92. Building a Retail Launch Strategy

Amber Bylund

[00:00:00] Hey everyone. Very excited for today's episode, which is all about retail sales strategy for emerging C P G brands. How to think about your expansion, how to translate that strategy into accurate execution so that as you are growing, you can be as effective as possible. And so for today's conversation, I've invited.

Amber Bylund , who is the VP of Sales Strategy at City Capital Holdings, or we'll call 'em Citi, with 15 years of experience working in the CPG industry, first at big cpg at General Mills and Danon. Then also at a dozen cousins who is a fan favorite of our show. Now Amber is now a member of city's diligence and strategy team.

Amber, welcome. Thank you. Very excited to be here.. So I wanna start off at the top. Thank you. Talking about brands or retail strategy for emerging brands. Cause I think that a lot of founders just jump into starting a [00:01:00] company and just like taking whatever call they can get into. But from your experience, how do you think emerging brands should think about their retail strategy in terms of like their channels and how they grow or even the types of.

I think that's a really great question, and I'll come at this from a place of not being a founder and not having, you know, my, my savings on the line, my friends and family's money on the line. So I, I certainly can appreciate and have a certain level of, you know, deference to those types of decisions.

That said The first thing, if I were to do this, you know, just with my own money, I would think about taking a step back and really thinking through, as you built your brand, what types of consumers, what types of shoppers are you focusing, and what's your reason to be in this world? . And from that, as you look across all of the different opportunities that either have come your way or you want to consider pursuing, how do those retailers and where you, , what you believe their shoppers are, line up to who are the optimal core [00:02:00] consumers of your product?

Now they're gonna be plenty of people who purchase your product that you didn't expect to or that you're not targeting at all. And those are wonderful windfalls. But the, when you think about where you wanna purposely go, or purposefully. , you want the highest level of overlap possible so that you set yourself up to have not only the best data story, but the closest inability to be successful.

And then take those learnings from where you were successful and apply them and replicate further and further. And that's really important because as you start to expand, and hopefully your products is. Is successful enough to warrant expansion into other retailers and other places. Just as a rule of thumb, as you expand, it gets more and more diluted in terms of not only your performance, but you get a little bit further and further away from that, that core consumer.

And so again, that's really important to try to start as best as you can where you're gonna be most successful. And then from there, let's say you've identified, oh, you know, I think I'm gonna be really successful by starting in a Harris. So you're Harris [00:03:00] Teeter, you're in the Southeast Harris Teeters route to market for you will then be U N F I because you don't have a big enough business to go direct.

Okay? So now you're in the U N F I warehouse and you're met with the Harris Teeter buyer. They want to bring you in. They're bigger and they're big enough to warrant opening or unlocking that warehouse with U nfi. It's important to think about how you. Not only approach your business starting out at Harris Teeter, but also you can't forget about all of the other retailers that that particular warehouse services.

And so with UNFI that at that warehouse, that might be also the fresh market, a variety of independence, food Lion. And while you may not be interested in going in each of these, there's an opportunity there because now you're covered in the warehouse and so you. Take out Harris Teeter, insert any other retailer round that has, you know, a potential to unlock a, an anchor location of a warehouse for you within a distributor.

Make sure that you're thinking about [00:04:00] what else can you then get into just as an additional amount of revenue generation just by being in strategic place has to unlock. And then, you know, as well, Can you take that and turn it into another retailer that's another anchor account in another location and do the same thing.

Or maybe it's unlocking, you know, a different distributor through KEhe because you've unlocked, you know, a certain account that services. Within that space. And so that's a very long-winded example, but that's just one way that I think about it from a route to market side of things. I think as well, I would also add on just a tactical note that when you're starting from the ground up, One thing I always try , to advise founders of is to keep a very simple price list.

You can't imagine. I've seen a variety of different ones where you have, you know, one price for wholesaler pickup distributor. You know, a restaurant group, like sometimes for different retailers, you're like, [00:05:00] oh, let's negotiate one off for every single retailer. Yeah, yeah. And it ends up on your price list.

 And the way that I would recommend instead is to keep it as simple as possible, like one or two. So meaning you have a direct where you are either pick up or delivery and kind of, that's, that's pretty much it because the way that I see it, you can always overlay trade. When you start from a place of, you know, the most optimal, profitable price point that you can put out there within reason.

And then if you want to bring your prices down to something that's more palatable for your in shoppers, you can do that through trade majority of the time, and that allows you the ability to not only flex your pricing as you need to in different economic conditions where you may not be able to afford to invest in certain places as much as you could before.

and you don't necessarily have the ability or the justification on paper to take pricing up, well then you're kind of screwed sometimes because then you, you don't have anywhere to go and you're the one who ends [00:06:00] up taking the brunt of it. And so again, thinking through managing your business from a trade standpoint in that regard, but also it allows you to more clearly compare apples to apples, your cost to serve each of these locations because you don't have flowing through your p and l.

$10 price point because it's Walmart, but then a 15 or 20 somewhere else, but rather all of your prices are the same and you then you account for that in trade. Again. It also allows you to understand where you're spending and if you want to adjust that in the future. Yeah, I love that. And then Amber, one thing that you mentioned earlier, which I f.

Find trips up. A lot of founders, honestly, is when they're starting out, they'll launch in, like you said, Harris Teeter, but then because of their distribution, they have an opportunity to grow in other retailers. Mm-hmm. A lot of times they, companies will take that approach because it feels like more revenue, but a lot of times they find.

Smaller companies don't really understand the nuances of different retailers and get themselves in the situations where maybe they're planning for a Harris Tee or launch and they generally understood how they [00:07:00] work, but now they're launching in a few dozen other retailers that they don't really understand like the buyers or they might not have a great relationship or like who the customers are, and then they end up in situations.

the product is underperforming. And they're like, well, we weren't really focused there. And they're in like this weird situation. Yeah do you suggest that, I know every situation's gonna be a little different, but have you found just from your seeing companies, it's better to focus on like mastering one retailer at a time or doing like a really broad expansion or how do you, were some of the different ways to approach that?

I think that's a, a really great question. The first thing that I try to do is do it from a financial, just black and white pen to paper. You may have an opportunity of a retailer that you don't quite understand, but you can at least get your hands on what are the expectations of them in order to be a part of their set.

 I expect you to promote X amount of time at this level of discount. And by the way, before you show up on my shelf, I want this level of slotting and.[00:08:00] You can typically take that information and then also in those questions or in those conversations, ask, you know, Hey, here's what I'm thinking in terms of my, you know, my velocity on shelf based off of what I've seen in the past.

What are your intentions? What are your expectations for my brand? And what also do you typically see in your category for similar brands and products like mine? With all of that information, you can back into a pretty simple model of how much you know gross revenue you would expect to generate over the course of this first year with that retailer.

From there, you determine. , okay. If they expect me to promote at this level, at this frequency, and also I need to pay this upfront, upfront, fixed cost, you put all of that together to understand what is the ultimate cost to do business with this retailer, and then can I afford it? Because you could know the best of all of the information in terms of the strategy of all these different retailers, and it could be really great in terms of sounding, you know, sexy.

Like, oh, they have a great [00:09:00] shopper. Oh, they're this, you know, Position in the industry, they're gonna look really cool on paper to my investors. Except when you put it into the mix of your current customers, can you afford it? And maybe you can't afford it right now, and it's year one situation that's just untenable.

Maybe that's someone that you unfortunately have to wait until later. So again, the financial exercises, it's critical because, and what are some of those pieces that you put into the financial equation? I'm thinking things like trait spin, slotting, mm-hmm. um, What are some of the other. Yeah, so I think about it from a gross to net standpoint.

So again, when you think about your, your units for short per week on, on average, that you would anticipate, you know, for this type of a retailer, at least, you know, based off of your history or benchmarking whatever, whatever data, information you can get, and then you take that against the cost to get those onto the shelf.

From an internal standpoint, based off of your price list from there, that's, so that's gonna be your gross revenue. From there, you need to figure. , what's the fixed cost of [00:10:00] slotting? Can I negotiate that or not? What is my annual trade percentage based off of How many times I need to promote at the depth that I'm willing to do it?

So say 15%, and then what retailer margin do they need to make on those promotions? Then how much do I expect to sell every day? So that's your base volume of just those, those base turns of units per store, per week without promotion. How much do you expect to sell when you're on promotion? , and then you have kind of your, your weighted average of those sales at those two different like margin cases or costs to you.

And that bakes up your total mix, which then you sub out again, you're slotting as well as. Very technical things like your spoils rate, any other degradations like home store, et cetera. And that gets you down to your, your net sales, which can be a little challenging to get to whenever you're trying to look at it.

From a going through a wholesaler, or sorry, through a distributor standpoint versus direct, but you can typically ballpark it just from [00:11:00] the volume that you're getting through the shelf or through the, yeah, through the, the. Sorry, not the shelf through the the register rather than what they're actually placing orders through, which is gonna be a little bit higher.

And then I know one area that trips up a lot of the founders, especially when you're like under 5,000 stores, understand thousand stores, is understanding the velocity of certain retailers. Have you ever experienced and just talking or working with the brands where you thought your velocity view one thing and ended up being either way lower or way higher?

Yes. And I would say I experience this both firsthand, but then also, you know, in my new role as I'm working with different brands as well as just getting to know folks in the industry and learning, there's certainly rules of thumb out there. And I won't get into exact information because it can vary by, by temperature state, but when you talk to enough people, you'll get to understand the relationship between what a whole foods turn might look like versus.

A target turn versus a Kroger versus a Walmart. And [00:12:00] within that, I've always tried to understand, all right, about, you know, what ratio should these all be to each other? And then if my business is different, that's okay. It's more so do I understand why? Because if there's commonalities that, oh, everyone's business, you know, target is a, a killer account for them, it's always, you know, gonna be at least three quarters of what your Whole Foods business is.

And then if I get in there and I'm like, huh, mine is. and all of my consumer information, or at least my perception of their shopper would tell me it should be the same. Like, this should be a home run. Then why is that? And that can certainly lead you down the path of like, well, maybe my price is too high.

Well, have I walked the shelf? The shelf and or walked the store to look at the set to understand, okay, this is all fine and good behind a screen and my, you know, idea of what the, the set's gonna look like. But as you start to do some audits, whether friends and family or yourself, and you get in there and you realize, , oh, well crap, I'm like on the bottom left hand corner of the set.

And my price point [00:13:00] compared to this guy next to me who everybody understands and knows because they've been in the game for 20 years is like double their price. And so, you know, again, it starts to give a little more color to what you may be seeing come through in data that just doesn't quite make sense.

And then it's up to you to understand, okay, what levers can you pull in the most affordable, optimal way? to help mitigate some of those, those issues that you're seeing. Yeah, I love that. And I mean, that leads to another question because one of the biggest mistakes that I made and learning as I should say with my previous brand T Squares, is when I launched in Mariano's stores, we didn't really know what we were getting into was like our second big retailer after HOL Foods and we launched in store.

And, and we did not have any merchandising. We just, or any promotion plan really in store. And we were just like, Hey, we'll see how the product does on the shelf. And it was terrible. We ended up being in five different locations around the store. I could not find the product when I walked the [00:14:00] store for like 20 minutes and it was mine, , right?

And I was like, I was a consumer, consumer gonna find it. And it really led me to understand that you cannot rely on just a distributor retailer to. Sell the product for you as a brand, you are responsible for selling your product off the shelf. And so I'm curious what you've learned on, you know, what makes an effective launch strategy when you're going into a retailer for the first time.

Is there like a playbook that you've seen work or a few where you're like, okay, we're gonna launch, we're gonna run, you know, a promo right off the gate we're going to use. These like online shopper programs that get shoppers into the store and buying a product? Like have you seen different kind of playbooks work well for launching a new retailer?

I think there's a few things that I would, I would say I've seen work successfully. First and foremost where you're able, exactly what you just said is so important, which I think people will take for granted, which is getting into the store like, and I mean, literally, Walking the store if you're, like I said, if you're capable, if you're, if you're able to get there, I don't [00:15:00] mean booking a flight, but getting someone's eyes onto this, to the set, but also in the store to walk around and understand how easy it is to shop there.

That is important not only when you're in the set, but also back to your earlier question around how do you decide where, what retailers you should go to next. Like, I always try to walk a store if I can again, just to understand a bit more of how they can, they communicate to their shoppers, et cetera.

But beyond that, let's say, okay, you, you've met with the buyer, you've, you've convinced them to get on the shelf, you're ready to launch. Now you're in the store. How do you think about promoting or setting up the right plan to be success? Regardless of the size of company, whether that be the big General Mills to known days or my smaller days here in the startup world that I play in now, the first 12 to 13 weeks of your launch are so important.

They have different names for it. We used to call it I P P initial product period at General Mills, like that was such a highly coveted timeframe. of ensuring that you set yourself up for success. And so [00:16:00] what I mean by that is during those first 12 weeks from launch, you want to not only have all hands on deck of thinking about or keeping an eye on your supply, cuz you can't sell what's not there.

So yeah, I would say you walk into it with expectations of velocity. They are almost always gonna be wildly. Hopefully in a good way, but sometimes in a negative way. And you just need to stay on your toes with a replenishment plan that allows you to stay in stock. So that's number one, being there on the shelf when you launch.

And that, by the way, starts with having the product ready on time and in full for the pipe fill. Secondly, when you're thinking about your promotions, whatever you can afford, try your best to line it up all together. And what I mean by that is you may have some executions that are gonna be on shelf in terms of price point.

You may have some own media where you're gonna talk about it on your Instagram page. You may have a retailer specific influencer or influencer. Who has a great following for people who shop at that store, and you want to [00:17:00] also have them talk about the fact that you're launching there, whatever it is. I think it's always best to try to, again, vertically line those things up so that it's hitting all at the same time.

And then when people see things, hear these things, they're most likely to, to again purchase your product around that same timeframe. Ideally whenever you have a launch, if it's around, I'll, I'll call it like a seasonal period or some, some major event. , I would always try to make sure you can really double down hard with one of your deeper price points during that time.

So making this up, let's say you launch a product in the Mexican set, and I mean like the Mexican, like food set in a regular retailer. In April, so great April, or even like, you know, March. . That's still within the first 12 weeks leading into Cinco de Mayo. Are there promotions that are already gonna be set up with your retailer that you don't need to convince them of?

They've already gotta add that they're thinking about for this with potentially display space, et cetera. Can you ask for that [00:18:00] already before you even launch in your meeting to say, Hey, a lot of people are gonna be looking for my type of a product during this particular period that happens to coincide with the.

Amount of time that we're trying to establish ourselves in your store. Would you be open to allowing my brand to participate in this promotion? And, hey, by the way, we would make a great meal solution for some of your private label offerings that fit with this and other bigger brands. What about a display and could we participate in that?

And I'll be happy to support you there. So again, these are just different tactics that I've seen, but again, it boils down to. Making sure that you have the right levels of promotional support, meaning the proper depth, and you're gonna experiment with some things. I'd say a minimum 15%, but if you have deeper price points in your back pocket, I would run them earlier rather than later.

Again, to drive much more trial when people don't know who you are, the shelf. And then can you have enough? Things in your back pocket within that time period that you're able to [00:19:00] turn on before you get outside that window. A k a you know, are there any digital coupons that work well at that retailer that in mark can turn on for you in a matter of two weeks or a week?

How does that look? Or is that affordable, et cetera. So, I don't wanna ramble on but , there are a few things when it comes to the short. Period of making sure you get your baselines out there strong, and then keeping a couple of things that are in your back pocket to, again, adjust if you need to, to make it, make it better.

I think those are all amazing tips and I appreciate you sharing that. Amber. I think that a lot of founders underestimate that initial launch period and go into things unprepared cause they wanna see how the retailer does but they're really setting themselves up for failure because of the product doesn't sell.

You look bad to the retailer. And then when reset times come around or so you are gonna have a much more challenging time. So I think those are all really great tips. I appreciate it. Thanks so much for being, I think I think about that. Yeah. Sorry. I just was say, I think about that as like I've learned over a little bit of time like.

where you can like play to [00:20:00] win. Don't just play to not lose because sometimes whenever you're like, okay, well let's just see how it goes and we'll adjust if we need to. You've already potentially lost outta the gate against yourself versus again, leaning in responsibly to to win. I love that. Play. The win, not play not to lose.

Excellent. Amber, thanks so much for being on the show today. I really appreciate all your insights. Of course. Thank you for having me, Jordan.