The Startup CPG Podcast

00:00
Jonathan Lawrence
Hello.

00:00
Daniel Scharff
Welcome to the Startup CPG podcast. Today we are thrilled to have Jonathan Lawrence, a seasoned leader with over 20 years in the natural food supplement and body care industry. Jonathan is the vice president of center store at Fresh Time Market, which is based in Downers Grove, Illinois, with a mission to transform communities by offering fresh and healthy food at incredible values. And it's one of my absolute favorite grocers in the country. I am so thrilled to have Jonathan here to tell us all about freshtime and how brands can get on their radar and how to do well if you can get into working with them. And without further ado, let's just jump into it. Jonathan, thank you so much for joining us. I'm so happy to have you here. Do you mind just doing a quick little intro?

00:45
Jonathan Lawrence
Yeah, you bet. So, hi. Yeah, Jonathan Lawrence, I'm vice president of center store here at Freshtime. About me I've been in the natural industry my whole life, so going back to independent stores. My family had stores in Phoenix growing up called Arizona Health Food. So I was eight years old on the register kind of thing. So just grew up with that. So I have a lot of great relationships and friends within the industry, family that's still in the industry. After our family sold our company, I went on the vendor side as a startup for a little while. So I get the hustle and I get the kind of entrepreneurial spirit that exists with all these startup companies. It's one of the hardest and most gratifying things you'll ever do.

01:28
Jonathan Lawrence
We sold that company and then I went back to the retail side at Sunflower Farmers Market and then sprouts, which I'm sure you've all heard of, and then fresh time here, where I've been here since the start, so about ten and a half years now at fresh time.

01:46
Daniel Scharff
All right, cool. Well, I mean, just getting right into it. Can you just tell everybody a little bit about fresh time? And I mentioned before, it's just one of my absolute favorite grocers in the country. I, having run a brand, have traveled all over and visited tons of stores and I think visiting probably one of the flagship ones near the office there. Just what struck me about it is it's just beautiful and kind of almost has like a farmers market type feel to it. But you get in there, it is so well curated. Every brand in there just seems outstanding. The workers in the stores are all just very nice and engaging and they're interested to hear about products and it's just beautiful. Everything is well maintained. Your products are going to look great if you're in there as a brand.

02:34
Daniel Scharff
The experience of working with you guys was unbelievable. The level of support and just. I mean, the velocity was great. These are just like high velocity stores that are just super nice and incredible for a brand. So now your turn.

02:50
Jonathan Lawrence
Yeah. So fresh time. We got 70 stores in the midwest in about ten states. Our office is here, based as we're talking about, 40 minutes west of the city in Chicago. So in Downers Grove? Yeah. Everything within our stores is curated. So from the signage on the outside to the inside. Early on, we spent a lot of time, days and days, really, of just going over the flow and the fixtures and everything. And even today, it's really kind of morphed and changed. We're constantly kind of playing with that. Like, what is the store of the future? What is the right size? What is that first impression when customers come in? And I'm really happy that you talked about the team because that's the most important thing, really. Anyone can sell what we sell.

03:41
Jonathan Lawrence
We like to say that there's that curation that we put together, but ultimately, it's that team. It's the team you connect with in the support office and how they work well with everyone and truly treat people how they want to be treated. And then at store level, those team members are so passionate about the products they sell because we always talk about it's more than just retail. Right. We have the ability to affect people's lives and change them for the better by introducing them to the brands and amazing brands, mission based brands that we get to sell every day. So personally, I couldn't just do a grocery store kind of gig. This is the industry that I love, that I'm passionate about, and it makes me feel great that's what you got when you came into our stores.

04:29
Daniel Scharff
Absolutely. And I don't know why I didn't expect it, because the interaction that I'd already had with your team was so positive. I could have assumed that it was going to reflect all the way through to the stores. That was really marvelous. Sometimes people ask me like, hey, where in the US would you launch a brand? And actually, having spent now some more time in Chicago, I used to live there when I was younger, but now I was recently back there for a startup CPG event, visiting the retailers there. It's an amazing place to launch because brands are so well prepared in Chicago.

05:04
Daniel Scharff
It also can be much more affordable than very pricey la that I'm sitting in right now with our ridiculous rents nice weather this time of year, but oh my God, if you're like starting a payroll and everything, Chicago is an amazing option because you get great people, great talent. But I think even more than that, just the ability to partner with retailers like you guys, because that's enough for an early brand if they're local. And I know you guys do a lot to support local brands. Just super impressed. So just taking advantage of your experience. Also from sprouts, how would you compare fresh time market to sprouts, for example?

05:45
Jonathan Lawrence
Totally different. No, I'm kidding. So when we started fresh time, a lot of our organization has its background at Henry's wild oats. So when you think about the farmers market concept, it goes back before sprouts. But sprouts is like the. And fresh time are really like the modern equivalent today. So when we first started freshtime, a lot of the sets looked very similar. Now, granted, I just came from sprouts, right? And I was a vitamin category manager there, so it's not like I was changing my mind on what I thought the assortment should look like. So we started very parallel and then we've gone different directions. And part of that's based on the communities we serve. So sprouts, we both like to be first to market, right? We both like to bring innovation. They're a big company today.

06:41
Jonathan Lawrence
They're growing like gangbusters, which is really exciting to see. And they've done a great job of still being able to foster innovation and new and local. I think we've done a little differently because we're 70 stores, right? We're that perfect size to launch brands where if it doesn't work, we're going to help you along that way. And if you launch a new product or something, and it's not going to kill you. If it doesn't work, you flip it, you do something different. We've kind of walked that line recently with bringing a little bit conventional. And as a person who's grown up in natural the whole lives, that was hard because we've always looked for brands that were kind of counterculture to kind of the mainstream.

07:29
Jonathan Lawrence
But we did it intentionally and purposely because a lot of the communities that we're in aren't full on hardcore, what we call our core natural customer. Right. We talk about meeting them in their journey. So to do that, you have to have some of the products that they recognize. So I always give the example of the deodorant set, right? Deodorant is the last step a person will take on their organic or natural journey. Or at least that's how it used to be, right? Because you're nervous to make that step. Because it's got to be efficacious. It's got to work. And if you're looking at my set five years ago, you might recognize Tom's and a couple others, but that's it. So if I'm a person who's maybe I'm eating organic fruits and vegetables, I'm going after grass fed meat.

08:21
Jonathan Lawrence
I've got some natural items in my pantry, but I'm not fully there. I'm looking at that set, and there's nothing for me. And so I walk past it. We looked at that example and said, okay, what are some of the brands that they do recognize? And by placing them in that set, do they at least recognize? Hey, I'm looking at the deodorant set, right? And then, okay, there's a product that I use and recognize. That's the gateway, though, because that's where we have team members that can talk to that individual and talk to them about what these brands do or how they're better or how it's better for your health.

09:00
Jonathan Lawrence
So we meet them by giving them some of the products that they're used to or maybe that their family uses, but with the intention that we're going to trade them up to a better for you product.

09:11
Daniel Scharff
It's super interesting how you talk about that. I was just remembering my perceptions of organic before I knew a little bit more about it. And in some categories, organic, it means it's going to be just better performance and it's going to taste better. Like, if I think of an organic BlackBerry, like, let's go. It's going to be big and juicy and awesome. But then if I think about an organic deodorant, I'm like, I'm going to smell terrible. At least that's the way it used to be. I don't know. I'm probably one of the holdovers where I'm still using just some name brand stuff. I don't even know what it is, but it's the one I've always used, and that's okay.

09:44
Jonathan Lawrence
You're a perfect example of why we did it, right? So when you come into our store, you need to pick up your name brand or the branded deodorant you're used to. You might find it now, you might not find all the selections that you're used to, but you'll at least see it. And then maybe once or twice you buy it within our store. But you keep coming around these other brands that you see, and you have that interaction with one of our knowledgeable team members, and you might try it. Right? And then once you see that it works, it's safer, it's healthier, like any category within our store. Now, all of a sudden, we're converting that customer, and I think that's what gets lost in all this is like, how do you make meaningful change?

10:28
Jonathan Lawrence
Well, you can't just say, hey, we're only going to carry this. If you don't like it, don't buy it. That's fine. Right? And there's stores for that where it's just meant for the core customer. But if you really want to change behavior or bring people to a different element, you do have to meet them where they're at. So that does mean us sacrificing a little bit of what we're about in order to bridge that customer. But you have to be very careful there. You can't go overboard. It can muddy up the message. So you have to be very specific in where you go. And we never promote conventional products, but they're there. To some of our core customers, they may see it, and why do you have that?

11:14
Jonathan Lawrence
But to majority of people, they're going to see that and they're going to kind of recognize it, and they're going to feel a little bit more comfortable and accessible into our store. So that's the big thing, is accessibility. So getting back to your original question with what's different between us and sprouts? Sprouts has gone really heavy in a great way with private label. A lot of innovation there. They've done a fantastic job from a core natural assortment. We're very similar. I think the biggest difference is we've got some conventional brands where they've typically gone more strong into private label.

11:47
Daniel Scharff
That's so interesting to hear you say that because. Yeah, I mean, I don't want to have to go to cvs to get the deodorant after I do the shop at the store. So it sounds like you guys are paying attention to what the shoppers want and just trying to make sure that they know they can pick that up there even. Or, yeah, if they do want the very high end new stuff. Also that maybe, probably. I'm still a couple of years out from making the switch on deodorant. But isn't it interesting, though, that you do have some categories? Yeah, organic blackberries are better, organic toothpaste probably isn't going to taste the way you're used to it tasting, and you might wonder if it works as well as probably the chemically stuff that I buy.

12:30
Daniel Scharff
Even when I had launched an organic beverage brand and actually when I started in on it, I was like, well, I don't know if it'll taste as good, but at least it's organic and that'll be the selling point. I didn't understand that actually at the end it was going to taste a lot better because it was organic, more expensive, and higher quality ingredients. So I guess it does change my category. You've had such a cool career. I'm just wondering along the way, what were some of the things that you learned across your different roles in your journey, things that you took from being the vitamin buyer and other things on your way to leading what I think is a really impressive team.

13:14
Daniel Scharff
And I love all the people on your team, like Allie Cotter and Ellen, and I've had great experiences with all of them. But, yeah. Interested to hear what you've picked up along the way.

13:25
Jonathan Lawrence
Yeah. Part of I think why they're so great to work with is the understanding that this is a small but amazing industry and people change roles in companies all the time and you never know what's going to happen. So you truly need to treat everyone with a certain sense of respect and dignity and admiration. Because today I'm on the retail buyer desk. Right. So our team members determine whether people's products get on the shelf, whether they're going to get all these sales or not. But I've also seen the switch where that person that was on the retail desk is now on the vendor side, and they see a whole different side of the business. And so that's the thing is, you build great relationships with this industry. You want people to be successful.

14:23
Jonathan Lawrence
I mean, a hard thing is you got to say no nine times out of ten, but you have to go into it treating people the way you want to be treated, because you never know. Again, Daniel, you brought products to us, right? So you were a vendor. Great product, by the way. Two years from now, you could be on the retail side or you could be doing something, and I'm now pitching to you. And it was, how you treat someone when you're in a position of power says a lot. And I think that's what's important about our team, is retail is a grind. It's hard. So much of our day is being there for the stores that are serving the customers, and it's not an easy job, but you are put in a position of power in certain situations.

15:11
Jonathan Lawrence
And it's important that we're fun to work with. We're the company you want to work with, not the one you have to be in. And I'm really happy that kind of comes through because that's kind of our mantra here. And it's fun. It's fun to see the brands that you partner with early be successful, and it's fun to see those people that have put so much work into things start to experience that success and those relationships go on. I mean, there's brands that I brought in early in like sunflower and sprouts when I was a category manager and maybe they were a sales manager, and now that person, CEO of the company, and we still have those great relationships because of the time we spent together. So that's the biggest takeaway I think I've had over the last few years.

15:56
Jonathan Lawrence
You see a lot of innovation, you see a lot of companies grow, sell a lot of startups. But I would say that the relationships you make are the biggest thing and the things that really kind of carry you through.

16:11
Daniel Scharff
I love hearing you say that and I know any brand listening will really appreciate that as well. And it's been my experience with you guys also. I know also people get busy and it's hard to respond and respond nicely and with care to kind of everything that comes your way, but I really do believe you guys do that. And there are other retailers out there who are completely the opposite. I had one experience with a national buyer where went to a charity event because it was like, hey, buy something, it'll support this charity. And then you get to pitch to these buyers. And the national drinks buyer came by and just looked at me and he's like, I'm not trying drinks today. Like, what? Dude, are you serious?

16:54
Daniel Scharff
How could you do that to a brand and you're just going to show up like that? I just was like, all right, note taken, man. Yeah. If I ever in that position, for sure you're going to feel it.

17:05
Jonathan Lawrence
That's why it's great, I think, in people's career to work on both sides of the desk because like I said, when were part of a startup, the brand that my uncle started and I was part of it was plant fusion. So it's a plant based protein still out there today. It's hard to call stores, it's hard to get responses. And I think a lot of times certain buyers, it's difficult for them to say no, and they may just kind of skirt around it a little bit. But soon you realize that the people on the sales side, they can handle it. They just need answer. If it's no, and not at this time.

17:46
Jonathan Lawrence
Now we say, yeah, it's not right now, but it's never a full no, because you never know because we might misjudge a product and we say, it's not the right fit for us right now. Six months from now, that brand can blow up. Well, guess who's calling and saying, hey, we'd love to take that product in. Right? So for the brands listening, it's hard to get on the shelf. It's not easy. And there's a lot of brands out there, and you need to understand truly how your brand is unique and different, because on this side, we get to see a lot of things out there. Right? So if you know the market, you know how your product is differentiated, if you hit the right time, all those things help you.

18:35
Jonathan Lawrence
But just because you don't make a category review or you don't get in on the first time, keep trying. It's not a never know. And then it could be one buyer's opinion. Right, because that's a great thing. Our category managers, they own their sets like they manage their business, and the assortment that they have is their interpretation of what the category should be. We flip desks all the time. Right, so you named Allie. Allie is in food service now. Right? And she's leading deli. Ellen's in grocery. Kristen's leading the grocery team. So we do flip desks too, strategically as well, so that we're getting a different point of view on those sets. So for the brands, sometimes it's just the right time, but I would say always keep at it. Always keep trying, because things never stay the same.

19:29
Daniel Scharff
And that's a good reminder. I actually saw Ali at Fancy Foods this week and was going to see if she can join us for a food service by our podcast as well, because that's just such a great perspective to get. So I'll be looking forward to that also. So how do you think about the overall center store then? What is it overall that you're trying to accomplish? And how are you thinking about the space for the different categories and what you want to accomplish overall?

19:58
Jonathan Lawrence
Yeah. So our store and sprouts are pretty much the same size. Right? So this market, you're anywhere between 22 28,000 sqft. So it's a convenient shop. Right. It's not a big, huge supermarket, but you have to be very specific with what you want to do within that space. So we've remodeled probably 60 stores. We're doing another nine this year, where we're giving groceries some more space, because we quickly realized early on, especially as the grocery category has just grown and there's so much innovation in it. Over the last like eight to ten years, we didn't have enough space. And so we're trying to complete that shop for the customer.

20:43
Jonathan Lawrence
So we know we can't be everything to everyone, but as a strong secondary shop to most people, but also a core shop or a primary shop to the core customer, we're trying to ensure that we've got the right assortment, the right space for every department. So on the center store side, for us at least, that's dry grocery, dairy, frozen bulk beer, wine, spirits, vitamins and supplements, body care, general merchandise. It's a lot to try to fit in. So this year we're actually going to be really digging into space to sales and some assortment work to understand what is the right size for grocery, but what is the right size for grocery in a city store, in a suburban store, in a college store? And then how does that relate to Minnesota, Indiana, Michigan? Like, they're all different.

21:42
Jonathan Lawrence
So today it's kind of a one size fits all. Where we're going to get better over the next couple of years is tailoring that assortment to not only the population, but also regionally. What makes sense, there's a lot of work, a lot of resources needed to do that. But ultimately that allows instead of a 70 store chain, each store is going to better reflect that community. So if it's a college store, natural living, unfortunately, is probably going to be a little bit smaller. Because they're primarily college students, they don't necessarily have all the income to afford all the supplements we carry, and they're probably pretty healthy, right? So we all knew what were like when were 18 to 24, right? We felt invincible.

22:34
Jonathan Lawrence
But we're also going to make sure that we carry ramen and there's other categories that we're going to have to bump up to better serve that customer. In our city stores, they're typically high volume, smaller baskets as compared to like suburban stores where they're shopping with carts. So you just kind of have to take all those factors into how you're kind of building that assortment. And so that's what's going to be really exciting for the next couple of years is how we get to tailor that to each area.

23:10
Daniel Scharff
Super interesting to hear. And yeah, I went to college in Gambier, Ohio, in nearby Mount Vernon, Ohio. There was a Walmart, and that's where I shopped. And I was not buying anything high end. I was definitely buying more, thinking I was invincible kind of stuff. And I hope my mom isn't listening to this, but probably picking up some very inexpensive beer also with my fake id. Mom, don't.

23:40
Jonathan Lawrence
That's what we see in our college stores. Right. And so again, we have to figure out where do we meet them? Oh, and by the way, we have an amazing non alcoholic beverage that we're continuing to grow. So if mom's listening, there are options out there for the kids too, where they get the experience without it being legal, just in case.

24:00
Daniel Scharff
Awesome. Yeah. One thing I'm curious about is how do you and your team measure, let's say, the success of your category managers? I know there are other retailers I've talked to who can be pretty open about it. They're like, yeah, look, I mean, obviously sales in the category in my space is going to be really important. I also have margin targets from the company. I've even talked to some retailers that have said there is this specific activation that we can sell to brands and we get bonused based on signing people up for that because the company thinks it's really important for brands to participate in it. Yeah. How do you guys think about that? And what are the goals that the category managers have?

24:44
Jonathan Lawrence
Yeah, well, number one is retail. So sales and margin, that's always going to be a part of it. But every year is different, right? Some years we might see grocery, dry grocery has a banner year. Well, guess what? They got to comp over that the next year. And what we saw last year with inflation and kind of coming off Covid natural living for us of vitamins and body care, it was down. It was down 6%. But guess what? This year it's up like 10%. So it's going to ebb and flow. I think when we look at success or determining success for our category managers, it's the art and science, and you hear that a lot. The science is category management. It's knowing the numbers. It's looking at your margin, looking at your assortment, looking at the turns within the category.

25:37
Jonathan Lawrence
Are you growing the category? Are you growing the category when everyone else isn't right? Or are you growing it at the same rate where everyone else is at? So like, spins data and everything else is very helpful to kind of understand where do we stand? But that's category management anywhere. I think where we look at it differently is, do you know the industry? Are you an expert in the category that you're managing, can you go into a room and look at items and understand what is innovation and different or what's going to sell well versus if you're just picking and choosing. So in order for you to make the right decisions, because with innovation, there's no data. With new items, there's no data to go off of and say, oh, this item is selling at x units per store, per week.

26:27
Jonathan Lawrence
No, you have to know your category very well to understand what's new and what's going to drive that. So when you pick those items and they do well, there's no better feeling for you, for the brand, when you see those sales, it's phenomenal. Also, just kind of like, how included are they in the industry? Do they know the brands? Do they have great relationships with them? When we're walking the floor, am I hearing great things again? You might hear, oh, yeah, they're doing great when they're there, right? Because that's the person who controls if their products on the shelf or not. It's when they're no longer on the category or that person changes roles. When you really hear, were they a partner? Did they know what they were doing? Were they building the brand? Were they helping me understand how to grow?

27:23
Jonathan Lawrence
And I'm really fortunate that's what I get to hear about my team. So you have to know category management and you'll learn it. Some people come into the team, they've been category managers before, they've gone to school for it. Others, they've come from the stores or they have different experience. We teach, coach and train them on category management. But first and foremost, you have to know the natural foods industry. You have to know what's out there and what's truly innovative, and you have to live it. And that's a big change where. I know I'm rambling, but if you go to some of these big companies, they're great at being category managers, but they move them around so much that they never really get fully. They're not bought into the industry or the category or natural.

28:10
Jonathan Lawrence
And so it makes it a little bit more difficult. It's why they can come up to you when you come by and say, I'm not doing drinks today, because that person has been jaded. They've had a million brands come their way. They feel like everyone wants a piece of them and they've never sat on the other side of the desk. And so for them, they either need to do better at their job to get promoted, to get out to not be a category manager or go do something else.

28:36
Daniel Scharff
Yeah. Wow. It is really just so refreshing to hear that perspective. And even that person that I'm referencing, it's a retailer that's known for discontinuing brands really early on. And it sounds like you guys really appreciate the power that you have. I mean, you know, a yes or a no from you guys can make or break a brand.

29:00
Jonathan Lawrence
Yes, break a brand if we don't make sure that brand is ready, especially when you're at those. My time at sprouts, were 140 stores I think, at the time, and I remember having conversations with the brand saying, I want to bring you in, but I also don't want to put you out of business if it doesn't work. So are you prepared to free fill that many stores? Do you have the ability to do x amount of promotions per year? You're probably not going to make money the first year or two. Are you ready for that? And then what's your margin look like? Because you have to manufacture when you're manufacturing your product. Did you build enough margin in if it goes through a distributor?

29:44
Jonathan Lawrence
So not everyone does it, but you've got the responsibility that you at least need to make sure that they understand what they're signing up for.

29:53
Daniel Scharff
Yeah, that makes a lot of sense. And I mean, yeah, if you're thinking about something like sprouts, I mean, the opportunity is enormous, but so is the risk. And even on things like the innovation set, which is a super cool opportunity, oh, boy, that's a lot of product for a new brand to all of a sudden flex up to. They're going to place a massive po that's going to go national. You have to be ready to all of a sudden flex up and produce all that and then not really know if you're going to get on shelf later or not. And, yeah, a lot of money and risk in there.

30:28
Jonathan Lawrence
Yeah, you got to be prepared for what happens if they say yes or.

30:33
Daniel Scharff
No and you won't know. I was excited to hear you mention that. The times when you really get it right, you find an innovation before probably the data would show it to you and that it's really taken off. Do you any brands that you remember that happening, whether it was you or your team, where you're just like, yeah, we nailed that one and proud to bring that.

30:58
Jonathan Lawrence
And it's the ones that we missed that I remember the most, honestly, where we're not first, but going back in my career, like Vega was one at first, they were a vegan meal replacement for triathletes. It's a very specific demographic. But then they rebranded and then meeting with that team, we're like, okay, they've got something here. Noon categories. So CBD Freshtime was the first retailer of any size to bring in CBD. And we did it because went to some random trade show in Chicago and CB sciences was there and we learned about the product and we're like, man, this really has the ability to help people. But we knew it was like, it's a gray line, but we thought the ability to help people was so big that it was worth the risk. And so we brought it in. We're very quiet about it.

32:04
Jonathan Lawrence
We never promoted it. And then it started growing and growing. The excise police came in once or twice and took the product. So we had to kind of manage through that. But that blew up and it's since leveled out. But to say were one of the first to carry that is pretty cool. Yeah. Vital proteins. We were one of the first to carry vital proteins as brand. Again, they're up there, Chicago brand, same with RX bar. So it's fun to see that. And then grow. And then you grow with them. That's the best part. And then they sell. And that's what's great about this industry and why natural brands need innovation. Because we find the brands, we grow them, they get very successful and then they sell. Typically not all of them, but you can't be mad at someone who worked.

33:03
Jonathan Lawrence
It's the dream, right? And they're selling for hundreds of millions of dollars. So what do we do, right? Once that brand sells that big company, their ROI is not going to be made in our stores anymore. Right? So they need to go take it to kind of the mass channels. And when they do that, typically our sales with that brand are never going to grow again. They're going to maintain and then eventually they're going to kind of stagnate. Well, that's why we look for the next one and the next one, which is why innovation is so important. Because we build brands, they get successful, some of them stay within it and they grow, and others, it's that retail circle of life or that brand circle of life that we see. And as long as you know that's the process.

33:50
Jonathan Lawrence
Can't get mad that they sell. I used to, I used to get really mad when I see a brand that I manage that's in Walgreens and I'm like, what are you doing? And then you mature a little bit and you're like, okay, I get it. Congratulations. More people have access to a quality product. But now I need to go find the next innovation.

34:09
Daniel Scharff
Yeah, that's so interesting to hear you say that. So if I'm submitting to one of the category managers, if I want to be that innovation, and I'm a new product, and it's not quite clear that's what consumers are looking for, how can I show that to you that like, hey, this is the innovation of the set. If it's not immediately obvious to your team.

34:33
Jonathan Lawrence
So we try to go to all the major shows, right? Whether it's the Kehi shows, new Hope, Newtopia, that'll be new this year. You mentioned you saw some of our team over at fancy food. We try to get out there as much as we then, because it's not like we're posting a billboard on the side of the building that has our category review schedule, right? And like, how to submit items. So we recognize that. So we try to make sure everyone is aware of the schedule. Now, category review schedules are needed, but we're really only deep diving into a handful of categories per desk per year because they take a long time. Because you're looking at your strategy, you're looking at what's this set going to be like over the next couple of years? Do I need to grow space, shrink space?

35:29
Jonathan Lawrence
And then also there's the assortment work and then pricing. What's my pricing strategy going forward in this category? The rest of the time we might do, we'll call them fix the mix, right? It's a small, like, hey, I'm bringing in 15 items or twelve items, I'm bringing out ten items or something like that. But what's key is that the team has the ability to bring in a new item at any point, anytime now it requires more. You're doing a lot of work for a limited amount of space and items, but innovation doesn't wait for category review schedules. So if you want to send samples, send a sell sheet. At least get the product in front of them so that they can make that decision. Now, they may see it and say, that's a cool product.

36:24
Jonathan Lawrence
It's not worth what I would have to do to cut that in. I'm not ready to disco something out of that set at this time, but I'll look at it during a category view when I'm making a lot of changes. And I have the space, time, and ability to do that if it's something that like, oh my God, I need this item. We'll figure out a way to do that. So if I'm a brand, I'm at least getting information saying, hey, I just want you to make you aware of this product. If you haven't seen it, love for you to try it. If you have any feedback, please let me know. Majority of the time you may not get feedback. And it's not because they don't want to. It's because they have a million other things they have to do.

37:09
Jonathan Lawrence
But now they've seen the brand, now you're on their radar and they've probably either tried it or had someone try it. I try like a million things every week that come into this office because I love doing that. But at least that's the start. And then you keep following up and then they'll come back and they'll say, here's the category view schedule. If someone tells you, here is my category view schedule, that's either they're afraid to say no, right? Or it could be honestly like, hey, it's not a yes or a no. It's just, it's not something that's blowing me away right now that I need to move on immediately. So here's a time when I'm reviewing it and we can meet and discuss and see if it is the right item. Yeah.

37:58
Daniel Scharff
And I had that experience. Ellen was so nice and actually did do that when we had some new skus to launch in. But it really helped, I think, that I had actually been in the stores and looked at the set and I had recommendations when I met with her of, look, this is the way it is right now. And I think actually if you could take these two skus and then move us up here, I think that's going to make the whole set. And I think that's how we're going to bring a lot of incremental sales with this innovation that we have.

38:27
Jonathan Lawrence
See, that's one of the key parts that I think a lot of people miss. You've been in our stores. You know what the set looks like. Anyone can reach out on LinkedIn. Anyone can get your email and send you an email and say, my favorite is when you can tell my name was just changed. Right. And then this product would be a great fit for, and sometimes doesn't even say fresh time. Sometimes they mess it up and they put the other store and then it's the canned email and then images or product one. Don't do that. Take the time. A buyer can tell and short it up. Like you don't need to write a paragraph, but introduce yourself, introduce your product. Here's some key information.

39:13
Jonathan Lawrence
Real simple, but very importantly is know your customer, know who you're talking to because you knowing the sets, you were able to come in with some feedback, with some understanding what her interpretation of the set was. That's big. That takes it to another level and that's a meaningful interaction.

39:34
Daniel Scharff
Yeah. So at the end of that, she did agree to cut it in, basically. And she's like, look, it's not going to be perfect. This is very difficult for us to do. And of course, I was like, that's totally fine. Thank you so much for doing this. And then I think we worked closely with the Kehi team that I know you guys are really close partners with to make it happen.

39:54
Jonathan Lawrence
Yeah.

39:56
Daniel Scharff
And I was just looking back and I was trying to remember how I had was fortunate enough to connect with you initially. And I think the way that I managed to do it is I will use every channel available to me and figure out a way to try to make contacts. I think initially it was ahead of Expo east, and I think I remember going on to the old virtual platform that they had where you could actually see which buyers were attending and they don't have this anymore. But I learned actually, if you send a message to a buyer through that platform, it sends them an email, which, I mean, is cool because as an early brand, most of the time you don't know who the buyers are or have an ability to contact them.

40:35
Daniel Scharff
So I think I had sent you an email saying, hey, here's who we are, please come by the booth. And then you did, and it was amazing. Showed up to the booth like, hey, you emailed me. Here I am to check this out and just remember having a great interaction. And I was looking back at our LinkedIn history, and then I sent you a note, and then you were just rooting for us and you're like, hey, you talked to category managers. They're the ones that are going to make the decision on this. But I like the product. I'm supportive of it.

41:00
Jonathan Lawrence
Yeah. And that's what I always try to do because I miss category management. It was such a fun role. I don't get to make those decisions anymore. The team does. Right? They own it. But what I try to do is if I see something unique or different, I'll send it their way. When vendors kind of, I guess, the email version of a cold call, right? When they just send me information, I may not respond to the vendor because they're going around the category manager, and sometimes they just may not know who the category manager is. But I always forward that information to the category manager, and sometimes they follow up, sometimes they may not, because, again, there's a lot on the desk, but I do at least try to funnel that information where I can.

41:48
Jonathan Lawrence
But every email I always send to my team, it's always, FYI, because they make the decisions on the product, because if I do it and maybe they don't fully agree, now you've got angry category manager that is not necessarily rooting for your brand because they weren't involved in the decision. The vendor, the brand, went above them, and that's a tough situation to be in. So I try to never do that, not only to the category manager, but more importantly, I'm not going to do that to the brand.

42:21
Daniel Scharff
Yeah.

42:22
Jonathan Lawrence
Okay.

42:22
Daniel Scharff
That's very considerate of you. And then just regarding local brands, because when I was in your store, I saw a great presence for local brands like freestyle snacks and a bunch of other people. How do you guys think about local brands? What kind of programs do you have specifically to support them?

42:39
Jonathan Lawrence
So we love local, and we're going through some brand strategy work, and it's one of our pillars is community, and part of that is local products. Local is hard to do, so you really have to set up the infrastructure for it to be successful. And it can't live on a category manager's desk because we know what's local to downers Grove or Chicago kind of. Right, but we don't know what's locally relevant to Minneapolis, Detroit, Grand Rapids, so on and so forth. So when we decided to really go after local in an impactful way, we said, okay, the stores have to be involved. The store directors, the people in that store, we call them, like, local scouts, and we have them in every region. But at the end of the day, everyone that works in freshtime is a local scout.

43:40
Jonathan Lawrence
And so we had to kind of blend where we support them from the support office with getting brands set up and kind of helping them understand a little bit of category management, but they really make those decisions, and it's all under. So we have a gal named Rebecca Stevens who does a phenomenal job and is just crushing local for us. And she's probably one of the most passionate people around local. And she started as a store director at Fresh. So we've partnered with a few other pod foods and Keihi and a few others. And so the store directors, they're the ones where you go pitch to. So when I get a call and say, hey, I'm a local brand in St. Louis. Awesome. Go to the stores.

44:27
Jonathan Lawrence
They have the ability to say, I want this product, and if you get into that store, we'll help them get it set up or help get you set up within the system and then support it. Do demos, be in there as much as you can because that'll help you get into the next local store and the next one. So if you're in St. Louis, well, now you got to get into like seven or eight stores. So just keep building those sales and be in the store because customers love local products. But guess what? Even more, they love to meet the person behind the, that's like, oh, my God, you made your own cookie. That's phenomenal. Tell me about it. They want to support that. So we have those programs to make the barrier very easy for local brands to get set up.

45:19
Jonathan Lawrence
And then we made sure that there's space within the stores. So typically it's end caps and other fixtures. This year we're going into, we're really going to focus on how do we cut that into the actual category sets. So how do we create enough space within each category to ensure that we've got two shelves of local for coffee, if that's a heavy local category, but making sure that there's space everywhere so that they can cut them into the right spot. And that way that end cap, while impactful and impressive, doesn't become like a yard sale looking end cap. That's just kind of mismatched. Because if I'm a local salsa, I'm excited to get in fresh time and I don't care that it's on an end cap. I'm next to a candle or something else.

46:06
Jonathan Lawrence
But eventually I'm going to do best if I'm in the salsa set. So now that's that next iteration. So we're about 3% of total sales are now local, which we've grown huge in the last year. But then now we have to kind of go back and teach stores category management and understand, give them some guardrails. So again, let's go salsa. I don't care what brand you are, we don't need twelve different flavors of your salsa. No one does, right. Have that online so that those customers can try different things. But I'm never going to do the volume and I'm going to get shrink out of that because they're going to buy three different ones and everything else is going to be minimal. So what's shrink goes out of code it's waste.

46:56
Jonathan Lawrence
Well, we look at shrink in different ways, but in this instance it would be, I brought in the product, I have too many skus. Those top three I'm selling through, I'm turning right, I'm getting fresh product in. But those others, the dates start coming up, or it's just taking up space and it's not productive for me. So we're going to take local to another level as far as how we're really utilizing the best items and getting them to be very productive. But then that allows us, too, to keep understanding what is locally relevant, and the stores are going to get better and better every year. And what's great is we get to see those brands grow. And we've had a number of brands already that started as local and now they're in all stores.

47:41
Jonathan Lawrence
So once you kind of get into all the stores within the region, we'll look at you within the next category of you and say, you know what? That salsa is great for local, but it's just a great product. And I think I can sell that local Illinois salsa. I can probably sell that in Iowa because it's delicious. And so that's how we start taking those local brands and creating and building them up to being national.

48:07
Daniel Scharff
Yeah. Really, really helpful to hear wonder, you know, across all the categories, is there anything you feel like is missing from your store or the industry? Like a certain kind of product where you feel like this is something shoppers are looking for and it just doesn't exist yet? It could be a specific kind of claim that's out there and you're just not seeing a lot of products like that, or you just want to see more Skus within a certain kind of category because you see it really on fire. But anything out there, maybe this would be if Jonathan Lawrence started his own company, this is what the product he'd be launching right now.

48:43
Jonathan Lawrence
So there's probably three of those I have, but I'm not going to share them on here just in case. That's my backup plan. But honestly, what's great is when I get surprised by a product that I had no idea should even exist or a category when I look at what's growing and when I'm excited for it to grow, it's kind of like maybe more than the ethnic products or international products that we're starting to see because that's introducing people to different flavors and textures. Not to get too worldly, but I think the more you're introduced to things outside of your comfort zone, the more, well, rounded. You are right. So it's like if you want to get to know the world and be a good person, travel. Right.

49:39
Jonathan Lawrence
And so if we can kind of bring that experience, too, that's why I'm excited to see more kind of international flavors and products and these brands kind of starting up. We've had a few different kind of local shows, I guess you would say. And I'm pretty involved with naturally Chicago, and we worked with them and partnered with them on locally grown, which is how to help local brands be ready for retail, but then also how to help retailers bring in local, because again, it's hard. If we can do some of the work for them, then it's a little bit more manageable. So part of it, we're launching it at fresh time, but really it's meant to help retailers as well as some of those local brands to how do they work? How do you make the magic happen?

50:35
Jonathan Lawrence
And a lot of the cool things that we've seen have been like, hey, this was my grandmother's recipe, and I can't find this product anywhere here. Maybe I'm a first generation american or maybe they were an immigrant or something. And every time we try those, it's so different and unique and good food is good. I'm. I'm a white guy from Phoenix, Arizona. Right. But if there's a Middle eastern dip. Right. That's good there. I know that's good. So it's really exciting to bring those flavors and kind of challenge people a little bit to what they're used to. I would say that's not what's missing, but what's not fully represented yet. And I think where there's a lot of space there.

51:24
Daniel Scharff
Yeah, I was just remembering also I have a friend who has kind of an international kind of condiment brand, and I know they were lucky enough to get an opportunity with a cool retailer, but also where they were placed was kind of out of context. It was pretty interesting because he's like, yeah, in that part of the store, like you were talking about on the end caps, no one's looking for that product. So it doesn't really make sense, and they're not sure what to make of it. So if you don't actually work with category manager to get put in the right place, you're not setting yourself up very well.

51:54
Jonathan Lawrence
Yeah. And that's where you got to. The category manager has to challenge himself as well, the brand, because they're going to say, well, where should I put this? Right? So if it's a tie condiment, you don't put that next to ketchup, right? So you got to think, okay, is it in condiments or is it in a tie set? Do I have enough tie to make it a full set? Or am I just kind of putting a whole region of the earth into one little, small, four foot set? How big do you grow? But what's great is, like I talked about earlier, that's where having the flexibility, when you have multiple stores, to create an assortment that's relevant to that community is important. So we've got a lot of our stores that have a bigger demographic of asian community.

52:47
Jonathan Lawrence
Well, you better have more than a four foot set of asian if you want to be relevant to that customer. So we've been able to flex out there. But it's like, how do you do that more in other ways and kind of understand still within the realm of natural and organic, but then how do you make sure that you're relevant to those growing communities?

53:07
Daniel Scharff
Yeah, makes sense. Well, maybe last question for you, just since you mentioned discovering new products when you're traveling and kind of being out there, I wonder if you have one or two examples of foods that you've discovered out there in the wild that you really loved. And I'll give maybe one or two of mine one. When I lived in Brazil, I discovered Belchigeju, which is like brazilian cheese. You know, you have that Brazi bites brand that does it here and a few other people, but that was one. Now, if I ever find warm belchigeju, it's all mine. I'm gobbling it up. And then, you know, just more locally. I don't know why, but I had never really had chili oil. And then just an incredible dumpling restaurant opened up near my old house in San Francisco.

53:52
Daniel Scharff
And I had it there and was like, what is this deliciousness? I didn't even know I liked stuff like this. And now I buy it and have it at home. Anything like that for you?

54:03
Jonathan Lawrence
So my memory is bad sometimes, but I can just remember the flavors, the taste, or the experience. So I think it was at. It might have been the most recent. Expo west. No, I'm sorry, it was Expo east. The last one there was kind of that new item or new brand area. And that's fun. That's fun to get to kind of talk to those people that are excited. This is their first show, right? They've made it because they're a brand now. They've got their product in a package that's exciting, whether anyone bought it or like, they made it at that point. And there was this kind of, like, I think it was a Middle Eastern brand, and again, it was connected to their grandmother, I think. And it was like a tomato based product. And actually they were local in Philly, too.

54:58
Jonathan Lawrence
So it was a local Philly brand. And there were these different dips. They had different levels of, you know, you never know what you're going to go into, especially when they're like, yeah, this one's hot and we mean it. And you try it and you're like, oh, my. Like, I can't stop eating this. And then I went and I grabbed Allie and I grabbed others. I was like, you got to try this. Because I'm trying to think, where would we put this in our store? Is this a food service deli item? Is this going grocery? Because you're automatically thinking, like, how do I get more people to experience that? And then I can't think of the Filipino brand that had like, the banana ketchup. Philamnella, by the way, that guy's always working. I think he goes to every show and he's always excited.

55:58
Jonathan Lawrence
The different products where they like, I'm eating ketchup out on a spoon, which I don't do that. But then you try that, or you try it with rice and beans and how they give it to you and you're just like, I would have never thought that those flavors existed together. But now I'm thinking, my daughter loves ketchup. She needs to try this. We need to expand her palate. And I know we're just talking about food, but those are the type of things where I think you're going to see innovation. We've done a great job in this industry around functional. Bev mushrooms have been really big. It's great to see everyday supplements kind of coming back. So it doesn't need to be just kind of trends like the tried and true products are really kind of coming back.

56:46
Jonathan Lawrence
But those international flavors, I think, is a big opportunity because I know we don't have the best place to put them all. So retail has to figure out how are we going to take all of these where they're not necessarily going to always be enough space for their own set. But how do we bring these worldly flavors together and then get the customer to try, like, so you got a sample, you got a demo. If you're one of those brands, especially in the midwest, right, meat and potatoes world, to get them out of their comfort zone, get them to try it, and then all of a sudden you open up their mind.

57:24
Daniel Scharff
All right, well, speaking of discovering new innovation at Expo, I hope that at this expo Westview and everybody listening will check out our startup CPG dedicated section. We actually did it for the first time at Expo east and as part of their innovation experience, we had a grouping of brands there that are all early brands from our community still figuring it out and all. Just so excited when they get a chance to meet somebody from your team. And we will have it at Expo west as well. It's going to be on level three of ACC, which if you're looking at that main convention hall, it's up at the top left, we have 25 booths, tons of amazing brands, including the two that just won our female founder giveaway that we did with settle. Just wonderful products.

58:04
Daniel Scharff
So I hope you'll come by and get to check some of them out. I hope everybody does and hope I will get to hang out with you there as well. So Jonathan, just thank you so much. This has been super interesting for me, especially just to kind of hear the broader perspective about how you think about overall center store and category management. So I certainly learned a lot. I'm sure everybody else did as well. And I would recommend everybody know, maybe follow Jonathan on LinkedIn and just kind of learn more about him. And I hope all of you get to go check out a freshtime store as well, in your market or in your travels. So Jonathan, thank you again so much for joining us. We really appreciate your time.

58:43
Jonathan Lawrence
Absolutely. And our team, that's the first place we're going to stop is that new innovation area. So we'll see you there.

58:49
Daniel Scharff
Woohoo. All right, see you all there.

58:52
Jonathan Lawrence
See you guys. Bye.