Jordan Buckner (00:00)
Launching into a new retailer, especially one like Whole Foods is really exciting, but also comes with a lot of challenges and obstacles along the way to actually prove yourself on shelf. It's really important to make sure that you have a strategy for how you're going to sell product, how you're going to show up and do demos, running promotions that are aligned with Whole Foods customers, and for that many, any other natural channel retailer, but it's not always easy. So I've added on today Sabrina Kautz who

is a fractional retail focused CMO for emerging brands. helps brands come up with strategies that actually will sell off the shelf. And today we're to be talking about how to drive velocity in Whole Foods. Sabrina, welcome. So Whole Foods was my first account with TeaSquares When I was launching my Energy Bar brand back in 2016, we launched in Whole Foods. And from there, like we were selling in D to C.

Sabrina Kautz (00:41)
Thank you, so happy to be here.

Jordan Buckner (00:55)
three to four months into the business, we got an opportunity to pitch the whole fees and we're like, oh, this is great. Finally, like I got on the store shelf, started one store based in Chicago and I had like no idea what we were doing, right? It's like, let's get the product on the shelf. I kind of know we have to do demos, but we ran into problem after problem just in terms of figuring out how retail works. I know a lot of new brands experience the same thing. And so I'd love to talk today about, you know, what are some of those things that brands need to think about in

selling with Whole Foods or any other natural channel retailer and how to go about thinking about it. So I guess to start, where do you usually see in terms of the brands that you work with, like starting off in selling the Whole Foods once they kind of get approval, kind of what are those things that you help them think through?

Sabrina Kautz (01:39)
Yeah, so there's a lot to think about. It's very exciting when you get into Whole Foods, whether it's one region, multiple regions, full chain. think a lot of the thoughts and strategies end up being the same regardless. So the first thing to really think about is how you're making that announcement to your consumers. So obviously if you have a very engaged social audience, making sure that you're playing it up there.

Getting them engaged, getting them excited, getting them into the store. I've seen so many amazing kind of community members that go in, they take pictures, they help spread the word to their followers. So I think starting with people who you already know are following the brand and are super engaged is great. Something that I tend to look at is across social media channels, if you can identify like your top 20 or 30 engaged consumers and ask them if they have a Whole Foods near them.

ask them if they would be willing to go in and buy a product, film a little video, create some content for you, put it on their socials. There's so many vehicles right now that if you don't have a coupon clearing house, you can find a way to get them a free product rebate, or you can send them some product and have it mocked up. But some of those inside the store, like really generating consumer excitement is a great way to start as you're thinking about the Whole Foods launch.

Jordan Buckner (02:57)
Yeah, I mean, one thing that I realized too was I had no idea how retail worked when I kind of launched into Whole Foods. And I think a lot of founders who I talked to, Whole Foods is like one of their first regional kind of retailers. And so they're even just trying to figure out like how to think about that business overall. I remember, I think we were only selling at about 12 Whole Foods stores kind of at one point, some brands kind of go much larger, some international.

Is Whole Foods still one of those accounts where you can run a successful business only selling at Whole Foods or are velocities kind of wildly different based on the category that you're selling in?

Sabrina Kautz (03:34)
I think the category really is dependent on the velocities and you can really talk to your buyer about what those expectations are. Knowing what that velocity threshold is super important because that is what you'll be measured against as you start talking about success of the account. But I one thing to keep in mind is it does take some time to ramp to that velocity. I don't know that anyone's expecting you if you are expected to hit two units per store per week.

anybody's expecting you to hit that in week one. So it'll take a couple of months. I think the one other thing I really think about is you do get a lot of data access with Whole Foods. You'll get access to their portal on the backend. You can pull all of your product sales week over week, and you can also pull it by store. It'll help you calculate out what that velocity is. So you can pull your weekly units. What I will say is to remember how many stores you're supposed to be in. So remember how many stores are actually in the region.

and make sure that you're dividing by the number of stores in total. So say you're in the mid Atlantic, there's, believe, 54 stores. There might be one week where you're only selling in 48. And so it'll say 48 stores selling. As you're doing the velocity, anything that'll pull through Nielsen will be out of that total 54. say you sold 100 units, you would do 100 units divided by 54 instead of 100 units divided by 48, which would inflate that velocity slightly.

So just make sure you're thinking through it, but you can get to that velocity week over week through the back end of the Whole Foods portal.

Jordan Buckner (05:00)
Yeah, I think the data piece is really important, especially to know like how your brand is performing. Are there any strategies that you recommend in terms of like laying out a 90 day plan for launching into Whole Foods that you recommend brands follow to really have the best chance of finding that success?

Sabrina Kautz (05:17)
Yeah, so I think there's a couple of things. So number one, make sure that if you're managing the business on your own or if you have a broker that you have your trade plan submitted on time, so you'll get their trade plan calendar, which is their TPR schedule. There's due dates for each of them. And so just make sure you're filling that out. There'll be a way to put in the scans. They also have an Amazon 10 percent that you'll have to put in if you have.

promotion with UNFI, there's ways to overlay that versus if you're just doing a scan to Whole Foods. So number one, make sure your trade plan is up and running. Number two, remember resets don't all happen in the same day. So you probably will have two to three weeks that you'll be rolling out onto shelf. So when you're setting up demos, when you're thinking about TPRs, make sure you have a little bit of a buffer on the front end to allow for all of the shelves to reset.

I tend to tell brands not to do much in the first month, so really wait like a full four weeks, then make sure you're setting up demos. So for demos, you'll have to get set up with the interactions platform and there's multiple different ways to do demos in Whole Foods.

Jordan Buckner (06:22)
And what's the interactions platform for those who don't know?

Sabrina Kautz (06:25)
So the interactions platform, you'll get an email, you can work with your buyer on how to get set up. And so what that will do is allow you to get into the backend and actually set up demos. There's a couple of different ways to do it. So interactions is Whole Foods owned demo team, so they can run them for you. So there's a email you can reach out to and say, Hey, I want to run demos in this region across these couple of weeks. And they'll say, okay, like we'll take care of it for you.

We'll make sure that the inventory is ordered. That is more expensive. So there's, there's definitely a price tag that comes along with it being fully managed. You can also set up demos yourself. So again, you go into the platform, you'll log in, you need to be at least two weeks ahead of schedule. And so you can find the stores you want to do demos in. And that can be where you think they're going to be strong. if you as a founder is going to do the demo, pick stores that are located within a radius

of you if you're going to be the one to show up and do them. Or there's some great resources. There's obviously some third party demo agencies that are amazing. There's also sites like Trusted Herd. There's some Facebook groups that you can go on and post that you need. Brand ambassadors that are going to come and help with the demos. So there's a lot of things to think about and to weigh out. I will say the one thing is your budgeting for demos.

is make sure you're budgeting for the demo cost. And then on top of that, you need to budget for product that the brand ambassador has to purchase. So the brand ambassador will go in, they'll purchase product off the shelf, and then they'll use that to demo the product. So make sure you're including in the budget, however many units you think they'll have to buy in that total cost. I see a lot of founders just budget the actual demo costs and paying the brand ambassadors and they forget to include the cost.

Jordan Buckner (08:08)
product.

Sabrina Kautz (08:09)
It's not cost. It's not. Yep. It's not wholesale. It is the retail cost.

Jordan Buckner (08:13)
What do you think it takes for brands to really be successful in the Whole Foods? Does it still work for the local brand who's just getting started to really launch and start building a customer base? Are consumers really going towards brands that have existing brand awareness and are driving customers into the store? Because I know when I launched, we had zero. There were like 100 people that knew about TeaSquares when we launched at the Whole Foods, right?

It was educating like person by person to drive sales. was in stores doing demos four days a week. Um, my co-founders were, it was extremely exhausting and it felt like we were like educating customers one by one. Other founders told me like, Hey, that's really expensive to also run demos. Is it better to do, um, have sales and redo like TPRs to break price reductions where like our whole shoppers.

buying products and discovering it based on that, is that more cost effective than doing demos? I'm kind of curious to hear your thoughts.

Sabrina Kautz (09:13)
Yeah, there's a couple different tactics that tend to work in Whole Foods. So TPRs are table stakes. I think you should at least plan on four TPR periods per year. So really think about doing at least one a quarter. If you can do more, then think about doing more. Whole Foods also offers off-shelf programs. They tend to be a little bit more expensive. So just take a look at how you're budgeting out your trade.

Then the marketing programs, demos are great. It's great to be one-to-one with customers. Yes, you may only hit 30 to 50 in a day. So just kind of take into account when you're talking about a lot of the ways that I measure success is kind of cost per unit move. So how much you're actually spending to move one unit. Demos tend to have a higher cost per unit moved. What I would do is isolate those stores on the backend from a data perspective and take a look at them.

over the six months following the demo and see if they're continuing to provide a lift versus stores that you did not do demos in. The other thing that you saw

Jordan Buckner (10:14)
through just for those who are familiar like how to think through lift and how to measure that.

Sabrina Kautz (10:19)
Yeah. So what I, what I do is, take your total stores average out how many units you're selling. so then you have like a total store average. Then what I do is take the weeks before the demo, the weeks during the demo, the weeks after the demo, get the average there. And then I run groups that isolate both stores that had demos. So if you're doing, it a round of 10 demos over two weeks, taking a look at

those 10 stores over those two weeks. And then I also will look at a group that does not have the demos. So I have a velocity of stores that ran demos, a velocity of stores that did not run demos, and then an average velocity. And then I take a look at that continued over the next couple of weeks or months to see if that lift is sustained. So you can just look at what the difference is between those stores and see if you're seeing more activity in stores that you're providing demos in.

The other tactic that I would say is great for Whole Foods is their Whole Foods and Amazon programming. So this is their retail media network, similar to Instacart in retailers outside of Whole Foods. And what it allows you to do is sign up for search terms. So you purchase search terms on a cost per click basis. And so you can reach a broader network of consumers. So where you're one to one with the demos and you can have those sustained conversations.

You're kind of one to many with your Amazon pages. And so here I would really think about these pages like you would a non Whole Foods Amazon page, make sure that they're optimized for SEO, make sure that you have the right images, right? Make sure that the titles make sense. I also seen the ASINs not connect a lot of times. So there is a team within Whole Foods that if your ASINs, which are, the unit identifier on Amazon, it's called an ASIN.

If they're not working, there's a team with Whole Foods that you can just make sure that they're linked up and that when you're running ads, you're actually starting to see unit movement. Again, a lot of these hiccups happened in the first, call it one to four months. I would just make sure that you're in that platform all the time, making sure it's working. Again, work with your buyer to get.

the information emails, each team is slightly different. They all have inboxes that they manage and I will say they're incredibly responsive. So don't feel bad about reaching out. I probably have some people more than I should, but don't feel bad about reaching out and trying to get these problems solved. But once you can get set up and you can start with a minimum spend, think their minimum is $10 or $20 a day, it can be fairly small.

Play around with it. See where you're seeing Lyft. See how those units are selling. Again, in the back end on the portal, when you pull your weekly unit sales by store, it'll show you if that sale is done in store or online. So you can start, again, taking a look at which stores are really doing a solid online business versus in store.

Jordan Buckner (13:14)
And are these when you're saying online business, are these ads that are using like people doing in-store pickup or home delivery for products through Whole Foods?

Sabrina Kautz (13:22)
Yep. So this is a Click and Collect. So when you order something on Amazon through Whole Foods, similar to Instacart, there is a shopper that goes in to Whole Foods. They'll shop for you and then they'll bring them to bring them to the consumer's door. So it's that Click and Collect program. And so again, you can, you can see what sales are done in store versus online, by store, by week. So there's a ton you can get from that backend.

Jordan Buckner (13:45)
Yeah, I love thinking about like the data as a way of looking at how the business is performing overall. And then one of my biggest challenges was going from managing literally like start at one Whole Foods store to three to five to 12. And even at that like 12 level, remember like being able to keep everything in my mind of like, okay, who's the buyer who kind of customers was inventory look out was like really challenging. And then I imagine like Whole Foods has over 500 stores in North America right now. And so.

How do you kind of suggest brands go about managing and looking at those store accounts when you get that large, even regionally, they're between 50 and 75 stores per region. That's still a lot for a small team to keep in their head. And so how do you go about creating a process or a system to understanding how your brand is performing, moving, and then driving velocity?

Sabrina Kautz (14:37)
Yeah. So I think there are different ways. So you're obviously going to be looking at each marketing program you're running. You're going to be looking at what that's driving. So whether that's return on ad spend for whole foods on Amazon or Lyft on demos, or if you're running a rebate campaign, such as WeStock Isle, there's, there's a couple of different ones, like take a look at what their redemption is on, on the backend there. So taking a look at each individual program,

how they're returning and how your budget's spending there, as well as then, what I do is I pull weekly my stores, my units by product, and then I have a master spreadsheet that I can filter in. And what I do is I actually stoplight by store who I know is at the velocity threshold we need to be at or over. So I do a green if we're slightly below. So say you're at two units per store per week as your threshold.

two or over would be green, between one and two is yellow, under one is red, and then I go through every week and see where we might be running into some out of stocks, where we might need to work with either the Whole Foods team or the individual store managers or UNIFI and figure that out, and which stores are our best performers and lowest performers, and does it make sense to start, continue to support the high performers and raise those peaks, or do we need to...

throw some more money into some of those lower performers to get them up to that more medium level threshold.

Jordan Buckner (16:02)
Yeah. Do you, I was going to say like, I've heard different logic. Some people say like, Hey, focus on your top performing stores because those are the ones that you already have customers at. it's easier to increase frequency or buying behavior there than some of your lowest performing. but then they'll say, of course, right. Like you don't want to have a lot of little performing stores because then that's going to make you look pretty bad overall, but might take more money and effort to bring those stores up. Do you have any recommendations? Basically what you've seen, like works well or doesn't work.

Sabrina Kautz (16:30)
I tend to be in the first camp where I say to raise the peaks, but what I have done with Whole Foods is I will do a couple of demos in some of the lower performing stores and see if we're getting the same lift or any lift. I've had some demos in a low performing store that only sell one or two units, which to me just means that the target demographic's not there, that it might just be not the best market. Not every store is gonna be your best selling store.

And so we do a couple of those and they're really not hitting. And if we can play around with some dollars and it really is just keeping at that steady state, then not that I say walk away from it, definitely keep them in your total umbrella programming. But that would show that it's going to make more sense and be more efficient to really try to raise those better performers. Because when you're looking at your velocity, you really want to look at average velocity. And so if you can get your better performers up to six, seven, eight units per store per week.

Even if you have a handful of stores doing 0.5, 0.6, that average is still going to be above the threshold that your buyer is going to want to see.

Jordan Buckner (17:31)
That makes a lot of sense. Do you have any sense of, I know this is going to vary based on the brand, but just an idea of what type of marketing and sales support spend that it takes to support brands at a regional versus a national level? Like do brands really need a hundred thousand dollars? Do you need to eat five million dollars? Just kind of get a sense of what that investment looks like from a trade and sales support level.

Sabrina Kautz (17:57)
So trade, always try to keep at that. And again, this is just a mid level, but I try to keep it at that like 18 to 20%, regardless if we're regional or national, I still think as you're building out the P and L, like it's just smart to keep that trade spend there and see where that hits. I you might be slightly below, you might be slightly above. I've worked in categories where we were at 15%. I've been in categories where we at 24. So that 18 to 20 is a good average.

In terms of marketing, again, I try to do it as a percentage. So I try to keep 10 to 10 % ideally if you can do a little bit more and then back into. if 10 % of your sales is marketing, then start factoring in, say if we wanted to spend $20 per day on Whole Foods on Amazon for this amount of stores, what bucket of money do I need to do that? And then what is your remaining bucket?

And then test a demo or two. If you're doing a hosted demo, which means that you are going into the store, you can do them in one, two, three, and get a sense of that works and not spend a ton of money. And then maybe you try a rebate and a couple other stores and you have some either geo-targeted ads or you're working with an influencer in one market to get those codes out there. So I would say if you're regional, definitely test it.

out and see what you think works. I'm not saying every marketing tactic that works in one region is going to work across if you're nationally, but I think if you get a good sense in one region and test and learn at those smaller dollar numbers, then you're going to have a better playbook for when you expand to those two, three, four regions. And then you can start figuring out what dollar amounts you need. I hate to say based on percentage, but I would figure out what your estimated annual sales are in Whole Foods and then kind of back out what

what that bucket is and then really think about how you're spending and making sure that you're keeping your working dollars, which means it's actually leading to a sale. again, digital advertising demos, et cetera, at like 70 % of that budget or higher, there's obviously going to be some printing fees, paying brand ambassadors, things like that that are more sunk costs, but make sure we're trying to keep those really efficient dollars at that 70 % of your marketing spend.

Jordan Buckner (20:15)
Yeah, that makes a lot of sense. know, I think one of the challenges, at least like to think about this, so that brands have an expectation because Whole Foods can be a good revenue channel. It might not be. And there's also the investment that goes into it. Cause I think when we were selling, I remember looking at our sales at Whole Foods and after a one month period across, it was like 12 or 15 stores at the time, we maybe sold $3,000 worth of product at a wholesale price.

And I think our costs of all the demos, the product, everything that we were selling was like $2,900 or something like that. And so one, the overall like revenue amount wasn't. You know, amazing. but then also I think we literally made like a hundred dollars in profit. And that was actually from like our founding team doing a lot of the work. So it doesn't include all the overhead costs. And it made me think like, huh, so we do all this work.

just to maybe make $100 or lose money. And I was running like, yeah, at scale there's probably gonna be a little bit of room there, but it really kind of made me reflect in terms of why are we selling in retail and Whole Foods and what's the actual monetary benefit of it? Like what's that investment gonna look like? And it really made me kind of step back and think like, okay, is this the best investment where we are right now? And is it gonna...

drive the business forward in the way that I needed to.

Sabrina Kautz (21:38)
And I think when you launch, you're going overspend like you need to get it out there. You need to get, you need to get the buzz. I, the way that we talk about it, marketing is around like these tent pole moments. So I don't know that you need to spend at the same level all year. There's definitely ebbs and flows suspending. So at launch you're spending probably quite a bit of money. So you may break even and then post launch, even probably pull back a little bit and just remember that.

It's not one-to-one. So if you convert one consumer and they purchase five units over the course of the year, and you're spending that $1 to get that consumer, being able, and that's harder to get without syndicated data and looking at that repeat. But if you can get kind of that heavy consumer that continues to purchase and that $1 media spend will return fivefold on top of that as you're thinking about that consumer base.

Jordan Buckner (22:29)
Now that's really helpful. Any other last tips that you found in working with selling at Whole Foods to help move velocity or just in terms of thinking about like building relationships or how to manage those accounts?

Sabrina Kautz (22:40)
I will say Whole Foods is very relationship driven, both with your buyer as well as go out and talk to the store managers, buy the team in the break room some product for them to try. Like those are the people that are selling your product. Those are the people that consumers are asking for recommendations or where can I find or something along those lines. If you can grow kind of that brand love amongst the people that are actually working at Whole Foods, that is one account I will say it goes a very long way with.

I go to my local Whole Foods for some of the brands that I work with and talk to them all the time. They'll they'll give you consumer feedback like they're listening more than you think they are. So don't discount the people that are in the store that are in the market. If you are fortunate enough to have the money for merchandisers, like get that feedback from them. If not, ask some friends to go in and do it. Ask friends to pull, give your products or push back, pull them to the front of the shelf. Have them go.

buy a couple bags and pay them back, have them go talk to store managers. think building that relationships, I've seen secondary placement and displays come out of that that weren't paid for because you have a great relationship with a store manager and you're doing really well. And I've seen them put products on pegboards just because of that relationship. So,

Jordan Buckner (23:50)
And with me and T-squares too, we had a store like that and we got to know the buyer and they're like, I think bought like four times the amount of product from us one week. And we went to deliver and they're like, yeah, we had this extra pegboard. So we just put your product up here.

Sabrina Kautz (24:04)
I just saw that happen with a brand and we sold I think like 14 units in that store when we were normally doing four or five. So not saying it's gonna happen in every store, but where you can build those relationships. If you're on vacation where you could pop in and say hi, like that human connection and that one-to-one and putting a face to a name does mean a lot to people.

Jordan Buckner (24:22)
I love that. love that. Sabrina, thanks so much for being on and talking about Whole Foods and how brands can drive their velocity.