Introducing a new product to grocery stores

Inspired by the]Ramen Noodle thread.

Say I’ve invented a new food product, I’ve got Belrix’s Bodacious Badger Bits in a can that I want to get my local supermarket to sell it.

What’s the process? There’s an immediate problem producing large quantities of this without a place to ship to and there’s the converse problem of getting a store to stock something that’s not being made, yet.

Do I corner the president of Safeway in his driveway and stuff a spoon of Badgery goodness down his gullet? Ditto for whatever Heize is running the place now and try to get my product as the 58th variety?

What’s the dope?

Start with an advertising agency and a big booth at the Supermarket Food Fair.
Raise a lot of entheusiasm for your product with free samples, pretty sales reps., etc., etc.
Advertise on national TV.
Set up demos in local supermarkets in test areas.
Make a good impression.
Go Nation Wide with big promotional activities.
Take your place as the King of Belrix’s Bodacious Badger Bits!

I know about this one from a few different ways on both sides. All big supermarkets and even stores like Wal-Mart have people called Category Managers and sometimes people called buyers and merchandisers. These may be the same person or they may work as a team. These are pretty high pressure jobs and these people manage a given product line in the stores. The have to run it almost like their own business in many ways.

Lets say you have a new line of butter that you want a medium sized supermarket chain to sell. The most direct thing you have to do is to get a meeting with the dairy category manager. This isn’t all that easy because there are lots of people trying to sell them things all the time. You have to “sell” your product to them with all the great reasons why they should carry it. They will hardly ever take something on the first try. It may take months.

Once they express some interest in carrying it, you have to work out details and these people are good at extracting money wherever they can. As mentioned in the other thread, it is likely you may have to pay money to get the chance at all and they reserve the right to discontinue it. Even after they carry it, money still flows back and forth in ways that make Enron look simple.

After they accept your product, you still lots of responsibilities as a vendor. You will have to pay them to put your product on special for example.

It is a brutal business and they have the upper hand. One big myth floating around is the supermarket margins are razor thin. That is generally false and they have money flowing in from lots of directions.

If it’s a small store, you can usually just walk in and ask for the owner and go from there. Be sure you’re ready with samples, prices, quantity discounts. And know the answers when they ask you about gaurenteed sale, terms, first fill free etc… As for big super markets. It might be easier to get you’re product to a distributer and let them push it to the stores for several reasons: They all ready know who to talk to in each store, they’re ‘in’ lots of stores, they have a means for distribution etc…

That is a good point. My wife and her family are distributors of specialty foods. They get to see it both ways. First, they have to put the screw to some farmer or small farmer to be able to compete selling their product. Then, they have to get in the cage with people from Trader Joes and Whole Foods and the like. I will tell in all honestly that Whole Foods has this hippy-trippy small farmer friendly face on the outside and then you pull off the mask and it is really just another Wal-Mart. They have gotten especially brutal on the sourcing over the years. It isn’t a game for amateurs.

1.) Get a boatload of money.

2.) Find a distributor that will rep your product.

3.) Become very familiar with the term “slotting fees”.

4.) Hope for the best but prepare for the worst.

Doing business with large chains is like getting in the ring with a professional heavyweight boxer. If you can’t compete on their level you’re going to get your ass whumped.

P. S. I’ve gone a few rounds in Bentonville (and other famous venues).