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 us and give us a review on Apple Podcasts or your listening platform of choice.
Jackie, Mike, great to see you again.
Thanks for having us.
So happy to have you here.
Jackie, I mentioned earlier, you're wearing a tank top, and if I had my druthers, I'd be wearing four more sweaters.
It's 40 degrees here.
It's so cold in New England.
It's definitely becoming fall.
Yeah, it's very warm here, and it's kind of messing with my head because I want to be in plaid and I want to be in my boots, but I can't yet.
Well, we would be happy to have you here any time, and you can get your fill of the cold because we've got plenty of it here in Newton.
Jackie was telling me that summer comes back in November, so I'm like, San Diego is the place to be.
We're fools.
We're idiots.
Yeah, this is called like the local summer because all the tourists leave, and then we get to play and go to the beach, and it's not packed.
And the surf is like kind of beginner to intermediate surf, so if you're new, you can get out there and surf and you're not like getting run over by pros and stuff.
So it just sounds like the best.
Yeah, it sounds like you both need to come back over here.
Yeah.
Well, until I can get myself over to the West Coast like a smart person, the one thing that I do appreciate about the fall is you get to cook some more warming things that may not make sense in the summer.
Just last night, I made a sort of like impromptu ramen noodle soup.
My older son was a little sick.
No, you didn't.
I made mine out of emmy.
I made mine out of sun noodle.
Yummy.
Yeah, yummy.
That's exactly right.
Well, I want to hear how you made yours.
I make chicken stock in these like big cauldrons and freeze them and like a huge, I save all my chicken scraps and vegetable scraps and stuff and make a big cauldron of that.
So I defrosted one and then use that little seasoning packet that they have.
And man, those are some delicious ramen noodles.
I'm not as advanced as you are at the broth game.
Not always, but kudos to you on that because making your own broth is so good.
But I used emmy and it makes the broth for you and gives you the noodles.
And I had some meatballs left over.
So I added meatballs and I had some spinach and I added some chili crisp, of course.
What brand of chili crisp did you use?
In this case, I used Fly by Jing.
I used Mamafuku.
Yum.
I think that might be the spiciest one I've had.
Am I?
Really?
Yeah.
Have you had the hot pot queen?
The Chongqing style stuff is pretty spicy too, but also Fly by Jing's extra spicy is, it pays off.
All right, I'm gonna keep my eyes peeled for those.
Jackie, how about you?
Are you still preparing summer salads and ice cream cones, or when do you start cooking, when do you start cooking winter food on the West Coast?
Yeah, not yet.
I've still been grilling outside.
I have a grill that I've been using for some salmon, some vegetables, keeping it kind of simple.
I also have really been getting into making just plant-based sushi, because it's so easy to make at home.
And I found this really cool brand called Conscious, and it is a frozen product, and it's all plant-based sushi and onigiri.
So really, really cool stuff.
That sounds awesome.
Yeah.
Are you rolling the sushi with a sushi mat?
What are you filling it with?
Yeah.
So, I mean, you can fill it with anything.
I usually do avocado, cucumber, maybe some tofu.
And then as long as you have a really good dipping sauce, it really doesn't matter what you put in it, because it's gonna taste good.
Well, that all sounds fantastic, and I wanna eat at both of your houses sometime soon.
Well, believe it or not, we are almost into November when we have a couple of script flips that I'm very excited about.
We are going to host Ariana Farahani of Plant Press.
She is trying to figure out a pricing model that accommodates distributor markup and trade spend, which is certainly something that trips up almost everybody in CPG at some point.
We are going to bring in Scott Sanders, who was actually at our Newton Meetup last week.
So Scott Sanders and then Sarton Molnar Fenton of Faye, they are both going to help her out with that.
And then after that, we are going to do the Zoom script flip with Amy Ziedelman, Fred Hart and Adam Levitt.
That's going to be a great one.
We're going to review the skew and try to figure out why their chocolate skew isn't jumping off the shelves.
So definitely tune in for that.
bevnet.com/communitycall is where you can sign up for those recordings.
Join us live, ask us all your questions.
And if you have ideas for a community call or you want to put yourself forward for a script flip, if you're an emerging brand and you're having issues that you think we should cover and you want some help, head over to slack.bevnet.com, hit us up and we'll help you out.
Yeah, the script flip is pretty cool.
If you're listening to the podcast for the first time, you're saying, what's this script flip?
And it's basically a lot of podcasts.
You get an expert who comes on and tells a story.
In this case, it's somebody who has a problem and they're willing to tell us all about what their problem is and we're looking for experts to come and help.
So you can go to bevnet.com/communitycall.
You can look at the upcoming script flips that we have.
And if you're an expert, you can participate in the show.
Just sign up for the show.
Come on, raise your hand when it's time and we will have you on the show and then you'll end up on the podcast.
We are waiting to hear from you.
Just like one of those...
Our show is our live recording.
They're live recordings.
We're waiting for you.
It's like one of those PBS fundraisers.
We're all stationed at our telephones, except our telephones.
Operators are standing by.
We are standing by in our Slack community, slack.bevnet.com.
We're just waiting for you.
Yeah, and it's a no-brainer.
I mean, it's all free.
And I know there's so many founders out there and operators that have burning questions, and sometimes they don't know who to ask, and they're just banging their head on the wall trying to figure something out, and you don't have to bang your head on the wall.
You don't ever have to.
You can join our community, slack.bevnet.com.
Start asking your hardest questions there.
That's, a lot of the times, that's how we decide who's going to be on the next script flip.
We'll dig in to find you some answers.
The community will put forward some answers.
Together, as a group, we will get the work done and the problem solved.
We'll get to the bottom of this.
Yeah, we'll get to the bottom of this.
That's exactly right.
Well, UpNext, we've got the UNFI Next Community Call all cued up for you.
We spoke with Aaron May, Senior Manager of the UpNext program, so please enjoy.
Today, we are going to be talking about UNFI UpNext.
Of course, distribution is crucial to selling food and beverage at retail, but can certainly present some significant challenges for early-stage brands who have limited resources and limited retail accounts as well.
Today, we are thrilled to welcome Aaron May, Senior Program Manager of UNFI UpNext, to talk about UNFI's UpNext program, which helps stand up emerging brands and helps get them ready for wide-scale broad-line distribution.
Aaron, so great to have you here.
This is your second day back from paternity leave, and we're so glad that you're joining us on your second day back.
Congratulations.
Thank you so much, Melissa.
I'm happy to be here, get back into the swing of things.
I'm still a little rusty, but looking forward to our chat.
Well, I'm sure you're sleep deprived, so take all the time you need to answer any questions.
Before we kind of get into the nitty-gritty of this, we'd love to hear what your experience at UNFI has been.
How did you come to be running the UpNext program?
Sure.
I like to tell people I'm a grizzled UNFI lifer.
I have been here since I graduated college, which I think provided a good perspective to take on a program like UpNext, where education is such a big part of the success of brands and of partnerships.
So I started in the marketing department with all sorts of different roles in our publications there.
And then I was a supplier relationship manager for six years managing mostly frozen and chill ice cream, cheese, butter.
I liked my desk because that was pretty solid.
Then once this opportunity came up, I had seen enough brands flourish and seen enough fall on their face when at the product level, it wasn't so different.
And so I feel that taking some of that experience and sharing it has put me in a good place to lead a truly fantastic team to continue finding these suppliers and helping them become great partners for us.
Within a few years, if they can be profitable and we can be profitable, then everyone's happy.
But getting to that point, you will run into everything along the way.
It certainly sounds like you're exactly the right person to be heading up this program.
Why don't you give us kind of in a nutshell what the UNFI UpNext program is and what it aims to do?
Sure.
Since I came in in December of 21, the program itself was kind of...
It was working almost separately from our broad line suppliers.
Like I had a disconnect from it, and I could feel that.
And then through the interview process, I'm friendly with those on the team.
I wanted to go in and figure out what are the problems that we can answer for suppliers to get them to that place.
And beyond education, a lot of it had to do with a human face, a contact, a person who would listen.
So what we really try to do is aim to create a community, even if we're not yet partnering with a supplier, where we can offer advice and what we would be looking for.
And really put ourselves and myself out there to soften the perspective that people have about UNFI and large distribution.
It's four big walls in the warehouses, our corporate offices in Providence.
Who's the guy that I go to to let them know that my product exists?
And then once we get to that point and bring people into the program, then it's to help them improve as a brand and who to speak with and when, and when to say no to certain things.
And I'm sure we're going to get into all of that.
But it really is, I wanted to start the process a little bit earlier than a local Whole Foods or a Whole Foods region just brought me in.
I was making this stuff in my mom's basement last week.
I don't know what to do.
And the first interaction is where money's changing hands.
To me, I felt like there was a need for us to start engaging at a smaller, lower level to get people, because it is a journey, and it's a long journey to success.
And who is that person at UNFI that brands should talk to if they're not in the program yet?
So I would say, and we can drop this in the chat, UNFI, UpNext, at unfi.com.
We are all in there, my team of nine, going through it each day, and we answer everyone within 48 hours or two business days, because we're going to hear from people who are just starting out or just heard about the program.
And I feel that's been a position of strength over the past year, is that the UNFI UpNext name is out there, where I want it to be, so people feel that it's approachable.
And to me, just having that one single source, so I was just out on paternity leave, I know that my team had that, and that they were taking care of it, and people were getting answered and directed.
Also, beyond that, if they want to apply, we're happy to send that link out as well.
Excellent.
Would you repeat that link as well?
The where to apply?
UNFI at UpNext?
At unfi.com.
Okay, got it.
Let's talk about what the criteria is for brands to move into the UNFI UpNext program.
What's the criteria for being accepted?
Who gets chosen and who needs to wait?
Sure.
Actually, if we could pull up the presentation and go to the second slide here, I think that explains it really well.
That was another thing we wanted to bring in was a mission statement.
Who are we bringing in?
Are we trying to just hit a number of suppliers?
That didn't feel right.
Are we trying to get people in and then push them out before they're ready?
That didn't feel right.
So I boiled it down to being the destination program for emerging brands, diverse suppliers, and category disruptors.
And all of those are a little bit intentionally ambiguous, but it does provide what we're looking for.
I think it's really important to note that our team has also taken on our diversity initiatives for all of our suppliers and making sure those who are in underrepresented groups are getting a shot with UNFI and actually being boosted.
We'll get into some of those programs later and category disruptors.
So some of the examples that I give on this, an emerging brand is one where the product is in the right market, the packaging looks good, and we can see great success down the line for them, and they just need a little bit of help.
Diverse suppliers a little bit more self-explanatory, and we'll get into more of that later.
And then what I was excited about is these category disruptors.
So when I had just begun as an SRM doing Frozen, a little brand called Halo Top became a thing, and I started seeing these sales go up, and I started working with people who were building planograms, and all of a sudden we have an extra entire freezer door, and we were able to catch that at UNFI early.
I want UpNext to be the place that captures those brands that are rocket ships that do need the help upfront to get them set up for success with UNFI and whatever else we can provide with our sales team or some of our retail partners.
So everything, and we talk about this as a team, if we really like a brand or if we're on the fence, we just come back to this first sentence, tell me why they're emerging, diverse own, and or category disruptive, and that answers a lot of the questions for us.
As far as size goes, because I think a lot of people really get caught on, like there's going to be, you have to do X before you can even be considered, or, oh no, I'm already with UNFI.
I don't know really what I'm doing, but I'm selling too much.
We don't like to put numbers on it for entry to the program.
It's those with great products in need, and also selfishly, the coolest part for us, we can choose a culture fit, a culture fit with what my team wants to do, and we get to meet these founders, and we get to see what they're about, and less of what the product is, and more on why are they making this product?
What does it mean to them?
And we get to choose our own suppliers.
So just by doing that with my team, if we're choosing them up front, and they've applied, I think that that really adds to, it creates a great partnership right off the bat, because you know that the person who's going to be managing you through this process is rooting for you, because they saw something, and they want to move forward with your brand specifically.
Let's move on to the second slide.
We have your sort of list of what the onboarding process looks like.
And so I do just want to clarify.
So are you saying that brands can enter into the UNFI UpNext program, even if they're not carried in X number of retailers or at X number of sales, if they're just selling at farmers markets, there's no criteria for sales or number of doors?
That's a really good call out.
We do expect that you have a retailer of, I don't want to say significant size.
Basically, no matter what UpNext offers or UNFI offers, our most valuable asset will always be slots in the warehouse.
And for those slots to be justified, you need to come in selling five plus cases per week in grocery, and it actually goes up with chill and frozen.
But if you come to us with a plan and a 10-store chain or 30 independents that pull out of New York City, and here's who you're presenting to in the coming months, we can certainly make the choice to roll the dice at that point.
But getting started, it sounds like, and I've come back to this mantra, we don't say no to brands, we say not yet.
That really is because the biggest stumbling point usually is you get into UNFI, you have a 90-day period where you have to offer a 15% discount, we have fees for bringing products into our warehouses, and you're already behind even after the first PO hits.
And if that first PO isn't selling where it needs to be, depending on space in the warehouse, it was just the wrong time, should have waited six months.
And I feel as gatekeepers for this, it's really important for us to say that with that positive spin, like, here's where you are, here's where I would see it going wrong, and here's the timing that makes sense to me, please reapply, keep our contact info, feel free to reach out on LinkedIn, and we go from there.
So, yeah, thank you for pointing that piece out.
So, you just mentioned the intro OI off invoice agreement.
Is that also part of the commitment to UNFI with the UpNext program?
I think what my question here is, are there any differences in terms of what the brand's commitments are if they're enrolling into the UNFI UpNext program from a cost perspective versus broad line distribution?
So, the discounts are still expected, still at that 15% off invoice, looking for quarterly promotions or at least two per year, always wiggle room there within the program.
All of our fees for marketing programs, I think with the exception of PAC changes, are about 50%.
And through this deck, you can actually click a link that will give you the UpNext marketing rates.
And you can see it is pretty, the savings are pretty significant.
I don't like to use that as our number one calling card for what we are selling as a program, just because we do want to find those that truly want to grow into that broad line experience.
So the one thing I can offer are those discounts, but more importantly, I can offer clarity, because that's what we hear a lot of.
It's mystery deductions, and that's simply not the case.
We can give you what to read.
We can give you resources to talk it through.
And I have found that's really beneficial.
And I do want to let everyone know, again, too, if you have any questions at all, throw them in the chat.
We've got Aaron here.
He has been at UNFI forever.
So please ask any questions that you have.
We'd be happy to answer those.
You were just talking about some of the answers that the UNFI UpNext team can give to emerging brands, especially as they're sort of navigating the system in a new way.
So are you saying that the supplier development managers, which is, is there one supplier development manager assigned to each brand?
Yes, there is.
So if we want to bring up this onboarding process again, I left my previous role with 205 suppliers assigned to me.
My team all carry about 40 to 50.
And so they're able to set up more of a monthly touch base, more open for questions along the way.
Because especially with these one and two person operations, which we have a lot of time, maybe with a regional broker, they need that answer today or else they can't move on to the next thing.
So we're able to provide that in a more meaningful way.
So they would get assigned to the supplier development manager once they're onboarded.
So our onboarding process has changed quite a bit in the past year and a half.
So anyone can apply at any time.
It's a dry, boring form, but it gives us everything that we need to start.
Where's your insurance at this point?
Do you have your own manufacturing space?
What's your SRP?
What's your trade spend?
It's not a binding agreement, everyone.
But putting our best guesses in there so we can review, like, is this one that we want to even pursue at this point, or should we give some feedback?
Like, we would require 5 million in insurance coverage, and we don't think your SRP is attainable based on this.
Here are some things you could change.
We think that, you know, you're coming to me with a 20-pack of something instead of a six-pack, where even if you only sold 18 jars of pasta sauce in those six-pack, it counts as three cases in our system, whereas just the one, you would have to sell 100 jars of pasta sauce to meet that five-case requirement.
So we go through that piece, read the Q&A submissions, and then my team, as they review those, will flag the ones that they think have the most potential.
And this is on a monthly cadence.
I saw that was a question in there.
And we will ask them then to provide us a two-
to three-minute video that it's so much fun.
We get anything and everything in these because we want to understand who we would be working with.
And we're not asking for production quality or anything like that.
Most of them are selfies on the iPhone, just telling us about what they're about, why they do it, why they think that this is the next best thing and that they could really benefit by working with us.
So my team, we sit together on the first Wednesday of each month and go through usually like 10 to 15 videos.
And then we review the Q&A at the same time as a team and have a really lively discussion about pros and cons.
And then after that, we all vote.
It's not a yes or no.
A lot of it is based on do they have retailers?
Are they a certified diverse or woman owned business?
Is this category disruptive?
And then is this something that you would want to manage to get them to that next level?
And so once we go through all of those steps, it's pretty easy for me to see which ones we should be bringing on now, which ones we should be telling to reapply, or which ones we feel would be better suited because of where they are in their journey for Broadline.
And then they're into the program, and they'll meet with their supplier development manager, and we could bring in someone, like we talked about before the call, Melissa, with Gorgie, who's going to be taking things over very shortly if they haven't already with this community-based approach.
I'm a big fan of the brand and the product.
They're going to have more lofty goals for year one and year two, and therefore we're going to have a more lofty ask as far as how they market with us and how they promote with us, how we can help them with their vision in order to get them to that Broadline level.
Another one might be one that just won Nugget Market in California, 10-store chain, and they're still figuring out their manufacturing.
Well, their first-year goal is going to look very, very different, and we don't want to just put them in at the same place as every other brand, and we agree to some goals, and then we'll review every 3, 6, 12 months.
Did we hit our benchmarks for here?
If not, what went wrong?
How can we fix it going forward?
So it's really hands-on and helps us know because we're a very large distributor, but I want our brands getting into every store, whether it's through us or not, to build that brand awareness so we can really keep up with how things are trending there and within their category.
And that is definitely something that you probably would not get on a broad line desk, those sort of, how's it going check-ins, and we need to get marketing and promotion at that time.
We need to help them get into the right warehouses, but we get very granular with UpNext.
And those check-ins, again, are with your supplier development manager.
What's the cadence of meetings with that person that you're assigned to?
It really depends on the supplier's needs and also realistically the balance of the desk.
I would say a quarterly check-in is pretty much required.
Some people have a monthly, some people like to wait until things are on fire, and then they call and ask you to call back in five minutes.
We have all sorts of different types of how people want to work with us.
I personally like that quarterly.
And then if you need a check-in, shoot an email and sometimes the year available that week.
And then we have one marketing planning session per year, which are going on right now, June through September sort of period to plan 2024.
Morgan has a question.
How does the program work?
Which I actually think is a good prompt to sort of, you know, encapsulate in a nutshell the UNFI UpNext program.
What's the sort of one encapsulating sentence just for any folks who might have joined a little later?
How does it work?
I would say the UpNext program provides a unique entry into distribution that allows you to have a contact and a mentor where you're looking to go towards a partnership, which is, to me, mutual success.
And the ways that we do that are through discounts and marketing programs, but also really through guidance.
My team is also very experienced, and most have been in this role for three plus, maybe five plus years.
So they have seen all sorts of brands and can provide that guidance to them.
That was a run-on sentence, but it was technically one sentence.
That definitely qualified as a sentence.
I want to give a shout-out to Kayla Davis when I was on the brand side.
I had the pleasure of working with her, and just so responsive and helpful in that role.
She's fantastic.
Yeah, fantastic.
All right, let's see.
We've got a question here from Anastasio who wants to know what the process to request to be a part of this is.
And important to note that this person is asking from the perspective of a European startup brand looking to get into the US.
So that's a unique situation.
Yep.
So we get those a lot from Europe and from Canada mostly, where brands have established.
So in Canada, we actually have another UpNext program as part of our UNFI Canada.
And I check in with them once in a while.
Great team up there.
For that, I would say reach out to that inbox with the deck.
What are you selling?
Why do you think it's going to work in the US?
And what is your plan to gain retailers?
I would not advise getting into the program and then trying to get retailers just touching back to what we said before.
You know, that clock starts ticking as soon as that first PO lands.
And six months really is when things start to have to get going.
But as I was also saying, creating a community, I think it's important that you reach out now so we're aware of it and can provide some feedback based on other companies that we have had, that we've dealt with.
I think we have one in the program from New Zealand.
So we have like a half hour window per week that we can talk where they're getting up for coffee.
I'm about to be off in a week.
But yeah, we could definitely continue that conversation.
And we will be posting this presentation on the BevNET Slack Community.
So all of that information that you just went over where to send it to, I believe, is in the deck as well.
Certainly distribution is a chicken and egg sort of program.
Does UNFI UpNext help at all in a situation that's so common for brands where you're pitching to a retailer, they say, you know, who's your distributor?
And if you don't necessarily have one for that account, they say, come back and let us know when you're carried by UNFI, for example.
How does that play out?
So I would say let's use Kayla as an example, because she's a supplier development manager on my team.
So she has a brand that's on her desk, and they say they want to open up our York warehouse because Wegmans wants to pull their product.
We have a good system in place for us to go to Wegmans directly or through their sales reps and say, hey, is this something that's coming?
If so, when?
And what are your rough estimates?
We're not holding you to this.
And we work with those retail partners to kind of jump the gun a little bit, but basically we're not really skipping a step.
We're just getting confirmations.
It works better through some retailers than others.
I had the chance to go and present to Wegmans in person.
I had the chance to go to Big Y.
We have a program with natural grocers, and also we have a small program with Stop and Shop.
And we'll get into some of those partnerships later, because that is a really unique...
And we're looking to continue to do that, and these presentations have all been very fruitful.
The Wegmans team especially, they're so invested in brands and people, and then we'll figure out the rest later.
Like, this product is great.
This category manager is all about it.
Let's give it a shot.
And it's an EDLP program, so it's a nice place to get in.
So I've been making those presentations.
I probably presented Wegmans with 12 or 13, and I think they carry seven or eight of them now.
So that's something you're definitely not getting anywhere else, honestly, at UNFI or not, as far as I can tell.
Essentially, it's a soft brokerage, I guess, now that I say it out loud, but I don't want to digress too much on that piece.
Okay, thanks for that.
I see a question here from Carl who wants to know what kind of margin UNFI is operating on for this program.
It sounds like it's the same for UpNext as it is for Broadline, but can you dive into markups a little bit?
I can't really share too much on that, so what will happen is you will provide us with your cost, and then we'll factor in freight, or if you're delivering, we'll take it from there.
Now we have our landed costs, and if you have, so we'll have cost plus customers that will get that price plus whatever percentage, and that's what it's going to be there.
We, obviously, we're not going to share markups and margins, but I'm trying to talk it out in a way that shows our philosophy for it.
So then we also do have our published wholesale price.
Now that would be about as high as any retailer would pay.
That is what's listed in our promotions.
We tend to go with the higher price knowing we have so many customers, and each agreement with them is confidential, but also the pricing varies so much.
So when you're looking at UNFI, as far as margin goes, completely rigid.
This is what it is.
Here's the wholesale printed price.
But I do encourage you, and we can give some advice on that, to work with retailers directly to get EDLPs in place, to figure out how your promotions through UNFI are affecting price there to make sure it's being passed through.
We ask our suppliers to do a lot, but we will give you the list of what you need to do to make sure that this is followed through on shelf.
You talked a little bit about the community that the UpNext program offers, and that brands who aren't necessarily in the UpNext program yet can still sort of have communication with your team.
Is that something that your team can help brands with before they even launch with UNFI to get a clear picture of what the cost is going to be, kind of depending on what their intended trajectory is so they can plan?
Baseline, yeah.
I would say if you have a price to us, but also your price to us could vary, because if you're manufacturing in Maryland and that first big win happens to come in Southern California, then we're going to be tacking on pretty substantial freight costs.
But everything except for margin markup, we're pretty open with as far as here's the freight cost.
Can you beat it delivering yourselves?
Do you have that sort of volume?
I sound like I'm dancing around the questions that I'm seeing in the chat, but the reality is there are so many variables.
We're happy to try at a ballpark.
I think what might be more valuable is if you have a low carb snack bar and you reach out to try to get some advice on what price that you think that they should be selling at, we can offer more expertise there, or at shelf, I should say, and how that works.
Getting it from your manufacturing facility all the way to a shelf somewhere, we can kind of help.
Here's what to watch out for as this price is getting built up and you need to make sure you remain profitable.
Okay.
So are you saying if you have an intended SRP, that gives your team a little something to work with?
Yeah, absolutely.
That's actually part of the form, and we kind of go through it to be like, all right, you're selling it to us at this much, and this is what you want at shelf.
People aren't paying $7.99 for that fake snack bar I just made up, but if you come back down to $2.99, $3.99, because that is a huge, huge part.
I wish I had more that I could provide on that, but yeah, we're here for that, even if distribution is a year or two down the line.
Very helpful for brands to be able to plan out when the right time for them is.
Sure.
I see a question from Richard, who wants to know if brands ever offer equity to strengthen the partnership with UNFI?
Not through UpNext and not to my knowledge, but that is a very good question.
We have a question from Saril's Chocochips.
If you already have local distribution, does this affect your participation in the UpNext program if you're chosen?
So if you're, if I'm understanding the question correctly, if you're using a regional distributor, how does that affect your UNFI relationship?
No effect on it.
We may ask in order for you to hit our minimums that you consider moving some business to UNFI.
But we, like I said earlier, I am aware that there are other ways to get products to shelf that is not just through UNFI.
And I want to see these brands do what's best for them as far as getting, they need the brand recognition.
I need to know that when I walk into a Shaw's, we do not distribute to up here in the Northeast, like I'm still going through the aisles and seeing where people are represented, who's got some end caps, who's on a good deal, to make sure that they're getting it out there and hitting that critical mass that I know that they are scaling up.
So therefore, sky's the limit with us.
Michelle had the question, what's the margin on the wholesale published price?
I think we covered that already.
It's variable.
If you have an SRP, you can work with the team a little bit to see if you can back into the number.
Right.
So you mentioned that this would be a great time to dive into some of the retailers that you have a great relationship with as part of the UpNext program.
So I'm in Northeast Connecticut.
My ability to get the stores around here and meet with them, it is a little more limited to this region, so I know it pretty well.
Stop and Shop is a really exciting, growing program with us and the other giant accounts.
We have Dave's Markets out of Rhode Island, which I am obsessed with.
I love those stores.
Yeah, so good.
Roach Brothers and Big Y, we have really good partnerships with.
I'm trying to think.
It's pretty ripe with some Indies as well.
You get into Vermont, New Hampshire.
I know I'm missing people, but I could follow up or whoever reached out.
Feel free to reach out, LinkedIn.
This is your second day back from fraternity leave.
I think you're doing real well.
Trying to get all the questions on the pop quiz here.
You're doing great.
What trips brands up the most as they're starting to scale?
Let's say they're in the UpNext program.
What are some of the cautionary tales that you've seen that brands can kind of help have in their minds as they're applying for programs like this and getting launched with UNFI?
Sure.
I think the biggest one is treating every acceptance by a retailer as a huge win because some of them with slotting fees, with their free fill requests, and then there's no real binding agreement there for them to keep it for 12 months.
They're kind of doing the same thing that I'm doing as far as gatekeeping on those slots in the warehouse.
They're doing the same for turns in store, so it's great to get the opportunity.
But if it costs you $30,000 and two cases, is that something that you can handle at this point, and do you want to put all your eggs in that basket?
A lot of times, it really is a not yet situation, and I'm not going to name stores by name here, but we're happy to give candid feedback, because they are just facts.
What are they asking you for at these stores?
Is that something you can take on?
Because then where it gets lost, and where the friction comes with UNFI and supplier, is those billbacks do go through on your UNFI check.
That's something that we offer our customers.
And so it can look like you just got blindsided, because it just got pulled from a check, or you didn't get a check at all.
And then you go and check in with Kayla, and she says, that's because you owe us 10 grand.
That's not a good feeling.
And that just puts everyone off on the wrong foot.
So small, sustainable growth is always the way to go.
You know, there are some huge wins, and we actually get those a lot, where we'll have somebody kind of plugging along, they're in our Hudson Valley warehouse, and then Whole Foods takes on everything, everywhere.
We just had a chip brand, Humble Chips, big fan, they're based out of Canada as well.
And they're going through that journey right now.
And we're excited for them, but the best we can do is communicate and over communicate.
You know, did we have an OI in place that now costs way more, because you're going into almost all of our warehouses.
So I think that's a big piece.
But then on the opposite side, we do have a few that come in and then kind of just get a win and then rest.
And it's a hustle business.
It's going out and continuing to build and following that, working with UNFI and your supplier development manager, still promoting your products through your distributor, through your retailers is really important.
And I am a big fan of having, if you're very new to distribution, and it can be factored in having a broker that can help you.
I'm not saying you have to go out and get some big national broker, but just somebody who has some UNFI or other distributor experience that can help less for selling into stores at this point and more for mentorship.
Because I control what's going on with UNFI, but I know that that's not the only place that someone's doing business.
So they need to be able to keep track of all of that and when to promote and what pitfalls to watch out for.
I'm not asking you to name all the brokers that UNFI has great relationships with, but off the top of your head, are there a couple that you've seen really be able to foster smart growth with emerging brands?
Sure.
I would say we have worked really well with Greenspoon.
They really care about their suppliers.
That's not saying anyone else doesn't.
No, no, of course.
Yeah, we have a lot of great brokers.
And I will say, I was used to seeing, when I had the desk before, it was like, okay, are they advantage?
Are they presence?
Are they?
But now we see a lot more regional folks and people trying to build people up or master brokers who take on just a few of these brands and help build up.
But I would say, yeah, interview carefully and often and really make clear what your goals are and what your goals are with UNFI and where you'll need their help.
Because obviously costs, everyone's asking you for a little bit, us included.
And that's the nature of the beast.
So you're going to know your books better than we could, but it really, it goes a long, long way.
I was just looking at one this morning where Whole Foods actually told the supplier that they wished that they had had a broker before a pack change fell through and now we have a major delay.
Like it was just one of those things that you can't expect to know it all day one.
I've been with UNFI for 14 years and I learned something new every day.
So yeah, that's a lot, but there are a lot of things to consider.
That's great information.
We have a couple more questions, and then I also really quickly want to touch on graduating out of UNFI, UpNext, and into Broadline.
First, let's touch on these two questions from Catherine Fleming.
Do you have a lot of California-based retail accounts as well?
Yeah, absolutely.
For sure.
Southern California, I think, Moreno Valley is our biggest warehouse.
Yeah, of all shapes and sizes.
So we actually launch a lot of brands that are based out of SoCal for that reason.
And then Robert Haynes wants to know, outside of the Northeast, is there a specific region of interest?
So a specific region of interest for UNFI, and then also any emerging categories or trends in general that you're all kind of looking at right now.
Sure.
I mean, we're nationwide and beyond with Canada.
And also the super value acquisition from a couple of years ago.
You know, we've got about 60 warehouses scattered across the US.
I just find with these brands that tend to come in, higher quality products tend to, the SRP is a little bit higher, and that's tend to.
Like, I'm open, if you have a conventional something that can fit into this, we will make it work.
So that's kind of why it tends to sound like it sticks to the coast.
And as far as trending, brain health, adaptogens, anything involving mushrooms.
We have seen this over and over, and it's working at shelf.
Better for you, grab and go.
A lot of things aimed at kids lately, which has been great for me, because I have a five-year-old.
You're in the market.
Yes.
But I would say just off the top of my head, and we actually, UNFI does have trends reports, where our category management team, I'll see if I can link to those, provides an awful lot of feedback on what they're seeing at fancy food, at expos, at our own shows, and what's coming next.
And then there's another question about how to apply.
So I do want to let everybody know that I will put the presentation that we've gone through on this call in our Slack community.
So bevnet, slack.bevnet.com, slack.bevnet.com.
I'll put the presentation there.
And then if there are any other links that you want to share, I can post those there as well.
That seems to be about all of the time we have today.
But in closing, can you encapsulate what you've seen as being successful for...
How do brands really chase success with programs like UNFI?
Oh, no, we were going to go into graduating, and UpNext and into...
All right.
So graduating, we did have to set some baselines.
$350,000 in purchases is where we start to look to graduate folks if they're ready.
The goal is to have people within two years be in and out of the program.
It is not a destination.
It's not a place to stay because the fees are lower.
And those are some tough conversations that we've had in the past.
But graduating essentially means that there's a checklist that's also linked in here that you can go to to see, even if you're two years away from considering distribution.
You can see what we're expecting at the end of our journey with UpNext.
Here are, I understand that to dispute a deduction, I go to this person.
Check that box.
I understand that this is the PAC change form, and this is the process.
It's just showing its accountability.
Here are the things that we went through.
And it really is a goal, and it's something to celebrate.
We always shout it out on our social.
Graduating is a good thing.
It's really hard to make that point when the fees go to standard rates.
But you're now going to a supplier manager who works exclusively with your category, so they may have some more insight there.
So you understand the processes, show that you have a strong marketing calendar, and fill out the requirements, and then you'll be introduced to your new supplier manager.
And we're proud to tell your story.
It's really, that's the best part of this, is that we got someone from here to there.
And then I don't know if we could bring up some of our graduated suppliers.
I know that's on...
Third to last slide.
Yeah.
And we can go through some of these great stories.
Great brands on this page.
Yeah, isn't this great?
And all different types of folks.
I had the Snacklins, their head of sales used to be a UNFI SRM, Keith Lundstrom, so I was super pumped to...
They were actually our UpNext Supplier of the Year, which was an award we gave out at one of our trade shows.
To hand that to Keith, who I've known for a long time, was really special.
Midday Squares, these guys are outrageous.
I love them.
They have the biggest, best personalities.
They just got shouted out by Kim Kardashian on her Instagram page the other day, so I'm sure they're going nuts up there.
Nixie, I mean, we had them, and the next thing I looked, and we were buying millions of dollars of their sparkling water, and I was seeing it on NCAPS.
Ming's Bings, they were always so much fun at shows and absolutely delicious.
So this is just a few that I threw together here because I had the privilege, a lot of these folks came in before I was in this role, but getting to know them and then see their success, and also because I came from Broadline, I know who they're going to, and I know that they're in good hands.
So if we also want to show who's in the program now...
Yep, next slide.
Yeah, just to give an idea of what we're looking for.
So I had mentioned earlier, you know, one of our rocket ships, Gorgie, just got into the program, I think, only three or four months ago.
I know you folks will be chatting with them soon.
Super high energy.
I mean, great product, great concept.
If we can move on to the next slide, that would be great, and we'll just take a quick look at these current suppliers.
But you can...
Please go ahead and keep talking about the current brands.
Yeah, the current ones.
Actually, I have Aviv in here, which I saw that, and I was like, why didn't I invent that?
These are the frozen, basically, pucks that you break in half, and it's a non-blend smoothie mix that you just put in with your almond milk or whatever you're having that with.
They're fantastic.
VFC, another super high-energy, great-tasting product.
And then Viv for your V based out of Boston.
They won our Pitch Slam, which is an event that we do at all of our trade shows with UpNext suppliers.
Stepping on stage and giving their best two minutes to go through what their story is.
And it's in a room full of retailers and sales folks from UNFI.
So that's a lot of fun.
Who else do we have here?
Oh, Go Nanas.
That's one of my favorite stories that we have.
Something born of COVID.
These two women came together to make a...
I couldn't even really explain.
A bake at home in the bowl, like just add the banana sort of banana bread concoction.
And it's so, so good.
And they were able to scale it from...
Because we also get a lot of questions about, okay, this stuff sells really well on QVC, on Amazon, on these direct-to-consumers.
And now I feel the need because stores are asking me.
So they have the cash flow to make this thing work.
They just need the guidance.
So that was an example there as well.
And then a Friendly Bread, Delicious Sourdough Grilled Cheese Sandwiches, LGBTQ certified.
They have been a great addition, and we had them come to headquarters last year, and I ate like two and a half of those things.
So they are fantastic.
Excellent, excellent stuff.
Thanks so much for giving us a peek at the current suppliers and then those who have graduated.
So appreciate it.
Aaron, thank you so much for joining us today.
What's the best way for folks to get in touch with you?
I know that there's an outreach contact on the presentation that I'm going to share on our Slack, but any other information that you want to share with people who want to get in touch?
Add me on LinkedIn.
We can chat there, and then I'll direct you from there based on the questions.
Yeah, I think that's probably the best spot.
Melissa, I'm going to flip you a link to our general inquiry inbox, as well as where to apply.
And if you do choose to apply, anybody on the call, please note that you joined us here and that we had a chance to go through some of the program.
And yeah, we'll be in touch, that's for sure.
Thank you so much, Aaron.
Thanks to everybody who joined us, and we'll see you next time.
That concludes another episode of the Community Call Podcast.
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