SPOTLIGHTVELOCITYEDITION TRADEANNOUNCINGTHESHELFIES2022FINALISTSMARKETING101, THE NEW AGE OF COUPONING AND GETTING PRICING RIGHT SUMMER ‘22 CERTIFICATIONSUnderstanding Yishi’s Path TO SUCCESSNATIONWIDE
WWW.STARTUPCPG.COM THE TABLESUMMERSPOTLIGHT2022OFCONTENTS 03 Letter from the Editor 05 Meet the Startup CPGer Annie Wang 06 Yishi Foods: Waking Up the Instant Oatmeal Category 10 To Be or Not To Be… Certified 14 Sparkling Beverages: Anything But Still 18 Trade Marketing 101 24 When The Price Is Right, and The Promo Is Strong 30 The New Age of Couponing 36 Meet the Shelfies 2022 Finalists 38 #Community_San_Francisco Brand Feature: BTR Bars
LETTEREDITOR'S DEAR STARTUP CPG COMMUNITY,
In the past year, I’ve been hit with a hard truth: most of building a CPG brand is not the “fun stuff.” As someone without my own brand, I’ve spent nearly all of my life witnessing CPG as a consumer – the nutritional innovation, branding, and exciting flavors and ingredients. But because of this, I often fail to witness the realities of building a brand from scratch. This year, I’ve interviewed and worked with countless founders, and have learned so much more about the day-to-day work of the most successful founders. The truth? Most of it is wildly unsexy.
Cheers, ManagingJenna Editor, The Spotlight
*: I’d like to extend an extra thank you to the amazing members of our very own Startup CPG team, Erin Fasano and Peter Boyajian, who both spent many hours explaining the ins and outs of trade marketing to a total newbie on the subject (me) – they are true experts in their field.
Jenna is the Editor of The Spotlight magazine and works on Startup CPG’s marketing team. She is passionate about emerging CPG, also working as a publicist for Knack PR and a freelance copywriter for CPGseveralbrands.
In this edition of The Spotlight, the (incredible) new staff writers and I will be breaking down the basics of some unglamorous topics, like trade marketing, couponing,* and obtaining certifications. And while these topics pale in comparison to buzzy influencer campaigns and hot new ingredient innovations, they may just become a new tool to add to your ever-growing toolkit of CPG expertise.Ifyoutake the time to browse through the pages, you’ll also find some truly thrilling hidden gems, including an interview with Yishi Foods – who recently launched nationally in Whole Foods – and perhaps most excitingly, the official 2022 Shelfies Finalists list. Stay tuned for the Shelfies Special Edition of The Spotlight to come out in the next few weeks!
We hope you enjoy this edition, and cannot wait to kick off the start of Shelfies season with you.
Lindsey Pfeiffer Staff Writer
Jenna Movsowitz Managing Editor, The Spotlight
Tamara Romčević Designer
Operations Consultant & Host of Startup CPG’s Podcast
Annie Wang Staff Writer
Environment, Community Building, CPG and Marketing!
WHAT ARE YOU PASSIONATE ABOUT (IN 5 WORDS OR FEWER)?
What I eat is really varied, but I think about Rao’s Arrabbiata pasta sauce on the daily.
FAVORITE PODCAST OR REGULAR CLUBHOUSE TO TUNE INTO?
My background is in environmental policy mixed with food tech CPG work (think lab-made whiskey!). In 2021, I melded my interests in sustainability and food systems and started my own business making vegan Asian snacks called Annie’s T Cakes where I make mooncakes, Taiwanese pineapple cakes, almond cookies, and more.
In addition to the rockin’ Startup CPG Podcast, you’ll either find me listen ing to Rotton Mango (a true crime pod) or Planet Money.
Connecting with folks that are driven to change the world and seem to have endless grit.
TELL US ABOUT YOUR BACKGROUND IN 3 SENTENCES.
BEST ADVICE YOU’VE EVER BEEN GIVEN IN THE CPG SPACE
Try to keep vendor fees for events to less than 20% of your projected event revenue (s/o to Elliot from Obour for this gem!)
Grilled cheese sandwich with grilled mushrooms and onions using either Miyo ko’s or Daiya slices and siracha to dip on the side.
WHAT’S BEEN THE MOST REWARDING PART OF BEING PART OF THE STARTUP CPG COMMUNITY?
FAVORITE SNEAK-INTO-THE-KITCHEN-IN-THE-MIDDLE-OF-THENIGHT SNACK?
A CPG BRAND YOU EAT/DRINK EVERY DAY?
Like many entrepreneurs, the first year in busi ness Jiang started at a smaller scale, working in a commercial kitchen with her co-founder and COO, Ze Li, and gathering feedback from early adopt ers through pop ups at yoga studios and farmers markets. As an immigrant without experience in the food industry, Jiang took time building up her
WAKING UP THE INSTANT OATMEAL CATEGORY Yishi Foods
By Annie Wang
The story starts in Qingdao with the hearty aroma of a delicious Chinese porridge. Yishi Foods’ CEO and Co-Founder, Lin Jiang, would wake up on crisp
mornings to her mother’s culinary flexes, one of which was a hearty black sesame porridge. Deli cious, nutritious and satisfying, the memory of this breakfast would stay with Jiang even as she moved to the U.S. for school at the age of 19. Fast forward post-graduation and Jiang, living on her own as a consultant in the U.S., found herself constantly reaching for unhealthy snacks to get her through the day. In an attempt to find something that would make her less groggy, she turned to oatmeal. Though her body became less sluggish, her mind quickly be came bored with the limited flavor offerings found in instant oatmeal.
As of this story’s publication, Yishi will have launched into 524 additional Whole Foods loca tions, bringing their total retail placements to 1,000 nationwide. And customers aren’t the only ones ex cited about the new product. To date, the company has raised over $3-million in funding from backers like XXY Ventures, CompanyFirst, Bill Skeens, and the Dorm Room Fund. So where did Yishi Foods, a brand growing with such rapid velocity, begin? And where are they headed?
Still hoping to find a healthy snack, Jiang started making her own flavored oatmeal, starting with the black sesame porridge her mom used to make. Not long after, the office was abuzz with her creations. Coworkers put in requests for different flavors. Some even asked if they could buy Jiang’s oatmeal. After becoming a student at the University of Chicago’s Booth School of Business, Jiang pursued her Asian inspired oatmeal idea as a side project, eventually quitting her job to work on the business full time.
hen was the last time you were excited about instant oatmeal? For most, instant oatmeal conjures up images of shelves on shelves filled with flavors like apple cinnamon, maple syrup, and just plain oatmeal. But, Yishi Foods, launched during the pandemic, is painting over the largely grayscale breakfast offerings of the present day with a bright swatch of Asian inspired instant oatmeal flavors. The company makes flavors like Taro Bubble Tea, Toasted Black Sesame, and Matcha Latte.
Outside of Yishi Foods, Jiang is excited to connect with and learn from other CPG founders.
step of the supply chain,” says Jiang. Now, they’re seeing the benefits of their hard work tackling supply chain and logistical issues during the pandemic paying off. For one, the company doesn’t expect any more stocking issues. “We’re coming out of a tunnel,” says Jiang, “I think our supply chain will be a lot more robust.”
COVID, Yishi dove right into alltionspeoplethesesolvingchallenges.“Wehiredmoreontheoperateamtohelpmanagethecomplexityatevery
network in the space and learning the ins and outs of the food industry. In April 2020, Jiang launched a Kickstarter for her business, then named Crave Natural, and successfully raised $11K+ to fund an initial production run and grassroots make campaigns singular. The fledgling brand then launched in August 2020, first testing their products in local Chicago markets.After almost a year of iteration and learnings, Jiang and her team rebranded and launched in June 2021 as Yishi Foods in what Jiang called a “low key” launch. “We didn’t run any ads.” says Jiang, “All of the content on our social pages are from our own team: fun videos playing with products, recipes, oat meal photos…We also reached out to influenc ers on IG and asked them to try our products for free.”
The team has learned a lot of lessons about supply chain logistics and finding the right co-manufactur er and how to maintain and manage their growing production needs. “After working with [our first coman], we realized the importance for a coman to have an inventory reconciliation system,” says Jiang, “This is one of many things a professional coman should have. It’s important to have records of inven tory so you can track things and make sure numbers match reality.” And the switch comes at a great time as the company has grown out of their old coman. These days, the company is struggling with making enough product to keep up with demand.
Over the next six months, Jiang and her team will be hyper focused on further growing their distribution, launching into their next 524 Whole Foods stores, leveraging data to increase their competitive edge, and achieving a sustainable business model. When it comes to practical advice for new entrepreneurs, Jiang suggests focusing on organ ic marketing to give your brand the time to get feedback and refine your products and find the right customer fit. According to Jiang, focusing on organic marketing allowed Yishi to conserve capital in the early stages since selling online is becoming more expensive. Jiang also advises brands to build in a robust margin for their products since launching into retail is both expensive and complex. “There’s a lot of ways to spend money for retail distribution,” Jiang says, “…a new brand will have to do promo tions to at least get people to try their product, so a healthy margin will support that.”
ADVICE AND THE PATH FORWARD
When I caught up with Jiang last month over video, she was just a day away from boarding an eight hour flight on her way to a well-deserved European vacation. In some ways, it’s a perfect reflection of this new era of post-COVID operations as things begin to shift toward a new normal.Because of the company’s hyper focus on solving and building infrastructure for their operational chal lenges during the pandemic, they are now reaping the benefits as the world begins to open up. For instance, while their sales volumes have gone up, helping to offset some of the costs due to inflation, supply chain hang ups leading to delays, and labor shortages, their overall costs have risen. Thankfully, in the company’s original financial model and forecast, they’d budgeted for the need to hire additional operations folks. As such, bolstered by the solutions they built during
By Lindsey Pfeiffer
TO BE OR NOT TO CERTIFIED,BE…THAT IS
ising above in a crowd of seemingly never-ending food and beverage innovations requires more than just a delicious product. Brands need to couple standout flavors with strong selling points and value propositions that can’t come from taste alone. And with shoppers’ barely fleeting glances, it’s critical that products visually and recognizably spell out their benefits. That’s where certifications come in.
In the better-for-you product space, callouts like “organic,” “non-GMO,” and the like are highly useful in consumer’s under standing of your product’s benefits and ultimately, can lead to purchase. But not all major certifications are created equal.
You may already be familiar with the main players – USDA Certified Organic, Non-GMO Project Verified, Kosher, the list goes on. But just how beneficial are these industry-recognized claims for your product and brand? And which ones do consum ers actually care about?
For some brands, going through the lengthy and costly process of becoming USDA Certified Organic is crucial to their success, while for others, it may not be the most important qualification consumers consider when shopping. If the majority of your target audience places higher value on other health-related certifications such as Non-GMO Project Verified, or you find that they’re more interested in other key qualifiers of your product altogether, such as price or overall taste, pursuing certain certifications may not be worth your while. Ultimately, it all comes down to the wants and needs of your brand and the people it serves.
To better understand the importance of certifications in de livering a standout product, we sat down with members of our community to shed light on the process and payout of becoming certified — from both the brand and consumer perspectives.
While some certifications like USDA Certified Organic are widely established and have clear, defined parameters and labeling, there are others that are more difficult to measure, yet are still highly important to many consumers. For smallscale, regional companies like Vermont Tortilla Company, using locally-sourced ingredients is a major component of their brand identity and how they connect to their customers. We spoke with April Moulaert, Co-Founder of Vermont Tortilla Company, about it’s mission and passion for crafting organic, locally-pro duced foods. “We were so inspired by the local foods movement – and sustainable farming – that we wanted to [create] a healthy and delicious food product that could be made using local produce,” said Moulaert. After extensive research, they settled on organic corn tortillas made the traditional way – using 100% freshly
Luckily for companies figuring out which certifications to target and what the process will look like, they aren’t the guinea pigs. Plenty of CPG brands have gone through the process of becoming certified — a process that can be time-, capital-, and labor-intensive. Take Soom Foods, maker of premium tahini spreads. For Soom, becoming USDA Certified Organic back in 2016 was as much about honoring their passion for sourcing high-quality ingredients as it was about delivering products their customers could feel good about. While the process of becoming USDA Certified Organic has earned the reputation of being difficult and resource-intensive, it can be easier for some brands, depending on the com plexity of their supply chains and ingredi ent sourcing. “Soom was very lucky with this process because most of our supply chain was already certified prior to us contracting with our manufacturing part ner,” said Dana Mensah, Soom’s Director of Marketing. “From the sesame field to the manufacturer itself, the certifications were in place so all we needed to do was ensure our labels were compliant.”
USDA Certified Organic seal on their jars for six years, Mensah affirms that the investment has been well worth if for Soom. “Our organic customers are very loyal to purchasing and supporting Soom Organic Tahini. It’s been very important to ensure we have a high quality organic option available as our customers tend to be natural grocery shoppers.”
For a brand like Soom, whose Premium Tahini features only one ingredient — sesame seeds — obtaining that organic certification wasn’t too much of a lift. Still, even for companies whose products feature a longer ingredient deck, Mensah noted that if it’s something your consum ers care about, it’s probably worth the ef fort. But that doesn’t mean you have to go it alone: working with certification experts can be an invaluable effort and can help make sure you get it right the first time. For many food and beverage startups, this means working with a co-manufacturer to help obtain that certification rather than owning the entire process in house. This can be particularly useful for becoming USDA Certified Organic, which can require a size-able investment of capital, time, and other key resources for com panies that don’t have that infrastructure already in place; it can take roughly any where from 6 months to a year to establish internal systems to support and maintain an organic Ultimately,certification.itcomesdown to your consumers’ core values, your ability to make that investment, and what path you choose to take in becoming certified –whether it’s on your own or with the sup port of a co-man. Having had that green
As the company sets its sights on nationwide distribution in Sprouts stores, one challenge will be keeping locality front and center for its new – and existing – customer base. For them, this means utilizing their packaging to help share their passion for locally-sourced ingredi ents. “We reference our commitment to local on our packaging, which launched in June of this year!” On their packaging, they call out their connection to local, organic farmers, and break down the process of nixtamalization – a method of processing corn that increases its nu tritional value by unlocking amino acids – that they use within the production of their tortillas. The duo worked with a designer to create fun infographics and simple, consumer-friendly language to better communicate these values to their customers. This new language includes references to the company’s role in the Northeastern food shed and prioritiza tion of community agriculture in Ver mont. While they just recently launched this updated packaging, they note that reception has so far been positive, both from shoppers and retail partners.
For the majority of mainstream consumers, certifications like USDA Organic and Non-GMO Project Verified have lasted the test of time. Among Social Nature’s collective of over 1 million shoppers, 78% identify organic as a highly important attribute when making a purchasing decision. Similarly, they’ve found that 45% of those shoppers recognize non-GMO as a key callout. “Most of our population
has been socialized to recognize and trust government regulation and verification around what we eat,” says Malach. So while these certifications require more upfront work, they bring with them a greater sense of trust and awareness among shoppers — as well as expanded retail opportunities.
Before rolling up your sleeves and going after a list of certifications to add to your products, it’s crucial to take stock of which ones your core consumers actually care about. Because while some certifica tions are easier to check off than others, they all require a significant investment of both time and capital, so it’s important to step back and evaluate your custom ers’ needs first. While final decisions rely heavily on the specifics of your own brand, there exist general trends around what consumers are really looking for when shopping. We sat down with Jessica Malach of Social Nature, a product dis covery and trial platform in the natural
That said, finding certain ingredi ents, like certified Organic corn, can be challenging for food manufacturers. When looking for growers that aligned with their mission and goals, finding the right match wasn’t easy. “When you look around Vermont, field (aka dent) corn – which is the kind you use to make tortillas – seems to be everywhere. How ever, almost none of it is certified organic. We reached out to the Vermont Agen cy of Agriculture as well as Northeast Organic Farming Association (NOFA), our certification body, and at first nothing panned out here in Vermont,” explained Moulaert. So the company expanded its search. “We even visited a farm in Quebec and purchased a few tons of certified organic corn from them but [ultimately] the corn did not work for us.” Luckily, April and her husband Azur (the company’s other Co-Founder) finally found something close to home. “We were so fortunate to find our growers, located just 8 miles from our factory across Lake Champlain in Essex, NY. They had never sold their corn for human consumption before, but sold it mainly as organic animal feed. “We pay them above market prices, as we place great value on the work they do, being good stewards of the land and keeping our manufacturing process local.”
products space, to uncover what some of those trends are and how brands can use that knowledge to drive trial and awareness.
stone ground corn.
l CONSUMERS ARE READING (NOT JUST SKIMMING) LABELS. Now more than ever, consumers want to know exactly what goes into the foods they buy. “Especially during the pandemic, people have become even more health conscious and are paying more attention to what is in their food,” noted Malach. Having clearly identifiable certifications and product attribute callouts on your label is an easy way to quickly disseminate the information that matters most to consumers.
l NOT ALL CERTIFICATIONS ARE CREATED EQUAL. When it comes down to it, your product’s label can only hold so much information. It’s important to prioritize the key product attributes that are most likely to grab (and hold) your customers’ attention. “From a hierarchy of needs perspective, most consumers focus on their health, environment and then extend the circle out to impact,” Malach pointed out. When making purchasing decisions, consumers tend to prioritize their own functional, personal needs first, eventually making their way to broader social impact (Harvard Business Review). So when you’re deciding which callouts to keep on your packaging, consider which ones most directly impact the day-today lives of your core customers.
l DRIVE AWARENESS BEYOND THE LABEL. That said, telling your company’s story doesn’t end with your packaging. It’s important to continue the conversation with consumers around your brand’s mission and values, said Malach. “Brands that have a strong digital presence, that have invested in an online content strategy with storytelling and transparency as part of their efforts, are able to connect with people beyond the shelf.” One way to make that connection? QR codes. “Having QR codes on your packaging helps to build relationships with consumers. It could be asking for a review or promoting a contest or giveaway, something to start telling those deeper stories.”
l BIG NAME CERTIFICATIONS ARE WORTH THE INVESTMENT.
WHEN CUSTOMERS.OFDAY-TODAYIMPACTDIRECTLYONESCONSIDERPACKAGING,KEEPCALLOUTSDECIDINGYOU’REWHICHTOONYOURWHICHMOSTTHELIVESYOURCORE WWW.STARTUPCPG.COM 13
By Lindsey Pfeiffer
SPARKLING BEVERAGES Anything But Still
These days, consumers crave beverages that can support their physical and mental wellbeing, not just those that pack in great flavor. That’s where functional beverages come in. By definition, functional drinks are those that are “marketed to highlight specific product ingredients or supposed health benefits.” And as a subcategory, these beverages are growing in popularity. Let’s take a look at some of the numbers (from Beverage Industry):
DOWN TO EARTH
very time we step into the grocery store, it feels like a new sparkling beverage has made its way onto the shelf. Gone are the days when the choices for a carbonated drink fell between a can of Diet Coke and a bottle of San Pellegrino. Recent data around Americans’ soda consumption shows that consumers are in fact ready for something new, with annual consump tion of traditional soda continuing to decline YoY (Statista), while sales of sparkling beverages were up 9.6% YoY in 2021 (NielsenIQ).Now,there are more sparkling beverages available to con sumers than ever before. But it’s not just new flavor combina tions that have been added to the lineup; brands are pushing the boundaries of the category, from culturally-inspired ingredients to healthier versions of classics we know and love.
Within such a saturated category, key trends and rapidly expanding sub-categories have helped some beverage brands find their niche and reach potential new customer segments. But how can brands find the opportunity to bring something new and fresh into and drive velocity within such a competi tive market? In this article, we’ve broken down these up-andcoming trends and some of the brands in our community that are successfully innovating within them.
While functional beverages had already begun to take off prior to 2020, for many brands and consumers, the COVID-19 pandemic accelerated that growth. Some compa nies – like NEOPOP, producer of better-for-you sodas that draw on classic flavors and promote relaxation – were even a product of it: “NEOPOP was born out of my personal need to manage stress during the pandemic. Our mission is to make it convenient and accessible for Millennials and Gen-Z to relax during the day,” says Founder & CEO Adamya Shar ma. NEOPOP uses nootropics and adaptogenic ingredients, including L-Theanine and ashwagandha, both “proven to reduce stress, improve concentration and boost energy levels,” Sharma adds. Additionally, their beverages are often more affordable than those infused with CBD.
l 29% of consumers identified calming/relaxing as a key product attribute in beverages they purchased
LET’S GET FUNCTIONAL
l Between July 2020 and June 2021, consumer interest in immune-boosting ingredients, like ginger and turmeric, and their use in beverages increased by 51%
Healthier alternatives to Big Soda are nothing new. For many consumers, finding replacements that boast natural ingredi ents and little to no sugar is top of mind. Fresh Fizz, a Brook lyn-based startup, was born out of that exact desire: “I had opened our facility with the intent of producing hard seltzer” says Founder Yoni Schwartz. “During the months it took to get licensed, I had equipment sitting idle, so I was looking for something else to produce. Coming from my wife’s ‘clean food’ household, I decided to create a soda she would allow in the house — and Fresh Fizz was born.” Fresh Fizz’s unique selling point? Unlike other alternatives to traditional soda, the company uses only natural sweeteners in their products, like honey and maple syrup.
l Consumer interest in gut health grew 77% between 2019 and 2021
Seeking out beverages that focus on natural ingredients isn’t unique to Schwartz and his wife, consumers are actively looking for clean-label drinks. Strategically placing ingredi ents at the forefront of both online and offline messaging has helped Fresh Fizz get into the hands of shoppers. On their packaging, this looks like direct callouts to their short and sweet ingredient deck. Online, they are transparent about where they source their ingredients, including sourcing their fresh herbs from SubHerb Farms and their locally-produced
honey from Dutch Gold Honey. For the pair, in-store demos are also key for driving initial trial and ultimately, velocity. Those in-store connections are especially important for the company, given their weighted focus on retail over DTC. “We view DTC as a marketing channel more than a profit generator, as it’s challenging to maintain strong margins when factoring in the cost of shipping liquis,” notes Schwartz. As a recent semifinalist in BevNET’s New Beverage Showdown, a competition sponsored by Coca-Cola’s Venturing and Emerg ing Businesses division, the company has gained momentum towards building its retail distribution throughout New York and the greater Northeast region in the coming months.
But relaxation isn’t the only benefit consumers look for in their favorite sparkling drinks. Gut and immune health-fo
For products like Mayawell’s that center on providing health benefits, education is key for driving consumer adoption – and retention. Shuttlesworth notes that commu nicating that in a retail setting can be challenging, especially with limited time and space: “In most cases, there are limits to what you can include on the shelf, so we’ve worked to incorporate as much information on our cans as possible to educate customers about what makes Mayawell unique.” This includes callouts like “made with Organic agave,” “4g of natural sugar,” and “supports improved digestion,” among others. In-store demos have also helped the company con nect with consumers in real time to provide that education on a deeper level. Mayawell has also successfully sought out other in-store opportunities: “We packed out an entire end cap cooler at one of our key retailers with just under 1,000 units and sold through in less than a week,” says Shut tlesworth.Mayawell’s focus on retail expansion over DTC channels has always been part of the company’s strategy, but has become even more essential in recent months. “Gener ally speaking, shipping liquid is difficult. With gas prices through the roof and staffing issues layered on top of that, we’re getting hit with extra costs and surcharges that make DTC fulfillment cost-prohibitive,” Shuttlesworth explains. Aside from meeting consumers where they already are with in-store sampling, the company is also testing the use of digital coupons to bring in a wider net of potential customers. Now, Mayawell looks to continue expansion on both coasts, building on their current distribution in select Whole Foods and other local retail ers.
cused beverages have become so desirable, it seems every other can on the shelf features probiotics, prebiotics, or some blend of both. Enter Mayawell. Founded by Oaxa ca-native Vicente Reyes, Mayawell focuses on providing a delicious beverage that supports a healthy gut. Within their range of flavors, including pineapple mango and raspberry cucumber, Mayawell’s sodas pack 5g of prebiotic fiber per can through the use of their proprietary Active Agave™. “Our proprietary Active Agave™ is both low glycemic index and low fructose, which makes it a great option for a wide range of consumers with diverse dietary needs,” explains Co-Founder and CEO Oliver Shuttlesworth. The compa ny’s use of agave helps it differentiate from its competitors twofold, since most prebiotic sodas on the market use stevia as a primary sweetener. “Many consumers shy away from stevia because of its flavor profile, but perhaps less known is that stevia has also been shown to create an imbalance with gut bacteria,” says Shuttlesworth.
Once boxes for taste and health are checked off, many upand-coming beverage companies look to the past to create drinks inspired by – and infused with – cultural ingredi ents and processes. One such brand, Halmi, creates light sparkling beverages inspired by traditional Korean flavors. “‘Halmi’ is a loving nickname for grandma in Korean, and our drinks are a nod to my halmi’s recipes and the wonder ful ingredients she helped me appreciate,” explains founder Hannah Bae. The brand currently offers its signa ture flavor, Cinnamon, Ginger, Jujube, Per simmon. “It’s a sparkling take on Korea’s beloved SuJeongGwa; a sweetened spiced punch that has been brewed for generations to aid digestion and ward off colds.”
While the creation of Hal mi’s sparkling drinks has in large part been influenced by Bae’s own experience as a daughter of Korean immi grants, she feels strongly that those experiences aren’t hers alone, but rather shared by Asian Americans seeking more representation around what they grew up eating and
Even though consumers are looking for beverages they can feel good about drinking, that doesn’t mean they are ready to sacrifice their favorite flavors. That’s where brands like NEOPOP come in. The company toes the line between what consumers love about sodas of the past and what they want from the ones of today. While a good chunk of brands that are reimagining soda work towards developing unique, never-before-seen flavor offerings, NEOPOP focuses on meeting consumers where they already are — with nos talgic, tried-and-true flavors like Cola and Lemon Lime. “After speaking with hundreds of consumers pre-launch, we identified that [they] don’t like the artificial ingredients of diet sodas, but love the full flavor and crisp carbonation,” saysBrandsSharma.like NEOPOP know that capitalizing on consum ers’ desire for a more health-conscious beverage and their love of sweetened, carbonated drinks means playing up nostalgia while playing down the use of added sugar and unnecessary ingredients. For them, successfully reaching consumers and driving velocity means innovating – to a point. “The relaxation beverage category is fairly new, and there exists some friction points for consumers to enter the category. We [carefully and specifically] chose well-known, established soda flavors to get more consumers into the category due to the level of awareness they bring,” notes Sharma.
experience the brand firsthand and in-person, Bae has begun to emphasize an equal play for retail. “Besides the flavor, the biggest response I’ve received is that our branding stands out on a crowded shelf,” notes Bae. “Pursuing both DTC and retail as complimentary verticals is our way of creating visibility, brand awareness, and strengthening word-of-mouth and enthusiasm for our beverages.”
Bringing cans to more aisles throughout the country is top of mind for Bae. “Halmi may be niche as of now, but I want to make sure our beverages are accessible regardless of where folks live.” While she currently ships orders across the U.S. from her New York City apartment, Bae recently signed a lease on a warehouse space so she can scale up and work towards expanding Halmi’s physical retail presence from coast to coast. For Bae, successfully driving velocity in those spaces means creating deeper connections and relationships with retailers that are mission-aligned with her brand. “Creating lasting and intentional relationships with owners that can speak to our story and ingredients has been crucial,” she says. “And forming these connections allows for more opportunities to have in-person tastings, activations and events where potential customers can trial our product and drive additional sales.”
From health and wellness to nods towards heritage and all the flavors in between, sparkling water is quickly filtering to the top.
drinking. “Seeing yourself represented and being able to share a part of your culture, especially when you’re part of a mar ginalized community, is gratifying but also bittersweet that it took this long,” Bae shares.
Halmi has been a labor of love for Bae, who started the company on her own in 2021 and continues to own all as pects of the business today. “My passion to start Halmi came from a very personal, emotional and cultural place rather than any calculated career move into the food and beverage industry,” she says. “There was a lot to discover, including that the space I’m entering is traditionally male-dominated, that ingredients like jujube and persimmon aren’t commonly used, and that it was rare for an Asian American female to bootstrap the entire workflow from my home on my own,” explains Bae. But more than anything, seeing members of her community and beyond rally behind Halmi’s products and mission has continued to fuel Bae’s passion for not only creat ing beverages that connect her to her own culture, but inspire others to do the same. “The long term goal is to have Halmi be a platform to reconnect with our ancestry; to celebrate our hyphenated identities as Asian Americans.”
“When Halmi first launched, I was giving DTC more attention as I get to speak to customers directly, gather data points and have more control over the shopping experience,” Bae says. But after learning that consumers had a desire to
brands, getting on-shelf feels like the culmination of a grueling journey. Finally seeing the product that once was a mere whiteboard sketch in its physical form, sitting next to the brands you once admired, is priceless
There is a suite of activations you can do in partnership with your retailer — and these are known as trade marketing. To understand the basic tenants of trade marketing, most marketing professionals refer to a quick acronym, MAPPS (or AMPPS), which stands for:
MERCHANDISING In-store mer chandising is the fulfillment, organization and presentation of products within the store. Retail merchandising is most concerned with driving purchase at shelf
In other words, with so many other brands fighting for shelf space, your con tinued stay on the shelf is determined by your ability to get off of it.
Erin Fasano, Chief Marketing Officer of CORE Foods, shares this sentiment: “Don’t spend money driving people to the pasta aisle. Barilla already did that,” she says. BigCo brands are dropping thousands on top-of-funnel awareness campaigns to drive customers to the store — and small brands can piggyback off of their ad spend. “Focus on being the best competitive choice on shelf when someone else already drove them to the store,” Fasano adds. Though we like to be lieve that consumers go into a store with awareness-campaign-driven conviction, two-thirds of purchasing decisions are made in-store, leaving a huge opportunity for emerging CPG brands to get their products in front of shoppers at the point
WHAT IS MARKETING?TRADE
MARKETING 101 Trade
of Sopurchase.howcan brands leverage the instore experience, and, ultimately, drive velocity? It all comes down to trade marketing, or as I say, the unsexiest form of marketing. Buckle up.
ut that’s just it — without getting into the hands of consumers, your shelf occupancy has no tangible value. Despite common misconceptions, there is actually no sta tistical correlation between %ACV (“all commodity volume”; a measurement of breadth of distribution) and average YoY growth for premium CPG brands (Rich ardson). Essentially, the number of stores or channels you’re in will not necessarily predict your growth – it will just trick top-line growth. A true measurement of growth is velocity, or units purchased per store per week.
THE SECRET TO OFF-SHELF?GETTING THE UNSEXIEST FORM OF MARKETING
hands of an eager-to-share Kardashian — but these hot marketing tactics often have little to do with moving units off shelf for newbies on the scene. Brand awareness campaigns, or top-of-funnel awareness, are much more effective for BigCo brands than emerging brands. As James Rich ardson, author of Ramping Your Brand, explains, “big brands can rely on top-offunnel marketing because they are simply reminding consumers of their existence. Emerging brands are informing.”
When you think of “marketing,” you like ly think of brand awareness campaigns — the flashy photoshoots, the witty taglines, your product magically landing in the
assortment strategy) or appealing to the mass-market, like Walmart or Amazon (mass-market assortment strategy).
PRICING: The price of your product. Put simply, baseline pricing could make or break your velocities. It is critical to drive your everyday price to a competitive level. Check out page 23 of this edition to learn more about how to price your product for retail.
“In the initial conversation with your re tail buyer or category manager, be trans parent about the pricing you’re hoping to achieve at shelf,” says Boyajian. Though pricing is ultimately at the discretion of the retailer, you want to be transparent to enable your retailer to match your pricing strategy.
through inventory replenishment, beau tiful product display, planogram compli ance, and new product sell-ins.
stories that standalone shelf space cannot. Cross-merchandising in particular is a merchandising tactic that allows you to tell your customers the story of how your brand will fit into their lives with other products they already enjoy. Anna Peck, co-founder of Chia Smash, emphasizes the brand’s early success in cross-mer chandising at their first retailer: “In our first Whole Foods account, we found cre ative ways to build brand awareness and trial through cross-merchandising. We set up wing displays with Chia Smash and bread, or Chia Smash with nut butter and oats, and helped customers understand the use case for Chia Smash.”
ASSORTMENT: Assortment refers to the product variety, or set of SKUs, that are present in any given store. Different retailers likely have different assortment strategies, leaning more towards the tastes of their local consumers (localized
Humans are attracted to storytelling, and displays have the opportunity to tell
Peter Boyajian, Head of Partnerships at Startup CPG, describes merchandising as the baseline of velocity. After launching multiple brands with retailers like Target, CVS and Sprouts, Boyajian believes that “getting off shelf is often a huge unlock for brands. Whether you’re Liquid Death building an instagram-worthy case stack Halloween display, IWON Organics with a packed out end cap, or Burts Bees with clip strips of product at the cash register, your goal should be to break free of just being found within your set.”
Beyond the depth and cadence of pro motion, Boyajian suggests that you ask your retailer about how they typically back promotions with added activa tions, as many retailers will want you to spend a bit more on top of your promo.
There are two ways to run a promo tion: off-invoice or chargeback/scanback. Off-invoice allowances are processed through the distributor; you sell the distributor inventory at a discount, so you pay the price of the discount upfront, even if the units don’t get sold during the promotional period. Chargebacks, often seen as a more preferable method, are processed through the retailer; the retailer bills the vendor for each item purchased at a discount at the end of the
TRADE SPEND IS INVESTING IN
Most retailers have a minimum thresh old for putting up that yellow tag on shelf that indicates a TPR to the customer — make sure you know this threshold (it’s often 20% or more). Some retailers also expect that you spend additional trade dollars on advertising during a promo period, and may withhold the vital yellow tags without this added spend. “You’ll need a best-in-class team to make sure that tags go up. Retailer compliance is not guaranteed,” says Boyajian.
Each retailer will have different expecta tions for how often TPRs are run and the depth of the promotion. Most retailers encourage 3-4 promotional periods per year. If your retailer is everyday low cost (EDLC), you can expect frequency or depth of promotion to be a bit lower. As
As a consumer, you’ve likely seen your fair share of TPRs indicated by the yellow sale tag on the shelf. Consider how this tag impacted your purchase. Whether subconsciously or not, yellow tags have wriggled their way into our shopper psyches — and you don’t want your brand to miss out on the chance to drive incremental velocity.
: Also known as temporary price reduction (TPR), this is when your product is discounted (at least 5% or more) from the regular price for a given period of time. TPRs are the only time a retailer will see a reduced price as they scan, as they are measured using the retailer’s POS system.
you’re setting up your promo calendar, be sure that your expectations are aligned with those of your retailer.
1. Promotions can and should look different depending on your category. Because jams and jellies are at the center of the store and receive less foot traffic than the store’s perimeter, Chia Smash goes heavier on depth and frequency of promotions than other categories. She suggests looking to
When Boyajian was working at a pre vious brand that had 4 SKUs on a retail shelf, it took up 8% of (non-eye level) shelf space but was driving 30% of volume in category sales. “We went to the buyer with this data, and explained that they were leaving dollars on the table by not giving us more shelf space and better placement,” he shares. Approaching buyers with data that supports your request in their favor is key to maximizing trade spend.
SO, WHAT KIND OF SPEND ARE WE LOOKING AT?
Knowing this, it’s critical to go into buy er meetings “knowing your numbers”, advises Jake Huber, US Sales Director of St. Pierre. “Let your budget be their budget. If you come in with a solidified promotional plan and marketing plan, and your buyers ask for a program at an additional cost, you need to be transpar ent — if you pay Paul, you have to rob Peter,” Huber says. “That could come in the form of pulling back on a promo tion, or pulling away some marketing, but if you make that decision together, you are both responsible for the success of your promotion. Being credible and knowing your budget for a promotion makes it a partnership, as opposed to a transaction.”
Though many stick to the “20%” figure as a good rule-of-thumb for trade spend, industry vets often differ in opinion — especially early into your retail journey.
You’re never guaranteed a specific place on the shelf. Oftentimes, the planogram won’t even be shared until you’re already on shelf. But Boyajian advises that you talk about shelving upfront with your buyer. Ask for a more premium location — don’t assume they know you’re seeking one. “It’s likely for emerging brands to start out on the bottom shelf,” Boyajian warns. “Your job is simply to support your items, and eventually be able to show data that indicates that you’re out sized for where you’re placed,” he says.
Philippe Chetrit, CEO of Toodaloo, emphasizes the many small items often left out of budget chats: “If you’re ex panding beyond your region, you’ll want to bring on a merchandising team. Your
When Chia Smash later launched nationally in Sprouts, co-founder Anna Peck was determined to understand the ins and outs of their particular promo tional strategies, just as she had with her local Whole Foods. While drafting a promotional plan, Peck encourages early stage brands to remember:
SHELVING Shelving is focused on where your product physically sits on shelf. The placement of your product can
In the first year, many retailers will expect freefills and heavy TPRs to demonstrate early commitment: “For your first year in retail, it’s not unreasonable to exceed 30% on trade marketing alone, not including shopper marketing,” says Boyajian.
“We analyze potential trade spend with a bottoms up approach and then build out our forecast for each unique retailer,” says Dana Mensah, Director of Marketing at Soom tahini, which just launched nation ally at Whole Foods Market. “The goal is to impact distribution and velocity but still hit our net trade spend revenue targets.”
merchandising team is going to want t-shirts. You’re going to want them to have enough product on-hand to be able to buy a manager a bag every time they’re in the store. There are a lot of little pieces that are probably the ones that impact you the most — and that you might not have budgeted for.”
have a major impact on sales, the truism behind the saying “eye level is buy level.”
Though trade spend expectations may seem monstrous, it’s worth noting that this spend goes far beyond CAC — which is why trade is considered an above the line spend. You’re investing in a relation ship with your retailer, and, by proxy, in expanded distribution in the future.
When Chia Smash launched in their first Whole Foods store in Manhattan as a local vendor, the co-founders made it their mission to be the best retail partners possible. They went into the store multi ple times a week, got to know everyone on the store team, and met frequently with their buyer. Boyajian describes this as the “soft” items of trade marketing: the way you’re perceived in the store, your relationship with store employ ees, and how you go to market (with a broker, merchandising team, or in-house support). In early days, the Chia Smash co-founders largely focused on building strong relationships, and working closely with their category manager to set up creative promotions and displays that met Whole Foods’ “clean floor policy.”
1. Pay-per-click (PPC): When retailers have their own sites or apps, vendors should consider leveraging this digital space as extra shelf space. To drive
Beyond the yellow tag TPRs, “retailers often offer creative ways to pepper in brand exposure outside of those promo tional periods or on top of promotions. Brands should strategically lean in,” Peck suggests. Oftentimes, these initiatives span beyond trade marketing into the realm of shopper marketing, or activa tions intended to drive shopper purchas ing decision without direct involvement of the retailer:
2. Nothing is set in stone — which means that pivots can and should occur. “We’re testing as we go and making sure we’re always iterating. Whatever we do, we have a measurement framework in place. We analyze promotions as they’re happening, and pivot as needed.” For accounts like Whole Foods Market, brands can see data through the portal and run analyses on promotions. But for accounts that go through a distributor like UNFI or KeHE, you’re only receiving selling data, not POS data. For these accounts, the Chia Smash team has built their own reporting dashboard (on Google Sheets) to get a feel for their velocities.
competitors within your category to outline your basic strategy.
3. Demos: If a hefty price tag is stopping you from considering demo opportunities, you’re not
metaphorical foot traffic, Peck recommends leaning into PPC, or boosted search, on the retailer sites. Peck quickly discovered Sprouts’s dedication to early brands through their shopper marketing portal: “We onboarded onto Instacart with Sprouts, and focused on PPC advertising off the bat,” she adds.
alone. Whether performing a demo with in-house employees or hiring out, demos can easily add up and feel like a waste of time or money. But Peck encourages founders to look at demos differently: “Look at demos from a qualitative lens,” she advises. Especially in a sleepy category with many legacy brands, Peck has found that Chia Smash’s target market isn’t necessarily looking for innovation. “It’s on us as a brand to have people taste our product, understand our differentiators, engage with customers one-on-one, and ultimately encourage conversion from their household staples.” Peck does note, however, that demos work better with certain partners than others. Stores like Sprouts and Whole Foods, for example, often attract customers seeking out brand discovery, as opposed to a Kroger.
3. Maintaining retailer relationships is crucial. This data isn’t just valuable information for their team; it breeds a collaborative relationship with their retailer: “As we run our own analyses, we share our findings with our category managers. If a promo went well, we’re excited to share our success. If a promo doesn’t hit our goals, we seek feedback from our category managers and brainstorm new ways to get creative within their store walls.” Regardless of the news they are delivering, the Chia Smash team keeps an open flow of communication with their category manager. “This is how we proved ourselves early on,” Peck says.
2. Digital Couponing: Though we have a whole other article on couponing, it’s worth mentioning here that retailers often encourage use of digital couponing on top of key promotional periods. Sprouts works with INMAR for digital couponing — so Chia Smash onboarded with INMAR, too. Working with INMAR allows for digital coupons to show up in the Sprouts app, and for customers to redeem them in the store.
Whether you’re selling DTC or in retail, you should dig deep into competitor pricing. Machu Picchu CEO and Startup CPG founder, Daniel Scharff, says that “all pricing is relative”, and especially for retail. He recommends using the market leaders’ pricing as a starting ground. Many emerging brands will go for premium pric es, but there are some ‘magic price points’ in every category, above which your volume will drastically decline. You can often determine these by seeing if there are some big round numbers that brands don’t cross at key retailers. Though your
By Annie Wang
sk a founder about pricing and promotions, and be prepared for a lengthy and fascinating spoken-word novel. Setting the right price can be daunting; not only do brands need to consider how much money they need for baseline survival, they also need to think through what will make them the most competitive, and what their consumers are willing to accept. Factor in retail expansion and the promo tions required to support a launch, and it often feels like you’re playing in a whole other stratosphere.
PRICING FOR DTC WITH AN TOWARDSEYERETAIL
pricing might still be higher per oz than your competitors, if you’re the only brand in the category above $5, you’ll pay for it on volume, if the retailer will even accept yourForpricing.DTCbrands with goals of launch ing into retail in the future, there are a lot of expenses to budget for to hit store shelves. In terms of creating margins that can accommodate a launch from DTC to retail, Pulp Pantry CEO and founder Kaitlin Mogentale recommends working backwards from your suggested retail price (SRP) — the price that customers pay for your product. Each retailer also has differ ent wants and margin requirements, but you probably have a sense for where you’d like to land on shelf as compared to com petition to generate the volume to remain on shelf. “I like to break [our margins] out by retailer so I come up with a trade spend budget / P&L for each individual channel and gauge how to best leverage marketing dollars by retailer.”
So how should brands go about choos ing the right price for their product? And how can brands protect their margins and make sure they’re not only surviving, but also thriving?
l 20-30% distributor margin (big accounts like Whole Foods could be under 10%)
While keeping in mind Scharff’s “magic price point” guideline, and other recom mendations on how to set your pricing, Mogentale would include the below margins to budget into your current DTC pricing when getting ready to launch into retail:
WHEN THE PRICE IS RIGHT, AND THE PROMO IS STRONG
To get a baseline for your pricing strategy, you first need to understand your cost of goods sold (COGS) — the cost it takes to produce your product. As a baseline, COGS can include your ingredients, packaging, logistics costs, and the labor required to bring your product to life (as applicable). Businesses with a handmade product vs one made with a co-manufac turer (co-man) will calculate their COGS differently. For handmade products, nailing down an efficient, step by step pro duction system will be critical to calculate labor costs associated with producing your product.Nextcomes the big M — margins.
l 35-40% retailer margin (snacks, for example, are 40%, but note that different categories have varying margin expectations and you should
After you make a sale, your margin is the money that’s left after subtracting your COGS. Margins are most often calculated as percentages. Your margins are what you use to support your business; the money spent on marketing, non-production related salaries, and other operational costs comes from this percentage. Having a strong understanding of your margins allows for better sales projections and budgeting for sales, marketing, retail, and other promotional spends. Understanding your COGS also means you can be nimble when figuring out which products play which roles in your entire product catalog. For instance, which of your products are your cash cows that act as a point of entry for new customers? Which products have higher margins but require more spend to sell?
How to arrive at your margin? Work backwards from your SRP:
3. From there, you can calculate your own margin - based on your COGS (Distributor Price - COGS) = your gross margin in dollars, divided by your distributor price to get to your % gross margin.
2. Your Wholesale Price / (1- 25%) = Your Price to the Distributor (what pricing you’ll need to offer your distributor, for them to sell to the retailer at the desired wholesale price)
■ 15-20% off your top line revenue towards trade marketing spend (displays, promotions, other retailersupported marketing programs, instore activations like demos, etc.) but VC funded companies might even be up to 20-25% in awareness-building, high-growth stage
l Minimum 30% for your landed margin given your distributor pricing, which allows for:
Setting up your Promo
ask brands in your category for feedback on retailer expectations)
For new brands, promotions are one of the keys to growth. In order to get yourself in front of potential customers, you have to give them a reason to try your product. There are numerous promotions you could choose from. Promotions based on price, sampling, and package deals to name a few. But before you can choose what kind of promotion you’ll be doing, you first need to define what you want to achieve. Do you want to engage with new customers or further build relation ships with existing customers? Thinking through the goals for upcoming promo tions will also help you plan out the best ways to measure your ROI from each promotion. You also want to consider promotions that reflect the use case and buying occasion for your specific prod uct. Some products may be introductory and good for gaining traction with new customers, while others are high margin products with infrequent sales.
If you’re feeling overwhelmed with the vast sea of possible promotions, you can look at promotions competitors are running and test those to see how your customers respond. Your customers will also likely respond differently to different promos online verses on the shelf. As with most things in business, getting to the core of what works for your brand requires experimentation.
Mogentale emphasizes a 30% margin at minimum to cover marketing spend in retail stores. “I’ve seen some brands get even more aggressive — closer to 15 to 20% spent on trade spend — but then maybe it’s an additional 15 to 25% spent on marketing outside of the retailer. Once you get on the shelf, the work really be gins. You want to make sure that you have
When it comes to providing SRPs, Mogentale recommends providing the
same baseline pricing for all retailers and distributors to reduce management head aches, but creating an everyday low price (EDLP) to help when negotiating with re tailers with different margin requirements. An everyday low price is a deal brands work out with each retailer to ensure mar gin & on-shelf prices align. . For instance, if Retailer A has a margin goal of 40% when selling your product, but in recent times they are only getting a 33% margin due to increased purchase price from the distributor or otherwise, your brand would pay Retailer A to close the gap and maintain the desired SRP while meeting the retailer’s margin requirements.
the capacity to continue to support your retailers with monthly spend and trade [marketing] to stay on the shelf.”
■ 15-20% off your top line revenue towards shopper marketing or other marketing support outside of trade
1. SRP / (1- 40%) = Your Wholesale Price to the Retailer (assuming a 40% retailer margin, which is common for snack categories, for instance)
Avoiding Promo Pitfalls
Mogentale personally collects sales data from her retailers each month, but asks for it to be broken down into weekly seg ments since promotions usually last two weeks and may rotate in stores weekly. In addition to sales data, Mogentale also likes to collect data on the customer acquisition costs to calculate which marketing pro grams to continue supporting and which to change or cut. Mogentale has found that some of the most valuable promotions have been launch promotions (to drive trials), off-shelf displays (end caps or side caps), in-store sampling, and demos and coupons.Brands should also be diligent about measuring their key performance indi cators (KPIs) through sales data to see which promotions are worth continuing. In general, brands should “make sure their
Promotions are not only a great chance to incentivize new and withbuildalsopurchase,customersexistingtothey’reagreattimetorelationshipsretailers
FROM SURVIVING TO THRIVING
Don’t want to spend a lot of time and money on promotions that don’t work? Who does!? Our CPG veterans shared some common pitfalls to avoid. For discounts, Scharff recommends 20% off as an upper limit for promotions; anything above that threshold may be teaching your customers to only purchase from you when there is a deal, thus unintentionally reducing your product’s purchase price.
promos are ‘sticking,’ or that you’re seeing a sustained lift in velocity after promoting,” says Mogentale, “Otherwise, this could indicate there are issues on shelf or that product is not being purchased again after a firstTrackpurchase.”yoursales and costs after each promotion to find out which promotions perform best in driving permanent lift (i.e. incremental growth in baseline velocity following the promotion) with the lowest cost. For example, if a 20% off promotion will drive the same lift as a 25% off deal, you can opt to save money in the long run by minimizing the discount while still driving the same end result.
In addition to visiting stores to support active promotions, Mogentale’s team also visits stores prior to promotions to secure additional displays, make sure inventory looks good, and make sure shelf tags are up to maximize success. Mogentale tries to use promotions to gain leverage for better placement within each retail location.
Promos aren’t working if they’re not build ing your customer base. To find out what’s working and what’s not, brands need to collect data. Both Scharff and Mogentale recommend measuring promotions in weekly increments to see what’s working and what can be cut. If you’re still trying to figure out which promos to focus on, Scharff suggests testing out smaller pro mos infrequently to see the response from your customers. Examples of these smaller promos could include running a promo tion of 15-20% discount or multiple deals once per quarter instead of a 50% BOGO that will burn through your promo dollars, set a bad precedent with the retailer and customers, and give low ROI.
Instead of relying on frequent and heavy discounts, Mogentale prefers to do demos for Pulp Pantry to support trials instead. For frequency of promotions, Mogen tale says to start with one promotion per quarter, one to two deeper discounts like buy-one-get-one deals, and one to two
promotions that are 20% off and other lighter discounts. She also warns brands against free fills — when retailers ask brands for free products the retailer can sell on shelf — and that brands should instead negotiate with retailers to do more high-impact promotions upon launch that drive trial and mutual benefit, such as buyone-get-onePromotionsdeals.arenot only a great chance to incentivize new and existing customers to purchase, they’re also a great time to build relationships with retailers. Pulp Pantry relies heavily on paid local college students to manage their in-store activa tions and promotions. Part of the training for these local brand ambassadors is build ing rapport with store managers. “Anytime we’re doing a demo, [the ambassador should make] contact with the grocery manager. Make sure to call stores ahead of your demos to check on inventory and make sure you’ve got enough inventory to do a demo. We really look [to local ambassadors] as building the relationship on the store level [so the retailer knows] that we’re supporting them on the ground.”
Measuring the Impact of your Promos
When it comes to fronting the cost for promotions, most retailers will ask brands to foot the bill. But if retail partners are open to splitting the cost for the promo tion, it will not only help your ROI but may also help the promotion succeed.
When thinking through the best timing for different promotions, Aura Bora’s Head of Strategy and Business Operations, Scotty Jacobs, recommends timing promos for major holidays and the seasonality of your product category. “The best promos occur when consumer intent to purchase is organically high,” says Jacobs. “For sparkling water, that’s during the warmer months and – perhaps unexpectedly – in January when consumers may be looking for a ‘new year, new you’ option. By pro mo’ing during the high-intent periods, the promo dollars can end up driving greater incrementality than organic demand would otherwise support.”
Regardless of whether or not your goal is to launch in retail, hitting the right price points and analyzing sales data for promo tions are invaluable tools for brands look ing to grow. As founders, it can be easy to feel overwhelmed by the mountains of in formation that should be gathered. At the end of the day, it’s important to remember that mistakes made are just lessons learned on the path towards building a successful company.Whether you’re starting out and just figuring out your pricing, about to launch into retail stores, or have been running your business for a while experimentation is key and a growth mindset will save you a lot of undue pressure. So go forth and price, promote, and learn!
“In all of our [retailer] conversations, [sell-through] is the #1 KPI. We have these wonderful retail partners...that are giving us their most precious asset which is real estate on their shelves. And our commitment to them is that we are going to invest in getting consumers to try the product.”
“You cannot launch innovation without finding a way for people to taste it….You’re not going to be able to demo enough to justify the cost. What you’ve got to be able to is to get enough demos going to encourage repeat purchase and that will eventually pay for itself.”
“So we were in the store multiple times a week, we built relationships with the store team, knew them really well, we were able to work with them to get window displays and cross merchandise with other brands, get end caps and really make sure that our product was always on shelf, it was always looking good, and we were doing everything we could do to support getting our shelf.”
#50 The Data Behind the Modern Wellness Consumer with Social Nature’s Jessica Malach
Anna Peck, CEO and Co-founder of Chia Smash, discusses how a focus on velocity at their first Whole Foods Market location helped Chia Smash then launch regionally. Plus, how they supported their national Sprouts Farmers Marketing launch with promotions.
Listen in to hear Jessica Malach share what you need to know about the modern wellness consumer to understand and better serve them in store including: how they define health, which certifications and labels resonate most, how they find new products, what drives repurchase, how not to market to them, and more. Jessica Malach is the VP of Marketing & Insights at Social Nature.
Miguel Leal, Co-Founder and CEO of SOMOS, shares about how they are supporting their national HEB, Kroger, and Sprouts launches with digital strategies, including geo targeted advertising and leveraging their own website to drive trial and then in-store purchases. Miguel co-founded SOMOS alongside two former co-workers and KIND Snacks executives, Daniel Lubetzky and Rodrigo Zuloaga.
#55: Nationally Launching the Reimagination of Jam with Chia Smash
“A lot of the natural health retailers (including chains) will have “buy local” sections. So I think it’s really important for locally made brands to build relationships with local retailers and to partner in the storytelling together….You’re going to have shelf talkers or some kind of displays that are speaking to [your product]. The local store staff might be trained about [your product] and can let people know when they see someone picking… it’s actually made here.”
TOAST-IT co-founders Coco & Mafe share about how they leveraged consumer data to get on shelf at Publix and how they evaluate sell-through data constantly and adjust their promotional strategies accordingly.
Seth Goldman covers how you can build your own field marketing program how to take field marketing and demos beyond just sampling with merchandising, displays, customer feedback, and market research. You may know Seth as the co-founder of Honest Tea and author of Mission in a Bottle, and Seth is now the Co-Founder and CEO of Eat the Change, Co-Founder of PLNT Burger, and Chair of the Board for Beyond Meat.
“Nobody wants to have a brand being picked up by a retailer and then have the product just sit on the shelves. You want it to move. And as a brand you need to be able to support that… we do a lot of demos. We also have a broker agency that helps with merchandising, which is so important, just making sure that the product is there, has the pricing, and just understanding the velocity in the store.”
ON THE POD: EPISODES ON DRIVING VELOCITY AT RETAIL Hey @Auditory Learners, we've got you covered
#48 Just TOAST-IT! Data-first, customer-focused, and expanding into Publix with Mafe & Coco
#47 Authenticity 101: Developing a clear & authentic brand identity at SOMOS with Miguel Leal
Pure Gold Series: How to Build a Field Marketing Event & Demo Program with Seth Goldman
Instant Redeemable Coupons (IRCs): Also known as on-pack coupons, IRCs allow you to run a temporary cam paign without repackaging your product. They use an adhesive backed liner to affix your coupon or promotional message to your product’s packaging. Erin Fasano, Chief Marketing Officer of CORE Foods, explains that IRCs often drive impulse purchases, and are the format most associated with “slippage”, which is when a shopper makes a purchasing decision based on the discount, but then fails to redeem the discount at checkout. Do with this information what you will.
TLC’s reality show Extreme Couponing painted a very partic ular picture of the “couponer” persona. Most episodes opened with a seemingly middle class, Boomer woman hunched over her kitchen table with a pair of scissors, furiously snipping paper coupons. Her home looked more like a warehouse than a living space, shelves upon shelves of hoarded snacks bought on discount. Everywhere she went, a poor cashier was met with a busted envelope stuffed to the seams and the hawk eyes of a TSA agent pressed to their register screen. To the average view er, Extreme Couponing was more similar to Animal Planet than a reality show. Yet despite the many stereotypes associated with couponing, the average consumer is still using them — just differently. In this article, we’ll cover the landscape of coupons and rebates today.
Catalina: A Catalina coupon (Cat) is a coupon printed with the shopper’s receipt. It can be used like cash on the shopper’s next trip. An example of a Cat may be: buy (3) boxes of cereal to receive a $1 coupon good on your next order (OYNO). Participating brands enjoy Catalina for its targeting capabili ties; Catalina analyzes purchase card behavior to target highly specific demographics on their next shopping trip.
Unlike TPRs, which run through the retailer, all couponing and rebate options are dealt with behind-the-scenes — so your retailers still see your product move at full price. This means that you don’t risk losing money in an off-invoice allowance, the retailer sees the full item price come through, and you have more data points to point to in future retail pitches. Basically,
SHOULD ALL BRANDS CONSIDER COUPONS AND/OR RECEIPT ShortREDEMPTION?answer?Yes.
Free-Standing Inserts (FSIs): FSIs are the bundles of coupons typically found as an insert in your Sunday paper, aka, the Extreme couponer’s go-to. Though most brands are moving away from this format, some still find that this makes sense for their target audience — if your demo is wearing slippers on the porch while sipping coffee from a “#1 Grandpa” mug, your brand may just be the perfect fit for FSIs.
if you’re not using coupons, you’re missing out on some major velocity action. So let’s unpack (some of)* your options.
Even for premium products, couponing has become not only relevant, but a necessity in getting off shelf. Seventy-nine per cent of affluent customers (household income over $100k) use coupons when planning their shopping. Ninety-three percent of millennial parents and 92% of parents are using digital coupons.Consumer demand is there. But how do these non-retail er-run strategies improve retailer relationships?
Point-of-Purchase Signage (POPs): POPs refer to a host of display ads, which include coupon options like tear pads. Tear pads are exactly what they sound like, and are a quick execution of conversion driving coupons. Often used in conjunction with TPRs, POPs are a great supplement to other campaigns and
PHYSICAL COUPONING OPTIONS
THE NEW AGE OF couponing ft.
*: there are endless shopper marketing activations to try in retail. In fact, it is literally someone’s entire job to explore these options. This article will briefly touch upon the couponing/rebate landscape, but if you have any further questions, please reach out to our resident shopper marketing expert Erin Fasano (firstname.lastname@example.org).
By Jenna Movsowitz
SMS RECEIPT INTRODUCINGREDEMPTION:AISLE.
“Content has always been our superpower. But what we didn’t know how to do was meet our content at the shelf,” says Courtnie Beceiro, Director of Brand Marketing at Haven’s Kitchen. “People are still wandering grocery aisles, still discovering on-shelf. aisle allows us to leverage our existing content to reach that customer
Tiffin, an alum of CPG unicorn Super Coffee, founded aisle to address the disconnect between the in-store and online cus tomer. “Brands that sell direct-to-consumer (DTC) often have a large budget behind their digital marketing efforts — but DTC sees only a small chunk of their revenue, and they have no idea if their efforts are moving units in store,” Tiffin notes. aisle allows for DTC brands to leverage existing marketing initiatives by transforming them into immediate product movers.
Instead of the required 2-12 weeks to launch a paper-based coupon campaign, and then waiting an additional four to six weeks for results, brands using digital coupons can deploy value to consumers’ mobile phones instantly and have near real-time insights.
Retailer Sites/Apps: Depending on your retailer, digital coupons may be a major piece of your promotional strategy. Retailers like Sprouts are powered through INMAR, which places digital coupons in-app. To supplement your in-app or retailer site coupons, you also may consider investing in PPC (pay-per-click) through a third-party like Criteo (used by Target) or CitrusAd (used by Albertson’s), which boost your product on the platform. Fasano recommends optimizing your PPC strategy by pairing it with promotional periods: “It’s way more efficient to buy clicks when you’re on discount than regular price, and helps you stretch your dollar,” she says. Buyers tend to like this strategy because it incentivizes customers to return to their app, and presents more offers to redeem than just the TPRs in-store.
Rebate/Rewards Apps: Redemption programs have his torically been presented to consumers in the form of an app. Ibotta and Shopkick are the two largest shopper rewards apps. Ibotta, which functions as a cash back app, has a large amount of users and is often seen as the optimal choice for a mass retailer like Walmart. Shopkick is a useful tool for CPGs with limited distribution; Shopkick allows you to build a unique program that incentivizes a variety of behaviors, from finding the product on-shelf to simply walking into a specific retail location. Fasano notes that Shopkick works best with stores that are highly traf ficked, like CVS or Sprouts.
help ensure that items make it into the basket. Only a few POP vendors are approved for in-store activation across the board — usually Valassis, Insignia Solutions, and Neptune Retail Solu tions — though you can also print your own POP and have your broker place it with buy approval in certain accounts.
since both of these apps have seen less frequent use in the natural channel, many brands have been seeking out alternative options.
DIGITAL COUPON/REBATE APPS.
Aisle is the new kid on the block — and vendors are excited about the opportunity of this tool to reach the natural channel shopper. Where Shopkick and Ibotta require the consumer to download an app for coupons or rebates, aisle lives entirely with in the consumer’s text messages. On the user end, this looks like purchasing a product in-store, texting a picture of their receipt post-purchase, and receiving a rebate through Venmo or PayPal within 24 hours of purchase. On the brand end, this looks like building a custom landing page with aisle, deploying that link wherever a link can be accessed (through social, email, website, QR code display on-shelf) – then waiting for the trials to start pouring“Drivingin.
trial has often been considered a brand problem, but we believe it’s actually a consumer problem,” says Chris Tiffin, founder of aisle. “The consumer doesn’t want to go through all of the traditional steps required to get a good sale or money back through a rebate program. aisle is the easiest user experience. We don’t require the customer to clutter their home screen with yet another app. Everything happens right where the consumer already is — their text messages.”
While these programs have a large initial reach, it can be challenging (and often costly) to re-engage with customers. And
Foto: Aisle WWW.TEXTAISLE.COM
One coupon certainly doesn’t fit all. Brands work hard to establish their voice and identity, but typical coupon and rebate options ren der all brands the same. aisle allows brand partners to customize the design and copy used in everything, from their landing page
We geo-target our aisle creatives in areas where we have a large concentration of stores. It’s both cheaper and much broader than an in-store demo
WHAT MAKES AISLE DIFFERENT
A few weeks after a conversion, aisle also allows brands to send custom texts that ask users about repeat purchases since their first trial. Across aisle’s brands, these surveys have received an average of a 40% response rate, and indicated that 51% of respondents repurchased on their own at least once since their initial trial.
CONSUMER DATA IS KING
BUILT IN RE-ENGAGEMENT
As a former CPG growth marketer himself, Tiffin knows the value of consumer data — and is passionate about providing it to all aisle partners. While other redemption programs offer gender, age, and the location of purchase, aisle provides email, phone number, store and zip code of conversion, and even an image of the receipt (which allows brands to conduct basket analyses, a feature that aisle is also working to offer in the future). “Tiffin really understands the need not just for incentivizing trial, but also capturing key data that emerging brands historically could not afford,” says Beceiro. aisle’s brands are finding unique ways to leverage this data to not only inform their marketing strategy, but also to creatively re-engage with aisle users.
and drive trial,” Becerio says. Haven’s Kitchen just onboarded onto aisle a few weeks ago, and the team is already excited about the results.
Existing redemption apps focus on the initial purchase-rebate interaction, and often charge more to re-engage. aisle aims to continue to engage with the customer beyond their first purchase — and seamlessly encourage word-of-mouth marketing to drive
continued momentum. After converting on their one unit free, aisle provides shoppers with a post-purchase link to share with their friends, and tracks whether the user shared the link. “It’s a flywheel of conversion. The shopper converts, they refer to a friend, and we send another offer — like BOGO* — to pro mote a second conversion,” Tiffin explains. This “flywheel” also gives brands insight into the consumers who actually like their product. aisle tracks whether or not the user shared the link with friends, and if they opted-in to redeeming their second offer. This data, paired with the consumer data, tells brands a clear story of their target market — which can be used to inform more targeted trial in future activations.
Actual Veggies, the chef-crafted veggie burger brand made with just veggies, has been using aisle’s services since May 2022 — and has converted almost 1000 people so far. As a frozen or refrigerated product, DTC was never their focus. Instead, they’ve been looking for ways to drive customers to stores. After exploring the many options, they found that paper cou pons lacked the conversion data they desired, and aisle was the perfect solution to reach a new audience.
Becerio of Haven’s Kitchen is also finding creative ways to loop aisle into their existing marketing strategy to drive further trial. The brand has been known to get crafty with QR codes on-pack to drive consumers to their engaging recipe content. But now, these QR codes have another function: trial. “Being able to put a QR code right on the shelf with the CTA (call to action) ‘get a free pouch today’ allows shoppers to instantly act upon their discovery and try the product, without having to locate a coupon,” she says. Haven’s Kitchen has never used paid ads to grow, and they are maintaining this strategy with aisle. Instead of deploying through paid social, “we’ve integrated aisle into the email automation for new subscribers,” Becerio says. “Once they’re in the system, we have an automated flow that welcomes people to Haven’s Kitchen. This flow now offers a free pouch for them to redeem in store, leading to the aisle landing page.”
HOW BRANDS ARE CONVERTING WITH AISLE
Actual Veggies has also been using aisle to supplement their sampling efforts. In stores that still aren’t permitting demos, aisle is an opportunity to drive trial. “We geo-target our aisle creatives in areas where we have a large concentration of stores. It’s both cheaper and much broader than an in-store demo,”
*: Each brand works with Tiffin and the aisle team to customize the primary and secondary offer to meet their unique goals.
notes Cassi Lubarsky, Head of Marketing at Actual Veggies.
The team has also paired aisle with organic social to humanize the trial process. In a series on their Instagram that introduced team members of Haven’s Kitchen, they used the caption: “DM us to get a free pack on Courtnie” and replied to all DMs with their custom aisle link.
to the text exchanges to the Venmo caption of the rebate, helping brands maintain their voice. This could be a consumer’s first ever interaction with your brand, and aisle aims to help you make the most brand-authentic first impression possible.
Overall, brands who work with aisle feel that Tiffin has un locked the new age of couponing – one that seamlessly integrates with existing marketing materials, meets the consumer where they are, and gives emerging brands the tools they need to scale like their BigCo competitor.
To supplement their efforts with aisle, the Actual Veggies team has used aisle’s consumer data to build out lookalike au diences in Facebook ads manager, and have seen great engage ment since targeting these lookalikes. As they launch in Costco, they will be experimenting with different aisle activations. They’re working on an influencer program in conjunction with aisle, where influencers will receive a special code to provide their audience with the aisle offer, like an affiliate code.
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l Baozza -BBQ Chicken l Savorly - Mini Gratins l Balkan Bites - Beef and Onion Bureks BEST FOODBREAKFAST l otherworld - Apple Cinnamon l For Good - Original l Actual Veggies - Actual Blue Breakfast Burger BEST PLANT-BASED l RIND - Carrot Cheese l Renegade Foods - Sweet Toscana l Funky Mello - Vanilla Marshmallow Creme BEST BAKED GOOD l Ruani - Delightful Peanut Butter Brownie l Nowhere Bakery - Chocolate Chip Cookies l Soozy’s Grain Free - Birthday Cake Donut l Joy Days - Chocolate Chip The Second Annual Shelfies Awards Ceremony Tickets: l Online l In-Person: San Francisco l In-Person: Austin l In-Person: Los Angeles
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Ashley Nickelsen, Founder & Chief Snack Officer
B.T.R. NATION is just getting started! They have a new product line launching in October (tackling a new part of the vending machine!) and they’re launching into more and more retail doors every month – helping the whole world snack on purpose, one delicious bite at a time.You can find B.T.R. NATION at www.btrnation.com, on Amazon, and in select retailers nationwide.
Based in San Francisco, CA, B.T.R. NATION is on a mission to end mindless snacking by taking the junk out of junk food. Simply put, B.T.R. NATION is on a quest to reimagine the modern vending machine, starting with one of the most boring categories, protein bars.
Founder & Chief Snack Officer, Ashley Nickelsen, originally started B.T.R. NATION as a tribute to her parents. B.T.R. actually stands for “be BOLD, TENACIOUS & RESILIENT,” their personal mantra. When Ashley’s parents were diagnosed with rare forms of stage 5 cancer, she became their primary caretaker. She quickly became disgusted by the grab-and-go snack options in hospital vending machines – high in sugar, ingredients you couldn’t pronounce, no functionality. So she took to the kitchen to create her own. That’s how the idea for B.T.R. NATION was born.
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