging needs to be retail-ready. This means it should be eye-catching, informative, and durable. It should tell the story of your brand at a glance and fit neatly on standard retail shelves. Think about what will make a shopper pick up your product instead of the one next to it.
Pricing and Margins: Grocery stores operate on tight margins, so your pricing needs to reflect that. You’ll need to strike a balance between being affordable for consumers and profitable for the store. Do your homework on the typical margin expectations for your category and price your products accordingly.
High Sales Volume: Stores want products that sell quickly. You’ll need to demonstrate that there’s strong demand for your product. This could be through sales data from other retailers, consumer surveys, or a strong marketing plan that drives traffic to the store.
Differentiation: Your product needs to offer something unique. This could be a novel flavor, a health benefit, eco-friendly packaging, or a compelling brand story. Whatever it is, make sure it’s clear and compelling.
Choosing the Right Grocers
Selecting the right grocers to partner with is crucial for your success. Not all stores are created equal, and the best fit for your product depends on various factors.
Target Audience: Understand where your target audience shops. If your product appeals to health-conscious consumers, look for grocers known for their organic and natural product offerings.
Store Size and Footprint: Smaller, regional grocers might be easier to break into initially and offer a more personal touch. Larger chains, while harder to penetrate, offer greater reach and volume potential.
Regional Strengths: Focus on stores that have a strong presence in regions where your product is most likely to succeed. Each region has its own shopping preferences and trends.
Reputation and Alignment: Choose grocers whose values align with your brand. If your product is eco-friendly, look for stores with a commitment to sustainability.
For each retailer you’ll want to ask yourself the following questions to better understand their fit with your product:
- Who is their key audience?
- What is their overall pricing strategy?
- What are other suppliers saying about working with the retailer?
- What competitive products are they currently selling?
Selling to Buyers
Approaching grocery store buyers can be daunting, but a well-prepared pitch can make all the difference.
Research and Targeting: Identify the stores that are the best fit for your product. Look at their current product range and customer base. Does your product fill a gap or complement their existing offerings?
Diverse Suppliers: Research each retailer’s opportunities for diverse suppliers. Many have a focus on bringing in new businesses, especially if they have a Supplier Diversity Program.
Samples and Meetings: Send samples of your product to the buyers along with your pitch. If possible, arrange a meeting to present your product in person. This gives you a chance to answer questions and build a relationship with the buyer.
Follow Up: At the end of the meeting specifically ask the buyer for the next steps, timing, and the best way to communicate with them moving forward. Keep in mind that they are very busy and may not respond to your first followup email. Persistence is key. Follow up regularly but politely. Buyers are busy, and it might take several attempts to get a response.
Are You a Diverse Supplier?
(Sponsored) Ahold Delhaize USA has a supplier diversity team that sources and supports diverse-owned suppliers at Food Lion, The GIANT Company, Giant Food, Stop & Shop and Hannaford. The team hosts quarterly matchmaking events to connect new and current vendors with buyers from the retail stores they support, offer pitch coaching classes and provide marketing opportunities like in-store diversity tags to help current vendors grow as a business. If you are a diverse-owned business, connect with the supplier diversity team. The goal of supplier diversity is to create opportunities for diverse owned businesses to be included within the entire supply chain of a company. To be considered diverse owned, your company must be at least 51% owned, controlled and managed by one of the following underrepresented groups: women, ethnic minority (Black, Asian Pacific, Asian Indian, Hispanic and Native American), person with disability, part of the LGBTQ+ community, or veteran. Learn More about Ahold Delhaize USA’s Supplier Diversity Program
Category Reviews
Category reviews are periodic evaluations conducted by retailers to assess and update their product offerings.
Timing: Find out when the retailer conducts their category reviews. These reviews typically happen once or twice a year and are the best time to pitch your product.
Preparation: Come to the table with solid data. This includes current sales numbers, market trends, and how your product can enhance the category’s performance. Highlight how your product meets current consumer demands and trends.
Presentation: Make your presentation concise and impactful. Focus on how your product fits into and enhances the existing category. Be prepared to discuss your marketing plans and how you’ll drive sales in their stores.
Onboarding Paperwork
Once you’ve secured interest from a buyer, there can be certain documents you need to first complete. Keep in mind that onboarding is not fast and can take months before your product hits the shelf.
Vendor Agreements: This contract outlines the terms and conditions of your relationship with the retailer, including payment terms, delivery schedules, and performance expectations. Carefully review the documents to understand the terms of the agreement from onboarding to offboarding and everything in between. If you’re not sure, ask questions from the retailer, advisors, or other founders.
Product Information Forms: You’ll need to provide detailed information about your product, including UPC codes, pricing, case pack sizes, and shelf life. Accurate information is crucial to avoid delays.
Compliance Documentation: Ensure you have all necessary certifications and compliance documents, such as food safety certifications and insurance certificates.
Working with a Retailer’s Preferred Distributor
Many large grocery stores work with preferred distributors to streamline their supply chain.
Choosing a Distributor: Retailers will have a list of preferred distributors, including National and Regional options. If you’re not in one of their preferred distributors, ask if they can make an introduction to their account manager to help you get onboarded. Ahold Delhaize USA is an example that prefers to use UNFI as a distributor for their great local brands.
Onboarding with the Distributor: You’ll need to establish a relationship with the distributor, which involves additional contracts and compliance checks. Make sure you understand their requirements and processes. Ask your buyer for an introduction to the distributor if you don’t already have a relationship with them. If you’re new to distribution, be sure to read our Distribution section of the guide that goes through all the details, as there are specific things you should know going into these agreements.
Coordination: Maintain clear communication between you, the distributor, and the retailer to ensure smooth operations. This includes managing inventory levels, delivery schedules, and addressing any issues that arise.
Selling Off the Shelf
Getting your product on the shelf is just the beginning. The real challenge is getting it to sell.
Promotional Plan: Come prepared with a promotional plan to drive product movement. This could include in-store promotions, discounts, and special displays. Collaborate with the retailer on promotions that align with their marketing calendar. Ask the retailer which promotional activations are available in the next 6 months. Additionally, you should ask them their preferred promotion types.
Sampling and Demos: One of the best ways to get customers to try your product is through in-store sampling and demos. Set up a booth, give out samples, and engage directly with shoppers. It’s a great way to create a buzz and drive immediate sales.
Social Media and Influencer Marketing: Leverage social media to create excitement about your product. Partner with influencers who can reach your target audience and create authentic buzz around your brand. Use geo-targeted ads to drive local traffic to stores carrying your product. You should also ask your buyer how you can engage with the retailer’s social media and marketing department.
Update your store locator with the new retail stores and locations to make it easier for customers to find where you’re in stock and create posts and e-mails promoting the launch. You’ll see earlier success if you can drive your own customers / followers into store to purchase.
Customer Engagement: Build a relationship with your customers. Encourage them to share their experiences on social media, and respond to their feedback. Engaged customers are more likely to become repeat buyers and brand advocates. Some retailers participate in community activations where your product may be featured (Foodbanks, 5Ks, new store launches, etc.).
Monitor Sales: Keep a close eye on your sales data. If a product isn’t moving, figure out why and adjust your strategy. Maybe the price is too high, or maybe the product needs better visibility. Be ready to pivot based on what the data tells you.
Some retailers provide sales data but most don’t. In this case, your best bet is utilizing distributor data through KeHE or UNFI.
Glimpse put together a Free KeHE, UNFI, and Whole Foods Market Sales Dashboard that you can access here.
Selling to conventional grocery stores is challenging but immensely rewarding. It requires understanding the market, meeting buyer expectations, and executing a well-thought-out pitch. Remember, it’s not just about getting your product on the shelf—it’s about making sure it stays there by driving sales and building strong relationships with store buyers.