07: Distributors
Regional Distributors
For many emerging CPG brands, the allure of working with national distributors like KeHE or UNFI is strong, but jumping into national distribution too soon can be risky. That’s where regional distributors come into play, offering a more manageable and strategic pathway to growth. By partnering with regional distributors, you can gain a foothold in specific geographic markets, fine-tune your distribution strategy, and gradually scale your operations.
Why Work with Regional Distributors?
Regional distributors specialize in serving specific areas, making them an excellent choice for brands looking to grow sustainably. They typically have strong relationships with local grocery stores, independent retailers, and even foodservice operators in their regions. This localized focus allows them to provide personalized service and attention that national distributors often can’t match.
Advantages of Regional Distributors
- Targeted Market Access: They provide access to retailers in a specific geographic area, allowing you to focus your sales and marketing efforts on one region at a time.
- Closer Relationships: Regional distributors often have stronger, more personalized relationships with local stores, which can make it easier for smaller brands to gain shelf space.
- Lower Cost of Entry: Because you’re not scaling nationally, you avoid the steep upfront costs and logistical challenges associated with larger distributors.
Types of Regional Distributors
Regional distributors can be categorized in two main ways:
- Retail-Specific Distributors: These distributors focus on supplying products to independent grocery stores, small regional chains, and specialized retailers. They often have deep relationships with these stores and understand the local market dynamics well. Working with them helps brands enter smaller chains and build demand.
- Category-Specific Distributors: Some distributors specialize in a certain type of product, such as refrigerated items, snacks, or natural and organic foods. For example, there are distributors who focus exclusively on beverages or frozen goods, allowing you to work with experts who understand the nuances of your product category.
For more details, you can check out our Regional Distributor Guide.
How to Approach Regional Distributors
When you’re ready to expand into new regions, start by researching distributors that specialize in your product category and geographic focus. Here’s how to approach regional distributors effectively:
- Build Proven Demand First: Distributors want to work with brands that have established demand. Before approaching a regional distributor, make sure you’ve proven your product’s success in smaller retailers, farmers markets, or through direct-to-consumer (DTC) channels. Demonstrating strong sales velocity will help convince them that your product is worth the shelf space.
- Have a Customer Account: Regional distributors want you to come to them with a sizable retail account already of 5-20 stores that they want to take over. Remember, distributors are in the business of warehouses and trucks, not sales. Don’t expect them to sell your product into accounts for you. If it happens, see it as an unexpected bonus.
- Craft a Compelling Sales Pitch: Just like when pitching to national distributors, your regional pitch needs to clearly communicate why your product will sell. Include data on your retail velocity, customer demand, and marketing strategy. Regional distributors will want to know how you plan to support sales growth in their region.
- Leverage Local Events: Many regional distributors attend or sponsor local food and beverage events. Participating in these events is a great way to build relationships and showcase your product to decision-makers in the area.
- Consider Working with Multiple Distributors: Depending on your expansion goals, it may make sense to work with multiple regional distributors in different markets. However, be cautious about overextending too soon. Focus on mastering one region before expanding into another.
Challenges
While working with regional distributors offers significant benefits, it also comes with challenges:
- Limited Reach: Unlike national distributors, regional distributors won’t be able to get your product into stores across the entire country. You’ll need to be strategic about which regions you target and how you plan to scale beyond them.
- Higher Complexity with Multiple Distributors: If you work with more than one regional distributor, you’ll need to manage relationships, inventory, and logistics across multiple partners. This adds complexity to your operations.
- Sales Cycles: The sales cycle with regional distributors can still take time, and while it may be shorter than national distributors, patience is key.
Regional Distributors as a Stepping Stone
For many CPG brands, regional distribution is an ideal stepping stone before jumping into the national arena. It allows you to build your brand, manage logistics on a smaller scale, and refine your approach before taking on the challenges of working with a larger, national distributor.
Brands that have successfully grown through regional distribution often credit these smaller partnerships as the key to their success. By building a regional presence, you create a foundation for broader expansion and national success when the time is right.
Make Regional Work for You
Starting with regional distributors allows you to gain valuable market experience without taking on the risk of scaling nationally too quickly. It’s a more focused, manageable approach to growing your brand, and for many CPG companies, it’s the most strategic path to success.
For a comprehensive guide to the regional distributors best suited for your business, check out our Guide to Grocery Distributors.