The Startup CPG Podcast

Ahmed Chehade
To be honest, we all in the DSD world kind of have the same angle and what are the same goals, right? So making friends in the DSD world is totally cool with me. I mean, collaborating is so fun, getting to work with other brands. I've got friends over at Rainforest and friends at Lad, at High Touch, and Allison. Right? I mean, everyone's so cool. Just great to work with good people. Getting good people together is always not a bad idea. So that's why I like to be friends with other dsds.

00:38
Allison Taylor
So if you're wanting to expand in the market, a DSD is a good way to go deep with your brand, build relationships in the region that you're launching or that you want to grow in. Because those are the. Those are the companies that are really in the stores every day. You know, merchandising, maybe they're ordering when each GSD is set up different. Some do full service, like Pintsize does ordering, merchandising, and even like, inventory management in the store. So it's very involved, very high touch in the stores and that. Right. DSD partner will, you know, answer those needs for you.

01:11
Daniel Scharff
Hello, startup CPG. You have lucked out because today you get to become friends with two of my favorite people, and not just in the DSD world. It's Allison from Pint Size Hawaii and Ahmed from good stuff. These are two super tastemaker DSD's, and that's direct store delivery. For those of you not familiar. They've volunteered to come on the podcast and explain to us all about how does DSD work? And how do two great dsds like theirs actually work with their customers and the brands. I hope you enjoy this as much as I did. Hello, everybody. Welcome to DSD day. I am so excited to welcome two of my favorite dsds to the pod. First, we've got Allison Taylor from one of the leading hawaiian DSD's called Pint Size Hawaii.

01:59
Daniel Scharff
Allison is the director of business development and she's responsible for growing a diverse portfolio of brands. She has over a decade of experience, so she knows all about the challenges that come with market expansion, including building your brand awareness and strategic partnerships. Prior to pint size, Allison was an account manager at UNFI and also she was at for five years. Back to the roots, which is an absolute innovator in the home garden category. It's led by some great friends of mine, Nikhil and Alex. But that's not all. We are also joined by the legendary Ahmed Chayadi. When you ask who the best in class DSD is for Norcal. Probably someone's gonna say, do you know about good stuff distributor? Then you're gonna try to find a way to learn more about Ahmed and his team. So this is how you can do that.

02:48
Daniel Scharff
I've been to their facility in SF, actually, and it is truly beautiful. I am not exaggerating at all when I say I would actually eat a meal off the floor of their warehouse because it's so spotless. So, without further ado, welcome, both of you, to the podcast. Thank you so much for being here.

03:05
Ahmed Chehade
Thank you, Denny.

03:06
Allison Taylor
Thanks, Daniel. Awesome intro.

03:08
Daniel Scharff
All right, so, Allison, you were the first person I got to agree to coming on to the podcast to do an episode for this DSD topic, which I've been desperate to do. And then you invited Ahmed. So I've been really lucky to actually work with both of you. But now I kind of wonder, because you know each other. Like, do you know a lot of DSD people? Like Allison, do you have a big DSD friend crew? You guys, like, show up and hang out at the trade shows?

03:29
Allison Taylor
Well, amen was one of the first ones that I made. So I think because we are literally on an island, we don't figuratively have to be one. So part of the job is reaching out and making friends. So he was one of my first DSD friends, so that's why I was, you know, he's got to come on the pod with me.

03:47
Daniel Scharff
All right, Ahmed, what about you? Are you, like, mister DSD popular, or are you mainly focused on your own thing or just friends with Alison?

03:54
Ahmed Chehade
You know, honestly, to be honest, we all in the DSD world kind of have the same angle and what are same goals, right? So making friends in the DSD world is totally cool with me. I mean, collaborating is so fun, getting to work with other brands. I've got friends over at Rainforest and friends at led at high touch, and Allison. Right. I mean, everyone's so cool. Just great to work with good people. Getting good people together is always not a bad idea. So that's why I like to be friends with other gps.

04:23
Daniel Scharff
All right, me too. I want to be friends with cool dsds. So I thought a good way to start would be. I feel like the most common question that you guys probably get that I hear about DSDS is, what is a DSD? Because I think when you're, like, launching a brand, you're not big enough for a DSD in most cases, or your brand's not where it needs to be. And so maybe you get more familiar first with like broadliners unfi ke. And then hopefully as you scale, then you start to hear about that and how that can unlock a lot of growth for your brand. Even like, I haven't worked with DSD so much. I was lucky to work with both of you guys.

04:59
Daniel Scharff
But, okay, so my impression of a DSD or my take on it versus broad, like broadliners, you can get into them, they service a lot of accounts. So if you can open up one of their distribution centers, they might hit lots of different accounts. A lot of them are going to be just kind of bigger chains and they may be going to like, I don't know, the chain's main distribution center. They may be going to the individual stores. And mainly what they're doing is going and putting the product in the back. They're delivering the product into the back of the store. And I think maybe it's a mass way to do it. You can hit a lot of chains and then you can go national with those broadliners also and get into other regions of theirs.

05:40
Daniel Scharff
And there's a lot of that's streamlined because you don't have to work with so many people and they can hit a lot of doors. And probably the, maybe the downside would be like that product still has to make its way from the back up to the front or wherever you're trying to get a merchandise. And that can hopefully happen. And it happens well, but a lot of times it doesn't happen, which is probably the thing that creates the industry of merchandising with our friends at basemakers and dirty hands and creates a big opportunity for them to then also help brands.

06:09
Daniel Scharff
So my impression of dsds is, okay, so if you're lucky enough to work with a DSD, number one, you can unlock a lot of people who wouldn't necessarily be pulling from those broadliners and that would be maybe like indies and they're small enough where they're not just working with them because they don't hit those same order volumes or just probably a lot more people who just don't happen to work with them and additional channels and convenience and a lot of like even food service because a lot of food service can pull from dsds. So that was kind of my impression. And then like, obviously you have to figure out how to work well with a DSD because it's different, right? You're going to have like, you want to motivate them.

06:46
Daniel Scharff
They're individuals on the floor going and, you know, driving the truck and doing these things and like you want to be top of mind for them. Like, they're almost an extended part of your team. So for me, that's, like, generally how I think about dsds is like this massive lever to unlock growth in just, you know, so many untapped for you channels and retailers, and you can work with ones in specific markets, and then obviously there's some, like, national ones, and you talked about some of them that can do other stuff. But, like, you know, people are always such big fans of, I would say, more specialized ones in specific regions. So what do you think? Maybe, Allison, I'll come to you first. Like, what did I get some of the stuff right? Like, what are some things that I missed?

07:26
Allison Taylor
I was going to say you nailed it. I think the difference, like, even coming from Unfi, I think the broadline distributors are really about going broad, and then DSD is about kind of going deep. So if you're wanting to expand in the market, a DSD is a good way to go deep with your brand, build relationships in the region that you're launching or that you want to grow in, because those are the companies that are really in the stores every day. You know, merchandising, maybe they're ordering, and each DSD is set up different. Some do full service, like, pint size does ordering, merchandising, and even, like, inventory management in the store. So it's very involved, very high touch in the stores, whereas, like, not so much from a broad line.

08:06
Allison Taylor
So I think that's the only thing I would add is, like, dsds can all be different, and it's really just about how deep do you want to go? Do you want to go deep in a certain channel? Deep in a whole market? And then that right DSD partner will answer those needs for you.

08:21
Daniel Scharff
Okay, Ahmed, what do you think? Anything you want to add?

08:23
Ahmed Chehade
Yeah, I mean, you guys hit it right on the spot. Dsds, when it comes to brand and brand development, it's really important that you have good DSD partners. And it's a collaborative effort from the DSD and the vendor and the retailer, because the relationships go deep. Right. Like, we're a 30 plus year old company, so our relationships go deep with a lot of these accounts or these buyers. And, you know, we have a good partner. We've got a good brand. Like. Like Alison said, you go deep into the relationship, you get granular into big, getting the pricing up, you get the program set up. You know, everything goes a to z. You get to check all the boxes, which is really cool.

09:02
Ahmed Chehade
And I don't think you necessarily get that type of service, that hands on service or customer service aspect of that personal touch with broadliners, you're definitely going to get that because I'm family owned. Everything I do, all the relationships that we set up, they mean they're meaningful. We strive for it. So you saw it when were with. When you chatted with us, my team, our sales reps, everyone knows everybody, and we work very tight together.

09:28
Daniel Scharff
Yeah, no, that was definitely a cool experience. I got to come and meet your whole team and then obviously have the relationship with you. And then, you know, I'm talking to you about, like, hey, this account of yours, we would love to get in there and, you know, you give me the guy's number to text and I'm texting him and you and trying to figure out the pricing and stuff. And like, yeah, that doesn't necessarily happen with a broad liner where they're giving you the buyers cell phone number to text. So, yeah, a pretty deep relationship that we have with you and that you have with the customers, obviously, who have trusted you for a long time. So that makes sense.

10:00
Daniel Scharff
And then is there a difference between the kind of brands that would be right for a broadliner versus ones that could be a good fit for a DSD? Maybe, Allison, since you've been at both UnfI and a DSD, you would have some perspective on that.

10:14
Allison Taylor
I think when I was at UnfI, I even noticed. I mean, the first time I've heard about good stuff was when they had shelf space in my schematic, and I was like, who are these guys? They're crushing it. You know, I think the difference would be. It's just really the type of the size the brand is. Like, if they really need some extra care and support and guidance on how to grow in a certain market, a DSD is probably a better fit for you. I think with. With just, like, the difference of brands, I think it's really what the brand's goals are and the type of support that they need. And then for on the DSD point of view, I mean, we're looking to really, you know, grow our portfolio in the categories that we plan and what we're missing.

10:56
Allison Taylor
So if you're a top brand and you're not in our portfolio and the categories we carry, we're probably interested in you as well.

11:04
Daniel Scharff
Okay. For me, when I think of DSD, I think of the higher velocity items, beverage and alk, and then maybe stuff that needs a little bit more care, like frozen Ahmed, is that right? I don't think of Mayo. Like, probably, like, mayo is. I don't know. I wouldn't think of that as being with a DSD. Is that right, Ahmed? Or what kind of products are you typically looking for?

11:28
Ahmed Chehade
It's funny you said, because, like, I hate mayonnaise, so we just don't carry any mayonnaise products, but we do sell condiments. But with that said, I mean, going back to that original question, it's about your niche, the DSD's niche and their customer service, their customer base. What type of business model do they have? Like, where's other DSD's in the Bay Area and northern California? We all don't do the same thing, right? Like, we all have our own alley that we stay in or we overlap. But essentially, when it comes to the brands, whether it's large or small, that's why good stuff kind of works in this niche. And we savvy our way to great relationships because we're not just taking care of the big brands that have great revenue streams for good stuff.

12:10
Ahmed Chehade
It takes care of the vendor, the distributor, as well as the retailer. When the customer gets a good product. Well, what we're also doing, we're sourcing local small brands, too, like mama teams who's at my office this morning doing a little Santa tasting with my guys. The first time entering distribution. Well, that's also part of good stuff's kind of business model, is to help the smaller brands get into the distribution channel so we can help emerging brands will succeed. And that's why we are where we are and the relationships that we've set and so how.

12:41
Daniel Scharff
So, Ahmed, how does somebody make sure that they find the right person? Like, in a market like SF, where you said they're okay, a handful of other people, and you each have their. Your own role. How is a brand going to know how to find you and that you would be the right person for them and not one of those other ones? Is it about like, hey, I want to get in this retailer and they happen to work best with you guys? Or is it more like, okay, they do the best with kind of more natural products?

13:07
Ahmed Chehade
Yeah, I mean, it's a layer of, like, multiple things, right? Like, as a brand's perspective, what's a brand new? Well, I'm say I'm a soda, right? I'm a conventional soda. Well, I'm not going to go sit in the natural distribution channel. I'm going to go find a more of a convenient factor type of distribution channel, like a picot or something like that. But when it comes to natural and specialty, organic, natural, specialty, that's where good stuff survives and that's where we live and that's what we try to cater to with our customer base. But it depends on the brand. It depends on what their goals are, what they're trying to achieve, what kind of customers they're trying to work with.

13:40
Ahmed Chehade
And that's essentially what I would say is figure out what dsds do, what's right and how do they do it, how long they've been doing it, and if it matches your brand's necessities and goals, then I think you find a right partner. But not every DSD is right for every brand. So that's okay.

13:57
Daniel Scharff
So that's a really interesting one. And then Alice and I, this is basically the same question for you. And I can say that, like, when I was looking for a DSD in Hawaii, it went like this. I went and tried to sell into Foodland, Hawaii, and the buyer at the time, Kenny, amazing guy, friend of mine, was like, yeah, I like this product. You're going to want a DSD. Like, I want you to have a DSD for this product to be treated right in the stores. It's going to be the best fit. So, yeah, maybe go and find one of those and check back in with me. And then I went on a wild goose chase for a while because none of them would talk to me. Honestly, I'm like googling. I don't know who they are. Like, I'm googling.

14:35
Daniel Scharff
Who are the DSDS there? I'm looking on their website, I'm just calling them. They're like, oh, yeah, I don't know, maybe call this other person and I don't know, like, what accounts do you already have? Oh, not a ton. Like, yeah, maybe not. And, you know, I think they are in pretty high demand. Then I don't know how it took me so long. But then eventually I found my way to pint size and was able to connect with you. And then it was all roses from there. That was amazing. And then, you know, of course, Kenny's like, yeah, I love them. That's great. Okay, let's get this going. But okay, if you think about that process, really, like, I think maybe I just knew a little bit more about SF.

15:09
Daniel Scharff
It was easier for me to find Ahmed and I just like, knew more people who knew about him. And so he was like top of the list always for me. With you, it just. Yeah, it took me a while to figure that out. Is that how it usually goes or like, how are people usually finding pint size Hawaii?

15:23
Allison Taylor
Yeah, I think it's mainly with our customers, like what the recommendations from the buyer. So I don't know if the question was asked like, hey, what's your preferred DSD partner in Hawaii? Or what ones do you use? But we work really closely with our customers just because were so remote that we are really tight with their needs and what they're looking for. So I meet with buyers monthly or quarterly depending on the category and figuring out what they're looking for. And usually it comes up in conversation in those meetings of what brands they're looking for that they want to bring on in DSD. So we partner really closely with our customers based on what they're looking for. And then also it goes both ways.

16:02
Allison Taylor
I can also present to them, you know, maybe something I think they're missing from walking the stores and things like that. So sometimes I'll pursue the brand or the brand will pursue me through the buyer.

16:12
Daniel Scharff
Yeah, that's pretty interesting. And honestly, I might have been too inexperienced to really ask that question very directly, but I think at the time he had tried to introduce me to some, but I don't know, maybe it just hadn't been a good fit. And then of course, when I found my way to you, then he was very excited. It's like, yeah, but that's perfect. But I think, you know, it's a really good point. And I think for brands of just knowing to ask that question because not only, yeah, like, you wouldn't know who the preferred one is unless you ask the buyer. And, yeah, why wouldn't they tell you that if they want to work with you? Yeah, like, yeah, and then bonus points if they actually introduce you.

16:43
Daniel Scharff
Because I can tell you, makes a whole world of difference if I call them out of the yellow pages and say like, oh, no, but like, you know, this retailer wants me verse if I could even get the buyer to send you an email with me on copy being like, hey, could you get them set up? You know, we like them. And then, man, it just really compounds from there because then I can call up 711 Hawaii also and be like, great. So we're actually getting set up with a DSD and now they'll take my call. Cause they're like, oh, with pint size? Like, yeah, okay, now we'll talk to you before, like, you know, this was not a real thing.

17:15
Daniel Scharff
So it's like, man, you have to fight so hard to get like that initial thing set up, but once you're moving, then, I don't know. You have the big advantage. Okay. So I wonder, actually, maybe this would be a good time for just everybody to get a. The overview of each of your operations, because we've kind of talked about a little bit as we backed into the DSD topic, but maybe we could just take a few minutes and, Ahmed, maybe if you want to go first of, just really like, what is good stuff for everybody who doesn't have the pleasure of already knowing about it?

17:42
Ahmed Chehade
Yeah, yeah, no, thanks for asking. Good stuff. Family owned distribution company based out of San Francisco, California. We service natural, organic, specialty, and mediterranean cuisine. That's our specialty there. We've been doing it for over 35 years now. We service all of greater Bay Area. So you can talk about all of San Francisco, Oakland, Berkeley, Sonoma, Napa, Santa Cruz, Sacramento. Big region. So we're about 100 miles radius from San Francisco. We run refrigerated trucks. We run frozen. We run refrigerated and dry products. We have two portions of our business. One portion is the retail grocery, where we service from small to large chain grocers. We have another portion of our business where small food centers, meaning we service restaurants, and we service cafes and hotels and catering companies with bulk ingredients within grain, spices, beans, dairy, etcetera.

18:39
Ahmed Chehade
So in a nutshell, good stuff is a regional distributor. Done it for a long time. We strive for relationship building, and we're really happy with what we've built and continue building here on it.

18:50
Daniel Scharff
Amazing. Like grocery chains, both bigger chains as well as independence, convenience also, I know you guys do some amazing high end convenience stores, even that anybody would want to get into. And then alternate channels, including food service and probably a bunch of other stuff as well that probably people wouldn't know how to get in touch with those guys until they start working with you. So I guess my next question would be, like, how much of that distribution are people coming in with when they get to start working with you, versus how much do you open up for them because you start working with them?

19:20
Ahmed Chehade
Well, it's a collaborative effort. I mean, like, right? I mean, when we onboard a new brand, we have to go and kind of look at all the checkboxes. Okay, are you currently doing distribution? Do you want it go through unify, or do you want it to be pulled through? Good stuff. What's the goal there? Then we talk about the account base. We say, hey, we got these chains. Let's make sure we keep these as leads. Priorities. We've got these kind of single location, independent health food stores. We got these sea stores, these different stores and convenience stores that we cater to. And then we've got some fun profile accounts like the Giants and the eighty's, and you've got all sorts of fun stuff within the community here. And if the brand does a good job in communicating, brand awareness is continued to be developed.

20:04
Ahmed Chehade
You get those opportunities to get into those accounts and we talk through, and we'll go through the account list and say, hey, where do you want to be? We'll communicate with my reps. They have their account list, they go and do their selling and pitching, and I do my selling as well. So it's all fun collaborative effort and going through the account list together, seeing exactly who we cater to because they'll look through the list and be like, oh, that's cool. I didn't know I was in there. Just some random moment in time and you look through archications and that's cool. I love to see that.

20:34
Daniel Scharff
Okay, perfect. And so just to add, we do.

20:37
Ahmed Chehade
A ton of airport business, too. So, like, that's also a huge reason why a lot of brands like to work with us, too, just because the brand, where does it get from being at the airport? We've been doing it for a long time, so it's good business for sure.

20:48
Daniel Scharff
Yeah. Amazing. Okay, cool. And Ahmed, what is your role at Goodstuff? What is all the stuff that you do there? What do you spend all day on?

20:56
Ahmed Chehade
Yeah, so I'm the chief operating officer. I run the business with my brother Malik. He's my right hand man. I mean, he is a go getter. I love all the efforts he does. But for me personally, I mean, I oversee the operations. My brother and I wear many hats. So for me, from buying, setting up the vendor relationship, setting up the pricing, the economics, to get the pricing onto the shelf, we run the promotional programs, marketing programs to take sales execution, fleet management, running the staff, hr. I do a lot of stuff, but the main role that takes majority of my toll is going to be the vendor relationships and the sales with my sales team. So I oversee my sales team as well.

21:38
Daniel Scharff
Okay, amazing. And then, allison, do you mind giving the same overview for pint size Hawaii and what your overall role is there?

21:47
Allison Taylor
Sure. Yeah. Pint size has been a DSD on the hawaiian islands for about over 40 years now. So. And that's the whole state. So we're talking all major islands. We have warehouses on Oahu, which is like the major biggest island, and then the other neighboring islands, Kauai, Maui. And then we have warehouse in Hilo on the big islands. Unique about us is we have the warehouses on all the islands. And then our own fleets, our own trucking, our own warehousing. So we don't have any third party trucking or warehousing. And then we focus on all temp states, too. So traditionally, the company comes from nestling routes, mainly dreyers, Haagen Daws. So anywhere you can think of a drumstick, that's probably. That's where we service. So all channels, all ten states, as the company has eight, has gotten older.

22:40
Allison Taylor
We have a lot of expanding our natural portfolio as well. So we have more conventional routes that are expanding in natural and then similar structure. I mean, we have a sales team that operates on all the islands as well. We have account managers, we have order takers, we have merchandisers. And then our drivers also can, like, help with some of that as well, if it's like a smaller route. So we have a large team, hands on, out on the islands. And then, yeah, our main customer base, we service. I guess the largest tiered customers would be grocery supermarkets. So safeway, food, land and time. They're the largest grocery chains. And then our c store is another large channel for us. So we have a chain there in Hawaii called ABC. It's kind of like a New York City bodega in Waikiki.

23:28
Allison Taylor
They have everything you can think of and their stores for all the tourists. So we service their accounts. They're one of our larger accounts, as well as 711 and then other local sea store chains. And then we also do food service too. So that food service is super broad. It can be like hotels, it can be coffee shops, it can be smoothie shops. So that's. Or even hospitals and even anything you can think of beyond grocery retail and tea store. So that's our channel base, what we carry and kind of how we operate.

24:03
Daniel Scharff
Yeah, really interesting to hear. And I mean, I think, yeah, Hawaii is such a unique market. And I mean, I think so desirable for so many brands to get into just because, you know, I think I remember reading some studies about how people are really likely to discover products, especially when they're on vacation, and how those kind of products stick with them then when they come back. So it's such a cool place, both for the locals there to have the product available to them. And so many brands who are aspirational. Outdoor lifestyle, Hawaii, so beautiful, but also the chance to just reach so many high value people because of all the tourism in Hawaii as well. But it's not without its challenges. Right.

24:44
Daniel Scharff
I mean, the most obvious one of actually just kind of getting the product there, which from mainland can be a little challenging.

24:52
Ahmed Chehade
Right.

24:52
Daniel Scharff
I think if you go through unfi, like, okay, it's more or less the same model, but they're shipping stuff out there. And then probably you're just going to see it reflected at the price on shelf at some point with a nice little increase. Sorry to the locals, but definitely there are some price discrepancies with mainland versus Hawaii. But then on the brand side, we have to figure out, okay, if we're going to work with a DSD, we've got to figure out the best way to get the product to you as well. So I remember doing that exercise, figuring out, I think, asking you, okay, who's the best freight forwarder? And looking around a little bit and figuring out how we could make that work. But hopefully everybody gets through that process. That sounds like a pretty big differentiator then.

25:37
Daniel Scharff
So you have really good coverage all over the island. You've got your own warehouses. And now the name pint size makes sense to me. I guess, knowing the Nestle roots, I guess I probably should have connected that before. So, one thing I just wanted to ask, because you mentioned all the different kind of services that you guys do from taking orders. Really, what actually happens when the DSD rep shows up at the store? What are all the things that they're doing? If it's like a new account versus if it's an account they're servicing? Like, they drive up there, they've got an order, they're going in, they're talking to the manager. They're figuring out how much, like, what kind of an order they want to place. They're actually placing it.

26:18
Daniel Scharff
Probably they already have it on the truck or, like, you know, what's the, like, order of operations there that results in you maybe getting a new account? Like, who's the person that's actually doing that? Is it the same person that's delivering it? Or, like, what are they doing when they go to the store?

26:34
Allison Taylor
Do you want me to take that first?

26:36
Daniel Scharff
Yeah, why don't. Yeah, maybe, Allison, if you want to start with that one.

26:39
Allison Taylor
Yeah. I mean, for us, we have that structure that I mentioned. So we have the key account managers who pretty have the touch point on the buyer, like, or on the chain. They're more involved with the high level operations with the store and store managers. So they oversee the chain accounts. And then we have order takers, which pretty much follow the delivery schedule. So as products get delivered. You know, our order takers come and they just kind of backfill orders. They just are in the stores every week just checking on the shelves, and they're doing all the ordering for our customers. So it's a huge plus for the customer because they don't have to worry about any of our products. They know that we are taking care of it.

27:24
Allison Taylor
And then we also have merchandisers that follow, like, our truck route and make sure the shell, anything that gets dropped off on the pallet, they're the ones filling the shelves and executing on the schematic. So they're the ones. That's what the traffic looks like in the store once we drop off an order.

27:41
Daniel Scharff
Okay, so those are all separate people. You've got the key account team, like making the headquarter calls, calling the stores, getting stuff in, and then you've got, obviously, the person doing the truck who's delivering the product. But separate from that, you have someone different doing the order taking. So they're in the stores without product, but just checking and I making sure that you're ordering the right amount to be delivered. And then lastly, the merchandiser. So really four different key people. Ahmed, is that similar for you, or do you have a different setup?

28:09
Ahmed Chehade
I admire Allison's setup. It's very complex. It takes a lot of time management. With good stuff, it's a bit different. We have sales reps who have specific, confined territories that they oversee with specific chain accounts and small accounts. They've got a book of business that they oversee, and they go and they talk to the buyers, they talk to the owners, they go in there, they check the shelves, they check back stock, they submit orders for, whether that's the next day or the following day's deliveries. They try to set up displays, whatever it is. If there's a shipper program, they'll communicate, they'll help merchandise, but that's not their main responsibility.

28:45
Ahmed Chehade
It's more relationship building, inventory management at the store level, upselling new items, promotional programs to be passed on, and then, you know, put onto the shelf at the right price tag, make sure the product's nice and pretty on the shelf, giving it some TLC, shelf talkers, et cetera. But, and then from us, it's like orders are placed, orders prepared at our facility. Next day it's being delivered, and that's kind of the rotating process for us.

29:18
Daniel Scharff
Okay, so it sounds like maybe then some of those roles are consolidated into one person who's doing a lot of them, and they're just kind of more the go to. But then still the delivery of the product is going to be separate, correct?

29:30
Ahmed Chehade
Yeah. The delivery gets scheduled so the buyer knows that, the receiving team knows when their orders are being received and delivered, whereas my team's going off and doing all the relationship and then.

29:42
Daniel Scharff
So how does it work? Let's say you have like a small chain in the SF area with five locations, maybe like a rainbow or Gus's or something. Who's the person that would then be trying to get one of your brands into all the stores? Is it like you just have one of those persons kind of assigned to it or. Cause I know Allison said she, they have kind of more of a key account team that would do that stuff. But how would that work for you guys?

30:06
Ahmed Chehade
Yeah, it's a mixture. Some of my reps will oversee a large chain, like Nugget, for example. My guy Diego does a great job. He communicates with the team staff, presents new Adams and some chains I handle myself and so on. So it just depends on the account. But majority of the chains will funnel through me and some of the lower, smaller independents will funnel through my team or myself. So it's collaborative effort at the same time.

30:36
Daniel Scharff
Got it. Is there anything about, we talked a little bit about the uniqueness of Hawaii. Is there anything else about SF nor Cal that you think would make it really different from other parts of the country that people might be familiar with?

30:51
Ahmed Chehade
Well, yeah, you know, the Bay Area in Norcal is really filled with independence. It just, it's covered with a healthy amount of great long standing independent business. And I would say consumers are very educated. Right? Like, they're very intrigued on trying new products and trying new things and love samplings and demos and all, you know, all that hands on engagement with the consumers. But in terms of how it differentiates from maybe other places, I would just say, like, you've got a great, diverse melting pot of people in the Bay area, and you're going to try all sorts of stuff from very cultural products to very, you know, standard, convenient lines as well. I mean, you're going to get a lot of engagement just on a branded consumer level. Northern California.

31:44
Daniel Scharff
That makes sense to me. It vibes with my experience there. I had never almost been to SF before, but then moved out there. When I worked for just egg, I was working in the mission. So we basically had kind of like a tech food office in the middle of the mission. And I would go often for lunch to Gus's, which is a really strong independent chain there. And there would be brand sampling always, you know, when there's cheese, you load up when they're sampling the cheese, the good stuff. And, yeah, I would always try new things. I remember that was the first place I ever dared to try kombucha as, like, you know, an east coast boy. I'm like, let me see what's going on with this. I did not love it. I'll just be honest.

32:21
Daniel Scharff
The first time I had it was weird for me. And then. But then, you know, some of my other, like, tech kind of food coworkers would then go to the ethnic grocery store and get, like, a banh mi sandwich, and that was really cool, too. I'd go with them sometimes. So just, yeah, a lot of, like, well educated, interesting, kind of cultured people trying a lot of different stuff in just kind of proximities around where they work. And I would say probably at that point note, like, not a lot of people were, you know, walking over to the whole foods to get lunch, but rather just trying a lot of. And people loved rainbow grocery. I mean, I worked at a vegan company, so that makes more sense. But, yeah, there were some people who would go over there every day for lunch.

33:01
Daniel Scharff
So it makes sense in the context that you just gave that customers are loyal, too.

33:06
Ahmed Chehade
I mean, they'll be shopping at. They'll be shopping at Rainbow, like, their entire life. It's crazy. People love and have brand loyalty to the community markets that they shop at. I'll give a shout out to star Berkeley. It's like a small little market, but everyone knows that place. If you go to UC Berkeley like I did, and you just shop there just because that was the spot, you get your sandwiches and you get your snacks and all that stuff, because that was a spot that's a community area in Berkeley that you just go to all the time.

33:41
Daniel Scharff
All right, that makes sense. Alison, any other dynamics about the Hawaii market that people should know about?

33:47
Allison Taylor
I would say. I think what's unique about Hawaii, too, is if you put in the effort and you put in the commitment to really grow it and maybe spend some time, meet some people in Hawaii that come out, meet the buyers, come out, meet the team. If you're able to even spend, like, a few days up to a week in Hawaii, I mean, rough place to visit, but if you commit to come out and meet the environment, meet people and understand the market a little bit because it is unique, and it's also, like a cultural thing. If you come and show respect and come visit, I mean, it goes a long way with our customers. And the customers at, you know, at the, you know, foodland, for example, is our, one of our regional chains. It's the only, like, family owned chain in Hawaii.

34:36
Allison Taylor
I mean, they allow demos, and so when some of our newer brands have come and done demos, the customers really respond to that and they appreciate it. And they're usually customers off promo after that because they've met you, they trust you, they respect you for coming out. So I'd say if you're willing to be able to come out and grow in the market by visiting it and seeing it yourself, I mean, it goes a long way. It's a lasting impact.

35:03
Daniel Scharff
Yeah, well, that definitely consistent with everyone that I've known who's spent time in Hawaii. It's just, they just talked about how much respect they have for it and the importance of giving back and being local there and taking care of your environment and people around you. So that makes a lot of sense. I wonder maybe Allison first, like, are there any brands that you've seen just come in and really crush it with you? And they just did all that stuff the right way and they were very successful because of it.

35:30
Allison Taylor
Yeah, I think one of the suppliers or vendors that we good stuff and we share is health aid. The team we work with at health aid is they're on top of it, they're on top of their sales data. So they're. Even if they're not in Hawaii, they're really on top of their sales reports they get from us. They're really curious about how they can support. They do a business review with us at least once a year. They come out, they hit the market, they meet the team, they always share innovation with us. We're not like the last to know about what new flavors or new varieties or offerings are coming out. So they're very active, involved and supportive, and they've grown with us in the past year too. Mucha category has struggled, but they're continuing to grow with us.

36:21
Daniel Scharff
Good for them is then, Ahmed, is that similar for you guys or what? Are any other brands that you wanna mention that have done a great job?

36:28
Ahmed Chehade
Yeah, I think Allison and I have the same team from health aid, and they do a great job, honestly. I mean, we've, since we've onboarded Altaid a while back with the team that's taking care of us now. I mean, they just have consistent ground support, especially here in NorCal. I think they have three reps that the help out with good stuff and they consistent always on depletions. Right? Checking in on current existing accounts and then always looking for new business, too. You know, no rock is left on turn with Alpha. I love that approach with them.

37:00
Ahmed Chehade
I mean, just with our recent Sunset launch, they just go all out and they really did a great job just handling the relationships between my team, managing time and understanding the geographical territories and who the players are, who the customers are and how they're going to approach the customer base. They just did a really good job with the launch and hopefully that launch turns out to be really good for the brand long term.

37:29
Daniel Scharff
So you mentioned having people in the market and actually I remember when I was there kind of kicking off with you, the brand that was coming in next had three people there and I knew the brand, but I didn't know any of them. They're like, oh, yeah, we're all local, you know, we're like, you know, area sales managers in this region. I'm like, well, I wish I had those. That's cool. Like, how much do you really, like, want to see that, need to see that versus, you know, what do you want them to be doing versus what your team is doing, you know?

37:56
Ahmed Chehade
No, I mean, it's not easy to do that. I mean, you have to have the funds to have a ground team and be boots on the ground and do the, like the marketing from ground up at the retail level, creating relationships and doing the brand development on the store, giving the retail shelf a little TLC. Reaching out with my team, you know, it's a lot of work and it's a lot of effort. It can be expensive, but for brands that don't necessarily have that budget and for another brand that we found very successful. Right? Like we just onboarded a brand called fancy pants and they're out of the east coast and they know they can't spend a lot of time in the west coast. They don't have, they don't have a rack to support.

38:36
Ahmed Chehade
But what they did do is they went ahead of it and they reached out to all the top accounts so they knew what was going on. They gave my entire team really good placement deals and programs to have the autonomy to be in the market, to make the right decisions and to pitch a good product. And then on top of that, you stacked on incentives for my team to really focus on brand for a specific time period. Promotional programs as well as they did a ton of like this free sampling program, too. They send a pallet of sample packs that you just give off the customers to get passive demos because they can't do those demos hands on. So any accounts that do the demos in house, here's all the inventory for it. Just go pass it out for free.

39:22
Ahmed Chehade
They did a good job. They're still doing it, and we're still getting a lot of good returns and good feedback in the retail market.

39:29
Daniel Scharff
Amazing. Okay, Allison, I have the same question for you, but also, I mean, I think probably there are a lot of challenges, even. Especially for Hawaii, even if you do have, like, one person there. I don't know, there are a lot of different islands and who they can't get to a lot of the stuff. I also remember, you know, with my brand, were trying to find local demo support, like, somebody local to go in and support a lot of the accounts, and, oh, boy, was that tough. To find somebody consistent to go into, like. And for them to get to, like, two stores is hard because, I don't know, one of them is really far away from the other one, and maybe the waves were good that day and they didn't want to go.

40:02
Daniel Scharff
I don't know what happened, but they would always call and cancel. So what? Yeah. What do you like to see for local teams, and do you see it a lot?

40:09
Allison Taylor
Well, I mean, honestly, that's actually where I came from. From a start, when I was at a startup, I mean, I came from, like, a brand ambassador. That's how I started out. I started out doing demos, and then once we could hit the units per store per week, that Whole Foods required at the time, that was the chain, one of the local chains we had launched in, once I was able to hit that off promo, we kind of graduated to the next account, like, the next region. Took a lot of time and effort, but that was honestly the fun part of it. You know, if I asked, when is the next reset schedule? Can I come and can I help cut in my product? Can I come cut in other people's product?

40:48
Allison Taylor
Like, I would just show up and show that I really cared about, you know, their time and their interest in our brand. So, I mean, I. That's how I started out as, like, doing demos and showing my face and representing the brand. So I think, you know, if you don't have a full team, but you really want to launch in a market, I mean, you know, you want to be there. I mean, there's ways to do it without having, like, three or four people. It goes a long way if you're able to, even if it's just yourself going. And then with mostly with other teams, like other suppliers, that we have, as speaking from now we've seen like the teams come out. Like there's a few brands.

41:31
Allison Taylor
Like we launched mellow Water this winter and they had a team of a few people come out and do demos for a weekend. They came and met with the team and they did demos for the weekend and then they flew home. So, I mean, they came in, they hit it hard, and then they left. So that was effective and it's proven to, it's been proven to be positive.

41:54
Daniel Scharff
So, yeah, it's one of those things that's hard to convince your CFO of the immediate return of that with the trip and staying places and the car and the product and everything. But I mean, I think for all the reasons we talked about before, can make a huge difference where, okay, like the local team see you out there making the effort. They get a connection to the product. Like it's going to matter, especially over time, more than in a way you could probably measure it so directly. But I don't know. For me, honestly, I love demoing and I was the CEO of the company. I couldn't just be out demoing the whole time. But actually, great central market. I would go there, demo and sell so many cans and it was so fun for me.

42:37
Daniel Scharff
And it's really satisfying in a way that, okay, just sending emails from your computer doesn't necessarily tick all the same itch. Even when you're getting accounts and stuff, it's like, well, it's fun to be there and it's competitive and you're like, I'm going to sell every single pan on this shelf. Let's go. It's very gratifying when you see people like, okay, yes, go and buy it. And thank you. You liked it. It's great.

43:00
Allison Taylor
And it's also helpful, too, to leverage that time. So if you're going to commit to a demo, you're like, hey, I need an off shelf, I need an end cap, I need a hot promo, I need an ad. So there's ways to make it work for the time you're putting in. If you just get creative and say, hey, this is what I want to do or what I need to happen. Can I get this? Can I have that? And just ask for a display and go and build it and then demo next to it. And usually they're happy to have the secondary display. You're like, yeah, you're going to go sell it. Sure, have the secondary spot.

43:33
Daniel Scharff
Yeah, you're totally right. And then you can just sell everything on it. But yeah, I was amazed, like what you can get if you actually ask for it, even if you're not asking the, like, central buyer, but even in the store, like, hey, because I'm here today and I'm actually going to be over near that secondary cooler. Is it okay if we just put our product in there and then people can grab it and then next thing you know, that's just your spot and I don't know, there's a lot more you can get. Ahmed, do you see a lot of people supporting with your team, with demo support and getting out into the stores?

44:01
Ahmed Chehade
Well, just to tackle Alison's brand, you got to think outside the box for a lot of these brands, too. I mean, there's so many traditional ways to just going about it and you can skip it in any way, but thinking outside the box, leveraging, asking questions, talking to the brands, setting up those relationships. Yeah, I mean, those are great opportunities. But with demos, with brands that provide demos, when we have that, we see a lot of, I mean, the brands get their return. At the end of the day, the brands are going to sell through their product, they're going to get their return.

44:33
Ahmed Chehade
They're going to make a good spot for themselves with a relationship with the buyers that they're working with, especially if it's a very successful one and if the consumer feedback has been amazing, you get that type of opportunity to get your product in the consumer's mouth. That's what you want. And the retailers love that. Do we get a lot of it? I mean, with the local brands? Yeah, we do. Because the CEO or the owner of the company or their family business, they want to pitch their product. They want to see its brand succeed. So we'll get a lot of support. Just because we work with all local brands, with the larger brands that we work with, I mean, most of the vendors we work with on a larger scale pretty much live in LA, you know that.

45:25
Ahmed Chehade
So they'll take a quick fly up, flight up, maybe for a few days. We'll do a ride along with my sales reps or they'll schedule demos. But the most important part is, like Alison said ahead of time, you know, you're going to get those demos in the ask for that space. Ask for anything that you think is going to beneficial for the success of your brand. And the distributors in my reps are going to do whatever it takes to help you out, too.

45:54
Daniel Scharff
Its a good way to make sure theyll have product when you actually show up because theres nothing worse than flying to Hawaii and getting ready to do your thing at the store and then theres product not there.

46:03
Ahmed Chehade
Do your due diligence ahead of time, too. Thats the most important because sometimes we have, like there's times I'll find out they did a demo and weren't aware what demo was going to happen. My rep wasn't aware. So they didn't have enough inventory on the shelf. It's like you got to communicate ahead of time and let's get, we want on the same page the demo success and so you can actually run it.

46:28
Daniel Scharff
All right, so speaking of success and you know, when a brand approaches you, they want to be successful. A big part of that is going to be the retail price. I want to work with you, but the financials are a little bit different when you approach a DSD versus a broadliner. If you don't look at anything and take care of them easily with a DSD that's providing the enhanced service, your retail prices could shoot way up. Maybe we'll start with Allison. What do you want brands to be thinking about when they're coming in and talking to you about the structure and the financials and shelf price and all of, and support and everything?

47:07
Allison Taylor
Well, typically I think it's mainly about understanding that it's an island and it costs to get product there. And it shows even regardless of the DSD or a broad line, your price is going to be higher. And typically it's about a dollar higher than California. So that's just baseline expectations. There's also ways to do some market research by just shopping online and changing the zip code and saying, oh, like, what is this price in this store? Like, what is Safeway selling it for years? There's ways to check on, like, products if you're not in Hawaii and see, like, what is that selling for? You know, am I selling for, you know, premium product at $5 here and in California I'm going to be like, at 699, that's pretty high. So how do I, you know, what am I going to be?

48:00
Allison Taylor
How do I educate myself before I even pitch it and be prepared for that? So low. Like just based on expectations, it's probably going to be higher. And does that fit with your goals on shelf?

48:15
Daniel Scharff
And I remember so when I worked with you guys, so I had to go do the exercise. My CFO figuring out, like, okay, here's our normal distributor price. Here's how much it's going to cost for us to now ship it to Hawaii. Okay. It actually makes a big difference if we could ship maybe four pallets instead of one at a time, or how many could we ship? Because then that brings the cost per case of shipping it way down, figuring out all that stuff and asking you what your margins were going to be and what the retailer margins were going to be.

48:46
Daniel Scharff
So we back into this model together, and I think, Ahmed, with you, I had a similar exercise of really just, like, having a lot of transparency so that I could work with you to make sure were doing the right kind of rebates or pricing, just so that it wouldn't end up with some crazy price that was not going to work on shelves and was not going to work for the buyer. So, Ahmed, is that typically what you like to see from brands or anything else you want, you like for them to come prepared with?

49:13
Ahmed Chehade
Yeah. Just kind of working backwards from the price they want to see on the shelf. Right. Like you. You got to set you. You've done. You're the brand, you've done the due diligence and understanding your category, what price you need it to be on the shelf and where it needs to land at, whether it's a high low kind of thing and working backwards and making sure you're also in the green. Right. And as well as the distributor and the retailer. So, like, good stuff, I have a three win policy when it comes to working with my brands. It's a win for the vendor, the manufacturer of the brand, win for good stuff, a one for the retailer. Because once we've set up all those, that structure, economic structure together, that foundation, we've done the right job, we found the brand.

49:57
Ahmed Chehade
Right now, the consumer is going to get the right product at the right price, and they're going to be a happy consumer. At the end of the day, that's where I was like, I really try to make sure that when we're doing the economics and the price structure, it works for everybody. And whether it's the minimums that we have to account for or the margins that I have to account for, it all plays together, and every brand's different. So it just depends on the financial structure.

50:29
Daniel Scharff
Okay, makes sense. And then I guess maybe just kind of the last question, because this was a little bit newer to me, and if you're coming in from broadliners into DSD, one thing that you'll get asked by a lot of DSDS is, yeah, do you want to provide a sales incentive to the reps? And we think it'll be like you were saying before, it can be pretty impactful for them. Right. What do you typically see from brands in terms of incentives and what can be, like a home run for them to just really make sure that they are top of mind for people who have very busy jobs?

51:07
Ahmed Chehade
I guess I'll take that one. Just because we run incentives with my team all the time, with all new brands, and, yeah, every brand is different. Right. The budget allocations for an incentive program is. We have to be very specific because I really don't want to just, like, pull a bunch of money from a brand because I'm asking incentives for my sales. I want to make it work for both of us to make sure, hey, if we have to cap it at a dollar amount, whatever it is that you can afford, let's do it. Because if you don't have a broker that's overseeing and working their tail off and getting accounts into good stuff, well, you're really focusing on my reps. If you're not in the area dedicated, you're dedicating your time to it. So when we run incentives, I love creativity.

51:52
Ahmed Chehade
I love when brands are like, hey, let's do something collaborative. If they can assign a team to the area, do sales blitz for a week, and come in and really handle the area and make the relationships, get on the shelf, get the authorization, sell through, make volume deals. Because at good stuff, we love selling volume, too. We want to make sure that we're selling pallet deals. If customers can buy out of pallet increments, those are all the things that go into what we think about incentives and how it works for our team. But essentially, for us, it's like your brokerage costs for a period of time, because you're utilizing our reps in a very meaningful way. And hopefully it's very impactful. If you allocate the right resources to the right people, it works really well.

52:39
Daniel Scharff
Okay, cool. Allison. I don't know if you guys even do a lot of incentives or mainly, like, come down, make sure the team has some merch, like your branded hats, because I know people always love that or anything else.

52:50
Allison Taylor
Yeah, the team loves swag. I mean, I think a lot of teams do that, especially if you have, like, a polo in their color, like, in the company color. So I think, you know, swag's great. And as, like, a baseline, if you're able to do that, like, that's always welcome. And then we just are really starting to build out an incentive program for us. But in general, you know, I. What I've seen work with some of the suppliers that have run incentives for a while with us and that do it well is they're really focused on the account goals. So if it's like a, they're trying to hit a certain velocity or if they're trying to hit a certain volume, they try to reflect the incentive around their goal with that specific customer or channel.

53:41
Allison Taylor
So if it's like a c store, it's like, can I get one extra facing without or an extra flavor without taking away a current one? So trying to really be aggressive with the shelf space available or the type of velocity the customer wants to see, I think that's what they've done well, is like, hey, in this account I want to do this kind of incentive. In this channel I want to do this kind of incentive and it's more tailored to our different type of account. So that's been something creative. I've seen work really well because it helps our sales team get really focused on what the strategy is and being really specific.

54:24
Daniel Scharff
Amazing. Well, what a cool overview this has been. Honestly, I wish I had been able to listen to this before the first time I talked to both of you. I feel like it would have saved me a lot of very basic questions that probably you get all the time. I hope that you can at least send this podcast to some people who then talk to you for the first time and that we've knocked out a lot of the early questions that they would be asking you. That's usually my goal with a podcast. So I feel like, yeah, this is a pretty good overview. Anything you feel like we didn't touch on that you would really want brands to know about dsds or you guys in general or feel like we got it.

54:59
Ahmed Chehade
I mean, for me, I just want to harp on relationship building. I mean, that's what our industry really is. Like Alison said earlier, it's an incentive and you're trying to leverage the spacing on the shelf. There's only so much shelf space that you can actually put product on. Right? So we're not a unify, we're not a k, we're not these big conglomerate distribution companies. We have to be very specific on what we bring in. We have to curate our offering. So when we do so, we find right partners. We want to make sure we're driving into the relationship standpoint of growing business and brands by equal partnerships across the board.

55:36
Ahmed Chehade
And when the brands realize that the relationship in the market is extremely important and they continue to develop that collaborative effort, see a good amount of success and that's what I'd like to hear.

55:51
Daniel Scharff
Amazing. Allison, any final thoughts?

55:53
Allison Taylor
Yeah, I would say come prepared and come with suggestions and come with a willingness to learn and adapt and work with any distributor partner, whether it's good stuff or pint size, any DSD, you know, come prepared with what to make any decision easy for them. So come up front with your velocities, the category information, like maybe a light customer you're currently selling in. Just help us understand what you're currently doing, what are your goals? And don't have us pine for the information because we really want to do. We really do want to help and we really want you to reach your goals in our region. But it helps us a lot if you're able to come really prepared with the type of information we need to see from our perspective.

56:46
Daniel Scharff
All right, that's great advice. Well, thank you to both of you. I am very happy to have built a relationship with both of you. Two of my favorite people, always to see around the trade shows. I imagine if other people want to just follow along with you guys, maybe they could give you a follow on LinkedIn.

57:05
Ahmed Chehade
Yes, of course.

57:08
Daniel Scharff
Perfect. Okay, well, I expect you'll be getting a lot of follows then. And thank you guys so much. This is such a great intro into DSD's. And yeah, I hope everybody enjoyed this as much as I did. And I'm sure we'll do another episode in the future someday. The DSD 201.

57:25
Ahmed Chehade
Thanks Daniel. I appreciate it. It was a good channel.

57:28
Allison Taylor
Thanks for having us.

57:29
Daniel Scharff
Hi everyone. Thank you. Bye. All right, everybody, thank you so much for listening. If you enjoyed the podcast today, it would really help us out if you can leave a five star review on Apple Podcasts or Spotify. I am Daniel Scharff. I'm the host and founder of Startup CPU. Please feel free to reach out or add me on LinkedIn. If you're a potential sponsor that would like to appear on the podcast, please email partnershipstartupcpg.com and reminder to all of you out there, we would love to have you join the community. You can sign up at our website, startupcpg.com to learn about our webinars, events and Slack channel. If you enjoyed today's music, you can check out my band. It's the super fantastic on Spotify music. On behalf of the entire startup CPG team, thank you so much for listening and your support.

58:16
Daniel Scharff
See you next time.