Welcome to the Community Call Podcast.
I am Melissa Travers, Director of Community here at BevNET & NOSH, 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.
Happy New Year.
Happy New Year.
Happy New Year.
Yeah, how was your, did anyone take a break?
Did you guys all have fun?
Yeah, I took a break.
I got sick over the holidays, unfortunately, so I was tied to my apartment, but it was good for me because I tend to stay a little bit too busy, so I was forced to slow down.
I don't know what it says if the only way you can slow down is when you're sick, but I totally understand that, and I'm glad you got to slow down a little bit.
She only played three Gaelic football games that week.
Right, exactly, exactly.
How about you, Mike?
Did you do anything fun over the break?
Yeah, I got some crappy skiing in, hung out with the family.
Pretty, pretty good stuff.
Crappy skiing as one does in New England these days.
Ski the East, it's like ski the mashed potatoes.
There's probably a mashed potato brand that could sponsor the skiing of the East right now.
Ooh, that's actually not a bad idea.
I mean, I feel like it would be better than whatever snow we could come up with, right?
Cauliflower mashed potatoes.
Let's get on that.
We could have it sponsored.
Did either, I don't know if either of you had any favorite holiday products, but I totally fell in love with Mission Craft cocktails.
They were at our BevNET Live show.
I had an opportunity to-
Cocktail showdown contestants.
Cocktail showdown contestants.
Thank you, Mike.
I actually tried those.
Ooh, what'd you think?
Yeah, I suspended sober curiosity.
I thought those are really well done.
I was so surprised.
I mean, we get a lot of products in here, but I was so impressed with the freshness of the ingredients and how well they kind of turned out with just a good shake or stir with some ice.
I brought the Cosmo to a little get-together for like a pre-dinner round of drinks.
I brought them to New Year's Eve too, and man, they really went over very well.
Were you able to bring some magic cactus home with you, Jackie?
Yeah, I definitely had magic cactus at home.
I drank more THC than I did alcohol, I think, this time around for the holidays.
So yeah, but I also did drink, what was it?
Malk, their holiday nog.
It's really delicious.
And family tradition is just spiking egg nog with like de-sirono.
So you de-sirono-ed your Malk?
I did.
I did a little magic cactus myself.
Are you keeping a journal?
No, I mean, I'm just not melting, so there's nothing to really talk about.
It's kind of, you know, just kind of nice.
Just drink one, so it doesn't really do a hell of a lot.
Yeah, totally.
It kind of chills you out, takes the edge off, it's great.
Melting isn't always the goal, I suppose.
Only sometimes.
Yeah, sometimes it is.
Sometimes it's not, and it happens.
Which is always a good adventure.
Right before the break, I also had a chance to chat with Umima Sharwani, the founder of Paro.
Mike, this is a brand you turned me onto, and it was such a pleasure to chat with Umima.
She's a first-generation Pakistani American, and she worked at places like Google, fab.com, Glossier, and then she launched Paro.
I haven't had a chance, actually, yet to try the product itself.
Which items were you able to try?
I mean, I've tried the three items that they have, or at least the ones I know of.
So I've tried the Masoor Dal, which is red lentil stew.
It comes in a box, super easy to make, super tasty.
The Kitchari, which is mung beans, rice and spices.
And then I think, I guess their flagship product right now would be the Tarka oil, which is organic ghee with spices, chili, ginger, garlic.
It's a chili crisp.
It's a Pakistani chili crisp.
Would you use that chili crisp pretty much any place you would use a regular chili crisp?
I think, if I wasn't already on a quest to put fly-by-jing chili crisp on just about everything, then I would, maybe I can just add Tarka to the mix because it's, yeah, it's great.
I mean, it's more for savory stuff, she says, but you could put it on ice cream, give it a try.
I would totally give that a try.
When I chatted with her, she was furiously packing boxes and trying to wrap up for the holidays as these entrepreneurs do.
Extremely, in an extremely positive way though.
I mean, she's like a rare sunshine, super cool.
She did do a little post though, which I have a lot of respect for that de-glamorizes the entrepreneurial experience because there's a lot of hustle culture that just shows all the highs, highs, highs.
But startups are like extreme highs and extreme lows.
Every single day, you've got companies like Alvarex who have some illegal growing operation next to their warehouse, set fire and take out $40,000 of their inventory, things like that.
Those things happen like once a week or twice a week or three times a week at a startup, and then you've got the insane highs.
Have I gotten a retailer?
Or I talked to an investor or things like that.
So it's definitely not just all glory in the startup world.
And so, I mean, she's super positive but also very real.
I think that's so important, certainly.
There's gotta be a feeling of solidarity in the trenches as well as with all of the wins.
Yeah, and I feel like there's been a wave of more founders sharing those not wins or the dark moments in the entrepreneurial world.
And we saw some founders having health issues and kind of just preaching, slow down because it's not worth your health to just run yourself into the ground.
Dave, the founder of Dream Pops, had a scare and he posted about that and he was, I mean, it just shows you have to take really good care of yourself out there, especially if you're an entrepreneur because every day can just be nonstop go.
You have to find time to sleep.
You have to find time for leisure.
You have to find time to be with your family and your friends.
And this is a really, really hard game because you put your whole life into it.
So like work just becomes your life, becomes your work, becomes your life.
And if you don't find time for self-care, it's not going to happen.
So I hope some of those founders out there have New Year's resolutions for self-care.
If you need a shoulder to cry on, safe place for that is the BevNET Slack Community.
slack.bevnet.com, join us.
Youmima just joined us there.
Definitely hit us up, slack.bevnet.com, and let us know what we can help you with.
Ask your questions in the Ask channel, and just say hello.
And Dave is on the mend as well.
Oh, good, good.
Dave, we're sending you all of our well wishes.
Well, and other community-based content, here this month in January, we have a nice lineup of community calls scheduled for everybody.
We've got Arnulfo Ventura talking about exponential growth.
We've got Lee Robinson from Whole Foods Market taking us behind the scenes and what's going on at Whole Foods now and how brands can succeed.
We've got the Spins team.
We've got the New Hope team talking about Expo West, Nielsen IQ talking about the trends that they saw in 2023 and what that sets us up for in 2024.
So should be a good month in community calls.
And folks, if you want to sign up for those, communitycall.bevnet.com.
Well, this community call that we are introducing right here is about private label.
We've got a few favorite private label.
Is it nerdy to have favorite private label items?
I like Pirate's Booty.
No, Mike, it's private label, not pirate label.
I think that's even more nerdy.
Yeah, I think that's even more nerdy, yeah.
Well done, well done.
Jackie, I don't know, are you a private label shopper or are you a name brand gal?
I mean, every time I walk into Trader Joes, I feel like I have to be a private label shopper.
And, you know, a lot of their products are delicious, but the two things that always end up in my grocery cart are their coconut water, and then also they have these vegetable gyozas that are frozen, and they are so good, and they're so easy to just steam in the microwave, so I just always have those stocked in the freezer for like a snack.
Amanda Smirlinski, who is part of our social team, has been, she swears by their bone broth now.
And I have to try that, because bone broth can be really expensive.
Really expensive and quite a production to make.
Yeah.
I have a couple of favorites, too.
Oh, yeah, of course you have.
I love, this is my favorite game.
I love their wall of chocolate, so they have this like enormous brick of Belgian chocolate that's so good for baking.
They have milk and then two darks.
And they also have these little tetrapacked heavy creams, which I keep in the pantry.
Like if you need some cream and you don't have it, that's also, that's one of my favorites for sure.
Well, we are going to dive full on into the private label world in this episode of Community Call with Kim Greenfeld, former private label buyer for Whole Foods Market and Trader Joes.
She's going to take us behind the scenes, give us a look at how it works and the best opportunities for food and beverage brands.
Please enjoy.
Do you have a recent product launch, new hire, marketing campaign, distribution news, or some other exciting company announcement?
Let us know.
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Just head to submit.bevnet.com to get started.
Kim, thanks so much for joining us today.
And we're so excited to have you in studio.
Thank you very much.
I'm thrilled to be here.
So why don't we start off with just a look at what your roles have been as private label buyers.
You were at Whole Foods Market, Trader Joes.
What does a private label buyer do?
What sorts of activities are involved with that role?
It really depends on the retailer.
The retailer sets the tone of their private label, what they want their private label to end up being.
But as a private label buyer, one of the things you're looking at is if you are going up against a national brand, you're looking, do I want to do a Me Too equivalent?
Do I want to do a better than?
Or do I want to do a hyper better than?
Or for somebody like a Trader Joes, where it's pretty much all private label, they give you enough rope to hang yourself or to last you the big one, to innovate.
And the customer dictates with their dollars what they want to buy or not, whether it's something as simple as a P, or as interesting as a value added entree.
And I know this will vary from retailer to retailer as well, but how big are the private label teams at retailers like the ones that you were at?
Does it totally vary, or are there multiple buyers for different categories?
Well, yeah, that's a good question because different retailers have different setups.
Some retailers have the same buyer for categories, so you're the buyer for the brand as well as private label, and then other retailers separate private label buyers or a private label department from their national brand buyers.
So in those cases, such as the case in Whole Foods where they have a separate department for private label, which they call exclusive brands, for those guys, it's a bit of a different setup because they're looking at having a private label product sit next to a national brand on shelf.
So that's a different approach that you would take simply because you want the national...
Your private label is pure profit to your bottom line.
So you're setting the tone with your private label.
If you want it to match that national brand equivalent, so be it.
But in many cases, you can innovate and make private label a destination driver so that the person that's initially coming in for that branded item may see the private label equivalent or better than on shelf, look at the savings from that product and be driven to it automatically.
And because they believe in the store and they're loyal to the store, they're going to probably believe in that private label product too.
So it really behooves you to have the best tasting and best value product on shelf so that your customers, when they're trying it for the first time, are also going to be so delighted they're going to come back and get it a second and a third time.
And that's really the power of private label, is being able to set your own destiny, make a roadmap, and have customers be thrilled and keep coming back and buying more.
Let's get right into what brands sort of need to know about getting into private label, what's the right timing, that kind of thing, because I'm sure that there are things that brands need to sort of keep in mind to be successful before they even get involved.
When is a brand ready to jump into private label?
Is there a certain business structure that they should have in place before they start that business?
No, not necessarily.
The difference, if you have a brand, the only real reason to private label is for cashflow.
Because if you're creating a brand, you're putting a lot of your effort, most of your effort, hopefully, into creating that brand and making that brand as strong as it can be.
Private label is simply taking the marketing monies out and presenting that product to a retailer under their own label, which can be quite simple.
Many folks don't want to do that.
They feel like we've done our work on our brand.
We don't want a private label equivalent exactly of it.
And other folks feel like that's okay.
They've done the work, and why not reap the reward on both sides?
And in that case, it would be probably an 80-20 rule, 80% of the brand to 20% private label.
In my experience, if a brand gets over 20% private label, they need to work harder on the branded side to continue to keep that 80-20 rule simply because at some point, you're probably gonna wanna sell that brand, and the brand equity could prove to be quite lucrative if you keep it at that 80%, or maybe a 60-40.
But my point is, if you're a brand, you're gonna wanna keep it primarily branded and have private label be that little nugget of success, the little profit driver.
So you're saying that for most brands, having 20% of your business as private label and 80% is branded, that's sort of a ratio that you've seen work out for the best.
Is that what you're saying?
Yeah, it's been successful for many programs when a brand wants to look at an exit strategy.
If you don't care about an exit strategy and you're just looking to grow your brand, then you can determine if you want that to be 100% or 2%.
It's really up to you.
So Kim, what things do brands need to know before they get into private label business?
So you mentioned that, for example, having 20% of your private label business complement 80% of branded business makes sense.
Is that correct?
Yeah, I mean, it really depends on different organization and the brand, but yeah, in general, that's a good assessment.
And what about manufacturing capabilities?
Are there any things that brands need to have in place to sort of accommodate the inventory requirements when you roll into private label business, and does it depend on the retailer?
Well, it does depend on the retailer, but in terms of what you need to set up to do private label, is that what you're asking?
Well, if you're a brand, you've got everything done except the private label's packaging, private labelers' packaging.
So that would be a discussion to have.
Many of the folks that have private label, they either use a third-party graphics team, or they have internal graphics, and then you would have to just negotiate with them who pays for the packaging, is that rolled up into the cost of goods, who pays for the plates, are those amortized over two years or whatever length of time you determine.
But otherwise, there's no marketing money, there's nothing else that the manufacturer or the vendor, because many brands don't self-manufacture.
So even if you have a brand, you can use a co-manufactured private label.
Many private label retailers don't appreciate that or don't want that, but many are fine with it.
It really depends on what value the product has for their private label program.
So you just said that there are a number of brands who don't self-manufacture and do...
Most brands do not self-manufacture, that's correct.
Well, that's a revelation.
So I was always sort of under the impression that private label business was really an opportunity for brands that are self-manufacturing, but that...
So how does...
It is, it is.
But it's both, it's both.
So for example, I can think of, especially when I was a very junior buyer, I didn't know to ask the question, are you primary, are you manufacturing, are you self-manufacturing?
So I would just go to...
If I saw a product on shelf, I would look at the back of the information on the box, call the people and say, hey, are you interested in private labeling?
Now I know to ask the question, do you self-manufacture and things like that.
That can be important if you want certain tweaks done.
If you're talking to somebody who's having their product co-manufactured, they might not know.
So it's simply going to slow down that process.
It really depends on the degree of innovation.
If you're working directly with a manufacturer, you can really dictate the different innovative procedures you're going to undertake.
Whereas if you're working with a brand that is being co-man, you're usually stuck to that channel.
Is there a preference with retailers for brands to be running their own manufacturing?
Is that a preference?
For private label, the retailer doesn't care if a brand is self-manufactured or not.
But they do sometimes care if a private label is coming through the brand that's self-manufacturing or coming through a co-manufacturer.
Does that make sense?
So as far as a retailer goes, they don't care whether the brand is manufacturing themselves or co-man.
But they do care about the private label sometimes, right?
So there are certain retailers that dictate we only deal with manufacturers.
And there are other, for private label, there are other retailers that don't care about that.
They just care about the product itself, the quality of the product, the flavor, the value.
That makes perfect sense.
You've mentioned before that the benefits for brands are pretty simple, right?
What's the benefit to a brand for private label?
It would be cash flow.
They really would.
And then for the retailer, it's to create a destination driver within their store.
Whether that destination driver sits on shelf next to the national brand equivalent, or whether it's a stand-alone item.
That's really it.
It sounds pretty simple, right?
It's just cash flow.
I don't do brands because, yeah, private label is so simple.
Why would I muddy the waters with dealing with brands?
Yeah.
And then what are some of the risks or drawbacks for the brands?
What should brands be aware of when they're getting into private label?
I mean, from a brand equity standpoint, let's start there.
Well, I want to back that up a little bit, because you're touching on a lot of things here.
One reason a brand would want to private label is if the retailer has the brand and their own store brand, their brand on shelf, because then you have the opportunity to own 100% of that space, right?
Let's say you produce milk, right?
You can have the brand of milk, and then you can have your brand of milk.
The customer is going to go, oh, milk, okay, my normal brand versus the store brand.
I really believe in this store.
I love the product that they offer me.
I think their value is great.
I think it's clean, it's nice.
And hey, it's cheaper than the national brand.
I'm going to try the milk private label.
That's how you get people hooked.
They try it once, they like it, they're going to come buy it a second time.
Is there oftentimes no difference between the branded milk and the private label milk?
It's just the same exact product in a different package?
Yes.
That's amazing.
So what you're saying, though, is for a brand to own both of those pieces of business, then you own all the business.
You own 100% of the shelf, right?
If you are a private labeler that doesn't have national brand equivalents, then there's no issue, right?
So that also kind of leads into cannibalization.
I feel like that's also a question that brands have.
Is this going to eat into my branded sales?
What do you think about that?
Well, that's a really good question for folks to be asking.
And then you have the internal turmoil because you've got the people on high that are looking to the bottom line, and then you've got the people in the trenches that are saying, wait a minute, that's my shelf space.
I own that shelf space.
What about these private label guys usurping my turf, right?
So it's viewed as real estate, and they're renting space from the real estate.
So that private label product has got to be a viable moneymaker, right?
And when you say viable moneymaker, it's got to hit the rules of thumb, the heuristics that the company is putting forward, whether that be a margin proposition, a penny profit proposition, whatever their dictates are.
And for on the brand side, if you have a private label product, I would assume, I mean, and maybe I shouldn't assume, but the gross...
No, leave that to me, I do that all the time.
I would assume that the gross margin that you're looking to hit might be a little bit different than if it was a branded product.
Like what kind of...
You know, that's again, that's a retailer's dictate.
So it really does vary from retailer to retailer.
But usually private label is slightly less of a margin, but it really, again, depends on the retailer.
Depends.
Yeah.
All right.
Well, we have a question from Louis.
Louis, thanks so much for the question.
Louis wants to know if private label's mission is to capture profitability or to capture revenue.
So he's asking, do you think private labels are mainly created to attract more shoppers to the category or to avoid others leaving the category because of the out-of-pocket barrier?
Both.
Most definitely both.
One of the things that you can do with a private label program is make a destination driver so that you're, you know, getting people in for that product.
But again, you want to be making the most money with your product and still be showing that you are a value in your private label.
Thanks for the question, Louis.
What about a retailer's commitment to a brand in the private label space?
Is there a danger?
And you know, you mentioned 20% private label, 80% branded.
Is there a danger that you have all this business coming from Whole Foods or Costco or Trader Joes or whoever?
How dedicated are retailers to the brand supplying the private label product?
Is it possible that all of a sudden one day they say, oh, we don't need your product anymore?
Yeah, of course that is.
Especially if you're ordering through a third-party distributor.
You know, in a private label program, you've got annual contracts and what have you.
For brands, sometimes it's as simple as, gee, what are we going to offer?
This new brand is coming in.
Is that new brand viable enough to usurp the space of the big national brand on shelf?
So those are things that retailers really need to determine.
Yeah.
And would you say that retailers have less loyalty to their private label suppliers than they do to their branded products, or is it the same?
No, it's the opposite.
It's the opposite.
Retailers are much more...
I think they treat private label vendors better than they treat their national brand.
Very interesting.
Very interesting.
Simply because you're developing much more of a relationship.
This is your brand.
You're making sure that all the kinks have been worked out.
You're talking about...
You're constantly reviewing it.
You're constantly looking to make sure that the profitability is there, that the product is remaining consistent because this is your brand on it.
This is no longer the national brand, right?
So if there's a customer complaint, they're not calling the vendor.
They're calling you and saying, hey, your apple pie didn't live up to my standards.
When a brand pitches a product to a buyer, let's say they have a private label offering and a branded offering, could it hurt your chances of getting your branded product in if you agreed a private label?
Like, what's the negotiation there?
Not necessarily.
When I was at Whole Foods, we had all kinds of SKUs on shelf, and we were looking where the best opportunities per category where we could come in and infiltrate and offer private label products that were comparable or better than the national brand it sat next to on shelf.
Interesting.
Well, that all makes perfect sense in terms of sort of the risk benefit analysis for private label.
How about the retailers that are playing in this space?
When you think private label and retailers that do private label really well, who comes to mind immediately?
Well, I'm a little biased.
I think Trader Joes does an amazing job in innovation, in ferreting out the next thing.
Oftentimes at Trader Joes, they'll introduce an item, and it's discontinued because it's too fashion forward.
Only defined three or four years, everybody else saying, hey, you remember that item?
You know, so for me, Trader Joes does an amazing job.
Here in the US, around the world, I love Marks & Spencer in the UK, and then one of my very, very favorite retailers is Picard-sur-Gelais in France, that 99% of the products they sell are frozen.
The other 1% are simply standalone items that go with the frozen items.
You know, like ice cream cones that go with the ice cream.
Got it.
And then what are velocity expectations across retailers?
Do you know if they're similar to what the expectations for a branded product are?
Well, it really depends on, you know, somebody like a Trader Joes, you don't have any equivalent.
But somebody like a Stop-N-Shop, if you're doing an olive oil, you've probably got 10 olive oils next to it on shelf.
So they're very different depending on what the other skews on shelf are looking like.
Yep, that makes sense.
I mean, I'm sorry to generalize, but it really depends.
Each private label program is so personalized.
And that's what seems to be, and you know, from our pre-chat and from this too, it does seem that it's hard to sort of peg private label in general, that it really is such a retailer specific program.
And every retailer obviously runs it according to the way that works best for them.
So it sounds like you really have to know retailer by retailer what the expectations are, what the benefits are, and what the parameters are.
And hopefully the retailer has done their due diligence and set a roadmap so that when you're sitting down with that buyer, that buyer can share, okay, here is our vision.
Here's what it's looking like.
Our private label program is looking like now, and here's where we want it to look in the next three to five or whatever the expectations are with the vendor.
What information should a brand be asking for when they're having that conversation from the private label buyer?
About what are my, like is it, what are my velocity expectations?
What do I need to know about marketing, that kind of thing?
If you're having that conversation with a private label buyer, what should you be asking them to make sure that you're setting yourself up for success?
Yeah, I think you need to say, hey, what does this mean?
I'm used to the brand, which is a lot of marketing, a lot of selling.
In private label, you're not doing the marketing or selling.
The retailer's doing the marketing or selling.
So you really wanna know, okay, what are my annual volumes gonna look like?
What are my orders gonna look like?
Are they gonna be every two months, or are they gonna be every two weeks?
Those are the questions you wanna set up front, especially questions about who owns the packaging, who's ordering the packaging, who's designing the packaging, who's paying for the packaging, plates, et cetera, et cetera.
Those are the things you have to be concerned with in private label.
And then you need to make sure in your contract that you say, okay, I always like to talk about the end.
It's like, we're gonna get married, but let's talk about our divorce now.
So let's talk about an exit strategy.
What does that look like?
If customers decide to not vote with their dollars, and we have to discontinue this item, who's liable for the remaining packaging?
Who's liable for the remaining product?
So those are the conversations to have upfront.
Kind of like the prenup of private label.
A private label prenup.
Private label prenup, that's right.
And is there room for negotiation there?
Can you say to the...
Always, there's always room for negotiation.
And what would you say that brands should advocate for?
Like, for example, in terms of packaging, should they say, I want you to own the packaging, I want you to print it, that kind of thing?
Well, a lot of times you won't be able to dictate that much, but hey, redline the contracts and fight your hardest and see what comes, because some people will play the game and do a little give and take, and other guys are like, hey, these are our rules.
You got to play by our rules or not.
Any redlines that you've seen, any common redlines you've seen in contracts?
Yeah, everybody wants to push back on termination clauses.
Normal.
The standard is 90 days.
Yep, standard is 90 days.
All right, we've got a few questions here.
Let's get to these.
Josh Shirts, hi, Josh, has a great question.
So this actually leads into sort of our next topic of conversation anyways.
Where does innovation fit in for a private label?
Oh, that's good.
So if you're somebody like Trader Joes, you start with the innovation, right?
And then you're going to look for somebody that can produce that innovation in many cases.
But otherwise, if you're, let's say, a traditional retailer, you're going to say, what are the national brands doing on shelf and where does innovation come in there?
And maybe you look at doing the standard, you know, the OG version for the first item, and then for line extensions, you can say, okay, how can we take this oatmeal and supersize it into these other line extensions to have a whole family of, you know, breakfast items?
And how much does the retailer dictate innovation?
Will they typically ask a brand for four different versions of something, or should you do that on the brand side anyways?
The retailer will dictate what they're looking for, but it's up to the vendor to say, ah, but wait, there's more.
Have you thought about X, Y, and Z?
So the vendor can play the innovation game as well as if not better than the buyer because the vendor knows what they've done.
So they may say, oh god, those three recipes that we had on the back shelf, that might be good for this, they might be viable for this retailer.
What do you think about the innovation across a few different retailers?
So when you think about Whole Foods, you think about Trader Joes, and you think about Costco, just because you sort of have this inside look into that piece of business, how do you see those three retailers, for example, approaching innovation differently?
Costco is serving everybody, right?
Costco is serving the mom and pop stores, they're serving people like me, they're serving big families.
So they have to really, they have a narrower focus on what they can offer in terms of innovation in their private label.
I mean, certainly they could offer anything, but they want to get the most bang for their buck and drive volume in private label.
So they're going to let a lot of that innovation stay with the brands.
Trader Joes doesn't have a brand equivalent on shelf, so innovation is the name of the game.
And they do it probably better than anybody.
Whole Foods, they have to play both sides of the equation, and they're also trying to still get out of that whole paycheck thing that they've been hung with for decades now.
So I think for Whole Foods, they can play it on different playing fields because they can go against the national brands, go right up, play with them, and then they can also innovate and say, hey, we want to go to Europe or Asia and find some interesting things that we just haven't been able to find here or create here.
You know, I've noticed, for example, with Whole Foods Market, there will be a private label product that I absolutely love.
Like there were these rice crackers they had that I just loved so much.
I think they were on shelf for maybe a year, maybe a little bit less.
How does a retailer decide how long they're going to give a private label product time to thrive or drown?
And I'm sure that's different between retailers.
It differs from retailer to retailer, but what you're really looking for is you want to make sure if you're starting here that you're going up here and you're not just flatlining or going down to the bottom.
If things aren't moving and you haven't done anything, then you can say, okay, we haven't done any marketing whatsoever.
Does it make sense to market it?
Or is this dead on arrival and we should just cut our losses?
What are some of the marketing opportunities?
And again, I know this probably differs retailer from retailer, but what are some of those back pocket marketing strategies that a brand might be able to pull out if they find their private label product isn't turning the way that they...
Well, I mean, simple things.
In store, you can cross merchandise.
That's the easiest way to do it, right?
Especially if you're running, if something isn't moving and you're running short on code dates and shelf life issues, then cross merchandising is the name of the game.
Otherwise, your store, you know, social media is huge now.
Most retailers, if not all, not only have social media, but they have social media followers.
So if you are private labeling at certain retailers, you could have as many as 10 influencers that are coming into the store, seeing your product, or have the potential of seeing your product.
Most of those influencers are paid influencers.
You have to understand that.
They're not just you and me going into a store.
They probably started that way, but most of them are pay to play.
So every time you see a product, they're getting paid to show you that product.
And are those marketing efforts something that you would coordinate with your private label buyer?
No.
Only if it's in internal stuff.
If it's external marketing, no, that's...
You go after it yourself.
Well, you wouldn't go after it necessarily.
The private label, anything that is marketed in private label should be coming from the retailer.
So the retailer could give you the dictate to help with the marketing, but normally it's not led or driven by the vendor at all.
We're getting all the answers here today, folks.
We have a few more questions coming up.
Jay wants to know, which category...
This is a great one.
Which category or categories are you seeing the most innovation in for private label?
Frozen, especially like frozen appetizers and frozen entrees are huge right now because you can do anything.
You don't have to...
You can make items like you would in your home kitchen.
You don't have to add any magic fairy dust preservatives or anything that's gonna extend the shelf life of the product because you've got it guaranteed pretty much 12 months shelf life by freezing it.
Anything else?
I was at the PLMA show last week and there's a lot of packaging innovation, interestingly enough, and then a lot of straight meat items.
So we went from this meatless world of plant-based, plant-based, plant-based, and now suddenly I'm seeing a resurgence of meat items and value-added meat items.
So when you're saying straight meat, are we talking chicken thighs?
I saw several vendors that were straight cuts of meat, map-packed, frozen, which I hadn't seen at PLMA before.
I've seen a lot of sausage and what have you, but not just straight cuts of meat.
How about packaging?
What's going on there?
Packaging, there's a lot of skin pack and things that would make it...
Could you explain skin pack?
Oh, like a tightly sealed, vacuum-packed product.
So when it's frozen, it looks like you're looking at the steak, even though there's wrapping over it.
And do you think that's because the capabilities, like those are just manufacturing capabilities that are...
Yeah.
How about we certainly have a lot of beverage folks in our audience, what's the opportunity for beverage?
Oh my gosh.
Okay, beverages and snacks.
The innovation is...
there's no limit to the innovation.
Who would have thought years ago that you'd be mixing coconut water, carbonating it, putting in juice or putting in tea or putting in inclusions?
That was something that was unheard of.
It's kind of like the bar category 10 years ago.
Everybody thought the bar category had flatlined.
And look at the innovation, still continues in bars.
And you still have many people that are saying, bars, well, yeah, but that's not real food.
No, bologna.
It's real food.
If somebody is buying it and consuming it as a meal, it's real food.
Absolutely.
And so for beverage innovation, are there any, are there sort of any particular trends or strategies you're seeing work well these days?
Well, I'm not looking so much at beverage in terms of shelf stable.
I've been looking at beverage in terms of frozen for smoothies.
So people are doing all kinds of smoothies.
And we were at a tasting where they were doing a frozen smoothie mix and mixing it with not seltzer water, coconut, carbonated coconut water, which I thought was kind of interesting rather than just water.
They felt it gave it more of a kick.
All right.
Let's get to another question here.
Laura Briscoe.
Thank you so much for the question.
Laura says, we've heard comparisons between national brand and private label that suggests that only the national brand can support private label.
What about what's the opportunity for smaller manufacturers that aren't national?
Huge, huge.
So smaller manufacturers are actually the bread and butter of private label because most of the big guys can't do minimum tiny runs.
And the small manufacturers or medium manufacturers can support a private label program that doesn't necessarily have to have a retailer that's got 1,000 stores.
So if you're a small brand, and let's say you land a Trader Joes or a Whole Foods, that could be a significant portion of business.
Huge and to those people, I will say, again, go back to that 80-20.
If any retailer starts to become more than 20% of your business, you got to work harder on the other 80% to keep that balance.
Meaning you need to get your branded salesperson to start landing more doors.
Thanks so much for the question, Laura.
We have a question from Gail Galbraith.
What about co-branding for Private Label?
I've only had negative experiences in co-branding.
Can you explain co-branding too for Private Label?
Yeah, co-branding would be if you have Kim's natural gum with Wrigley's, okay?
So Kim's natural Wrigley's and Kim's do a brand together.
So I had an awful experience with a very well-known person, a chef back in the day on a private label, frozen product, that went south very quickly when egos got in the way.
So it's something for me, I've done a couple since then.
It was never a positive experience.
My thing is like either stick with the brand or stick with the store brand.
But when you put them together, it's not always a love match.
And when you say the egos got in the way, is that sort of, is it an ingredient thing?
No, it was no, no, not at all.
It was, but it's my brand.
No, you're wrong.
It's our brand, right?
It was one of, it was more of a pissing match.
Great question, Gail.
Thanks for that.
Ermas Linus has a question.
Are there, this is a great one.
Are there products that aren't a good fit for private label?
Sometimes, sometimes command products because the cost is just too high.
You know, the transportation alone, moving it from one location to another.
But no, private label can be anything.
I mean, I was at Lowe's over the weekend, I brought private label nails.
So, private label comes from wherever.
Thanks for that question, Irma.
All right, we've got another question from Lewis.
Can you tell about any category where private label products started from zero to a category leader and then cannibalized the prior leader?
So any category where, yeah.
I can't give you the specifics, but yes, we did have that.
We had an opportunity where we had said to the national brand, we'd like you to consider doing our private label.
They said no.
And we said, okay, you understand, we are going to do private label.
And they said, okay, okay, okay, okay, fine, we'll do the private label.
The private label is so successful, we ended up canceling the brand.
So they were very happy that they ended up saying, oh, we'll do your private label, since they would have ultimately lost their real estate of the brand had they not done the private label.
What keeps a retailer from doing that all the time if they're because it's money because they need the marketing dollars?
Brands bring marketing dollars.
Yep.
Another question from Irma here, would a retailer have more than one private label product, one private label item for the same product?
Usually not, but sometimes you could have a tiered system, you know, I don't know mayonnaise, you know, or whatever, the mayonnaise spread, mayonnaise and then organic highfalutin mayonnaise with truffle.
I don't know.
So there would be there would be kind of obvious differentiators to have a reason for yes.
Yeah, that makes sense.
Thanks for the question, Irma.
All right.
I'm a brand.
How do I get my product into Trader Joes private label?
How do I do it?
Who do I call?
You let your fingers do the walking.
I mean, one of the hardest things today, people call me all the time saying, how do I even find the buyer at Publix?
How do I even find the buyer at?
That is really hard to do that sleuthing.
If you exhibit at any shows, especially the private label manufacturer show, you get a book of all the buyers' names and their contact information.
So that's a great way to start, but it does mean going to that show as a vendor.
Not necessarily exhibiting, but you have to go to the show as a vendor.
You can't just pay and get the book, unfortunately.
But otherwise, it's who you know.
I mean, you can call the retailer, but often you get into the phone zone.
And so, you know, for zero, plus, right?
I mean, that's tough.
So a lot of times, it's calling friends, neighbors, anybody that has helped you along the way, anybody that was in the booth next to you at a show, ask them.
They're your best, your competition.
Why not?
I mean, my thing is, ask the question.
The worst thing that people can do is say, sorry, I'm not going to share that information with you.
Or not answer your email.
If you're a buyer, yeah, you probably won't answer the email, right?
And then once you get, let's say you get that buyer's email address or the phone number or whatever, you call them up or you shoot them an email.
What's your pitch?
Like, how do you present yourself?
Okay, private label buyers receive a lot of correspondence.
So keep it simple, all right?
Get right to the point.
Keep your introductory email, a couple of paragraphs.
Attach a deck that tells everything.
Keep your deck short and sweet.
They don't have time, usually, to look at all of the data.
That can be on the second date, but this blind date, you want to give them just the facts, ma'am, the dragnet version, and then after that, let them request information.
I would also give them a couple of weeks before you start reaching out and doing what I call pestering.
Squeaky Wheel, yes, does get the grease, but give them a couple of weeks to digest the information you've sent.
And then when you do send another email or another call, have it be a general reminder, you know.
Don't have it be, hey, I haven't heard from you.
It's got to be something, you know, maybe add a little something, something, something that you held back in the first email.
But wait, there's more.
Did I tell you about X, Y, and Z?
And what are buyers looking for in that deck?
For example, if I'm a brand and I'm pitching a product that I obviously have a branded version of, does it make sense for me to say, you know, year over year, our sales are rapidly increasing?
They're gonna know that.
They're gonna see that.
What they want to see is capabilities, packaging opportunities, line extensions.
What else are you doing?
Maybe you're leading with, you know, item one, but you do these two other items that you don't think are the next best thing to slice bread, but that retailer may.
So put, at least make mention of your capabilities.
And what about samples?
Can I like...
Don't send samples unsolicited.
Buyers get samples all the time.
It's just you're throwing money away.
So don't send any samples unless a buyer requests a sample.
Great tip.
Save yourself some money.
And then, if I'm a brand and I have...
Let's say I've got a private label product that's landed at Whole Foods or Costco or whatever it is.
And then I see an opportunity to maybe sell like a branded version to Sprouts.
What's the...
Do I have a contract that says, I can only send this proprietary formula, I can only sell it to Whole Foods?
Some retailers do expect to have an exclusive on the formula.
So you need to be very clear going in that, hey, this is our brand, we're allowing you to private label our brand, or we're not allowing you to private label our brand, and they're the changes that we'll allow on the private label.
Gotcha.
Got a question from Laura Briscoe.
Can you think of any examples of private label items that created a category?
I'm trying to think too.
Not off the top of my head, but probably.
I'm sure they're, yeah, right.
I'm just thinking back when I started at Trader Joes, we didn't have that many categories.
You know, there wasn't even pasta.
We didn't have cereal.
We didn't have, we had a granola.
We didn't have frozen.
But did it create a category?
No.
Years ago, before the bar category started, we sold these little things.
I can't remember if they came from Cliff or not.
It was probably a Cliff competitor.
They were called Buffalo Balls, and they were these round, they weren't a bar shape.
They were a ball shape.
But we were like, oh, that's cool.
And then there was a company that came out with a bar called Natural Nectar that was like a honey bar thing.
But yeah, I can't really come up with a specific.
Sorry about that.
Thanks for the question, Laura.
And then I have one last question for you.
So when I go to Trader Joes, it seems like 80% of the products on shelf are of course private label, but then there seems to be like 15 or 20% of branded items.
Why, how do you wind, how do those branded items wind up being on the Trader Joes shelves?
I don't know what Trader Joes thoughts are on it now, but in my experience at Trader Joes, we always looked for private label first because the store's name was Trader Joes, our brand was Trader Joes.
When we looked at items that weren't branded, it was because we either didn't necessarily believe in them and we wanted to do a test run, or there was an ingredient that was suspect that wasn't on the acceptable ingredient list.
But usually, you went right for private label.
Or you dealt with the brand because they wouldn't private label.
And as a brand, though, if you're...
So let's say, like, Fruisballs, for example, is a product I see at Trader Joes and they're branded.
So in an instance like that, is it likely that the retailer came to the brand and said, will you private label this?
No, it's probably...
I don't know what happened, but my guess would be that the brand approached the buyer and said, hey, are you interested?
And the buyer probably went, will you private label?
No, yeah, okay, well, what do you think?
Should we trial it?
Yeah, let's try it.
Got it, got it.
Kim, it's been such a pleasure chatting with you.
Thanks for hanging with all the ups and downs.
And just in closing, I know that you talked to so many brands.
Is there a blanket piece of advice that you can give to brands who are thinking about getting into private label and kind of wondering what the best approach is?
Yeah, I would keep it really simple.
Make sure that you're doing this, that you have the time and the bandwidth to do it.
And then just be real direct.
It's all about relationships and private label.
You want to build a relationship with that buyer and have a relationship for the long run.
Fantastic advice.
Kim Greenfeld, it's been such a pleasure to have you here.
Thanks, Melissa.
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