BRAND SECRETS AND STRATEGIES

PODCAST #180

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #180

Welcome to the Brand Secrets and Strategies podcast where the focus is on empowering brands and raising the bar.

I’m your host Dan Lohman. This weekly show is dedicated to getting your brand on the shelf and keeping it there.

Get ready to learn actionable insights and strategic solutions to grow your brand and save you valuable time and money.

LETS ROLL UP OUR SLEEVES AND GET STARTED!

Dan: Do you wish you had a way where you can see what's going on? What are the trends going on in different markets? If you do, then you're in the right place. Welcome, I talk a lot about community and how that makes natural, natural. And one of the things that's great about this community and natural is that we're all working together to help each other succeed. Today's guest is no different.

Dan: Today's guest has a resource, a valuable resource that's going to help you gain insights, valuable insights, into what other retailers and other brands are doing around the country. This is something you definitely want to check out because they give you the insights that you need to help you grow and scale your brand. They show you what's working and what's not working in different parts of the country, in different categories and with different brands.

Dan: In addition to that, one of the things that they do is that they've got a survey where they talk to a lot of leading retailers. Now surveys are fantastic because they give you insights about what's going on throughout the industry. Now what's unique about this survey is that it's very pure in terms of who they talk to. In other words, it's not commoditized information.

Dan: What do I mean by that? A lot of the big brands and a lot of the big solution providers tend to commoditize shoppers, brands and products, et cetera. That overlooks what makes natural natural. That overlooks what drives consumers to buy your products over and above your mainstream products, why your products are more valuable to the retailer in terms of the shoppers that you drive into the store. These insights are invaluable, and I've been able to successfully leverage them throughout my entire career, both when I was working for Kimberly Clark and Unilever, and then also for all my individual clients.

Dan: Some of these resources can be a game-changer because what a lot of retailers need, they need insights, actionable insights that you can provide to them. Not top line canned reports that all of your competition is providing at the same time. Savvy retailers already know how well your brand's performing on the shelf. They want to know about the consumer that you're driving in the store.

Dan: What's great about these insights, a survey that we're going to be talking about in a minute, is it's going to provide actionable insights to help you help the retailer identify what matters most to them. More customers coming in their store, a reasonable profit in the category and then a competitive advantage in the market. One of the things I've also done successfully, and I'd share this a little bit later, is how you can use informal insights that you can get from social listening and from other sources that you can bake into your sales presentation. And this is another way to help you grow and scale your brand. This is another way to help set you apart from other brands that you're competing against.

Dan: As always, I want to thank you for listening. This show's about you and it's for you. In appreciation for your time, there's a free downloadable guide for you at the end of every episode. I always include one easy to download, quick digest strategy that you can instantly adapt and make your own. One that you can use to grow sustainable sales with. And don't forget to go back to listen to previous episodes, where I may share one of your most pressing bottlenecks. The things that keep you up at night.

Dan: Remember, this shows about you and it's for you. The goal here is to help you get your product into more store shelves and into the hands of more shoppers. And check out my new YouTube channel where I share illustrations that bring the insights to life on the shorter episodes. Now, here's Heather with WholeFoods magazine.

Dan: Heather, thank you for coming on today. Could you please start by telling just a little bit about yourself and your journey to becoming a publisher?

Heather: Sure. Well, Daniel, thank you for having me as well. My journey, I kind of was born into it, I guess. My father was a salesman for a different publication in the natural products industry, which was Health Foods Business at the time. And then he ended up meeting a man named Larry Hester who owned WholeFoods magazine at that time, and they got together and my father was the workhorse so to say, and Larry has luckily had a good amount of money to fund him and together they worked really hard and recreated WholeFoods magazine.

Heather: So that was kind of... I always call WholeFoods my sibling growing up because we kind of grew up together. And then in 2000, my father purchased WholeFoods out completely. I was working there at the time. And yes, when I graduated college, the job market wasn't great. I always knew I had an interest in the industry, obviously, on the natural products industry, how do you not love right away? But also, I mean, publishing always was interesting and I've always liked doing sales.

Heather: So it was something that I liked, but I wasn't really sure where I was going with things. And when I graduated from college, the job market wasn't great. I went for some interviews, couldn't really afford to take some jobs because the pay was not great and the commuting would cost me more than what they're paying me. And I guess I just knew I had this opportunity and I really liked it so I decided to take it and I was really blessed because my father had a salesman at the time who thought that I could really be good at this and he said, "Howie, let me train her." And he trained me instead of my dad, which is probably the best thing to do.

Heather: Unfortunately, he got sick and had to leave the company. My dad turned to me and said, "Do you think you could do this with me?" I said, "I don't know, let's try it." Here we were and then I kept on growing and kept on taking more responsibilities away from my father without even trying, it just happened and so before I knew it, he made me the publisher. He got older and decided to semi-retire and he's still the president and works two days a week and I do everything else. I mean, obviously, I don't write the magazine and do everything else. I have a great staff.

Dan: No, no, that's great. But does he still boss you around? Or can you tell him what to do?

Heather: I tell him what to do more.

Dan: That's good. It's about time, right? Come about for a play. Just kidding. What got you interested or where did you find your interest? What drew you to the natural products industry?

Heather: Well, I guess it was. I mean, I grew up, I went to the trade shows. I mean, they're nothing like they were now. I mean, they were smaller. We used to say we'd just go trick or treating. Can we just go? I was allergic to chocolate carob. It was big at the time. People just used to give me stuff because they all knew I was Howie's daughter. That was always a big thing, I was Howie's daughter. Then when you ask of him, the question asked before, now people see him and he's Heather's father. So that's the difference there.

Dan: Oh nice.

Heather: But yeah, but I mean, I just saw the love and the fondness that people had for my father and then they just brought it on to me. When I did decide to join the company, he brought me to... it was Expo East, my first trade show that I actually worked in. I mean, I was actually getting paid. I was free labor for a long time. And introduced me to a lot of other people that worked for their families. They told me what it's like to work for a family business. They all said to me, "If you want to talk anytime, we're here." I could just tell that they really respected my father, which of course made things easier for me and I, in the end, have returned that favor when people do tell me they're working for a family business. I've had returned the favor and said, "Hey, anything you need. I've been there, done that, what do you need?" I think it was going good or bad. There's really no in-between there.

Dan: Well-

Heather: But I just-

Dan: No, keep going. I'm sorry.

Heather: Yeah, but just the industry, publishing is a lot of fun. It's gotten more fun because we could sell even more, like by selling digital, doing a podcast now like we're doing now. So it's even more fun than when I started. The natural industry has gotten way more corporate now. Even you take like Expo not happening this past couple of weeks. We're all sad that we don't get to see each other. I mean, I don't know any other industry that's like that.

Dan: I got to admit, one of the things that I look for Expo, look forward to, is the networking. I'm not a huge fan of brands going to trade shows because like, to your point, it's not what it used to be and certainly nothing against them. But my point is, it's hard to sell. And so for me, it's a big networking event, it's an opportunity to reconnect and establish those bonds, et cetera.

Dan: So when you're talking about the relationship that you have with the industry, I really want to get into the family business part. And why I wanted to talk about this is because one of the things I think that makes natural natural is that even though we're not blood family, we are a family. And because we work together and we help support each other, so I love the way you put that.

Dan: Could you talk a little bit more about that? And then how does that influence you? And then how do you think that that influences a lot of the brands that you see on shelves and retailers?

Heather: Gosh, that's like a three-point question. First of all, I wanted to say something about what you just said before about networking. You're absolutely right there. And it's actually funny because I actually use a line the other day because it's been hard to do sales lately. I mean, it's hard calling people, you don't know what state they're in. It's hard sending emails. You just don't know how people are feeling with anything or how they're affected by what's going on right now.

Heather: Being a small company, how we grow is by networking, hence you're one of our partners that we enjoy working with.

Dan: Thanks, likewise.

Heather: And I said to someone the other day, I said, "I might not be able to sell something, but I'm really good at networking." Because that's all I've been doing lately, but it's been fun because at least I get to talk to my friends. But back to your original question.

Heather: So the influences, gosh, it's a really hard question, actually. I work a lot with the supplement people, but I mean, a large part of our industry now is the grocery people. And I'm beginning to get to know a lot more of them. And I mean, there are so many new people coming in and I mean, you take like you or me, we walk through Expo, we used to know everybody. Now there's like a whole hand. There are thousands of people that we have no idea who they are and they don't know who we are but hopefully, they will soon.

Heather: And I mean, so we are very influential on things. And I mean, the industry as a whole... I'm just trying to gather my thoughts on this. I'm sorry.

Dan: No, that's fine. Go ahead, you're doing great.

Heather: The industry as a whole, with so many people merging, and especially on the dietary supplement side of it, with all the mergers and acquisitions that are going on, it's actually grown to be a smaller, such a more corporate area but yet, I mean, you still see some of the same people there, which makes it nice, but it does make it a lot harder to be doing business. And when I think the little stores, do you find that as well because they don't get the deals as much. And definitely from the distributors, it's a really hard thing because it's hard for a new company to get into the distribution. I mean, it's hard even to get noticed.

Heather: It's pay to play, you need money. And I mean, that's why a lot of it has been investments. You see a lot of our brands on Shark Tank. You see people just doing everything they can. And that's where I think actually and I know I'm going off-topic a little bit, I'm sorry.

Dan: No, that's fine.

Heather: But I spent a lot of time on LinkedIn after Expo West got canceled, or postponed then canceled. You saw these little guys really putting their stuff out there and just trying to get and you know. But also, on the other hand, even though they're getting some money back and all that, it's all the money they put out by setting up a booth and all that stuff. And you see people like these influencers that will actually pick them up and will actually but I mean, it might actually... Some people actually think it might be better for them that they didn't have this because they didn't have all the expenditure.

Heather: I don't really know exactly what's going to happen, but I've had so many conversations with so many people about brands that I probably wouldn't have even seen at Expo because it's just too big that you began to notice. And we actually helped out quite a bit. We kind of did where we did a virtual tour of Expo, where we invited anybody to send us your press releases, send us your photos, send us any specials you had going on. A lot of people did like popups and stuff like that and said, "Tell us what's going on, let us know."

Heather: So we tried to help everyone and I mean, not only us. Obviously, New Hope was trying to do everything they can do there. BevNET, I know, was very instrumental in doing things as well. So I mean, I can't take all the credit but I know we did our part. And you got to give credit to everybody. Go ahead.

Dan: No, no, I was just saying, no, that's exactly what I think of when I think of net family. I think of the trust that you have. First of all, there's a trust factor within this industry, and outsiders coming into this industry, it takes a while to kind of build that trust and develop that relationship. But to your point, those of us that are in this industry, we have a connection, which is really great.

Dan: I think it's great that you're doing their virtual tours and expo. And back to your point, that's one of the biggest challenges that I have with a trade show of this magnitude. Again, it's a lot of fun but the issue is that if you're a small brand or if you're a retailer, it's hard to have that one-on-one time with any brand, with any retailer. And it's really, really hard when you're...

Dan: You don't walk around the trade show floor with a hat on saying, "Hey, I'm a buyer at a retail" or something like that so they don't know who you are. And so that I think gets lost, that experience that what we used to have before, we used to get to sit down and talk to someone one on one. So I think to that degree, it's good in the sense that now people are trying to become more creative.

Dan: And one of the things I really like about this is that as an industry, we're trying to find ways to help these brands get discovered and get in front of retailers without the traditional pay to play model being such an influence. That's why you and I are talking today. And we're going to be doing a webinar next week. I'm excited about that. And then one of the things that we're doing is we're trying to raise the bar in the industry.

Dan: And so back to the networking thing, if I may. One of the things that are really great is because I've built these courses and the podcasts and the YouTube channel, et cetera, it provides the people to come on and talk about what they've learned. So you talked about Shark Tank. Dustin Finkel was on the podcast and laid out everything that he did to get on Shark Tank. So it's a great episode.

Dan: The point being is that with what you provide, the articles that you provide, the tremendous insights that you provide, et cetera, and what a lot of us are doing in the industry, New Hope, BevNET, et cetera. We're making it possible for these brands and these retailers to thrive in the absence of Expo West. Your thoughts?

Heather: No, absolutely. And that's where we always have been. Because basically, I mean, you used to have 30 seconds to talk to everybody at the show. Now, you don't even have that. I think maybe it's five seconds. So you really can't make an impression. And that's why a magazine like ourselves is good. I mean, there is a lot of education that goes on at Expo. But yes, you have to have a super pass for a lot of it. And some of the rooms are just so crowded.

Heather: So, and then once the show's over, it's done. I mean, there is other things and that's where we inform and educate every month, every day on our website, and others do that too. I don't mean to say that we're the only ones doing it. But if you could look through and you just read our magazine, I mean, you'll be very well educated by the time you're done with any issue. Especially I mean, one of the sad things that might not have in the Expo is that our March show issue was our retailer survey, which basically gave a whole report on the industry, dollars, and cents that were spent and their levels of the stores and all that.

Heather: So I mean, this is pertinent information, of course, and it's on our website, which is wholefoodsmagazine.com. And we actually will be doing a webinar on that as well on April 29th, just to talk people through that as well. So I mean, we're here to educate and do things, but I'm really interested, I mean, going a whole year ahead now with everything that's gone on now. And I mean, we were actually, because obviously, this came out in March, but it was for 2019.

Heather: So at the beginning of this year, we already saw that we had thought that we're going to see a big difference in the numbers for next year, meaning this year 2020, because of the Earth Fare going out of business, because of Lucky's. That was a big loss for a lot of people. So we already were like, "Well, let's see what happens with our new numbers." But now, I mean, then you throw this whole pandemic into it and stores are doing great.

Dan: That's good.

Heather: So I'm not really sure, yeah, so the numbers will be interesting in 2020. But obviously, we have to get through this year first and get through what we're going through right now. But, yeah, education is such a big part of a retailer staying alive and being competitive in this industry of mass-market and other competitors out there. And if they don't educate themselves on how to merchandise and do the things that we teach them how to do, as well as others, they're not going to survive.

Dan: No, and that's exactly why I hang out my shingle. That's why I do what I do to fill that void that unfortunately is in the industry. We're not and what I mean by that is, is mainstream CPG, we had to become very strategic because of Walmart, because of all the consolidations, et cetera. Those same skills... Actually, that's how category management was born, to weed out some of the inefficiencies and the costs, et cetera. And so we had to become a lot more strategic and those strategies that we learn can be applied to natural without losing your natural flair or without selling your soul as a lot of people would put it.

Dan: So that's what's so critically important, but now you're talking about the magazine. You talked about the retailer survey too. We probably should have asked you, I probably should have started by asking you to tell us a little bit about the magazine. What is the purpose? What is the mission? What are you trying to do? And who's your primary audience because your space, your niche is unique compared to other publications out there. And you play such an important role in this industry.

Heather: Well, we're a B2B so we are business to business for the natural product retailer. Unfortunately, that number hasn't been growing but other people selling natural products as the CPG people are has been growing, so we reach anyone that sells a natural product. It mostly is comprised of natural product retailers. But it also is comprised of supermarkets that sell natural products, drugstores that sell natural products, your mass merchandisers, your Costcos and all that. Of course, they sell a lot of products as well. Plus we've been having a lot of natural practitioners join our list recently, more digital than in imprint but yeah. So people like that, definitely. So anyone that basically sells a natural product to someone that would be on our list, but we do say we are primarily a publication for the natural product retailer.

Heather: But as you've heard me say many times on this already, and I say all the time, we inform and educate and that's basically what our mission is, is to inform and educate in the natural products industry. So whether you are a manufacturer, a supplier, a retailer, or someone else that sells a natural product, we hope that we do have a space for you there.

Heather: The magazine is very categorically laid out, as is our website where if you're a grocery buyer, you can go in and get your grocery information. And if you don't want to read the rest, you're missing out but you got the information you needed. Dietary supplement, you will find a little bit more because it's more to write about and you will have stuff there. Suppliers, we always have something for the supply side of the industry as well. And it's, again, our website's the same way. It's totally broken out that way. We do have content that does help everybody. And it's very easy to find what helps you there. And that's kind of what we try to do is just try to be a useful resource for anybody in the industry to make your job better and hopefully easier.

Dan: Well, thank you for sharing that because it's about raising the bar in the industry. It's about giving back to where we started with, that networking, that family, being able to provide insights to people. Heather, I spent a lot of time talking about how brands can't possibly know everything that's going on in the industry through every state, and neither can retailers, et cetera. In fact, retailers cannot possibly be an expert in every item on their store shelves or every category. So it's incumbent on us to help those brands and those retailers connect and share those insights to give them a competitive advantage against their mainstream counterparts.

Dan: Robert Craven coined the phrase mass slippage, which I love. And even though I wasn't using that term, that's kind of where I was going with this before. But the point is, how do we help these natural retailers remain relevant and thrive? And one of the things that I think we do is by teaching them strategies that they're not going to learn with the traditional models that I believe are somewhat broken in mainstream retail. And that's about, like you said, merchandising and choosing which products and what's going on in the category and so on and so forth.

Dan: When you talk about education, again it's a critically important part of what we all do, how are you unique? How do you see you're being unique in the industry in terms of the education that you provide?

Heather: Well, we do rely upon... It's true. I mean, retailers know a lot. They really are very smart. But obviously, they do need to learn more. And I mean, they learn from companies, they learn a lot about the products themselves, and we help that as well. We speak to a lot of experts in the industry that do tell us about the products. We talk about something different each month, obviously. And with that, as I said, experts do tell us about what is their new products and what offerings they have. And then we also do get things on how to merchandise them.

Heather: We do work closely with Jay Jacobowitz who is from Retail Insights and does our Merchandising Insights column, who helps meet with our merchandising, plus we also have a tip of the month every month, which Jay does six months of the year, and you do six months of the year.

Dan: Yes.

Heather: So, yeah, so I mean, we always are trying to give them ways to do more and how to do things more. But also, they need to know about the product education and what the offerings are now more than ever, because, by missing Expo, that's where everybody has new products.

Dan: Right. I don't know if I ever shared with you that I used to be a retailer.

Heather: I know.

Dan: I used to be a retailer at Price Club, I was the grocery manager. Now it's a little bit different. But very similar back then, because we had that small fill approach. And what I was getting about, I can't be an expert in everything. I remember I used to open a store up at 4:00 or 5:00 in the morning. But then, I got to go home about 9:30, 10:00 at night, but don't worry, I only did that six days a week. And so the point being is that's a lot of work. And it's incumbent upon those of us that have that ability to help provide those insights to retailers, et cetera.

Dan: So your retail survey, talk a little bit about that. If I'm a retailer, why do I care? Why does that matter? How's it going to help me grow and thrive? Because I've looked at it, it's great.

Heather: Because, basically, you're going to learn. We measure it by perishables, how much perishables you sell in your store. So we have a level one, level two, and that's how we kind of have the levels of the store. Obviously, a huge amount of perishables makes you the big supermarkets. The small or none makes you like a vitamin shop site. And then we do your sales via that, how much traffic there is, basically how to advertise, how much money they're spending in advertising, what they're doing to promote themselves, and things like that.

Heather: We ask them questions. At social media, obviously has fallen a lot more into things that way. But how do people better what they are doing? And that's kind of a generalization of the survey. It goes way deeper than that, but it does talk about your sales as to... I mean, the dollars were up. I'm sorry, I don't have the number on top of my head, but it was a good number. And maybe they don't have a lot but they were up and basically, it just talks about how these different levels of stores, how they can compete and how they do well with what they're doing. I'm not really explaining as well as I'd like to for some reason.

Dan: No, I think you're doing great.

Heather: But basically, it's like the small to mid-size store has been the most troublesome spot. And that was like a North Fair type of store so I chose something right there. They've had the most problems with anyone. But your vitamin shops actually do well because their markups are higher and they just sell vitamins. But it's, yeah. I mean, that's kind of. So we measure it as to, as I said, how many perishables are being sold in the stores and the levels of what they are that way. And then it's just what they do, how much their rent is, what their costs are, how much inventory they carry, things like that. And this way, why retailers are concerned about it is to see how they compare with others that are like them.

Dan: Well, thank you for sharing all that. One of the things that I think is really great about your survey, all surveys, especially yours, is that again, as a retailer, I don't have the ability just to call up every retailer, every different community and find out what they're doing. And so it helps bring us together. And it gives me insights into what's working and what's not working. And it helps me succeed. More importantly, it allows me, like you were kind of talking about a minute ago, it allows me to self-segment myself around the kind of retailer that I am.

Dan: So, for example, when I worked for SPINS, we were talking about pill shops and small retailers and vitamin... like a GNC and a vitamin shop, et cetera, versus a Natural Grocers and so on. The point being is that all those stores are a little bit different. NFM has a really good survey too that really puts people in different buckets. But what I love about your survey is it's, I would say, it's more pure than a lot of the other surveys in terms of where the information comes from.

Dan: By the way, one of the things I love about surveys is that a lot of times that information is even better than what you'd get if you had not pretended to have every retailer open up the books. And what I mean by that is that those numbers aren't always clean. A little off-topic but this can help illustrate it. When I got out of college, I used to be an analyst for Standard & Poor's. And I used to analyze companies primarily in the gas and oil business and chemicals and stuff like that.

Dan: And companies, they'd say, "This is what our net income is based on" and don't get too into the weeds, but they would define themselves differently. And so I would have to standardize them and say this is what you are based upon how you sell, et cetera. And again, a little bit into the weeds, but what I'm getting at is when you're talking about a retailer that has a similar size footprint in a similar size supplement category in a similar size produce section, then those are apples to apples.

Dan: Unfortunately, a lot of the publications that are out there, you're a store and it doesn't differentiate. You really can't get those nuances from what's working, what's not working unless you segment, unless you get down to that level. Your thoughts?

Heather: First of all, I'm thinking you've had many different jobs.

Dan: Yeah. Yeah, I've been around.

Heather: I've had one job basically all of my adult life. But yeah, so I agree with everything that you just said. And it is, first of all, I just want to get to yeah, what makes our survey different is because it is just the natural products industry. We don't really put the whole rest of the industry in there. And then we also do have the retail universe which does talk about the mass market and your superstores and all that. It gets your Trader Joe's in there as well as your Whole Foods markets and your other stores that do sell naturals. But our, yes, our survey is just pure natural product retailers and that's the difference there. And that is what makes it pure or so to say, what you said.

Dan: Well, thanks for sharing that. Well, the reasons I brought that out... Oh, sorry, go ahead, please.

Heather: No, you go.

Dan: Okay.

Heather: But yes, but everything that you were just saying now. I mean, every category manager needs what they need to do their job well. Everybody wants to succeed. Otherwise, we know what doesn't happen if you don't succeed. And to say that everybody needs the information and yeah, you can't. I mean, it's a sampling like any survey, it is a sampling. But if you see that you compare, you see that maybe you should be doing something different that you learn from somebody else. That's what a survey is good and useful for me.

Heather: We also do, we have a page in the magazine each month called what's selling, which is it's not a scientific survey at all. It's just retailers telling us... It's our most popular page, actually. It's retailers just telling us what's selling in their store in different categories. And we actually have, we do a natural choice awards as well, and it does mirror it pretty closely. So we do know that it does kind of mean something there that people do know what's selling in their stores. It's a lot easier now than...

Heather: I mean, way back when my dad first started working, I think they used to call up a retailer and maybe they just gave their favorite products or looked on the shelves and see what was there. I mean, now they have inventory systems and things like that where they could actually give us true numbers.

Dan: And it's so important and what I was getting at a minute ago, and you're absolutely right, so thanks for framing that, is that a lot of people commoditize retailer stores, shoppers, products, et cetera. And what makes us unique, what makes natural natural, that pure-play that we're talking about here is we're talking about what's really natural. And let me give you an example.

Dan: A lot of times people talk about the LOHAS consumer. Well, if I use that term in mainstream, they think of the person who eats a couple of salads and goes for a walk. It's like, "No, no, no, that's not us." We're paying attention to our carbon footprint and a lot of different things that go way, way beyond what a lot of people think about. Where did the product come from? Was it regenerative agriculture where it was grown? All of that. And the point being is that those kinds of insights are so much more relevant because that's the world we play in. That's the ripple in the pond.

Dan: And what I'm getting at here is that the ripple in the pond, what we're talking about where these trends begin, this later becomes the tidal wave that ends up on a Kroger shelf and the tsunami that ends up on a Walmart shelf. But this is the industry, this is where this starts. And so by having a retailer share those insights really help out a lot.

Dan: So in my world, one of the things I've done several times is I've actually had a brand do a very informal, unscientific survey on Facebook, et cetera. And I bake those insights into their selling story. And those insights within their selling story, their deck, has helped them get on store shelves. And the reason for that is because they're providing insights to retailers that no one else provides.

Dan: So it's extremely valuable and more importantly, in the retail community again, talking about what I used to do in terms of hours, you don't have time to spend going to different stores, unfortunately. So being able to have a resource like WholeFoods magazine that's going to help me see around the corner, help me see what's going on in different markets, it's critically important, and it's an indispensable resource to the retail community.

Dan: One of the things you talked about is small to midsize stores are struggling. How would you define those stores? And then, why do you think that is?

Heather: Oh my gosh. Well, I think as I said because you go to the big grocery store, you're doing your big shop. You're buying your groceries, you're doing all that and you get your supplements there too. Then you know you have your... If you just go in and buy dietary supplements, you might just go just your vitamin shop and just buy that. I mean, because if you're going to the small to mid-size stores, they aren't going to have all the groceries you want so you can't do your grocery shopping there. Maybe they might have all your supplements but I mean, it's just that it's not the big shop that you're looking to do or the quick shop that you're looking to do.

Heather: It's kind of in-between and obviously, the rent is higher. Having more perishables is more expensive because we have to have a turnaround for it. And basically, you have your inventory. I mean, everything. If you're a bigger store, you have to have more of everything. Your costs are higher. It also depends upon where you are and so, store traffic is a huge thing too no matter where.

Heather: It's kind of funny. Our local buyer office, our local health food store, they moved... I mean, now, they've been there for years, but I remember they first went to go move in there and they were building the Walmart there. And everyone questioned like, "Why would you go in a Walmart shopping center?" and they've thrived. I mean, they've gone bigger. They've thrived. I mean I'm sure they, I hate to say it, but I'm sure they've lost some customers that maybe somebody has asked them about a probiotic or something like that. And then they go to Walmart and buy cheaper. I'm sure that happens sometimes. But I mean, they have a loyal following.

Heather: I went in there right before... I thought I was going to an Expo West just to like get all my immune products, get my hand sanitizer, get everything before and it was bustling. It was so busy. It was lunchtime, they have a juice bar, it was nice. But I want to say something, what you talked about, trends. When you were talking about how we start the trends. It's so true right now. Like look, how big is plant-based right now? And where did that start?

Dan: Small stores, small brands.

Heather: Uh-huh (affirmative). Yeah, I mean, and we've been eating plant-based for years. No one ever knew. We've been doing plant protein. Now, how long has pea protein been part of what we've been doing? Rice protein or any kind of, you know. I mean, that's probably the biggest example right now of how it trends. That's nationwide, that's every marketer doing now, started with just the natural products industry. So I mean, yes, we are trendsetters now and we really do set the trends as to what's selling in the natural products stores.

Heather: I mean, you're always going to have your consumer that's going to eat their Doritos and I don't know what else. What else is bad for you? And drink their soda. But I mean for that, you have somebody that has converted and the millennials do. I mean, the millennials would rather have their kombucha than their Pepsi.

Dan: Well, and it's so important that we're talking about this. I'm so glad you brought this up. Small retailers. That's one of the main reasons why I do what I do. I have a belief that retail's broken and the reason I say that is because most retailers, they are told this is the way we need to do this. The strategies that your grandfather used, your great grandfather used, are not going to work today. And what I'm getting at is this is why I think that there's such an opportunity for us.

Dan: And so having a store, you always hear that price is only thing that drives sales at shelf. Well, in mainstream, that's kind of true. And the reason that is that way is that I believe that the big retailers spend most of their time trying to sell the stuff that they have on their shelf, rather than ask us what we want to buy. So the price is the only way that they can drive those sales off shelf.

Dan: However, the small niche stores have a unique opportunity to differentiate themselves. And this is why I'm so glad you mentioned that. So what I want smaller retailers to do is develop a strategy where you've got the things in your store, a few of the things in your store, or you leave that perception with a consumer that you've got good prices, you've got a decent selection, doesn't mean you have everything. But then you sell those unique items they can't get anywhere.

Dan: So, for example, using the 80-20 rule. If I go into small retail, like the one you're talking about, and I can get kettle chips for the same price that I can get at Walmart. Okay, that makes sense. But next to the kettle chips, I might put a dip that you can't find anywhere in town but at my store. It's an amazing dip and I can make up the margin on that dip. And then you think about the market basket, someone who buys the kettle chips and the dip, or whatever products. That customer is going to spend a lot more money. And it's about how do you position that retailer as being a value add?

Dan: A lot of people talk about loyalty as being a card. The reality is that loyalty cards are really nothing more than a coupon. I've got a loyalty card for every airliner fly in and for every store I shop at. Think about it.

Heather: Me too.

Dan: Most of us do, right?

Heather: Uh-huh (affirmative).

Dan: So loyalty is earned, it's not bought. And so if a retailer, a small retailer can give their customers what they want, exceed their expectations by having the products, et cetera, that are unique and different. They can develop a loyal following in their store. And that's going to differentiate them from the big retailers. If you think about a big ship can't turn on the ocean very quickly. That's what the big retailers are like.

Dan: So now we've got this pandemic and the big retailers are struggling to keep up with the products that they have. While these smaller stores, if they're really smart, they might be thinking creatively about well, what things boost immune support that we could provide to the community that is unique and different, et cetera, old-fashioned remedies, ancient, whatever that the big stores can't get. And we could own that part of the conversation.

Dan: And so that's what I love about what you're talking about. Back to your survey, this is why this matters. When an independent retailer's talking about what's selling in their store, they're not talking about, "Well, look. This brand here just paid me a ton of money to put this product on the shelf." They're talking about stuff that has a relationship with their customers. So their customers come in and say, "Yeah, that stuff's great." And it's that relationship, that story that helps build that loyalty.

Dan: And that's where I think we can really help these smaller retailers compete more effectively, survive and thrive. I think a lot of retailers are going to go by the wayside next year, the bigger retailers. And unfortunately, some of them need to, but I think it's critically important that smaller and independent retailers, coops, et cetera, leverage some of the strategies that we're talking about so that they remain relevant. Relevant, meaning that customers think of them as a destination for certain types of products. Your thoughts?

Heather: I couldn't agree more. And that's exactly what we do is make sure they get educated, make sure they know a product that maybe is not selling in the mainstream that is something that can be there. That yes, they have to have their big brands. They have to have some of those things because and there are people that loyally go into that store and buy those big brands from them. But just say like right now, everybody's looking for immune products. They go in looking for that elderberry. Maybe they're all sold out of elderberry. That seems to be what I've been hearing but in the meantime, maybe they say, "Well, maybe you want to buy and take some garlic or take some oregano" or something else that the mainstream people don't know about but then they're like, "Okay, yes, I do have some immune products here."

Heather: Or even what we have been saying is, I've been having this conversation with quite a few other people, is that if your immune [inaudible 00:40:40] obviously, you had [inaudible 00:40:41] for immune because you're not stupid, you're going to sell what needs to be sold. But if those products are sold out, then do something else. Maybe people are quarantined. Maybe do a thing of chips or maybe as I had the conversation with someone, I think I've mentioned to you the other day, you know maybe you do some self-care stuff. People can't get haircuts anymore. They can't color their hair, they can't get their nails done, they can't, I don't know, all the things that women do. They can't get a facial. Maybe you have like some masks out there in front and be like, "Let's do some self-care. You feel well and you want to look good. You want to feel good still. Or just color those roots or whatever you need to be doing at the time.

Heather: There's plenty of natural products for that. And maybe somebody then is swayed. I mean, there might be some people that don't go back to their salon, I don't know. Then there might be some people that don't go back to their big store when they find that they could buy a Seventh Generation toilet paper in a natural product store. I mean, there are things people are experimenting with and finding.

Heather: I actually had that conversation, back to the plant-based, sorry to reiterate things. But I actually had that conversation with someone, a plant-based person today. They were laughing that everything that was left in the freezer case was just the plant-based stuff. So someone actually tries it and maybe they actually do stick with it. It's a great opportunity. I mean, you don't want something like this to be an opportunity, but it is a chance that maybe people try something that they can't have before. And that's where people... So there probably are people that go into a health food store for the first time in their lives right now.

Dan: That's a good thing. That's exciting to hear.

Heather: I don't think.

Dan: Yeah, because [crosstalk 00:42:20]-

Heather: I don't want to take a pandemic and make it a good thing for us, but we have to find the silver lining anywhere. And obviously, the quote after Expo was we're making lemonade and we've been making lots of lemonade these past couple of weeks.

Dan: Absolutely.

Heather: But yeah, I mean, that retail really has an opportunity now but always to sell something that really is something different. Yes, you have the people that draw them in. But any good retailer that says, and most of them are, say, "Hey, what are you looking for?" And before you know it, they're not just buying that elderberry. They're buying oregano or they're buying... Even vitamin C, gosh, I mean, there are so many studies right now that vitamin C is so good for people. Someone might have forgotten about their vitamin C because they've hopped up on the elderberry, I don't know.

Dan: I wrote an article many, many years ago about the Dr. Oz effect back before he cracked down. He's such a champion of healthy products, and the point being is that talking about what these products are, what's unique about them. I used to work for a supplement brand that had a whole food supplement that I think the best brand out there, they're amazing. But the point is that there's a big difference between that and other products on the shelf. And here's where I'm going with this.

Dan: When you think about natural, for example, versus mainstream. If I go to a mainstream store, and I can buy vitamin C two for $5 or something like that for 1000 milligrams. Or I can buy one bottle for $30 for 50 milligrams, but yet this $30 bottle is going to metabolize my body. It's going to do more for me than these two bottles over here, I'm just going to pee it out. And the point being is that if you are what you eat and you eat... I'm saying this wrong.

Dan: If you believe that you are what you eat and what you eat matters, then understanding that difference and the point is that, like you're talking about, is that there's a big difference between the quality of the products and the ingredients within the products that you get at a natural store. They're more pure. They're more clean. That's not the right way to put it but you know what I mean. They're cleaner. They're products that you can trust.

Heather: [crosstalk 00:44:37] transparency now, I mean, you can see everything. I mean there are no secrets in anything. I mean, we all test. We all do everything. I mean, the products are as clean as you're going to get and clean label is such a big part. We actually have something coming out very soon on clean label as well, but it's actually in April. It'll be out in everyone's mailboxes soon.

Dan: Good, good, good. Look forward to it.

Heather: I think it's on our website. It's on our website now, actually. But yeah, I mean, there's no hiding anything anymore in this industry. I mean, we are a regulated industry, even though we're not regulated.

Dan: Well, but we self-regulate.

Heather: We self-regulate.

Dan: Yeah, we go... I'm glad you said that because I know of a company that says that they are transparent. And all they did is they stopped feeding their livestock steroids.

Heather: Oh gosh.

Dan: They're still raised inhumanely. They're still on the pen with a lot of it. A lot of things that we wouldn't do, but okay. So the brand I was talking about, going to share was MegaFood. They-

Heather: I knew you were going to say that too.

Dan: Yeah, I love them. They're fantastic.

Heather: Well, plus you quoted Robert earlier, so.

Dan: Yeah, I did. Well, I mean, that's one of my favorite brands. But one of the things that they do is they've got the big transparency project. You can go on their website, you can actually see how the product's made all the way through the line. They actually share their ingredients, most natural products. Literally, put the recipe on their product. And because that's the level of transparency where if you buy a lot of those other products, you don't really have that. Transparency for them is well, we didn't use as much dye in the packaging, whatever.

Dan: One of the things that I'm spending a lot of time is folks who are on compostable packaging, backyard compostable packaging, et cetera. And I'm learning so much. That's one of the areas I cover, kind of off topic a little bit.

Dan: The other thing you mentioned that I think is so critically important about this industry, not critically important, one of the biggest pluses or benefits of this industry. And you mentioned, I'm so glad you did. If I walk into a mainstream store and I say, "Where's the vitamin C?" "It's back that way someplace. Go find it yourself," right? If I walk into a small store, and that's where I was going with that Dr. Oz effects article, is that yeah, if you're out of a product, don't complain that you're out of it, help that customer understand what else is out there.

Dan: To your point, if you want something to do with cold or flu, et cetera, what about oil of oregano? Or what about some of the other products people might take that you may not have thought about that might work every bit as well as some of the other things? And so the point being is that natural, where that ripple starts, this is where we begin to educate, coming full circle with our conversation. This is where we educate our consumers, our community, about the value of the products that we sell. That's why you can sell a bottle of vitamin C for $30 and sales are going up steadily. Whereas two for $5, I cannot pay you as a customer enough money or discount the stuff enough to take it off my shelf is kind of the mindset.

Dan: So that's what's unique about this industry. And again, if we can help those smaller independent retailers understand best practices, but yet within this industry, what's different about it, how you should merchandise, your categories, et cetera. There are a lot of opportunities for us to make an even bigger impact. And that's one of the things I'm looking forward to.

Dan: In the webinar, we're talking about the courses, et cetera. So of course, we'll be looking for that. But the content that you put on your website is definitely helping retailers make that shift and helping the brands help the retailers compete more effectively and make that all-important shift. So thank you for doing that.

Heather: Sorry, you know what else is? I'm sorry. I may have interrupted you.

Dan: No, no, I'm finished.

Heather: Is, again, by getting back to transparency and all that, is that so many raw material suppliers now do advertise or do tell their story, and that's actually part of what we do as well. And I should have gotten that when we were speaking of... Every one of our features discusses raw materials to the finished product because they're all branded. The transparency is right there and they're all branded as to what they do. And by the manufacturer then, putting it on their label or just showing what they are, that lesson that they have that they've already sold to other people now goes through to this manufactured product as well.

Heather: I mean, you take a company like MegaFood, I mean, they're doing everything. I've been to MegaFood, I've seen what they do. I mean, it's an amazing facility.

Dan: It is.

Heather: They also have a food there that they're... I saw the vitamin C being made from the oranges there. But then on another hand, it's like you take raw materials, a flower-like [inaudible 00:49:34], which is in a lot of finished products on our shelves now. I actually did have the opportunity to be in India and see where their turmeric was grown and what happened and how it became curcumin and all that. It's an amazing thing or someone like Gaia that started from the beginning on their labels.

Heather: There's plenty of people that do it, but then the raw material, like as I said, like a [inaudible 00:49:59] and so many others. And [inaudible 00:50:00] and so many others do actually have that whole trail of where their fields are and where everything has happened. And it really then makes that retailer know wholeheartedly when they're selling a product that they're selling a quality product and they're not selling something that's made with filler, or doesn't make [inaudible 00:50:19] or as you say, with the vitamin C, that you could pee at home.

Heather: It is a difference and that's where the retailer does have that leg up on those Walmarts or whatever because of their products... And they could actually talk about it intelligently because they've read about it or they've learned about it. A rep has even told them about it. But hopefully, they've read about it in WholeFoods magazine.

Dan: Of course.

Heather: And that's how, really, they get to keep their customers and maybe they will even pay more for certain things because of that.

Dan: Exactly. Well, the law of reciprocation. If you walk into a store and someone's going to spend time with you and help you understand that while this ingredient, this particular pill is put together with high heat pressure that way that now it's not going to have the same nutrients that this other product was put together. There are so many different things within our industry, so many things people don't think about that education.

Dan: I had a great conversation with Phil Lempert, the SupermarketGuru, and we're talking about this. And what we were talking about the all-important role that natural retailers play is the theater. And what I mean by that is helping customers understand why this is different than this. I remember going into a retailer once years ago as a kid and I had my kids with me. Actually, I was younger, but I mean, I had my kids with me. Anyhow, the guy in the produce department actually cut into a couple of apples and said, "Here, try this one."

Dan: And I never tried some of those different varieties of apples. But it's that experience, that theater, and that's... Like I tell people, I never go into Whole Foods because I want to buy groceries. I go into Whole Foods because of the community, because of the theater, because of the atmosphere, because of the vibe. I can get cheaper stuff in other places any time and with a lot of different retailers. I mean if you shop at whatever. But then again, if you compare the quality, well, if you are what you eat and what you eat matters.

Dan: This is one of the biggest failings I think that we have as an industry. We're told to focus on price. And so the analogy that I give is that if I eat the cheap, generic bread, I'm hungry before I finish eating it. If I eat the best mainstream bread, I might be satiated for a couple of hours. If you are what you eat and what you eat matters and I eat the best organic bread, I might be satiated longer.

Dan: So if I spend an extra 40, 50 cents at shelf but yet I eat less bread over time because it satiates my body, that I'm actually cheaper. And I wish that this industry would really work on adopting that. But my point is that natural retailers are such a critical component of this industry, such a critical part of this industry because they're the ones that communicate those unique values, those important attributes to the customer. And they bring new customers into this world. And again, like the ripple in the pond, this is where all these things take place.

Dan: I could have told you back many, many years ago, that gluten-free was going to be a big deal. And everyone said, "No, no, no, no, no." But yet, look where it is today or chia or you name it.

Heather: Uh-huh (affirmative). Yes, you're right. Those are other trends that started in our industry that now became big in mainstream. Absolutely.

Dan: Absolutely. But thank you for doing what you do. What had we not cover that you'd like to share?

Heather: I think we covered a lot. God, I mean we both have spent a long time in this industry, I think we could talk forever. But I think let's leave them something for the webinar for next week to learn more on and yeah. I mean, just we're a special industry, we band together, we take care of our own. We get through this and I know love doesn't take care of everything, but we will be okay. I keep on saying one day at a time and that's what we have to do. But luckily, we sell stuff people want and need right now. And hopefully, we're educating people for the future to be healthier.

Dan: Thank you all, and amen, right? So thank you so much. I really appreciate your time. Thank you. And for anyone listening to this in the future, we'll make sure that we put a link or somehow let you know where you can listen to the replay or watch this video, as well as the webinar that we're going to be doing. So I'll be certain to put a link to this to WholeFoods magazine on my website in the show notes, as well as a link to the webinar, et cetera, so people can go back and listen to because again, it's all about educating.

Dan: As you started with, it's all about raising the bar in this industry and one thing I think makes natural natural is that we're all in this together. And it's not you versus whatever. It's how do we help each other succeed. And there's that honesty and transparency that you just don't see anywhere else, that authenticity.

Dan: So, Heather, thank you for your time. Thank you for all you do in this industry. I thoroughly enjoy partnering with you on articles. I look forward to working with you in the future. And thank you for coming on today.

Heather: Same here. Thank you so much for having me, and I enjoy your partnership very much too and look forward to the webinar next week.

Dan: Thanks. Appreciate it.

Dan: Thank you for listening. I want to thank Heather for coming on today and for sharing her insights. I also want to thank her for partnering with me on the webinar that we're talking about what's going to come out soon. You can learn more about that on the podcast webpage and through WholeFoods magazine. In addition to that, I'll be certain to put a link to WholeFoods magazine on the podcast webpage.

Dan: This week's free downloadable guide is Trade Marketing Essentials to Grow and Scale Your Brand. You can learn more about how to leverage this valuable resource to build a solid foundation around your trade marketing, you can get the link to WholeFoods magazine on the podcast webpage and in the show notes. You can also get the downloadable show guide and you can also get this week's free guide, Trade Marketing Essentials to Grow and Scale Your Brand on the podcast webpage. And you can get there by going to brandsecretsandstrategies.com/session180. Thank you for listening, and I look forward to seeing you in the next episode.

Whole Foods Magazine: https://wholefoodsmagazine.com

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