Welcome to the Community Call Podcast.
I'm Melissa Travers, Director of Community here at BevNET & NOSH, and I'm here with my co-hosts, Jackie Brugliera and Mike Schneider.
If you're enjoying the show, please follow and review us on Apple Podcasts or your listening platform of choice.
Great to see you both.
Mike, I have to ask you, so you stepped into my office a little earlier today.
Did you notice the strong smell in there by any chance?
Yeah, it smelled good.
I left my office and then came back in and I realized I brought fish sauce, Brussels sprouts for lunch as leftovers and they really fill a room.
Yeah.
We were having a particularly potent beverage at the time too, so I noticed more of that and I was just like trying to smell the fish sauce and the Brussels sprouts because that beverage did not smell particularly great.
It was an alchemy of smells.
Is there some rule about what you're allowed?
I know we talk about lunch a lot here, but is it like a plane where you really shouldn't, like you shouldn't bring fish and heat it up in a community microwave.
That's like a given, right?
I feel like seafood is always kind of a no-no.
Like it's kind of polarizing.
Some people enjoy the smell, but a lot of people don't.
Some people don't like microwave popcorn.
Remember that from the old days?
Don't make microwave popcorn because people would burn it and stuff.
Oh, see, burnt popcorn is one thing, but who doesn't like the smell of popcorn?
Crazies, I mean, they're psychopaths.
That's how you know.
Yeah, if you don't like the smell of popcorn, you might be a psychopath.
You might be.
No, you might just not like popcorn or you're allergic to it or you had like a bad experience with it or something.
Like, oh my gosh, once my brother, he would work at this restaurant and he brought ribs home and they were so delicious.
And then the next day I got so sick and I didn't want to have ribs for like four weeks.
That makes sense.
Or four years.
I don't remember which.
Or forever.
Or four some, yeah.
Yeah.
Oh yeah.
Well anyways, Brussels sprouts definitely make me think about the holidays because they're always on my holiday table, which also makes me think of sort of the non-alc conundrum, especially for folks who are maybe trying to cut down on the booze a little bit.
I know you're sober curious.
I am, yeah.
And Jackie, what's your, I know that you kind of like, I feel like you moved off of the booze for a little while.
Where are you in booze land now?
I'm more THC curious, I guess.
I am in between alcohol and THC.
Yeah, THC curious.
Yeah, THC curious.
I'm kind of joining Jackie there in THC curiosity, but I-
Oh wait, have you recovered from the melt?
No, I've never, I haven't.
So I'm like in super small doses.
I had a breeze.
I liked it.
I didn't do much, but it's 2.5.
How many milligrams are in a breeze?
2.5, yeah.
2.5, that was pretty good.
But I'm not like, I'm gonna try one every week.
I'm just, I have to work up to it.
Not like Jackie's a little more, a lot more adventurous than me in that respect.
Yeah.
Do you guys bring your own beverages places or like if you know you're gonna be somewhere, do you bring stuff with you?
I always bring my own stuff because I always have the coolest stuff.
So it's kind of like a party trick at this point.
Yeah, like what's gonna be in Jackie's bag?
You should bring a top hat, Jackie, just supposed to, ooh.
Or have those coats, you know, like what do you want, what do you want?
Ooh, that's a great idea.
With little pockets on the sides.
Hey kid, what do you want?
Wow.
So many images conjured up right now, hilarious.
So many images.
Well, Jackie, I don't know if you would put this Ouroboros green bean casserole beverage in your beverage coat, would you?
Yeah, it's actually funny because I was making dinner with a friend last weekend and we had like maybe a couple too many drinks to drink on Friday night.
So Saturday night, we were like, no alcohol.
And we actually just poured that over ice and it had a similar complexity to a mocktail.
So it was really good.
What do you think?
This is the same thing as with the olive oil martini.
It's very, very, very subtle.
And I almost feel like the packaging makes you think like you're going to be slurping down green bean casserole.
Try a little more.
Because I feel like this is a lot more potent than the olive oil and it's really nice.
Like the finish is super clean and good.
And Jackie, I'm with you.
Like it's a nice vegetal cocktail kind of substitute.
I crush this stuff too, whenever it comes in.
I didn't think it was going to come back, first of all.
This is like what, round two or round three?
I think round two.
I think it's round two of this stuff.
It's really good.
Multiple years?
Seems like it's a seasonal at this point.
Uh-huh, uh-huh.
You know, yeah, I do get, you're right.
It's like a-
Look at these happy green bean people.
They're so happy.
Yeah, I do definitely get the vegetal notes.
Definitely no crunchy onions, which I guess is a good thing.
Yeah.
No cream, which is also a good thing.
Yeah, no cream.
That would be, that would be quite the brew.
Oh, but if you mix this with cream soda, it would be pretty good.
I don't know.
Oh, I wanna try that.
Uh-huh.
I'm glad we had a chance to try that.
Melissa's not sure.
Jackie and I are like, ah.
I don't know.
I could go either way.
I'd try it.
Yeah.
Yeah, I think it's definitely interesting, and I appreciate that it's not fruity like, you know, pretty much every other seltzer.
So I'm gonna keep thinking about that while-
They went off the bean path with this one.
There might have been a little bit of that TH curiosity that led to this.
Creates magic, makes you a little bit more creative, thanks outside the box.
Or it melts your face right into the table.
Depending on a number of things.
Joke never gets old, does it?
Nope, well, another thing that never gets old for me, of course, is Community Call.
I am thrilled to introduce this episode of Community Call that we did with Andy Steele of Ollipop and Vanessa Walker of NUU Brands on DSD Networks and how to activate them for success.
Please enjoy.
Do you have a recent product launch, new hire, marketing campaign, distribution news, or some other exciting company announcement?
Let us know.
With our new self-service PR portal, submitting your news is easier than ever.
Just head to submit.bevnet.com to get started.
Today, we are very excited to be speaking with Trent Moffat, founder of Gotham Brands and JW Fischer of Nirvana Water.
We're going to be talking about DSD Networks, what you can expect and how to set yourself up for success to drive case sales.
Thank you both so much for joining us.
It's a pleasure to have you here and this is a great topic.
Hey, Melissa, thanks for the opportunity.
Appreciate it.
Trent, why don't we start with you?
We'd love an introduction.
You have an impressive beverage background.
Please tell us a little bit about your history in beverage.
Sure, so JW and I were just talking about this.
I started as a brand owner working with Small Kids Juice, working with distributors as we got this launched.
And it was quite exciting, right?
To open up distributors with the brand and then you think you're done and your job's done and distributors are gonna do all the work and they rely on you and your expertise with the brand to push through.
And what you'd find is these distributors are large and they've already got brands that are working and selling and how does your brand fit in?
So we've been doing that for a while.
And I started my own company where we represented startup companies trying to get built in New York.
And we created our own DSD system with, we've got warehousing trucks.
And we would start to incubate, accelerate brands into the New York marketplace with this model.
Well, the full sales team just focused literally on the top neighborhoods, top accounts.
We call it high spotting, right?
So where brands can get that visibility and traction and volume going to bounce them to a bigger distributor.
But we would do all the hard work and we vet the product out pretty well to make sure that the pricing was right, the product was right, the labeling was right, where it gets positioned in the stores.
We would work through all that before we push it onto a larger format.
But it's still a DSD operation at the end of the day, but it was New York City, which is never an easy market to work in.
So we found a niche that would work and we've rotated a lot of brands through the system here and I'm pretty proud of it.
Great stuff.
Thanks so much, Trent.
JW, before we started this show, you said that you have been in this business for 25 years and you certainly have an impressive background.
Where have you been in beverage?
Yeah, I mean, sure, actually even more than that, if you count, I mean, I was merchandising for Coca-Cola all through high school and college and I was running forklifts and doing warehouse stuff, merchandising, driving trucks all the way up until I graduated college.
That going into Snapple Beverage Group, then I ran a Snapple distributor, which was also a vitamin water and Monster and the early zeros, early mid zeros.
And then from there, it was with Honest Tea.
And we built up Honest Tea, sold the Coke, and then from there became vice president of Coca-Cola, adventuring and emerging brands for five years.
And then after that, was with a bunch of different brands, including Vita Cocoa, Super Coffee.
And now I'm with Nirvana Super.
Excellent.
And what are you working on at Nirvana Water?
So right now, there's actually the line is right behind me, but we are just currently working on building out availability and distribution.
We're working with Trent at Gotham in New York City right now and exploring other options throughout the country.
We have a cost as a broker.
So we're working on that as far as large store authorizations is concerned.
And then, we're talking to all your regular players and DSD and people that I've known for over the last 20 years.
And we're gonna try to build this thing out through DSD, some DSD, some warehouse, pending the geography and where we're at.
But super excited.
We just launched just at the last week of June, as Trent knows, and we're off to a really good start.
Great stuff.
Well, let's get right into it.
Let's start off with the level setting of the DSD landscape.
This is also something we were talking about before the show.
There are hundreds, you said, of DSDs, but paint a picture for us of how the country is sort of set up.
How many DSDs are there that beverage brands really need to kind of have their eyes on?
Trent, do you want to take that first?
I mean, that really all depends.
That's a pretty big question.
So I think if you're just starting out, you probably want to work in your backyard and you want to find a distributor to work with you just to vet your product and really figure out the nuts and bolts of it to get going.
And then as you grow, you might come up with an authorization.
It could be as large as Publix or Kroger that you want to go DSD and that's going to require hundreds of DSD and personnel on your side to get that going.
So it might be as simple as filling out a territory with one or a few key distributors, or it might be as big as filling it out nationally and trying to get your whole DSD network plugged in to fill every chain that you're going to come across.
And it's two different models, right?
But it certainly could be a couple to a couple hundred.
JW, how are you approaching this with Nirvana Water?
Where did you start?
Yes, so we are a mostly Northeast based company.
So of course you want to start where you are.
So strategically we're looking to build out kind of, there's two different approaches here, but to try to go mile deep, inch wide here and build a strategy where you're building success stories along the way.
So we are looking at, right now we have Trent in New York City.
We just signed and launched a distributor, Functional Distro in North Carolina.
And then the idea here is to slowly build out success stories one state at a time.
So we are also building up authorizations in the Northeast, but again, strategically targeting Northeast and then building and expanding upon those success stories in the future.
Brent, you mentioned that this was in your intro that oftentimes brands sort of, they don't quite understand that they're one brand of many with a DSD.
How, if you're launching with a DSD, especially if you're new to market, how do you call yourselves out of the crowd and get the attention of your DSD?
Couple of different ways.
One, we've been successful to do this at Gotham, right?
So we've built the brand to the point where you've got cases already going out the door, you've got success at retail.
So the brand's already pulling its doors.
So as you drop it into a larger distributor, you've already got a volume going.
But assuming you don't have that and you're just dropping into a distributor at zero cases where you could be in a house with vitamin water or VitaCoco.
Brands that are going big and loud, and how do you start to get two cases and four more cases and feel important?
And a lot of that is just relationships, right?
So you built a relationship by bringing in the brands that they already believe in it, but now you gotta get the sales reps and the whole team to get involved.
So that takes hard work.
You gotta work on the street.
You gotta sometimes pull the cases yourself and whatever it takes to get it going.
But a lot of it just comes down to the relationship with the key people that are gonna help you build your brand and identifying those inside the distributor to help you make that work, right?
Sometimes it's just as quick as having an authorization as you go into a distributor and you're already plugged in place.
So now you might have 200 shop rights.
So you might have Stop and Shop already plugged in.
So you might be pulling cases already to get the volume going and see it go on the trucks every single day.
That might be an easier way, but in essence, if you're gonna wanna continue to grow, you gotta go beyond that.
Is it a misconception that a DSD will help you with the sales component?
Is that something you really need to be doing on your own?
Or how much are they gonna help you sell into accounts?
They're busy, right?
And they've got, they've already could have 60 to 200 brands already under their umbrella and time and attention of brands that are already selling, right?
So it is a misconception.
I've seen a lot of folks just drop pallets or trucks into distributors and think, they're washing the hands of it and thinking they're done.
But now, whether it's just finding more authorizations for them to fill in certain markets where authorizations are heavy or working like a New York City market, working the independence with the team to continue to build out and grab those cases for the distributor are gonna be key, especially upfront.
Yeah, if I were to put my brand hat on or distributor hat on, I think that in today's climate, it is the brand's job to build the brand, so to speak.
I look at the DSD distributor, the two main goals that you hope for is that they're gonna secure and protect your space that you have and that they're gonna merchandise that space.
But at the end of the day, it's really on the brand to get that space.
Got it.
All right, so let's say we're a brand, we've signed on a DSD.
What should your expectations be of that DSD and what do they expect from you?
And I understand that that might be, there may be a different set of answers.
So to Trent's point, you're gonna go into a DSD house, whether it would be today with Nirvana going into DSD or with Honest Tea when we were bought by Coke and we were going into that Coke system, you are never going to be a priority brand for them.
So the only time you as the brand launching into this distributor, you have that first 30 days, that initial launch is when all eyes are on you and they're going to prioritize you.
After that, they have their top three to five brands and then they have their other 25 brands, okay?
25, 30 brands, 10 brands, whatever that is, okay?
So the first and foremost, the biggest priority is and the biggest spend as far as resources should go into that initial launch.
That first 30 days is crucial and key.
So you have to have a big sales rally.
First of all, you have to make sure that you're hiring the right people.
You do need people that are in the market that is gonna manage that market, especially the larger the market, the more people.
So take New York City, for example.
You're gonna have to have manpower.
That's gonna be your biggest expense.
You're gonna need a really extremely aggressive street deal to get the new availability and authorizations in the market.
And then you're also gonna need a really strong incentive.
You can run incentives on cases, on new accounts.
You can do top performers.
And then as far as top performers, you can do it on prizes.
You can always cash is always king when it comes to incentives.
I don't care what anybody says.
So you have that 30 days to make as big of a splash in that market as possible.
After those 30 days, there's gonna be another brand that's launching that's gonna take up a lot of their headspace minus their top three, five volume brands that are always gonna be a priority for them.
After that, that's why it's so key.
Okay, obviously the brand needs three things.
So you need money, you need a great product and you need people.
And the people after those 30 days that you're gonna be so dependent on the people that you hired to manage that distributor to keep it a success.
It's all about for me and what I've always said is like, these guys don't necessarily need us.
They are never gonna need us.
At least for the first 12, 14 months, they're probably most likely not going to need us.
We're not a priority.
Therefore, you have to hire the right people to put in place where it's not necessarily I have to sell this brand, but I want to sell this brand because it's cool.
Because those guys are cool.
They're good to me.
She's good to me.
He's good to me, whatever.
And you're forming, as Trent said, this is one of the, definitely an industry.
Times are changing.
The paradigms are shifting, but this is still relationship based, especially when it comes between a brand and a distributor.
Great stuff.
When you hire that team, what specifically do you want them to be doing out there?
What are they doing day to day?
So the biggest thing for me when I'm hiring someone is can this person build a relationship, and then do they know how to leverage the relationship?
Because you can get good people that everyone likes, but if no one respects, you're not gonna get a lot done.
I would also say I'm always hiring passionate over experienced, especially in this industry.
So you want somebody who's passionate, this is not a sexy industry, right?
This is about rolling up your sleeves and opening new accounts one at a time.
If you wanna build the brand the right way sustainably, it's about one account at a time.
So you need to hire people who have extremely strong work ethic, and then people who are great people, right?
People who could relate to people and that are gonna gain and garner their respect, and then know people who know how to ask the right questions.
A lot of this, when you're talking to a distributor, as Trent knows is, are you asking them the right questions to get what you need to get out of them?
So.
What are those right questions?
Support.
I mean, you looked at the bottom line, for me, in my opinion, from brand to distributor is about support.
We just had a meeting with Trent's team last month, and all I kept preaching is, how can we support you guys better?
What do you guys need to sell our product?
And what aren't you getting that you need?
What are the complaints?
Like making sure that there's demo support.
So field marketing is a piece of this, especially at the larger market level.
Incentives, and then again, the people that you put in place with them, because the expectations are that there's gonna be a lot of route riding involved, where your local salesperson, whether it's a regional level or an area sales manager level, district manager level, whatever you wanna call that, that they are interfacing with the brand reps as much as possible.
But the trick is that they are working with them as much as possible, but not to the point where you're annoying either.
So there's this fine line of wanting to be the number one brand person for these sales reps, but also not crossing that line as well as this guy.
Because if that guy's, if we're annoying this person, we're not a big enough brand yet, where they have to sell our products.
So if they don't have to, it's all reliant on that relationship that they have.
Because our reps are representing our brand, especially to the distributor sales rep.
No, we've had reps call my reps every single day and say, how many cases did you sell?
How many accounts did you open?
And everything else, that's required in a report.
So you are kind of annoying at some point, right?
So they want to help.
And honestly, you're selling for the people up front because the brand's not selling, right?
You've got 10 accounts and 100 cases, maybe if you're lucky the first week.
And if you've got good people and they come back and they come back and 90% of it's just showing up to JW's point, somebody with a good personality and somebody that's selling and doing the right thing out there, you're gonna want to help them.
And you're gonna have more built into the person and the people behind the brand than the brand itself.
And that'll change as the volume goes up.
But upfront, it's really the people coming in and what their expectations are and how you can help them.
The other piece is when you're coming in, where can you sell if you're on your own?
Distributors oftentimes give you a list of top 50 accounts, top 100 accounts to go after and try and go sell on your own that you're already selling.
Nothing worse than just selling an account the distributor is never gonna open up.
You might be with a beer distributor, it might be a great NA account, meaning non-alcoholic account.
They're never gonna make that delivery the second time.
They don't have a sales rep going back there.
So if you're going to accounts that their sales reps are already going to, it makes it a lot easier for the reorders.
So if you open up 10 accounts and those are 10 accounts within that distributor, theoretically, now you've got a sales rep from that distributor coming back and hopefully get in reorders for you as opposed to an account across the street that they're never gonna see.
Go after the easy stuff first.
And if they won't give you a list, ask them for a territory or an area that they're trying to build out and just ask them, right?
So what about these?
What about these?
There's nothing wrong with that.
And just ask.
You want to do smart work as opposed to just building out a whole territory that they won't even deliver to, right?
So you might be opening accounts in an area that you live next to, but they don't deliver, right?
That doesn't make sense.
You want to understand the parameters of the distributor case minimum.
So if they've got a five case minimum or a 10 case minimum, you sell them six cases, it's not going to get delivered until they add multiple brands into that portfolio to get that order in.
That doesn't help either.
So just understanding some of the parameters of distributor and the distributors will tell you all day long what helps them because it just makes it easier for them.
Is there no danger of stepping on toes if you're sending your team into accounts that the sales reps are going into as well?
Is that not an issue?
If you got a bad rep, right?
And they're just causing problems on the street and we've seen that.
So if you've got a, you know, JW said, if you want good people out there, they're doing the right thing, asking the right questions.
If you've got just some guy just offering the world and just not being able to back it up or saying, I'm going to do a demo on Saturday, it doesn't show up or I'll come back tomorrow and merchandise this display for you, it doesn't show up, then that's where you're going to have issues.
Follow-ups, 90% of it unequivocally.
And you have to treat, in my opinion, as a brand, you have to treat the distributor reps, even though this is a partnership, they should be looked at as a customer to you.
So they call, they ask for help, you need to be there, you are their support system.
If you're not, they will, if they have space available and they call you and you don't support that, they'll call the next brand rep and they'll never call you back again.
So it's about follow-up and treating them as like they are your best customer.
Makes perfect sense.
What are some of the tools that you need to provide your DSD with?
I mean, am I right to think of priceless, to sell sheets?
Those are all things I would imagine you need to provide at the beginning.
Is there anything else that they need to, in order to be able to do their job?
We've got a checklist here.
So basically we'll go through what are the deals we can offer?
An opening deal, right?
Is it a buy one, get one free?
Is it a buy four, get one free?
But whatever that deal might be or a discount.
And then ongoing, if we get bulk orders, what are our parameters?
Where can we safely say that we can do this on our own or for reps around the street?
And then if it's something bigger, then we'll get the brands involved, right?
If it's a 50 case order or a 20 case order or a big chain that wants to get involved, we'll obviously get the brand involved.
That's key.
And then the point of sale, we look for a couple of simple things right up front.
Sell sheet with barcode so they can easily be scanned at the store and entered into their system.
Maybe a shelf strip if that works, if it's a beverage.
And then if you have a dangle or something simple, just to grab some eye-catching when people walk in the store.
Very simple right up front.
I think that's more than enough.
Distributors, alternate distributors, some distributors print their own point of sale, which is beneficial.
So having the graphics ready and handy is good.
And then your pricing, making sure you've got your pricing nailed.
What's our street pricing?
What's our wholesale pricing?
And then if we got chains, do we have chain pricing and promos in place?
And having that nailed down with the distributor and working through that with the distributor.
So what works in his system, and ultimately you're gonna wanna get to an SRP in each one of the channels and making sure that works and working back and working through that with the distributor is beneficial.
And in my opinion, again, the first 30 days should be the most expensive.
JW, you mentioned street deals and incentives.
Can you explain the difference between those two?
So the street deals, just again, in DSD, this would not be compliant to any chain business, but any independent mom and pop business, you should have some type of street deal.
Ultra aggressive is which we start with, with Trent in New York City, obviously super competitive.
We actually have a BOGO for the first deal.
Some people might not like that, get scared of that, but for the first order, it's a BOGO.
And then you're gonna kind of pull that back a little bit.
So depending on how many skews you have, if you're running six skews, you probably wanna at least do like a buy five, get one free.
Everybody has a different P&L and what that means to them, but you wanna have some type of an aggressive deal there.
And again, I can't stress enough the first 30 days, it should be nothing about other than building out your availability as quickly and as big and broad as possible.
There's follow up to that, which would include field marketing to make sure you're building velocity in those accounts as far as getting demos out support and all that type of stuff.
But initially you wanna build as much availability when all eyes are on you that first 30, 60 days as possible.
So have an aggressive street deal, which is something of your four in one, three in one, whatever that is.
And then the incentive is just something that you're gonna give on top of some, whatever the commission is based for the distributor rep, you're gonna have something else that you're giving them.
We have done everything.
And even with Gotham, we've done a little bit of everything as well.
You can skin that cat a bunch of different ways.
You can do it based on 50 cents for every case sold.
You can do $5, $10 for every new account.
You always wanna have qualifiers built into that.
All right, so you are getting your money's worth from a brand perspective.
So put a qualifier in.
If it's a buck a case, they have to sell at least whatever that looks like based on scale, 200, 300 case minimum after, right?
And then new accounts, you need at least 50 new accounts to qualify, but you're gonna get 10 bucks, 15 bucks on every new account.
You can do that.
And then of course, always we like to put in some type of top performer, meaning the top three sales reps or the top three sales managers or whatever are going to win X, Y and Z.
There's a first, second, third place.
Again, we've done a bunch of different things.
That's where you can do the TVs and get really creative.
But at the end of the day, cash is always king no matter what anyone says.
And that's an ideal time to put some parameters in there too and work with the brand to make sure what makes sense.
They might have 15 different skews, right?
But they've got top four skews or top five skews.
You don't want to sell an account with one or two skews.
You get lost on the shelf in two seconds and it's going to be dismal, right?
So if he's got an incentive out there, he's going to want a minimum of five placements, meaning five different skews in the store.
So that you get the brand build as you see behind JW right there.
If you had one, it's going to get lost.
And inevitably, they're going to say the brand was slow and didn't sell.
Meanwhile, it's the sales reps' fault and our fault for doing it.
So meanwhile, reps will be out there all day long and you could probably even put something together as a reorder.
So you're going to for the right accounts where you know you're going to get the reorders, not just an account, just to get a $10 placement, but hey, maybe there's a $20 reorder rate.
So I'm going after the accounts where I know this brand makes sense.
I'm also going to go back and make sure it's merchandise and packed out of the back room in the cooler so that I've got a good shot to make the money later on, which is important to the brand to get those reorders.
And pictures and depletions to verify.
Exactly.
Excellent, excellent advice.
I do want to remind everybody that if you have any questions at all, go ahead and throw them in the chat.
We'd be happy to answer those for you.
Trent, JW just outlined a great 30-day promo strategy to get things going.
How do you look at long-term promo planning?
What do you typically look at as being successful?
So, ongoing, if you're a large distributor, you're gonna start to look for what chain authorizations are coming in that are important to you in the market.
Those aren't gonna happen day one, typically, unless you're coming in with an authorization, but then you're gonna have secondary and third authorizations you're looking for.
And those are gonna take 30, 60, 90, even up to a year to start working on those and get those in.
So, are you working on them?
Are we working with the right contacts?
And then you're gonna also want some kind of long-term deal, right?
Especially in New York City, or maybe some kind of discount if you're somewhere else across the country where you're dealing with more chains.
So, if they take 20 cases, can I get a deal on 10% off, 20% off?
Or is it a 10 and one ongoing?
So, this way, you've got some ammunition to get those reorders as opposed to just waiting because now you've sold two of the skews sold out, you got two left and the retailer's going, well, I got enough, we'll wait till next week.
How do we get these in and how do we get these moving?
Because you sold three skews and they sold very well.
How do we get those in quickly?
You're gonna wanna work on that as opposed to just leaving the shelf empty because now the consumer that bought those three skews can't find it and they're gonna move on to something else.
Reorders are gonna become very important and growing the cases in the distributor so that you become more and more important is just paramount, right?
Because you don't wanna just hold it, a thousand cases a month and just start to decline to 800, 700, you wanna go from a thousand to 2,000 to 3,000 and become more and more important.
If somebody else is in there doing 100,000 cases and you're doing a thousand, 2,000, 5,000 and they see the growth, the distributor people are gonna understand there's something here and they're gonna get excited behind it because it's exciting to sell something new and something growing as opposed to just taking orders all the time.
So you do wanna show growth and you wanna figure out ways to do that with a distributor.
And then post intro, as a brand person, I would try to do a monthly incentive per quarter, one per quarter.
Any ideas around what that incentive, is there a standard or does it completely depend?
You always wanna keep it fun and get creative and do different things every time you do something.
Again, you do the cases, you can do the new accounts, depending on you as a brand strategically, what you need to do on your backend.
And then you can always, top performers is always a great way to do it.
Sometimes you can do the frontline reps, you can do the managers, depending on the scale and size of the distributor, but you wanna keep it creative and fun.
All right, so we've got a great promo plan.
We're selling cases.
How do we make sure that we have enough inventory to support all those sales, especially if it's an emerging brand where you don't have a ton of historical data?
So your distributors are probably gonna go through and maybe once a week take an inventory, maybe once a month, some of them take an inventory and they might see a pallet of each and then see it going slow, especially the first week and say, we got plenty.
If you know you've got a deal coming up or you've got a big order coming in, if you start, it's up to the brand at that point, right?
Because the distributor is not gonna be paying attention to your brand and the velocities that are going out.
So you're gonna wanna pest them in essence saying, you know, do you have enough product?
Here's what we saw on the report last week.
Here's the inventory.
It's pretty easy, right?
You know what you shipped in, you know what your depletion report would look like.
So you know, you got 200 left out of a thousand and here's our run rate.
So you've probably got a double order this time.
So you do wanna make sure.
And then you also gotta understand how long it's gonna take to ship into a distributor and remind them of that.
So it's gonna take us two weeks to get your product.
It's gonna take you a solid week to get your product.
Did you have enough for the week?
You don't wanna run out, especially in the first 30 to 60 days.
You just, it's gonna hurt you.
You gotta track it closely, weekly, monthly upfront.
And then hopefully you can cross reference it maybe with some other brands that the distributor already has too.
Something else we discussed before this interview was mapping a territory.
Is that something, so do we map our territory before we even sign a contract?
When does that happen?
JW is great at this.
Well, that's a great question.
It's a million dollar question.
The distributor is always, DSD distributors predominantly need anchors, right?
The anchors are the supermarkets.
Okay, I need stop and shop and shop right.
Okay, the problem is that distributor only covers 5% of the stores, so there's a network, right?
Which is why night in the Northeast, there's a night in network to help with that.
But at the end of the day, that's the crux of the brand is to try to figure out how and when you're gonna do all this.
At Super Coffee, we were pretty lucky and successful.
We got about 30 distributors in the Northeast over like a six month timeframe.
But that came with some authorizations.
We had already had Wegmans built in and had stop and shop coming.
And so it's a little bit easier as a brand new brand where you don't have the authorizations yet.
And that's what we're juggling with right now, right?
When's the right time to talk to each and every one of these distributors?
Usually you start with the biggest and the smaller guys will fill in the holes as you go, but there's always anomalies and there's no textbook answer for this.
It's a little bit of minutia and there's playing with what you got.
So the good thing is that you wanna have the relationships built in already so they know that when you call, where you're going in for and you want to be able to have some type of volume plan set into the large store, the grocery focus, and you definitely want to at least have had conversations with most of those larger retailers in the market before you talk to the distributor.
And that's where it's ideal for us, being part of the track system now.
If a brand has multiple distributors and they've got a large chain that comes in, Trax has a huge team of just merchandisers that can go out and either set up shippers, set up displays, making sure that the reorders are coming in, checking for voids, doing a lot of, you might not have the manpower upfront, but you want a three month program just to make sure you're solidified and insured at this, the account that you just got an authorization, as opposed to leaving it up to the distributor.
Now you've got a thousand people out there in the market that can help you make sure a Kroger or Publix or something's taken care of, making sure the orders are taken, make sure the managers and the stores are aware of the product, quickly getting after it.
And it's a quick program just to make sure that you're getting the orders to the distributor and becoming important.
Yeah, it's a puzzle because a lot of them have different boundaries.
Most encores will have different boundaries than an AB house, per se.
So again, you just kind of have to take it as it comes and start big and work down on the smaller guys as you go.
What if you have, what if you've mapped out a territory with your distributor and they own a piece of territory that a retailer is in that you know you can get into, but they don't cover that retailer?
How do you negotiate something like that?
You can also lean on the buyer, right, for some help, saying, you know, we can cover 80% of your stores.
These are the 20% or two stores that we can't handle.
Can you call the distributor to get us an intro?
And a lot of them will force it right in because a lot of the retailers are so strong.
If they want the product, it's not always the case, right?
Some retailers will say, when you go get these two distributors or four distributors, come back to us, but you can always ask for an intro at the very least, right?
Sometimes they'll force it in, sometimes you're gonna get an intro, so.
Well, how about reporting?
What kinds of reports are you looking for and how do you make sense of them and help them sort of inform your strategy?
So we talked about depletion reports before.
Depletion basically show cases sold.
What we actually provide is detailed behind that.
So what accounts bought that week, where they bought, how many cases per account, and then you could start to track things, right?
So we would look at a couple of things, right?
How many accounts are open?
How many accounts are buying?
How many accounts are reordering?
And the velocities per skew, right?
Because you wanna start to track that inventory and start to track the products that are actually selling.
The brands might come in and say, these are gonna be our top three skews, but they don't know because they're brand new.
You might see a different change as the reps are pushing a certain skew or certain flavors taking off in the market.
It's easy to see.
So if you had that information, we give it weekly.
A lot of distributors will do it monthly, but I think what you'll see over time when you have 50 to 100 distributors, you might have 30 distributors, 20 distributors.
And if you're out there trying to sell and you're getting a report in a different format from 30 different distributors, you're gonna want to boilerplate that so you can actually look into it and drill in.
So these distributors are doing well, these distributors aren't doing well, and then you can drill into why they're doing well and why they're not doing well.
But if you're just looking at 30 different reports, probably you're not even looking at half of them.
There's no way you could look at that.
And then over time, quarterly, to start seeing trends and seeing where you want to grow, you're gonna want like formats.
And that's where you're gonna need somebody in finance or somebody else in the back room to help you.
So as far as communication on a monthly basis, there's depletions and there's chargebacks, right?
And that's why you need wrong management, probably at a regional level, someone who's managing those distributors, because as Trent just said, you have 50, 100 distributors, they're not one single person can manage this.
So you want regional, strong regional management that can help control that.
Are disputes as difficult with the DSD as they might be with a broad line distributor?
Tell me it gets easier.
It's different, it's different hard, right?
Because now you're talking to somebody individually and they'll say, well, you authorize this, this is what we're going with, but you'll get somebody on the phone, but you might have an argument over as to what it is.
Typically, you can get somebody on the phone with a distributor, but honestly, the person providing with the billback might not have the information as to why they're billing that back, that might come from a sales manager and you might have to get them on the phone, both of them on the phone at the same time to say, why are we getting all these free cases blown out when this is not the deal we authorize?
Yeah, and are the billbacks, is there one report you get from your distributor or do they send multiple reports that you need to sort of co-align into an Excel sheet or whatever system you're using?
You shouldn't get them one monthly charge back per distributor.
And is that what you recommend brands do?
So if you have 30 different distributors, is the most common practice to co-align them into say an Excel document until you get to a size where maybe you're looking at integrating a piece of software to keep track of everything?
You could do that for depletions, for charge backs.
There's just too much in there, packed in there.
So each distributor has to be looked at and managed separately, I would say, as far as charge backs are concerned.
I don't know how you would put that into, I mean, you have an accountant or a CFO or something that can top line and line item most of the stuff, but every report's gonna look a little bit different.
We have a question from Josh Balinski, at what point should a brand utilize VIP and is that the only software option?
Definitely not the only software option.
There's certainly different levels of expense.
I mean, here we use Salesforce to track anywhere from contacts we're making with different brands that are coming in to contacts in the past.
I think once in your head, it's beyond where you can remember to make calls and certainly if you've got a sales team and you wanna be able to see what they're doing and make sure they're following up, I think that's probably the most important time, but there's different price points and there's different softwares out there that can accommodate.
Thanks for the question, Josh.
JW, do you guys use sales VIP or anything like that?
He's super smart, he doesn't need to.
Yeah, right.
He's got it all right up here.
He does, he always does.
All right, so we've sort of laid out the how-to of so much of this.
What are the metrics you look at to know if you're doing well?
How do you know what you're doing is working?
I always look if the velocities are going up in month in, month out, right?
So if you're growing every week and every month, I think that's the first thing.
If you're flat or you see that first, you go out 30 days and all of a sudden you see a huge dip, which is, you will see a dip, right?
Because you just went and spent a ton of money and you went after it.
And the distributor on this end is growing because my guys are all incentivized.
Now they crushed it.
Now you got a little low because now you look for reorders.
But if you don't see a bounce back after the next three months, where are the gaps and what's missing?
You might have some goals in the P&L that you gotta hit to make sure your forecast is right based on that.
And you wanna kind of map that out with growth, but you wanna see growth and the distributors are looking for growth month in, month out.
Yeah, you wanna continually grow your availability as far as the volume part.
That's a loaded question because I feel like there's a frustration being completely transparent with whoever's listening is that always that situation, especially within the first 12 months with a brand, that usually I have a boss as a salesperson, I have a boss that's asking me month to month to month.
I prefer, I don't think looking at it from month prior is the right way to go.
There's so many variables that play of maybe why the volume is off from month to month.
But one thing for sure is after that first year is when you really wanna start, in my opinion, you wanna look at volume and you wanna see your base lifts, right?
You wanna see these lifts in the volume.
So from January 23 versus January 22, right?
There is some real data built into that.
From January 23 to December 22, not so much, right?
So the goal is that over time, annually, you're getting these big lifts, right?
When you look at it by month, there's seasonality that's built into that too.
Well, like, you're going from summer to fall, et cetera, et cetera.
As long as the first 12 months, you're continually building availability, meaning doors or outlets, that's the way to go.
And then I think after that first year, you always want to check and look at the doors.
But after that first year, that's really when you want to take a deeper dive into the volume piece, right?
And you want to make sure that you're seeing those lifts in your base.
I'd love to hear from each of you, your best words of advice for folks who are managing their DSDs and looking to get the most out of those partnerships.
Trent, let's start with you.
It should be a good partner, right?
And I think we set it up front.
Just showing up is one thing.
And then making the promises you make, if you follow through and they're there, if you can't for some reason, just the communication, right?
So there's plenty of times where I've got a brand that's out of stock on three SKUs and it's not gonna be in for two months.
They're losing a rep.
They haven't been able to hire rep for whatever reason.
You know, the products on delay, there could be a multiple different thing.
Anything that comes up or this authorization was promised to us, but it's not coming through.
Just communicating, right?
And if you're upfront with anybody, anybody would appreciate that, right?
And things do happen.
And if you're upfront and honest with them and communicate, it goes a long way.
JW, how about you?
No, passionate people over experience people.
Any day, the biggest thing that you need to build a brand, I love watching Shark Tank, because whenever there's a beverage person, they're like, ah, the sharks are always like, no way.
You know, this is the most competitive industry in the US, blah, blah, blah.
And it's, I love it.
And that's why you can have an awesome product.
You could have tons of money, but if you don't have passionate people who love the brand that are behind it, then it's not gonna go anywhere.
So make sure you hire the right people.
And I'm sure the brand has a lot to do with that too.
It has to be a brand that folks can get behind.
Yep, 100%.
Yeah, if you're not behind it, forget it.
What's that?
No, no, please.
If the brand's not behind it, why would the distributor, right?
To this point, you got to be right.
Exactly right.
No, I think those are perfect words to close on.
I would like to thank you both so much for joining us.
JW Fischer of Nirvana Water, Trent Moffat of Gotham Brands.
If folks have any questions after this, is LinkedIn the best way to get in touch?
Sure.
Yeah, for sure.
That concludes another episode of the Community Call Podcast.
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