The world has been flipped upside down due to the pandemic. Many things have changed and adjustments to make. How can your business thrive in this situation? Alex Marx gives an overview of how we could still make it in our business ventures despite this. He is the Director in Category Management at KeHE Distributors, a wholesale food distributor. How does a KeHE manager evaluate a brand? In this episode, he joins Elliot Begoun to discuss category management, implementing changes, innovation, and the advanced analytics side of business processes. Alex also advises center aisle brands in a competitive category to stand out as a sustainable brand. Are you eager to know how to approach the market, execute channel strategies, and leverage your products? Learn tips and tricks, so you are guided in the right direction and scale your business up!
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Listen to the podcast here
Alex Marx On Building Relationships With Distributors For Sustainable Business Growth
Before I introduce my guest, who I’m thrilled to have, and this is going to be a really important conversation, I want to do a founder shout-out, a brand shout-out. This is to Beerenberg Farm, a company that’s been in the Adelaide Hills of Australia. Been on their land since the 1800s. Six generations and they make an amazing array of products. Here in the US, there are six products and these are cool bursts of flavors. We’re calling them random acts of flavor. You’ll find them first in Northern California as it’s launching here as part of the pre-launch test.
Check them out at Beerenberg Farm. They are an amazing brand and culinarians. They’ve been great stewards of their land, their manufacturing facility is state of the art, incredibly ego friendly, and they generate all of their power from their solar array. They have water containment, and it’s a very cool concept, family, and opportunity. Check them out and if you’re in North Cal and places like Nugget’s, and Mollie Stone’s, Berkeley, etc., try out their product.
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Our guest is Alex Marx with KeHE. Given what’s transpired, there’s a lot we can talk about. Our focus, of course, is on this concept of building tardigrade brands. Brands that are nimble, capital-efficient, and resilient that are being smart with how they’re approaching the market. One of the absolute musts is fostering and understanding the relationship that can be built and should be built with a distributor.
Building Relationships With Distributors: There’s so much that goes into distributorship. It’s not just moving a box from A to B, which is what somebody would fundamentally think.
That’s what I wanted to invite Alex to share a bit about. How do you succeed and work well with KeHE and what are all the things that you can and should be leveraging and understanding etc.? Before we get into all that fun stuff, Alex, introduce yourself. He was telling me that he had a COVID wedding in December 2020. It’s a hell of a story. Many of us are having weird life moments in this time. Alex, thanks for joining, and please give a little bit of your background.
Thanks for having me. I won’t talk about the COVID wedding now. That’s a whole other podcast. Life’s crazy right now. I’m Alex Marx, a Director of Category Management at KeHE. I’ve been at KeHE for over eleven years. On August 17th, 2021, I will have been at KeHE for 1/3 of my life which is a wild data point to say out loud.
We could say you’re officially institutionalized.
You can say that. Like next is a KeHE tattoo. Why did I get with KeHE? I love to tell this story. I was a Western Michigan University food and consumer packaged goods, marketing graduate. I had a couple of offers on the table and as a college graduate or a college student, I wasn’t a supply chain major. I never thought I wanted to work for a distributor. To be totally candid, I didn’t even know what a distributor did but I knew that KeHE sold natural products. I’d be lying if I said I consumed a lot of natural specialty products in college. It was more like cheap beer and Taco Bell, probably. I had a hunch that KeHE was on a good growth path. I joined the company because of the products they sold.
We weren’t a B corp yet, but they still had that B corp vibe back then. I joined and over the years I’ve been here, it’s mostly been category management and sales roles. One of the funny things is, when you’re in one of those big boardrooms and you go around, you say your name, your title, and maybe one fun fact about you. My fun fact, now it might be the 1/3 of my life, but my fun fact historically has always been that I was the only person and KeHE to be based out of all four timezones of KeHE. From Detroit, Chicago, Boulder, and I did a stint in Portland, Oregon working with New Seasons Market. At a high level, that’s my KeHE career in a nutshell.
Talk a little bit about what you do now.
In category management at a distributor is a little bit unique. We still, for the most part, abide by what most people know to be the eight steps of category management. We’d conduct category reviews. Do everything from define the category, create a scorecard, implement changes, what have you, but ultimately, we’re focused on assortment. We recognize that the way that KeHE can help retailers compete in the marketplaces is we bring one truck with maybe 200, 300 different brands on a couple of pallets through the back door. We simplify the receiving process.
Building Relationships With Distributors: You have to be able to communicate your message. The next important thing is to know how you communicate that, and there’s nothing that’s going to replace direct interaction.
Another major way is we help them with their assortment, whether that be suggest and recommend or enable them to pick and choose from what we have. KeHE today has between 70,000 and 75,000 different items. Our team is tasked to forage for new products, new brands, and then ultimately make sure that those brands are successful. That means coaching them on go-to-market strategies and helping them with a promotional roadmap. Telling them what shows to go to. With our closest suppliers, we consult with them on things like packaging and brand evolution. You could sum it up in one word and say assortment but there’s so much that goes into distributorship. It’s not moving a box from A to B, which is maybe what somebody would fundamentally think.
For younger and earlier stage brands who are distributed by you, what are some of the ones that are doing it right with their category managers? How’s that relationship when it’s in its best stage look?
You can draw parallels from a successful brand, like life. I often think of it this way, “The best friends, partners, coworkers, and in this case, suppliers are often the best communicators.” For us, we’ve gone through this turbulent year with supply chain, COVID, ingredient shortages, and this chaos. What we found is people that communicate upfront and say, it can be both sides of the coin, by the way, they could say, “We’re having some supply issues.” They could say, “Just want to let you know, we have a warehouse full of hand sanitizer.”
Whatever it may be, ultimately, it’s communications. Connecting with your category manager, your supply chain planner, or the KeHE account managers. Just being transparent. The other thing that a lot of the best suppliers are doing is they’re still innovating. We had a lot of suppliers during COVID that were nervous. They weren’t out there innovating and launching new items, which is understandable but then there are these sweethearts of the industry that are like, “No, we’re plowing forward,” or innovating, launching new items, and taking the market by storm.
Everyone likes a good car crash so let’s go there. What are some of the common mistakes that brands make or do that you see that you shake your head and wish that you could reach out to them and say, “Don’t do that. That’s not the way to do it.” What are some of those? It could be directly related to how they work with KeHE, but also in general.
There’s a lot of stuff that we see that we turn off our Zoom cameras and shake our heads at. One of the most common things is, you’ll get these brands that are so aspirational and they want to take the world by storm, but they want complete world domination on day two. They don’t have a targeted strategy. For instance, if I’m coaching a brand that’s relatively new to the market, we’re usually talking about things like, “What’s your channel strategy?” “Where do you want to grow up?” “Where’s your backyard?” “Can you dominate on the West Coast and create a data story on the West Coast and then transfer that to other strategic regions or retailers around the country?”
We get so many suppliers or brands, when we ask them, “Where do you want to be?” They’re like, “Everywhere.” We’re like, “Now? Already? Wait, didn’t you just launch?” This is going to sound wild but there are so many brands that we communicate with where you’re like, “Wait a second, do you have a strategy?” That’s a big part of it and there are symptoms of that along the way like saying yes to everybody.
Perhaps they can’t afford to say yes to everybody, whether it be funding, maybe their co-packer can’t help them scale. Maybe they don’t have a broker or salesforce to support these folks. That’s a big part of it. We see a lot of really successful brands with these laser-focused strategies. I love when someone says, “We want to grow up on the West Coast for six months to a year and then talk about the East Coast,” then work themselves down to the Southwest, Midwest, what have you.
We talk a lot about this as well. It’s super important to know your noes and be disciplined around that. You’re building cases. You’re testing your growth hypothesis, you’re trying to prove your assumption. You pick a DC, get a good anchor, build density around that anchor, you prove to yourself, to investors, to your category managers, to everybody along with you on the ride that you can execute, you have a model that works, and then you begin to proliferate that model. You try it and now maybe you go to one or two more DCs and build from there.
The thing that’s made this hard, though, is some of the changes in the industry. When review calendars are so far from resets and they’re so infrequent, that’s where brands start getting FOMO. They’re so afraid, “If I don’t submit for this review, I have to wait another year for the review and then another 6 to 9 months after that review to get on shelf. I’m making a two-year delayed decision here by being disciplined.” That’s when discipline wanes and that’s where you have to be steadfast. You have to have communicated to all your stakeholders that you are going to be that disciplined and you can’t relent.
I’m a fan of doing it and submitting, but then if you get the yes and you realize you’re not ready saying, “Not yet.” Let me ask the question a little bit about some of the programs like elevate™, how would you recommend earlier stage brands who are looking to build a robust relationship with KeHE start that process? What programs are available to them, whether it’s that or whether it’s some of the diversity programs, etc.?
I’ll even back up a step further and say, “How do you get noticed?” Our team is foraging in every nook and cranny possible but we’ve been utilizing RangeMe more and more. Once the shows are firing back up, that’s a great place to meet a category manager. We work and partner with a lot of incubators and accelerators. We read all the publications. Be loud and proud about your brand and a number of areas. Once you’re set up in our organization, we have our incubator program called elevate™.
What happened was we saw that a lot of brand-new suppliers in our organization needed help in two key areas. The first area was finances, especially if you’re a founder of a food brand. It’s very expensive to launch a food brand, or food and beverage and CPG brand. Our elevate™ program gives some cost breaks, and most of the cost breaks are breaks towards growth vehicles. We have no advertising programs within KeHE. We put on shows and create buying environments there. We discount all those things. All the things that we feel like you should be a part of to grow your brand.
When I say discount, I’m probably underselling it, because we do a lot of free stuff. We give suppliers a lot of freebies on the elevate™ program. We have a lot of different types of ways to launch at KeHE. In addition to elevate™, you brought up a good one, DIVERSEtrade™. KeHE’s a B corp, and it’s totally not a certification that we put at the bottom of our PowerPoint presentations. It’s something we really do live by and if you hang around enough KeHE people, you’ll see it’s ingrained in our culture.
We are serious about helping brands and giving a hand up to the brands. For all the DIVERSEtrade™ suppliers, we do have some small discounts but it’s a lot of consulting and guiding them in the right direction. One of the things you mentioned, which I wish every brand new was, it’s great to launch with an anchor account. What happens if you don’t have that anchor account? People always say, “Chicken or the egg? KeHE wants me but they say we need an anchor account.” The anchor account says, “You’re not set up or selling anywhere already. How can we ignite this process of movement and inventory?”
We have a program called New at KeHE, where we only look at items that are in the market for about 90 days or less. We create a push strategy. We say, “For X amount of dollars per DC, you can get inventory into a DC.” It solves the inventory piece but then you’re also generating demand by creating this brand awareness because we blast this out to our salesforce. Being able to leverage the KeHE salesforce and make them an extension of your salesforce to some degree can be incredibly valuable. There are lots of programs, Elliot, we’ve got all sorts of stuff.
Let’s jump into a couple of specific questions. This one is from Aaron, and he says, “Alex, thanks for taking the time to chat with us. How do you foresee the trend of plastic-free packaging and water-free products continuing to grow? Is this something KeHE is prioritizing with its assortment?”
When you think of the plastic-free stuff, in particular, that trend spans beyond our industry. All sorts of industries are looking to cut back on plastic and that’s been a trend in the natural specialty food space for a long time that probably precedes my time. We’ve seen brands like PathWater with their aluminum bottles. We’ve seen Zevia, who doesn’t use plastic packaging, they’re sticking to aluminum. They tout that and I respect them for that. It’s a trend that is hot right now and it’s going to continue to be hot for years and years because let’s be honest, the different generations, Millennials, Gen Z, they’re all a little different. Gen Z takes sustainability incredibly seriously, which is amazing to see. I don’t see that trend dying off anytime soon.
I’ll give a little more color to this because Aaron’s with Spinster Sisters and what they’re doing is specifically with personal care is looking at a line of products like solid body lotion bars, deodorant bars, conditioner bars, and so forth. He’s trying to understand how the consumer, retailer, and distributor may find that as an opportunity in the marketplace.
We do. We asked ourselves this question, “How does a KeHE category manager evaluate a brand?” One of the things we determined was they all evaluate brands differently. Is that a problem? I don’t know, maybe. What we did was we tried to put some science behind how we should be evaluating brands. These are weighted. They’re not all equal but we look at ingredients, and that can be, “Is this product natural?” Of course, because if that’s not, you’re already shrinking your ceiling by not being able to be sold at a lot of our partners that only look at natural ingredients, but it goes beyond that.
Ingredients can also be, “Are they symbiotic?” Is this peanut butter and jelly, or is it peanut butter and paprika, which I don’t know, might be good? We’d look at innovation. “Is there a trend that this new item is playing off of?” Keto is not a surprise to anyone in 2021 who’s dialed in. Everyone knows keto is super hot but it’s a trend that’s sticking around. “Is it keto or does it have a new product attribute or format?” That’s where the plastic-free might come in.
We look at taste, which can be subjective. I, for instance, don’t love lemon and candy or baked goods. I try to score this off of execution, mouthfeel texture, things that go beyond my personal bias. We look at pricing and promotion. Obviously, that’s something that can kill a brand if you have the most amazing, CBD gummy bear. Sounds fantastic. I’d love to have it. I’d love to buy it unless it’s $50 a unit. We look at packaging. When someone’s walking by in a grocery store and they’re determining if they’re going to buy a product. The rule of thumb has always been, we only have two seconds to grab someone’s attention.
Three seconds, three feet is what we say.
I like that. That’s a little bit more grace. People are more curious in today’s world. That’s probably more accurate. We look at the people behind the brand. “Is this a founder that’s done it before?” “Is this founder smart, savvy, and knows how to leverage connections?” “Do they have good brokerage support?” “Do they have a sales management organization they work with?” “Do they have good mentors, counsel, etc.?”
Lastly, we look at purpose-driven. We actually scorecard this stuff and this is where something like plastic-free can jump out. All else equal, a product that’s plastic versus a product that’s plastic-free and touts supporting a more sustainable environment, of course, we’re going to pick the brand that’s more sustainable. It is something we look at scientifically.
I’ve got some follow up questions to that but I want to make I want to come back to another question that comes back to the elevate™ program, this one from Sarah Bird of Grace’s Goodness, “How does one apply for, or get considered for the elevate™ program?”
Historically, we haven’t had a URL or somewhere that someone can go because we want to make this a very exclusive program when we do show our elevate™ suppliers to a Sprouts, a Fresh Thyme, a New Seasons Market, any of our great partners, that we’re not stretching it too deep. We’ve had the program a while, and we have 85 suppliers. That said, the way that you do inquires and connect with the category manager and tell them, “This is why I’m different. This is what makes me unique in the marketplace. This is how I would stand out as an innovative elevate™ supplier and your product portfolio.”
Given the criteria you described, making sure that you can speak to those things probably, right?
If someone came and scorecard themselves and showed why they average high scores across the board. That’d be a first and pretty awesome.
You guys read it here. Fernando has a question and his question is specific but I’m going to broaden it. “Are dietary supplements a good fit for the categories within KeHE in terms of what you all distribute?” It would be good for those reading to better understand because it’s much broader than most people recognize.
Building Relationships With Distributors: An industry is built on innovation. When you stop innovating, there’s a good chance that your competition has not stopped innovating, and you could get left in the dust. What has worked in 2004 doesn’t work in 2021.
Absolutely. The short answer to that question is, yes. To elaborate, we are wall to wall in a grocery store. That’s inclusive of anything center store, traditional grocery categories, all the fun ones, beverages, snacks, nutrition bars, but we go beyond that. We go into general merchandise. We’re making a big push for pets right now. We’ve recognized that consumers often will be more cognizant of what they’re feeding their pet than what they’re feeding themselves, which is a head-scratcher.
Nowadays, when you say, “That’s dog food,” it’s like, “That means it’s good for you.”
“It’s grain-free.”
It’s all clean ingredients. It’s a whole lot better than the Ho Hos or Twinkie you’re snarfing down at the same time.
Beyond that, vitamins, minerals, supplements, health, and beauty care products. All of those fresh products, cheese, deli, bakery. We interact with the majority of the store. There’re some areas where we don’t really participate. Maybe some meat and seafood stuff. Now, of course, in center store, frozen seafood or, meat and plant-based alternatives we’re really deep in but not like the bulk stuff in the meat department, but otherwise, yes. The only other one I can think of is maybe floral, we don’t really do much of, but everything else, KeHE partners with and we’re looking to grow those business units.
Fernando has a follow-up, but I want to come back to Aaron’s question next, which is, “What advice would you give for a center aisle brand in a competitive category, such as rice to stand out as a sustainable brand?”
What I often tell founders is, and this is such a weird time to communicate this because we’re not doing live shows. We kind of are, some of them are firing back up sweets and snacks. Unfortunately, Fancy canceled, but Expo East is still hanging in there. It’s, you have to be able to communicate your message. That’s the simple answer, then it’s, how do you communicate it? In my opinion, there’s no replacement for in-person communication. We could break that up into a couple of different areas. One would be demoing. When this stuff opens back up and people are allowing you to demo, do that and communicate those points.
The other one is the live shows. When it comes to having a staff that’s going to communicate your features, benefits, and what makes you unique, absolutely, there are fantastic salespeople, brokers, etc. out there. Nobody tells a founder story like the founder. Get your hands in there, get dirty, go to those shows and scream your value prop from the mountaintops. Have the certifications to back it up, too.
It’s a hard thing on shelf to communicate everything that you’re wanting to communicate. In fact, one of the mistakes brands make is they try to communicate too much. They try to be everything and there’s no hierarchy to their message. There’s nothing that’s going to replace the direct interaction of you trying to extract cash from a consumer’s pocket or from a retailer and doing it. Aaron, there’s lots of other ways, of course beyond on shelf, but to the category managers at the distributor to the category buyers, part of it too is helping them walk their walk. It’s important that they understand the difference.
Fernando asked another great question. This one is interesting in a lot of ways. His question is, “What’s the best region to launch? There’s bound to be one.” I’ll answer first and say, people tend to launch in the same few DCs, in the same few markets in attempts to be on the coasts. It depends on where your consumer is, where the retailers are for that consumer but are there DCs in your experience within the KeHE network that tends to do better in helping pioneer new brands, or are they all relatively the same?
It’s a good question. Elliot, your answer is pretty much spot on. Mostly, generally, and historically, people launch maybe West Coast first, but ultimately, it’s the coasts and then they work in. That said, if you’re launching a new Cajun, stir-fried, maybe launch it in Louisiana, but it’s aligning who your product is for to the market.
Do we have DCs that perform better than others in terms of innovation? Yes, it’s DC-driven per se, but it’s all about who’s in DC. Of course, we have retailers that are gung-ho on innovation that is like, “We found the hottest products,” and they’re like, “We saw that at a farmers market a year ago.” I’m like, “Oh, man.”
It’s all about finding those retailers and I probably shouldn’t name them because then I’ll miss one and then I’ll feel terrible after this, but the natural channel has historically been a launchpad for most brands because they’ve historically been more apt to take a chance on a product and be geared towards innovation. One thing I will say is, we’ve seen a lot of conventional retailers really starting to change their tune. That’s maybe not every category, not every grocer, but the line is blurring a little bit.
It’s important to know and understand what each DC serves. For example, if one of the DC serves primarily large, conventional, that doesn’t mean that’s the wrong place to launch. It means the sale cycle maybe longer because you’re going to be having to go through their calendar review process. If you want to launch with independents and looking for DCs that have lots of independents that are being served is important. If they do a little investigatory work there. Nadia has a question, “Alex, thanks for being here with us. How do we get a list of all the programs that KeHE does to help brands or offers to help brands grow sales and, what the costs, etc. are?”
I’m glad to be here with Elliot and gang. Once you’re set up in our network, we have this thing called our roadmap planning session, where we meet with the majority of our suppliers from May to August. At that time, we’re evaluating the business from top to bottom. When we start one of these roadmap sessions, the first thing I’ll ask the supplier after our pleasantries are, “What happened in the last year?” “Where are we and what brought us here?” We then talk about, “What are your goals for the next year? Where do you want to be?”
Building Relationships With Distributors: Don’t let one buyer tell you that your products are not great, and let it destroy your dreams. Keep on fighting out there. Keep on innovating and improving.
That naturally transitions us into, “How do we get there?” Usually, that does require things like show participation if they want to expand in some areas, or maybe they’re not looking for tons of new distribution. They’re looking to grow velocities, and we’ll discuss those velocity drivers. When we send out this roadmap invite, that’s when we detail out all the costing of our programs. I don’t think that we actually post that publicly for folks outside of our supplier network but we do have this advertising overview that gives basically a line listing of every program and show and the cost affiliated to join.
Aaron has another question, which is, “Does KeHE have a foodservice arm?”
We don’t have a dedicated foodservice arm and to be candid, we don’t do a lot of foodservices. We do maybe a little bit here and there but it hasn’t been a primary focus of our organization.
Hector has a question that is interesting. “Back in my young years, I remember having live meetings with distributor category managers. CNS, SuperValu, United Western Grocers. I haven’t been able to land one or invited to have one. Are these not happening anymore? I’m talking pre-pandemic here.”
Pre and post-pandemic? Yes, we want to be having those meetings. We’ve transitioned all of those from live to Zoom meetings but ways to get a meeting would be to go on RangeMe, and the shows. Whenever a supplier reaches out to LinkedIn and me, I 100% of the time respond to them. I might not be their category manager but I will recommend them to a category manager. I’ll give them their contact info and then it’s old school asking for a meeting.
Some category managers are better at it than others, meaning, maybe during roadmap season, someone might say, “Let’s reconnect at the end of August.” In terms of innovation, if you have an innovative product, we’re thrilled to hear from you. That means we didn’t have to go hunting for your product. You essentially brought our dinner to us. We’re happy.
How would a brand find out who their category manager is?
On KeHE’s website, we have our category managers listed out. They can certainly always reach out to me and that’s what often happens. When somebody inquires, they’re not always at the right category manager. I’ll be honest, we shift categories all the time. It’s getting in touch with people that know KeHE as well. We post our updated org chart and our KeHEConnect platform frequently. If you have a broker or if you know another colleague that works with our organization, they can get you an updated one as well, in addition to reaching out to me.
Another question here is, “How best would you guide a brand to engage with KeHE’s sales organization?”
In my brain, I translate the question as, “How do I stand out, when Alex, you just told me you have a product portfolio of 70,000 different items?” It’s a fantastic question because it can be difficult. Do your research first. I used to be on an account. I get how it works. I would get so many suppliers that would just bcc me on this mass email, like, “Mister account manager, or Mrs. account manager, this is my product.” It’d be eight paragraphs of why they’re important and I’m like, “Shoot.”
By the time I get done reading, I’ve got three more of those in my inbox. There’s that or you get this email from this crafty supplier that says, “Alex, I know that New Seasons Market is reviewing the nutrition bar category in October. I’d love to present. Can I send you and the buyer samples? Here’s why my product is different from anything else they have on shelf.” They communicate 3 to 4 bullet points about what makes them separate. When I get those emails, I get so ear to ear, I’m like, “I want to clone you.” I love that. It’s all about a targeted approach, in my opinion.
It’s empathy. We talk a lot about that as well and that is recognizing what that account manager has on his or her plate and what’s going to make it easier for them to take action and make their job easier. That’s human nature. As you look, and as KeHE has gone through this almost unimaginable time in all of our periods, what’s going to change coming out of this? How is KeHE going to change? What are you guys looking for and looking to do differently whether it has to do with eCommerce and things like your brand driver program, other things along those lines? A little bit of future thinking from you.
We’ve seen consolidation in our industry. We’ve seen wholesalers and natural distributors partner together. What KeHE has done is we’ve guided our ship to say, “We operate a bit closer to the tail end of the bell curve. We don’t want to be a wholesaler. We want to specialize in natural and specialty food products.” That is our mission and we’re doubling down on innovation. You’ll see us get more aggressive with taking risks and placing bets on products that maybe don’t already have a ton of sales in the marketplace. There’s innovation. Another big thing that has changed the KeHE landscape is data.
I boil it down like this. You’re either one of three different types of companies. You’re either a data-driven company, you’re a company that is becoming a data-driven company, or you’re a company that’s going out of business. That’s it. There’s no fourth. It’s worth underlining and putting exclamation marks right after, “You need to be moving to become a more data organization if you’re not.”
What KeHE has done is we feel that we’ve gotten there ourselves or we’ve been on this journey for a while and we’ve come up with some great ways to interpret data and create actionable insights from all these numbers floating our way. Almost more importantly, we’ve empowered our supplier community by providing them all of this data. It’s selfish to say, “We’re a data-driven company,” and end there. If KeHE doesn’t create a win-win-win scenario for the supplier, the retailer, and ourselves, it’s not going to work.
What we’ve done is we’ve given tons and tons of data but not in a data dump fashion. It’s a strategic way, with a nice user interface where someone can have some serious learnings from data. We’ve given that to our suppliers so I’d say that those are the two biggest things but there are all sorts of things that are changing. The world is flipped upside down.
It’s a crazy moment of time and it’s going to remain crazy. There’s a lot of things that we don’t know how they’re going to shake out. Two quick last questions. Hector wanted to know, “Because you’re your director of category management, but you also reference, do you also have categories that you’re still actively managing yourself?”
Of course. I’m not a figurehead leader. My hands are dirty every day. I manage the nutrition bar category myself, which is inclusive of shelf-stable, and the ever-exciting refrigerated nutrition bar set or refrigerated snacking set, whatever we want to call that. They’re awesome brands from the powerhouses like Perfect Bar to some of the innovative decadent treats that are set like a Cocacao, which is an elegant brand.
Aaron asked a question specifically around KeHEConnect and the data. He says, “Is there a specific report or one that you would recommend every brand to leverage fully?”
I would recommend that brands leverage a few different reports fully. Just like Bare Bones, knowing how much inventory you have in a DC is important. Looking at inventory reports, it’s important to know where you’re selling. Sometimes you’ll gain new distribution points from KeHE selling your product and some brands have been totally unaware. There’s a report that shows every single store you’re selling to how much you’ve sold.
Going to the advanced analytics side of things, we have this gap and void report where a brand can go on and they can look at essentially where they’re selling already, which we’ve talked about, but then they can look out where they’re not selling. It might be entirely. They might not be selling any products at this independent store in this region or a banner here. It could be an opportunity to conduct a fix-to-mix analysis.
You might say, “We landed one of our dream accounts in Publix. They have six items but they have the wrong items.” You can look and see what accounts are selling what products as well. They’re all in the same user interface. You can create a central hitlist, an aspirational sales budget, all kinds of on one user interface that’s interactive and clean.
Is there a tutorial or place where brands can learn? Is that something they should engage their category manager with in terms of how to best leverage that? Should they have that conversation there?
We have lots and lots of tips, tricks, and tutorials. We have to print out stuff, PDF, and PowerPoint, but we also have tutorials where people will go through the reports and show you what’s most useful. You can do that but I would also highly encourage you to talk to your category manager about it because when I was asked, “What reports are best for me to use?” Maybe it’s a supplier that has 21 days of shelf life on their product at that point, maybe it’s the spoils report you want to look at. You want to see what retailers aren’t moving your product and reconsider product placement at those retailers. The category manager can help tailor a specific set of reports to you.
Alex, this has been great. Let’s do this. Let’s give you the floor to bring it home. What would you like to leave the readers of this, which are the founders and the teams of emerging brands, the investors, the people who are trying to build nimble capital-efficient and resilient brands? We always say tardigrades, not unicorns. If you wanted to impart some lasting wisdom, what would you want to share?
I would say that this industry is built on innovation. Innovation and new items are the lifeblood of the industry. When you stop innovating, there’s a good chance that your competition has not stopped innovating and you could get left in the dust. What has worked in 2004 doesn’t work in 2021 and what works in 2021, might not work in 2023. It turns out 2019 and 2021 feel like decades apart. If you launched a coconut water brand in 1998, I don’t know if you seemed that smart. If you launched one in 2005, you were maybe a touch too early and you were brilliant if you’d launched one in 2009 with the same product.
Life and distribution are all about timing. I don’t want to be cheesy but if you do believe in your product and a few years ago, you didn’t take the world by storm look at yourself in the mirror. Look at the things I mentioned, the pricing, the ingredients, perhaps calibrate your brand, but don’t let one buyer tell you that your products are not great and let it destroy your dreams. Keep on fighting out there. Keep on innovating, and improving, and choose KeHE as your preferred distributor partner.
Way to bring it home. Thanks, thanks for doing this with me. It was important. By the amount of questions so forth, I’ll probably be hitting you up for a revisit again and have you back on to talk more and maybe delve into a few of the topics more deeply like KeHEConnect because that’s important. This is a data-driven world and it’s having access to data and more importantly, knowing how to leverage data.
There are a lot of lessons to be learned here. We live in a totally different world. We live in a world now of drive-by submissions, which has made it hard when you’re doing a lot of your work with buyers by simply sending them a one-pager. You’ve got to hope that does all the talking for you. Things are changing and changing rapidly. Your ability to work with the right distributor partners, have access to data, be disciplined, and stay targeted are fundamental to your success. Thanks for joining. Congratulations. I’m a little bit late for your COVID wedding. Many years of happiness and thanks to everyone for reading and we’ll see you soon.
Thanks so much, Elliot. Thanks, everybody for tuning in. I appreciate it. You can always reach out to me on LinkedIn. I promise I will respond 100% of the time.
Important Links
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LinkedIn – Alex Marx
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