Rules of the Road: # 4 How do I know my brand is ready for retail distribution?
So your idea for a CPG (consumer packaged goods) brand is starting to come together. Well done! While good ideas are never easy- the execution of that idea (aka making it real) is where the very hard work lies. So let’s say you are experiencing some local market sales success- whether the local farmer’s market or in several local retail outlets and you are seeing some traction online- what do you need to think through and have nailed down before approaching your first retailer?
Enjoying some local market success with your brand is hard to do and quite exhilarating. All the work you have done to date appears to be paying off. And it is true that you can’t have big success until you have small success. But just because you are seeing positive signs in your local market, this does not mean you are automatically ready to go look for distribution in the brick & mortar world. Below are a few of the things you need to think about and the reasons why:
1) Packaging: Do you have ‘retail ready’ packaging? This means much more than a logo and a great design.
a. Have you joined GS1 and obtained a UPC for your brand?
b. Have you tested your package with consumers to make sure they can find it on the shelf once it is sitting within the shelf set of your category? In a farmer’s market setting, or on your own website, your package is not fighting for attention- the consumer is investing time to interact with your brand. Once within a category shelf set- that package has to be easy to find and hopefully have some stopping power so consumers will notice it. A design that is too fine with very thin fonts or too many design elements on the front panel will make it hard to find.
c. Is your package design oriented properly? You may want a horizontal presentation in order to have a larger ‘brand billboard’ however, your retailer likely wants a vertical presentation so it takes up less shelf space. Many retailers evaluate productivity on a per linear inch basis. So beware.
d. Do you have final packaging ready to go? The package that your product will when it arrives at retail stores. Retailers do not like to “imagine” your mock up is real. They have all been burned before.
e. Can your structural packaging stand up to the rigors of shipping? Thin cartons, or craft paper packaging can work in a local setting, but once your product is being shipped around the region or country- can it stand up to the beating it may take? A simple way to test is to take a case of your product and ship it to a friend in a distant city and have them ship it back. When you open up the case- how does your product look? Remember- no one buys the crushed box or dented can.
f. Do you have a logical case pack configuration? Meaning are you selling your product in a quantity retailers will find acceptable and do you have a logical inner pack? An inner pack is a shrink-wrapped subset of your product within a case. So you may have a case pack of 12 units with inners of four (4). This makes your product easier to ship out to stores from distribution centers. The above example would be considered a case pack of 3 x 4: meaning three (3) inner packs of four (4) units each (so 12 total pieces in your case). You may want a larger case pack, but retailers want to carry as little inventory as possible. This is worth a discussion with your copacker and with your sales agent at your target retailer. Don’t get this wrong by making assumptions.
2) Supplier: Do you have a great supplier that has a history of not having issues with any regulatory authorities (think quality issues)? Do you have a back up supplier identified and qualified? You must have a back up plan. Retailers will not care about your “issues”. Remember- the only thing a retailer hates more than a product that does not sell is one that does not ship.
3) Claims, Certifications: Are your claims all vetted and can be defended? If applicable, are your certifications in order (organic, gluten free, etc.)? Has your labeling been vetted by an expert in your category that knows all the rules and regulations? In the OTC drug world there is a saying: ‘it does not matter what your product can do- it matters what your label says your product can do’. Be incredibly careful that you can defend your label.
4) Online Success: Even if the sales are not huge, it will be important to be prepared to show a retail buyer that your business is building online and, ideally, that you are keeping up with demand by not running out of stock all the time. Bring real numbers and not just tales of success.
5) Driving Demand: Do you have the finances and ability to create a demand/marketing plan that can move product off the shelf once you get accepted by a retailer? The clock starts ticking the day your brand hits the shelf. This is true if you are in 20, 200, or 2000 store doors. If this answer is “no”- keep building your business online and locally in whatever number of stores you currently service while you figure out how to secure funding to drive demand (and build increased levels of inventory).
This is not the complete list of things to get right- but these are some of the big ones! We will cover additional steps toward getting into B&M retail and being successful in upcoming blog posts.
Zip us any questions on our ‘contact us’ page at Contact — Road 2 Retail.