BRAND SECRETS AND STRATEGIES

PODCAST #210

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #210

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: At brand secrets and strategies, you learn how to save valuable time and money, where you are in strategies to get your products on more store shelves and into the hands of more shoppers empowering brands and raising the bar. Chloe, thank you for coming on today. Could you please start telling us a little bit about yourself and your journey to becoming a writer for Forbes?

Chloe: Sure. Um, yes. So I have been at Forbes for six years now and now I kind of our coverage of food drink and agriculture, which knowing in may, before the pandemic had made coming, going around the world, honestly, to meet entrepreneurs, investors, billionaires. Um, and you know, now I'm writing about everything from agriculture impact investing to, uh, is it a profile on a secretive cheese billionaire behind, you know, creating pizza cheese in America? Um, a bunch of years ago to our water rights, um, in California and, you know, through that, um, it, it, hasn't been a lot different interesting people. And, um, I also manage our contributors online, who are writing about a bunch of different topics and food and ag.

Dan: Thank you for sharing that. The reason I wanted to meet you, the reason I wanted to reach out to you is because I've been following you for awhile. And one of the things unique about what you do, and this is I think the biggest compliment I could give anyone is that you're authentic. And what I mean by that is unfortunate. A lot of people in the industry, in the, in the publication industry write about something that someone else told them about, but you're living it. So when you're writing about food, if you're writing about different kinds of food or sampling or whatever, you're actually doing it, which I love that because it's that perspective that I think makes it real. In addition to that, you get to understand things from the perspective of the brand, the consumer, and everything else, and then share that wealth of information. So again, thank you for what you do. And, and as far as that's concerned, how did you get into this? I mean, did they just say, Hey, we want you to do this or in, or did you just ask for it or did you fall into it or how did you get started?

Chloe: Yeah, um, I have always loved food and gardening growing up. I was a nerd who would go to cooking school camp instead of a real camp. So I was like making a big Italian, uh, fresh pizzas and kinds of pasta for big family meals, um, in New Jersey and, and gardening, you know, ever since I was young. Um, and so I had a more traditional journalism route. Um, I was at GW and was an editor on the independent student newspaper there and had a really amazing experience, ran the news team, and also got to be on our board and to kind of run the organization. It's the second oldest newspaper in all of DC, uh, at a time when, you know, student journalism was crumbling. So it was fascinating to be on the board then. Um, but so, you know, through that, I got really into business journalism because I started realizing, you know, how these things are connected and eventually made my way to Forbes and sound, this kind of love of food, kind of coming back in through business reporting because, and I'm reporting on farms, honestly, because I wasn't something we had really covered much.

Chloe: We had a couple of restaurants and fast food, and I still do a lot of that coverage, but, you know, I started from, from being on the billionaire's team and seeing these kinds of the time, it seems players kind of touching all these hidden supply chains and it really kind of pulling the strings in a way that, um, you know, grocery brands on the shelf really can't, um, do, uh, I started seeing all that and, and kind of made my push to start kind of like covering this full time. Um, and I'm calling from my garden right now. So I live in New York City, but I still guarded myself here. Um, I even have composting worms on my garden, so, I try to really have zero waste as much as I can. And obviously, it's not perfect. I live in Manhattan and I get delivery fairly often. Um, but, um, I definitely try to be ethical and use what I know about supply chains and how this industry really works and operates, um, and make decisions myself.

Dan: Great. Thank you for sharing that. So in New York, how are things going there? You guys opening back up? Okay. Doing things are getting back to normal.

Chloe: Yeah. Um, I mean, I've been here since the beginning. I mean, since we haven't really listened to the pandemic hit, um, and it was clearly crazy, um, overwhelming at times dark days, for sure. Um, but it's, it's, it's definitely more relaxed on the streets now. Um, you can definitely feel that people are, you know, out there, I feeling a little bit less anxious, um, and, and things are kind of opening back up. I haven't been to restaurants, um, myself to sit down. Um, I've been doing takeout, but I'm not really going to restaurants right now because of like the ethical implications of sitting down at a restaurant where your server doesn't have health insurance, most likely. Um, but, uh, yeah, I mean, things are definitely ramping back up economically, for sure.

Dan: That's good to hear. And back to your comment about restaurants, I just feel for those people and the fact that it's starting to get cold again, you know, what are they going to do? I don't know. That's a whole nother conversation, but

Chloe: We're one of the indoor dining room right now actually still open Andrews. And there's been some big lawsuits from, from independent restaurant owners, uh, trying to figure out what's going to happen and trying to open into an ordinary indoor dining up. I mean, I don't really want to speculate it. I don't want to comment on the, I don't know. I think that it's a very hairy ethical situation. Um, but I understand the need to also want to be opening up to. So it's difficult.

Dan: Well, it's difficult, but you know, one of the things I don't think people really understand is that if you don't open, you don't make money. If you open at 25%, that's not enough. If you don't open, then what about all the people that work for you? The suppliers, all that other stuff. So you're right. It is a huge, huge issue. And I wish we would do more to, to help solve it. But, you know,

Chloe: Go ahead. The restaurant industry, I mean the restaurant model has been so broken for years leading up to this and it does the work at 25%. See, it doesn't work at 75%. You can see that either. You know, um, it really didn't even work at a hundred percent occupancy before this was happening. So, and that's where you had all these other different issues like gentrification and people trying to find cheaper rent because the rent was the only thing you could maybe control or get your margin back on. So, you know, I think the pandemics really just shown so many of these industries that were already at an unsustainable place financially. Um, and it's broken them, right? It's exposed that to so many consumers for the first time. Um, but it's not, it's not new, unfortunately.

Dan: Well, and that's why I wanted to have this conversation. Talk about the inequities of our broken food system. So let me back up a little bit, a lot of people don't know where their food comes from. You know, they think it comes from the grocery store period in a sentence, or you get it from the restaurant. They don't understand. I saw a really great thing on TV that I was so glad they did this. They went to a New York restaurant and they talked about them at this point, just onions, you know, just one little piece of their business, the onion supplier, the fact that first of all, the produce supplier, then the proto supplier can't buy the onions. And then the farmer can't fix his tractor and all the people that impact. But now when we're talking about retail food, even online food, I think it's even more of an issue because people don't see that supply chain, they don't see what's going on beyond the store shelf. And that's what I love what you're talking about because that's what brings us to life. That's, what's so relevant.

Chloe: Yeah. I mean, I also don't think that people realize that before the pandemic hit most produce they'd get at the grocery store would be, you know, sitting in a warehouse ripening or getting gas for months before it actually made it to the shelf as your fresh food. Um, and now with all the supply chain, you know, delays and delays in the ports and, and as we're realizing how global our produce system is, uh, know that's just the tip of the iceberg in terms of delays and in terms of, you know, how much it really takes to get your food to your plate. Um, but the important thing I think that's lost in all of that honestly, is that freshness also correlated directly to nutrition, right? So not only is it taking longer because of these global supply chains and these massive commodity systems that have been erected around our food system, but it's also making us less healthy in the process because the food that we're now trying to get this, it's supposed to be the healthier stuff.

Chloe: It's still taking so long to get to us and isn't ripening on the vine and that completely changes the nutritional content. Um, which I know this is a little bit of an aside, but that's why I've been so interested and seeing how frozen has been doing from the pandemic and frozen sales have been growing, going up so much like I, in a garden, who's an amazing chef. So bestselling cookbook author, no, she, she famously in March was, uh, posted a picture of her freezer that basically only had vodka in it. Why was I in a garden not using her freezer before this? And if I had a garden, it wasn't why wasn't, how were so many other people not right. But, you know, the point is that that produce is actually, if it's frozen, you know, as soon as it's picked, it's actually the most nutritious possible for you.

Chloe: Right. Um, anyway, it was a little bit of a diatribe, but I, you know, I'm just, I'm really excited to see how people are now like re you know, rethinking how to use their freezers and understanding how nutrition plays into it more because, you know, we can talk about supply chains and how kind of over, like how consolidated, but also massive they've all gotten. Um, but at the end of the day, I think what really will open people's eyes up to some of these issues is how it's impacted their, you know, their bodies and their health, you know, and nutrition and the massive nutrition inequalities that we have across the station. Right.

Dan: I'm glad you went there because that's one of the biggest challenges. Like I said when I was reaching out to you. Um, my, one of my missions, one of my goals here is to fix our broken food system. And it's these small disruptive brands that are at a competitive disadvantage because of that. And what I mean by that is that everyone has their handout. You've got to pay the supplier, the distributor, the whatever else, and they make it really difficult for these brands to thrive and survive. Whereas the big brands have a competitive advantage because they can go around some of those other issues. And then back to what you're saying, you know, the real, the best defense against any virus, there's a healthy diet. And yet it's these natural organic products that provide that real authentic help, that real authentic nutritional value.

Dan: And yet they're the ones struggling to get on the shelf. And because the big brands have big money, they can afford to buy they're wearing shelf, et cetera. So, I'm glad that we're exposing these inequities, and I love to figure out a way to fix them. And I think one of the ways to do that is to celebrate people you that are shining a light on the broken food system. And when you're talking about nutrition, I'm glad you got into that because that's what matters at the end of the day. It's Chloe. I liken it to be the ripple in the pond where the ripple in the pond starts as a natural channel, the R and D of the CPG industry. And that's where we start seeing things take, hold, new ideas, new concepts, cricket, protein, whatever, and that eventually percolates up to where it becomes a target, sorry, becomes a tidal wave, ends up RNA on a CarGurus shelf and a tsunami and ends up on a Walmart shelf. But it's, it's where these concepts and these ideas start. And in fact that you're shining a light on that. That's critically important. So first of all, do you agree, and then secondly, how would you view what's going on, what's taking place, and what is the impact of some of the things that you've seen, especially with the pandemic and even pre-pandemic?

Chloe: Yeah, I mean, you know, working at Forbes and having this kind of really macro view on our entire food system gives me an interesting perspective. And my last two stories actually kind of perfectly show this dichotomy that's been forming in our food system, right? Because, you know, Michael Pollan's Omnivore's dilemma, a massive game-changing book came out a decade ago at this point, but over a decade ago, um, and, and, you know, farmer's markets have taken off and local food systems have been kind of, um, you know, four to five directed, um, you know, independently of this kind of mass-market commodity system. And there are all these challenger brands, but my last two articles that talked about two IPOs that just happened. Um, what was it, vital farms for ethical ag brand, right? That's been scaling and kind of creating this market for pasture-raised eggs.

Chloe: The second happened, actually this just this past Monday through our staff was us a billion-dollar, you know, kind of mass potato chip brand, right. It's been around for 99 years and this, the public markets are going crazy right now, right? There's all this volatility, but also excitement around investments and things, or have been really going gangbusters all year. All of these different stacks are happening. All these different public at all. The IPO market is suddenly really, really picking up in the past few weeks. And it's really interesting to me that both of these companies both wanted to go public actually, because both of them seemingly on paper, might've had, you know, some of the more kind of stable financials in this market, right? You have us, which is a 99-year-old brand. The family owns 199.9% of it, I believe, um, leading up to this, right.

Chloe: They had some debt, but they had never taken on investment from the outside. Then you have vital, which founder-led. Matt are still had a considerable chunk of it. They had a lot of like very specifically found impact investors who wanted that kind of longterm return. Right. Um, and they were so groaned, but both of them at the end of the day needed this massive scale. And even though they both had, you know, had these longterm views and, and I would have thought maybe could have stayed private, right. And had more flexibility. They both said that the only way forward for them is to go public, get more capital, keep growing, grow faster because, at the end of the day, we're in this, like, I feel like late capitalism cycle where we are we're at the point of diminishing returns and you really can only be big at a certain point to really make that impact.

Chloe: Vital farms needs to get to the scale. It's still maybe I think 2% of the egg industry overall, right. It's an industry is so massive that even though they have, you know, I think it's a hundred million in sales or so, or a little bit more than that. Um, you know, it's nothing compared to what could be, right. So I've been thinking a lot about scale because this like need to scale this need to grow this need to have the purchasing power to compete because of the end game and because of the retailers and because of where your customers are and how to get to them. It's just, I think creative, I don't know. It seems like it's maybe creating massive inefficiencies, right? It seems like there's a lot of extra work happening. It seems like, it seems like it's concerning to me that maybe there isn't an end game for the independent. And I think that's something that needs to be, there needs to be a better way to have a more sustainable longterm solution for independent food companies.

Dan: Oh, I agree with you completely. In fact, that's a good point. One of the things I'm trying to do, Chloe, in terms of fixing our food system is teaching brands how to celebrate what's in their product, the ingredients, and the point being is that re retail's pay to play it's horribly expensive. And the idea behind it is that it's sit down and shut up, get out your checkbook. And that's how you get on a shelf. That's how you buy volume. That's how that's the traditional strategy that everyone uses. What I'm focused on is teaching brands, how to leverage a unique consumer that comes in their store. The point being is that consumer that comes into the store that buys the vital eggs, vital farms, eggs that understands why cage-free et cetera, is important. That consumer buys a lot of other premium products. And if they can help the retailer, keep that customer coming back into the store again and again again, Oh, and by the way, when they're in the store, here are the things that they buy then that helps our retail remain relevant.

Dan: It changes the dichotomy, the way that we look at our food system from being broken, based upon how much money can we get upfront for the PR to sell your product versus how do we really focus on what matters most to customer. And then going back to what you said a minute ago, I was a grocery manager for price club. The amount of produce that we throw away was staggering. It was disgusting. And so when you're talking about real nutritious food and try and understand what the impact of it, et cetera, you know, there are so many things we need to fix. So one, we've got to fix the supply chain. We've got to make it easier for these brands to get on a store shelf and get sold. We've got to make it easier for these small independent retailers to thrive by leveraging the strength of those unique consumers. And then the other thing we need to do is make it easier for them to compete so that when you're talking about the huge IPOs and stuff like that, it's more about getting, how do you get more runway out of your available resources rather than always looking to the next Hannah, instead of, I mean, you're kind of effectively an ATM machine for a lot of retailers and so on and so forth. How do you get more runway? What are your thoughts on that?

Chloe: I'm so glad we went there. I've honestly been. And if, you know, if anyone else has, I've been so interested in slotting fees and like how that maybe the pandemic has changed slotting fees or how it's changed, how much brands are spending with grocers or have to spend with retailers. So that's something that I don't have too much insight into. My reporting is all the time, like not fully transparent info, but it's always fascinating to me because I think you're hitting on this really important point. And that's good at what, what the scale of question comes back to, right? The growth the retailers are now requiring so much spend for the shelf space and like ad spend at and T taking on additional fees, like online advertising, all these different things that it's making the economics completely out of whack. And it makes it impossible for the founders to be able to grow their brand and reinvest and actually do what they want to be doing in the first place.

Chloe: Right. And, you know, that's why you have to respect a lot of the direct to consumer plays, even though, you know, it might be impossible to get to a certain level with that alone. Right. Um, I love what you said about the independent retailers. Um, I completely agree, and I, that's why I've been super interested in some of the deals that have been coming up, because know, obviously we've been going through a decade, maybe more of grocer consolidation and, um, like the, or one stripe deal that happened last year and their future potential expansion. Maybe, maybe the pandemic has changed that, but I know they were really planning to go nationwide with everyone. Um, but even just the more like the independent retailers that are calling up online, like bubble goods, for example, um, you, I, I think that is the future. And I think those like more segments that consumer groups and the, I think, you know, I mean, I think there's a lot of disappointment with whole foods, Amazon, right? I think there's a lot of disappointment with natural or natural food. Big grocers have gone. And I think social media and building brands and brand loyalty really present just like the independent grocer online with the big opportunity.

Dan: I'm so glad you talked to them so glad we're having this conversation. This is my jam. And that's why I've niched down a lot in terms of the trademarking piece in helping people with that. And so when the pandemic hit, I was supposed to speak at natural products, Expo West for the Canadian organic trade association, and everything got shut down. Right. And so

Chloe: No power to it. I was so excited about it. Can I just say, I mean, I've never seen a community go on LinkedIn more ferociously than the weekend before expo S when everyone was trying to figure out if they were going, they're not going, they're canceling wild, wild, wild anymore.

Dan: No, actually I was actually physically getting ready to walk out the door. When I got a phone call, I would have been there within five hours or whatever.

Chloe: I canceled the 24 hours maybe before I was supposed to. Yeah, it was, yeah, maybe

Dan: It was nuts. But so anyhow, I leaned in and I started a free weekly webinar series because the thing I realized I could do is to help brands answer and solve these exact questions. The funding question, the, you know, the, how do you get your strategic plan together, all that stuff. So that's what the focus of those free weekly webinars are. They're growing in. Popularity loves them. And, and where I'm going with all this is when you're talking about the broken food system. And you're talking about the way that things go to market. Now, this pay to play model is not working. So a lot of retailers adopt private label, and I'm not against private label, but it's the branded products that drive customers into the store. And yet you've got to make it easier for those branded products to thrive and grow and survive, et cetera. And go ahead.

Chloe: I completely agree. I mean, I, I've actually been thinking about this a lot right now, um, because of, uh, our pizza crust, right. Um, the problem is that right now, the only way to scale and get your brand past a certain point is essentially to cannibalize your own business and to modify the category. Like if you are a Kali power that has created the category, now you either have to private label your own product, right. And, and take away your market or your getting, get your price down, right. Modify your, your premium market that you just created. Or you have all the pressure, right. From a Nestle that sounds doing it, you know, their own in house brand, or, you know, all of the different, countless other ones that are as well. Um, so I've been thinking about that a lot, because right now it seems like there are only a few set ways to get to that next level in food, because I'm not sure if that's, maybe we all need to take a step back and be like Reese, just to keep rethinking things, because it seems like you really don't have many other options when you get if you want to get to that next level.

Chloe: And if you want to there, the options you have are not great.

Dan: No, no, no. They're not. Well, and I'm actually interviewing Gail Kali power next week,

Chloe: Not a huge, huge fan of hers for the record. Uh, you spoke on our under 30 stages in Detroit last year. Um, I think she's done an amazing job, but I think she's in a rock and a hard place. Right? I mean, I think, you know, she's, she's created a clearly a category that's so popular and, and clearly has created a real need that people, and now she has to deal with that. And that's not easy.

Dan: No, no, no. But I've got a better way to do that. So let's back up a little bit. You're absolutely right. So we've got to make it easier. And so on the podcast on the, you know, the different people I've talked to, et cetera, the supply chain deductions, and chargebacks and stuff like that. So I have a brand that sold $19,000 worth of product. I got a check for $12 and 34 cents from the distributor. I was talking to another brand that got into distribution in California. They're in California and they've got distribution in a store. And in Florida, Florida, Louisiana in Indiana, they can't support them. I get another brand that I was talking to that was told to go to a master broker. And they got distribution all over the country that they can't support. Almost put them out of business. It's these things that further complicate and exasperate part of the problem back to your trade-marketing piece, it's a drug.

Dan: It's something that the stores are addicted to. They want the front end margin. They want to charge for slotting. They want to charge for all those fees. So what I'm trying to do, clothes, I'm trying to help brands understand what is the best spend for your brand and how do you tell more effective stories? So again, if you went to a retailer, I'm a great guy. You know, you got a great gal, you got a great product, a great name, cool slogan, all that other stuff. Please put me on the shelf. You're at the mercy of the retailer to put you someplace, hopefully not in the back room where you can sell one. And then two, they're going to say, well, we want you to promote 10 times a year. And the reality is that 25% of your gross sales are tied. You're trade-marketing your promotional spending.

Dan: And yet 70% of those are better is wasted or ineffective. So instead, how about this? What if you went to the retailer and said, here's the customer that buys my product. And when they buy my product here, the things that they buy, and if I can help drive more foot traffic into your store, then I'll do that in Lewis, slotting, and some of the other fees, instead of promoting 10 times a year, I'm going to go deep five times a year, and here's how I'm going to do it. So brands, how to leverage that story, using the skills. Yeah, that's exactly what I mean to me, that's the way we change the conversation because the reality is the only way the retail is going to be relevant, meaning able to compete against the Amazons and everyone else in their market is if they keep more customers in their store, give them a reason to come back.

Dan: So generically speaking retailers don't make anything. And what they sell is real estate in the form of the space that your product takes up on the shelf, that little silver space. So what retailers really want more traffic in their store, a competitive advantage in their market, and a reasonable profit. And if you, as a brand can help a retailer achieve its goals. Then if the retailer is smart, they're going to bend over backward to help you achieve your goals, which is more sales, more distribution, more opportunities. And that's where I'm actually, that's a secret. That's been my secret throughout my career. What are your thoughts about that?

Chloe: I love that. And I think that's huge. I actually, I know, um, you know, so I head up our 3,030 reporting for the food and drink list. Um, and I know, um, Tara Bosch from smart suites, I know she's done that pretty successfully. And that, that brand has just gone absolutely gangbusters, especially this past year. Um, but she's been really smart and about the way she's built it. And I know that she has proven and, you know, gotten for the distribution in grocery stores because, um, you know, she's shown them that she's that incremental to so many other channels, just because of that data. How do you get that data? I mean, how is that proprietary data? Is that, is that like your secret sauce? Really? I'm so curious about that because I feel like that is huge. And if you can prove that to a grocer, that could be the key, right. To these margins work out

Dan: Well, it is my secret sauce, but I'll share it with you. Don't tell anyone else, just kidding the databases, the way that they're set up. And this isn't the fault of the databases, but they're not designed around the way the consumer actually shops the category. So when you're looking at syndicated data, they lump all of us or this, the shopper market data, they commoditize us. You're female there. Therefore you buy just like every other female, right? Sure. Just kidding. But it's really that mindset. So you'll hear me a joke on the podcast thought Chloe, where, you know, the low hos consumer to those people, it's someone who eats a couple of salads that goes for a walk. It's like, that's not us a gloss consumer. My world is someone who's trying to reduce. Their carbon footprint is paying attention to compostable packaging, all of that stuff, right.

Dan: Who's really, you know, supporting mission-based brands and whatnot. So the point is that I break down the category and resegment it based around the way the consumer actually shops the category. So when you're talking about pasta, if you go into the database, it probably says here's pasta, or, I mean, I'm a pizza crust. So what I would do is I'd break out the different kinds of pizzas, pizza crust, what they're made of, what are the attributes that are driving it back to the ripple in the pond. So the difference between this is kind of getting food nerdy. So you'll love this. Yeah. So if you eat, I did a big project for our Pacific natural foods recently. So, um, this is kind of the mindset. So if you look at the soup category where you've got low sodium, reduced sodium, lower sodium, et cetera, it's basically, this is lower sodium than I had yesterday, right?

Dan: It doesn't really mean anything. And people are so confused about what they're buying, what they're eating. So if you eat chicken soup, well, chicken has sodium naturally in it. So there's no sodium at it. And that's as low sodium as you can get. So explaining to a customer what matters, why that matters, et cetera. Okay. So then you have regular sodium. So iodized, sodium, Ida assault versus pink, Halima, MLA, and salt, which provides minerals that metabolizes in the body better, all that other stuff is not bad for the heart, as opposed to the iodine. How do you communicate that? So I help brands bake that into their signs story, but more importantly, to answer your question, I break that out in the databases. So now we can identify what are the actual trends in terms of what's going on. And this is something that people don't have access to.

Dan: And so there are a lot of people out there that are using can top on reports and they walk up to the retailer and say, look, I printed this off myself. I even changed the ink in my printer. Aren't you impressed? Just kidding. But that's kind of the mindset of the way we do this. Instead, if I can help a retailer understand what unique about, for example, call it power, have the retailer understand what's unique about the consumer when they buy Kali power or organic or whatever, how does that consumer buy other products in the category? So let me frame it this way. I did a buy feature an article for the 2016 category management handbook, where Nielsen gave me all access to their data.

Chloe: That's the ticket right there. That was cool. That was really

Dan: Just for the project. That was really cool. So here's what I was able to prove. If you look at him, this is all outlet, all categories, all everything, right? So just to pick on Derek, so is up 1.5% organic dairy represented organic dairy was up 12.4% or something like that. Organic dairy represented 9.8% of that pie, a $75 billion pie. Okay. If you remove that small sliver organic from the database, then the category would only be at 0.5%. And this is true across every category. Now go one step further. If we're looking at plant-based gluten-free et cetera, then the numbers are even greater. And we would get into the attributes about the more nutritious foods, the foods that are, have more of the stuff that we want and need organic, et cetera. That's where you see those trends even exploding. So back to your question, if I can help a retailer understand the value of that trend, understand where the ripples forming so they can skate to where the puck's going, rather, than where the puck's already gone.

Dan: That's the win, win for them. So to answer your question about the data, it's a matter of, if you get the data you need to understand what is it that you're looking for. And that all begins, goes back to the unique customer that buys your product. So two things I put out the free turnkey Salesforce strategies course about a year ago, actually, I'm launching a book about that next week where I'm going to talk. Yeah, thanks. Or I'm going to talk about how do you identify who that core consumer is? So we understand what's the difference between you as someone who's sitting in a garden in New York, who's trying to be zero waste, et cetera, as opposed to someone who drives a gasket, you know, that kind of thing. And so once we understand you, the consumer, now we can overlay all these strategies on top of it.

Dan: And so the real question is what do not, not the fact that the data is available, it's which data source makes sense to solve your specific problem. And so my claim to fame is I've been able to help the retailers and they've actually given me access to their internal data, which is a huge win because it's free. They're paying my time. I give them back the insights and they're able to get in competitive advantage, et cetera. But more importantly, this is how we change the conversation from a brand, any brand, being a commodity, just another package on a retailer shelf, instead of being a value, add of a value-added partner to the retailer, to help the retailer grow and scale. In fact, if you listened to, I hope you had a chance to listen to the podcast episode 205, where I suggested Maddie to the genius bar.

Chloe: It's so inspiring. Oh my gosh.

Dan: But that's kinda what I talk about. It's how do you leverage that strategy? And then where do you start growing sales in your backyard? How do you expand it, all that other stuff? So does that answer your question?

Chloe: Totally. It totally does. And that's, so that's really good to hear have you, and I, I don't want to start interviewing you, you know, but I'm curious, how have you seen it change through the pandemic? Or have you seen how retailers are thinking about how some of these younger or more disruptive brands can help them through the pandemic? Has that students at all? Or has it been more encouraging?

Dan: Yes and no. Okay. So there are two parts of that question. Early pandemic, big brands are having trouble getting product on the shelf. So I was encouraging small brands to get their product in distribution and take up some of that space and freeze, you know, skip the slotting and all that stuff, build brand awareness of whatever that was pre-pandemic. Now, post pan, I mean, not post, but now we're at today. Those brands are struggling because of the supply issues and all that other stuff we talked about. So, because they're struggling, they're not able to fill the orders to the degree they work that drug that we're talking about, trade promotion, retailers are going back to that. And so since brands have big pockets, they're trying to leverage those big brands to drive that promote those promotional dollars back into their store, which is squeezing out the small brands.

Dan: So instead of thinking about how do they survive, how do they remain relevant tomorrow and beyond? They're thinking about their bottom line, kind of mentioned that earlier, didn't you about their bottom line, as opposed to the longterm strategy? I believe that a lot of retailers are going to go under this next year and a lot of them deserve to, well, even before the pandemic. Yes. Because of the fact that they're so focused on private label instead of branding so focused on trade-marketing instead of really addressing the customer, let me put it, let me frame it this way. I lay that. One of the reasons is retail is broken is because retailers spend more of the time trying to sell us the stuff on their shelves rather than signing is the stuff that we want to buy. And if they were to change that, to focus on what we want as consumers, guess what we go in their stores more often, they would be more future proof. They'd be more relevant, they'd be more resilient to competitive threats in their market. What a thought.

Chloe: Totally. And I know you mentioned the word resilient and, and you know, I know I had talked about gross or consolidation before, but you know, even just with, um, I'm a Jersey girl, right? So the King's bankruptcy that was announced a few days ago, for example, it really shook me. Right. And I think, you know, with all these, with so many of these regional grocers, having been consolidated and through M and an over the years, we have these sound massive, massive, massive grocery store, holding corporations that are still really struggling to make this model work profitability wise. Um, yeah, I think it'll be interesting to see that going for, but I think obviously there's the key and I think it's a shame because like the resilience factor, right? I mean, no one will be, would be more committed to local than a local grocery chain, right? Like no one would be more committed to the regional, make sure the regional customers have enough food during a pandemic, Nana regionally owned family-owned grocery chain, which is what everything got consolidated for the past, like a decade or so. So I think we're in, we're in tepid waters for sure.

Dan: Let me go one step further. It's those local retailers, it's those local restaurants that are supporting the community activities, the little league, the soccer teams, all that other stuff, not the big chains. So we need to help them survive and thrive. We need to help them. We need to help remain relevant. We need to help them continue. So let me back up, I'll tell you a story that kind of fits into a kind of really explodes us are really helps frame this. There is a retard I'm not gonna embarrass them because they're still alive today. Unfortunately, fortunately, unfortunately, but anyhow, so they're a small retailer and they would have their own distribution center was in their chain and they wanted a profit from headquarters to the distribution center. And then they would charge an upsell to the retailer, their own retail zone stores. That's the model that you see in traditional natural, by the way, I should also say that what you see in traditional and natural today is the way that mainstream was 25, 30 years ago. I'm dating myself the reason that,

Chloe: Which is part of the discipline with where Nashville has gone. I've had so many just literally I have had so many people, bill Nyman included names in the food industry. I've told we have had just how massively disappointed they are in the trajectory of the natural grocery segment. I think that's like, there's something to be said for that

Dan: Is. And so we're talking about efficiency. So you wonder why distributors and stuff like that. Aren't around in the bit with the big retail, big brands are because they didn't provide value and I'm not trying to bash them. I mean, they should be a delivery service. They shouldn't be charging for promotions that don't do anything. It should be Jimmy charging for things that don't matter. But so back to what I was saying, so the point was the retailer was complaining that they could not compete against other brands and other retailers, but yet they're charging more money to get our product on their shelves. And they're screaming about the fact that we can't make it, you know, help them compete, head to head. And my point is that is one of the most fundamentally broken things in our system, but that's, what's kryptonite and into the natural channel, which is so unfortunate because these small brands, you know, it's actually, it's the consumer.

Dan: I know a brand that I'm working with. She has to have a product in a package for 80 cents, landed now for her to make any money for actually for her to break. Even she needs to sell it to you for $3 and 99 cents. Imagine the waste, how much, if she could SAR product for a more reasonable amount and she could learn it, make a decent living, you could buy their product cheaper and you can make it easier for the retailer, sells it to thrive. She can compete against every brand out there effectively. I mean, people don't think about organic does cost a little bit more, but it's the supply chain issues that make it so out of reach your thoughts.

Chloe: Oh, that's just such, it's so disappointing to hear. And I really finished with the example, that's such a clear example of how, what, where, where the excess, and where the waste is really coming from and going. Um, you know, I mean, we're in a time when food prices have been growing up for years, but now they're at this like really, really crazy all the time high. And everyone's essentially saying that they're only going to keep going up, right? The predictions are stark. We're obviously at a time of massive unemployment were at a time of massive insecurity and a nutritional health crisis. And it's just, it's just really disappointing, especially when you think about how at the end of the day that chain went bankrupt, right. Or, or it got acquired because it couldn't figure out it was taking so much of the profit. It had so much of the glut, but it still couldn't make its own model work because there was also broken. Sorry, I try to say a beat and I have hopes, I know people really want to hear hope, but it is hard sometimes when you're thinking about like this, the financial implications of the supply chains, because, you know, it's these like unhitch, it's these hidden unseen areas of inefficiency that are really going to be our downfall. Honestly, I know people want home.

Dan: No, it is well I'm betting. I mean, it's, it's, it's again, it's that drug it's called money. I, you know, you reminded me, uh, years ago when I was working for Unilever, uh, I was calling on an independent retailer in Fort Collins, Colorado called steel's market. And they had been around forever and they're taking, you know, finding the little leagues and all that stuff, a big part of the community, et cetera. They wanted to build a store, had the permits, everything was all ready to go. They'd been working on it for a long time. Walmart swooped in and grabbed the spot because the city gave it to them. They put in traffic lights, they gave them special tax breaks and stuff like that. And yet the people that work there, weren't getting, making enough money to pay, you know, to get health care and all that other stuff.

Dan: So they put a burden on that. The management came from outside of the community, et cetera. My point is we gotta get away from this big business mentality and focus more on main street. As long story short, that retailer went out of business. Now, granted, they were inaction. I forget they had nine or 12 stores or so, but I love the market, but you hear these stories all around us. So again, if we can change the model and we can help these small brands help the retailer compete more effectively, that's how we're going to change things. And, and another quick story, uh, I used to work for home-club, which is like the home Depot, one of the originals, and they moved into our neighborhood and there was an ACE hardware that sold everything in the sun gate gave tremendous service, et cetera. And everyone was worried about them going under.

Dan: Well, the reality is when you walk into the store and you say, well, it's down that way. If you want something right, go figure it out yourself or bad advice that small, independent grew and thrived, even though the big store went under after a few years, poor management, stuff like that. But the small store grew and thrive because they provided such incredible customer service. And because they had the products that customers actually wanted. So this is proven, this works. So now what we need to do is bring this into our world and help these brands and these retailers partner together. That's another thing, small, independent retailers can't possibly know what's going on beyond the bare on the store. That's where you come in and small brands. So if you can help a retailer understand what's going on in a different community or a different category, a different brand, et cetera, you're giving them insights awareness to something that they did not have insights or awareness around before one and two as a brand. If you can help that retailer gain those incremental insights, those trends understand what's going on in the category specifically, who's buying what, why they're buying it when they buy your product, whether things to buy, et cetera, the market basket, that's the sum total of everything, someone buys, then you're going to help that retailer grow and thrive. And that's how we help. In my opinion, small brands and small retailers thrive during all these uncertain times. Your thoughts.

Chloe: That's great to hear. No, I think, I think, you know, what's interesting about what you're talking about is you are working within these systems. I think it's super important so much in my work. You know, I, I'm very kind of involved and familiar and intimately, you know, sourced with, you know, this kind of local food movement and kind of this kind of separate supply chain that's been erected, you know, kind of again, like maybe since like the Omnivore's dilemma really kind of sprouted up and made it all this kind of consumer demand change. But you know, there, there is this kind of mat obviously like a massive system that needs, that needs people like you working within it to actually make some of these kinds of connections happen because they hadn't been happening as we've been discussing this entire time. Right. Um, so I think that's awesome.

Chloe: Um, and I think, you know, the broader issue, you know, I also really just appreciate that you're, you're looking at food service is such a behemoth that again has a completely separate supply chain, right? And it gets at least separate, completely separate set of consumers, completely separate set of, of suppliers. Um, and we're only going to be able to actually make changes in the food system. And it may change that is lasting and do add resilience at all of these different levels and, and, and support local suppliers. If we're thinking about all of these things, and I'm excited to see that, you know, you're bringing this like local mentality to the big retailers, to the big foodservice distributors. Um, because too often, honestly, I'm finding that these, these investors, these, um, these, they just don't speak these founders. They just, there's not enough kind of, and bridging the gaps between the two and non so that's part of what I think brings my purse. It makes my perspective and point of view, um, you know, as, as, maybe as interesting as maybe some people think it is right because I think there's not a lot of talking between. There's not a lot of people it's new, you're kind of only really in one or the other. And most of the, most of the commentary, most of the journalism about all this, um, is coming from one of the two perspectives. So

Dan: Yeah, it's kind of the same old, same old a sec. I got a quick story about that. So there's a famous food and a famous, a radio announcer that went over to his son's house for Thanksgiving. And his son's wife was putting him in the oven and she cut the ends off. And he said, why do you do that? As you said, I don't know. Cause when my mom always did that, the mom was standing there and she said, why did you always do that? And they said, well, because my pan was too small. That explains our entire industry. We do this because we're sheep and we can't think, and um,

Chloe: Round, round hole, square pegs in round holes, right? It's like, we're trying our antiquated systems for we're educated because of that. And now we're so far beyond, we forgot why

Dan: That's exactly. So my point is you should, shouldn't your go-to-market strategy, be every bit as innovative as in disruptive as the ingredients in your package,

Chloe: It has to be right. It has to be, but yet people aren't thinking about these things.

Dan: Well, it is. But look, so you were talking about direct to consumer, cause I know that's a big thing for you. Um, I think you should have a direct to consumer opportunity on your site, whatever you gotta be, go direct and then you can leverage and gain runway, et cetera. And then you can leverage that relationship with retail. Cause I've got a strategy where you can drive online shoppers into traditional retail, which is really cool, but the point is you've gotta be available anywhere your customer shops. So if I can develop a loyal tribe around my brand, outside of traditional retail and I can service them and I can focus my trade, spend on them in terms of I can reduce my trade spinning in stores. That's how I'm going to help those stores. By the way, I've got a really cool free trade promotion, ROI calculator on my site plugged up, it's free. But the point is, how do I help these brands grow and thrive by answering some of these questions? And thank you again for coming on the podcast because that's why the podcast exists. That's why I do what I do to share stories, to help brands, to challenge the standard with things.

Chloe: No, I'm excited to have been on the I'm so excited to be on the podcast. I'm excited to be having this conversation. I think more of these conversations need to be happening. Um, and especially, I don't know it because food doesn't CPG, particularly beverage too, you know, there are such fewer lower barriers to entry than a lot of other industries, right? Because of how much contract manufacturing this industry has. Um, no, I think it's even more important to have these conversations because of that because it is kind of looked at as an industry where people can make a fortune or people can make their livelihoods. Right. Um, and it also is very enticing for young entrepreneurs, right. Who maybe are getting taken advantage of by all this like new investor interest or VC interest in building and selling brands quickly. Right. Um, but I could go on a diatribe about, about bottles for, for days.

Dan: That's interesting. That's great. In fact, actually, I'll give a quick shout out. Uh, you told me to listen to it and I listened to, it was a great episode, the startup CPG podcast where you talk a lot about that. And that's an important thing brands to be thinking about, you know, just cause your mom loves it doesn't mean everyone else will, but how do you grow in scale? How do you solve a lot of those problems in that, what I'm trying to do here and that's what you're trying to do through your articles? So thank you so much for what you do. Is there anything else that you'd like to share? Any parting thoughts, advice, suggestions, recommendations.

Chloe: Yeah. So, um, but I guess we didn't actually totally talk about my newsletter, but let's talk on this perspective. My perspective is everything we've been talking about really is kind of, um, part of a new newsletter that I launched in April. It has almost 6,000 subscribers already and it's, you know, still, maybe only a few months old. So I'm very excited about it. And it's been a great way for me to promote a lot of my contributor's work as well. Um, but it's called mind theater and it's sent out through LinkedIn and, um, you know, it's pretty much tying all these pieces together of the food system. Um, and bringing in the billionaire perspective with the 30 under 30 perspective. Um, and uh, to that end, I will also do a quick plug for the 30, under 30. Um, we are now taking recommendations and nominations for, um, the next list, which will be coming out. So I'm really excited. It's my favorite time of year. Um, I've seen so many founders come through the lesson really just builds incredible brands. Um, but I've also seen great trends. Like we're being corpse coming through. You know, now almost most of the CPG folks who end up making the lists are typically Forbes now, which has been really exciting to see. Um, but yes, we're, we're pleased if you have any, if you have any recommendations, we're always looking, um, to have as wide of a net as possible.

Dan: Well, if I can make any introductions or help in that way any, in any way, let me know. That's why I wanted you to meet Matthew because, Oh, I just talked to him and what a great story. He's the kind of guy that you want as a good friend, what a super person and they're doing the B Corp thing in Canada without it without, I mean, I don't know if they, he is, I don't think he is a B Corp, but he's doing all this stuff that'd be corporate do. And

Chloe: Yeah, it takes, it takes a little bit to do, but it is worth it. And honestly, I mean, I think the biggest reason it is so, um, powerful is fact that it, you know, it protects founders in a lot of ways that maybe you don't realize at first, obviously, it has all these kinds of sustainability and ethically minded, um, you know, goals and kind of assurances, but it also really protects founders at the end of the day from Noah's sale. Or if they get into bed with the wrong investors who then want to sell to the wrong type of partner. Um, so I think that, um, there seems to be more kind of teeth like that, honestly, in this industry,

Dan: Let's go one step further. It's also the roadmap that you need to remain focused or effective or whatever you want to call it. What I mean by that is they keep you going on that same path. Instead of focusing on wall street, it's focused on more main street, it's focused more on your values. And the reality is that the customer that, that, you know, appreciate your mission. Let me frame it this way. I don't have the time to go to Africa and make water, clean water available to people, right? Or other, you name your other mission, human trafficking. It doesn't matter whatever your mission or your focus is. But if I can support a brand that does that, then that if I can help that brand do more good on our behalf, then that's a win, win for all of us. And so B Corp's being able to celebrate and help those brands, make those connections and connect with the consumer, baked it into your selling story. At the end of the day, this is what retailers want. They want those brands on their shelves that are going to track those kinds of customers that, that are aligned with whatever their mission is.

Chloe: Yeah. You know, and, and I think it's really important because it also just shows the retail group. We talking about retailers, you know, so much and getting the retailers to understand what is important to consumers. And I also bet what brands and founders can bring to retailers. I think these types of certifications are actually something that is beneficial and has validated in that way too.

Dan: It is. It's tremendous. And again, it's all about awareness. It's about education. So thank you for being such a strong voice in the industry.

Chloe: Well thank you for having me. Thank you for taking the time to ask me some questions and give me some time to talk about all these things that honestly I love I could, I could go on all this stuff for a long time.

Dan: Well, you have to come on again sometime. That'd be great. I would love that. Thank you so much for your time. I appreciate.

Chloe: Okay. Cool. Well, I will speak soon and, uh, looking forward to seeing how all this, how this keeps going. Fingers crossed. Thanks.

Chloe Sorvino on LinkedIn

Chloe Sorvino on Forbes

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