The Startup CPG Podcast

Aaron May
The Upmex program is for emerging brands, diverse owned suppliers and partners invested in sustainability, things that are really important to us as an organization and having a person in UNFI that they can bounce things off of, whether they're working with us today or they will be in a year.

00:26
Daniel Scharff
Oh, hey there. Are you up next? I hope so, because today's episode is Erin May, who manages the Up Next program for UNFI that's the big distributor to over 30,000 locations, including that famously tight relationship with Whole Foods. Up Next is a program designed to empower and educate emerging brands. Diverse suppliers and partners invested in sustainability. And in my last job as CEO of a beverage brand, I had the chance to be part of the UP Next program, and it was amazing. Listen in to learn all about Aaron's 15 year career at UNFI, the UP Next program, the benefits, the process for applying, and overall tips on just how to crush it with UNFI. For more info or to apply, you can check out their website. It's discover unfi.com upnext. You can also email them with any questions@unfiupnextnfi.com.

01:19
Daniel Scharff
And you can add Aaron on LinkedIn. He loves to be connected with the most exciting emerging brands. Enjoy. Hey everyone. I am so grateful. For those of you leaving reviews on Apple podcasts. I just want to shout out a few of the people who are doing it. So Ken Grain free wrote, this is a must listen pod for anyone in the CPG industry and even casual foodies he likes. The buyer spotlights the best. Andrea wrote, this is my go to resource. As a CPG marketer, the startup world's not easy, and it's great to know there's a whole community of us out there. Marcus Montgomery wrote, as an emerging brand, I love listening to these podcasts to find inspiration. Thank you so much. If you can leave a review, I want to shout you out here, your brand, your company.

02:00
Daniel Scharff
So please make sure you mention that in the review. Thanks, everybody. Now back to the show. All right. All right, Aaron, my friend, we are very lucky to have you here on the podcast, UNFi's up next program. It's a big opportunity for early brands to get their start. So before we get into it though, can you just tell everybody a little bit about you and your career?

02:20
Aaron May
Absolutely. Thanks for having me, Daniel. I appreciate it. So I am a grizzled Unfi lifer. I have been here since before I graduated college. If you'll indulge me, I actually was a marketing intern for UNFI when they were still headquartered in Dayville, Connecticut for a summer before my junior year of college. And my managers then, I still work with and work for now. So I came in to UNFI pretty much when we opened in Providence in October of 2009. I came in working on the marketing team as marketing coordinator, executing some of our programs that we add then, some of which we still have today. Worked my way through marketing and then got the opportunity to become a supplier relationship manager, managing frozen and some perishable categories, eggs, ice cream, pizza. I missed the samples, but I love where I am now.

03:13
Aaron May
So I've been managing UNFI's up next team for a close to three years and really loving it, loving working with this team, working with founders, working with people who are so passionate about growth and really just getting the message out there. So I think that really hopefully can resonate with your audience. It's been great working with these founders at this early stage.

03:39
Daniel Scharff
All right, and so how has UNFI changed during all the time that you've been there?

03:44
Aaron May
UNFI has changed an incredible amount. I mean, the whole industry has changed so much. UNFI went from basically as this natural foods, like the independent grocer, and, you know, that one aisle in your local grocery store where all the granola and the earthy, crunchy things were. That and has evolved, along with the industry itself, into everyday shopping experiences for most consumers. So I think that we have evolved through acquisition, through growth, just sheer size, because the need has been there and the want for all different types of products, for all different types of homes.

04:28
Daniel Scharff
And also because of you, of course.

04:30
Aaron May
Yeah. Well, I think you might be onto something there if management is listening.

04:36
Daniel Scharff
Okay, cool. And also, before we get into the good stuff, I know you're a guitar player as well. What do you like to play? I'm also a musician. I love to. Here.

04:44
Aaron May
Nice. Yeah. So, you know, with a six year old and a one year old, I've been sticking to the classics. This morning, we've had row your boat, twinkle, a couple of my favorites. But no, I've played music for a long time, and it's really just a way to relax and be creative, write a little bit. But also my wife plays as well, my brother, my father. So it's been a musical upbringing, and I've actually got. I'm touching my keyboard with my right hand, and I could almost reach my guitar with my left. So I keep it close to.

05:14
Daniel Scharff
All right, we can jam, Mandy. And I've got my ukulele here for anyone who doesn't know the music for this podcast is actually my music. I do play. You can check out the album if you want, maybe on Spotify. Super. Fantastic. That's us.

05:27
Aaron May
I could say it's pretty awesome. So check that out. For sure.

05:31
Daniel Scharff
All right, Aaron, you and I are going to headline one of the UNFI shows someday.

05:35
Aaron May
Yes.

05:35
Daniel Scharff
It's going to be amazing. So after that, all right, I'm going to play a twinkle little star like no one's ever heard it.

05:43
Aaron May
I'll play c, in case you're wondering. All right.

05:46
Daniel Scharff
Right. Extra twinkly. All right, so, Aaron, I know everybody wants me to get into UnFi. Up next. In my experience, this. So I was formerly the CEO for beverage brand, and we got into UnFi. Up next. And it was a game changer for us, just honestly getting that opportunity. We were able to open up some DC's. We had a friend inside the organization, which can be hard to navigate. Obviously, it's a big company now. You guys obviously have a lot of distribution. And so, I mean, it really helped us out. I feel like it just, you know, certain retailers could consider us because then were in UNFI. We had the code super early because of it, which we can talk about. But overall, can you just give everybody the 101 on Unfi up next.

06:28
Aaron May
Yeah, absolutely. So up next came about seven, maybe eight years ago. So it has been with UnFI, but it has evolved an incredible amount, you know, going back to just the changing landscape of retail and art, consumer base, but also meeting suppliers where they are and what is required to succeed with distribution. And what's required is that. I love that you referred to. Joan Schultz on my team is a supplier manager as a friend. So that's. I think that's what up next provides the most of a typical supplier manager. Like the role that I had, I managed about 200 lines. I worked with a lot of experienced brands that had, you know, regional sales managers, directors of sales, logistics, people not bootstrapping anymore. They've made it. And therefore, there's less education behind each decision that's made, because they have it.

07:19
Aaron May
So what up next really strives to provide is that education that community feel that you have. Not the person you interact with at UNFI, but you have your brand champion within the four walls of UNFI. So the Up Next program is for emerging brands, diverse owned suppliers and partners invested in sustainability, things that are really important to us as an organization. And my team is tasked with finding these suppliers right when they're ready and hopefully having them find us and having someone, a person in UNfI that they can bounce things off of, whether they're working with us today or they will be in a year. It's just engaging folks at that moment and answering the questions that they have.

08:03
Daniel Scharff
Okay, so what is it like for a brand that is not part of up next getting started with UNFI so that we can draw some comparisons.

08:10
Aaron May
So a brand that's not coming through the Up Next program, a retailer is going to request their items and then they'll have a contact and we'll have our specialists here set up the new items. You're going to get an email with the UPCs that we're requesting, along with a mountain of paperwork and a quick turnaround time to go through all of this to get your items set up within UNFI system. So UNFI has an east system and a west system. Unnatural. We have a conventional system. And you're going to be guided through the process to eventually be set up and have your products ready in a warehouse for purchase. And if you have questions along the way, you will get answers from your supplier manager. But a lot of it is just expected. You know, this is like another customer you're going to service.

08:59
Aaron May
UNFI is someone you're going to enter an agreement with. And then compared to up next, it's a little more proactive as far as establishing that partnership. We do want you to have retailers ready to pull your product, but we expect and ask for more questions along the way because you're entering a really big world, even if it's for a smaller opportunity. You're setting yourself up for success, for larger opportunities that come down the line. And your supplier development manager, as we talked about with Joan on my team, is there for you right from the beginning, and we'll get into how you apply and all of those things. But I think that draws the differences between just being set up and then being a part of the up next community.

09:45
Daniel Scharff
And I can say, in my experience, what it let us do was actually immediately open up a couple of distribution centers. So like you mentioned, if you don't have that access, what happens? Well, probably you need a retailer who can anchor the DC, meaning they have enough sway or volume with you guys to demand. Take this brand, please. I need them. And I would say on the small, like there are a couple, maybe four or five store retailers that do a ton of volume that can do it. But mainly it's like when you're 10, 15, 20 store chains that do enough volume to request that from you. But that's hard to get if you're an early brand, just out of the gate, you got a product.

10:26
Daniel Scharff
Otherwise, the rule typically, I think, is you need 30, 40 or 50 doors to request that you guys open up a DC, which is hard to gather together. Then the UNFI program, were able to immediately open up, I think, two or three high priority distribution centers for us. And then we hit the pavement and went out and we started selling to a lot of those like two, three, four store chains. And then you get in there and that gives you a better chance at the ten store chains and started cranking on those, too. And then I think we got to do some special promos, hit those unfi shows. And that's how we started getting the ball rolling, really. So it can be a little bit of a chicken and egg, which is a little awkward when you work at a egg company.

11:09
Daniel Scharff
Just so in case anyone's wondering, that was like our least favorite metaphor at just egg.

11:18
Aaron May
What I tell brands is we're looking to consistently move seven cases per item per week, per warehouse. Tell me how you're going to get there and we can have a conversation about that. I actually have something going in my inbox with a brand that we did not yet accept, but we're actually having the conversation now about how they can build a list that will convince my team that we're going to hit those minimums right from the jump. And I can kind of coach them up, and my team can coach them up and they can tell me what they're doing. And that's the sort of like open line of communication that it doesn't have to be a mystery like working with a big distributor. What my team does is it's not figuring us out to see what's going on behind the curtain.

12:01
Aaron May
You can come behind the curtain with us. We'll tell you what we're looking for and what we've seen in our experience in your category. You know, whether it's beverage or salty snack or frozen, you know, it's basically, there are a ton of rules and best practices and you're not expected to know everything. Come to us and we'll let you know what we're thinking and we can work together even when we're not working together yet.

12:22
Daniel Scharff
So I also remember then working with Joan. That's my girl. She was so helpful for us. We get a couple of those DC's, we're rolling now. And then we go to a unfi show, an expo, and we've got a collection of stores that now are asking for the product, but we have not been able to unlock the DC next. So, I mean, talking to her, if we really showed her the proof of that, then she'd say, okay, yeah, like, we can take a chance on this one. I mean, you know, you guys need to deliver that, obviously. But she could make that happen given that were doing the work. And that's, you know, I think a huge help for an early brand. And it's a big responsibility, too, because, I mean, opening up DC's has costs. There's going to be inventory there.

13:08
Daniel Scharff
Yeah, I mean, you need to. That's a great statistic that you gave, by the way. I'd never heard that number about the case per unit that you want out of each DC. But if you're growing and you can support it and deliver it, then that opens the doors for you to really start growing the business. So she had helped us with that, and then I think we also got some special access or maybe even a discount for the UNFI shows. So we would go to those, which I know they're often selling shows. For me, I actually was more interested in building relationships with the big retailers who were there. So I get Mohegan sun, which is the famous one that happens on the east coast, which is a very cool name for a place.

13:47
Daniel Scharff
Just trying to really get to meet some of the east coast retailers. The fresh markets of the world, a lot of the New York tastemaker ones, and then some of the west coast ones, like the Vegas one, is great for meeting all those high end California retailers. But that was my goal, rather than trying to do a deal on a truckload or something at a deep discount or even just like, I mean, you do get a little bit of a bunch of, like, independents. They're also looking for some deals. But like, yeah, I was there to really network with the people who unify is in deep with. Is that a pretty common experience for unify? Up next, brands, like, getting, I would say, pretty familiar with those trade shows.

14:26
Aaron May
Yeah. So this has been the biggest eye opener for me, moving from the role that I previously had to here is those trade shows. So we keep calling it the up next experience at the trade show. And Daniel just described it. It really is like there is a discounted rate because we want up next represented. Funny little anecdote from. I just got back from our Minneapolis show, and I got a text from Vanessa, from Jaju Pierogi, who I listened to that show about two months back and really enjoyed, and she sent me a picture because she was on the floor before I was, and the up next row was across from the Oscar Mayer Weiner mobile that was sitting in the middle of it.

15:09
Aaron May
It was like, follow the Wienermobile to get to the up next brands, which was a bizarre concept, but very funny to see. So I think that networking side is really important. So, and probably the most important. So we keep our brands together. I work with our sales team to make sure that they're bringing their customers there. They're two day selling shows, and on day one, we'll have a lot of those that have told me they're going to bring their customers through, come through. And a lot of it is about being prepared for anyone to come up from anywhere in the country, even though some are, I mean, the regional shows by geography, but you could have, you know, somebody going to Orlando because they're going to take the kids and the family and stay for a Disney vacation afterwards.

15:53
Aaron May
But maybe they're in the pack Northwest. So it's really about knowing where you already have distribution and then taking leads from places that you don't. So let's say that ten store chain in the Pac Northwest happens to be at a show and you're not open there yet. Connect with them and their UNFI sales rep, get that information, and then after the show, have a meeting with your supplier manager to say, hey, here's what I've got. What does this really mean as far as, should we open now? Are there other places we should target there? And then after day one of the show, we have our pitch slam competition, which I always did, my first one in Orlando in 2022, and we had 38 people in attendance. And since then, the pitches have gotten so fun and outlandish at times.

16:46
Aaron May
And then also, you know, the power of founders is just unreal. And this is what I'm reminded of every day, and how people are willing to tell their story, share their product, and have fun with it. And that's really, we have one rule, and it's keep it to three minutes or less. And now we've had close to 300 in attendance. And that's our sales team, our customers, fellow entrepreneurs, coming to see like air, which has been a brand that has really thrived with us. They won their last one, our last one in Minnesota, and I went to them the next day and asked how they came up with their idea, and they said they had gone to the two previous pitch slams they were scouting.

17:29
Aaron May
It was like sending a lead scout to go see next the pitcher you're going to face next week in a baseball game to see what was resonating with the audience. And we have a ton of fun with that hour. And then that also leads to on day two, we have a ton more traffic to up next because these markets that maybe they haven't considered your product at all and they are there for those volume discounts and they are there for a truckload. But now that you've given them incentive to come check it out. So I have loved it. You know, it's a lot. We have four per year, 2025. We'll have San Diego, Orlando, Mohegan, sun and Vegas. And we'll have a pitch slam at each and we'll have a great growing up next representation.

18:08
Aaron May
So I'm always super pumped to get to those shows and especially for that pitch slam.

18:12
Daniel Scharff
That's a good time. And I will just publicly submit myself as pitch slam mc candidate for one of the next ones. I want to come and get loud. That sounds like a great time.

18:21
Aaron May
That sounds like a plan.

18:23
Daniel Scharff
So we actually, thanks for mentioning that episode that we did with Vanessa from Jaju Pierogi. It was a great one. She had lots of really interesting content tips for people. Another episode I would call out is, if you look back, there's an episode that we did on distributor trade shows with Samuel Jacobson, and he's a pro. I've been at the UNFI show with him and just listen.

18:42
Aaron May
And Samuel, you got the right guy. He does so well. The shows. It's hard to find time to say hi because he's so busy.

18:49
Daniel Scharff
Yeah, he's like an order writing machine at those. So, yeah. Recommend that to anybody who wants to learn more about what it's like to be at one of these trade shows and how to do really well at it. Because Samuel is a pro for sure. And then one thing that we talk about is the role of the UNFI account managers because, great, you're in up next. And so we have our account manager, Joan, or the strategic relationship manager who does a great job with us. But it's really important also to try to connect with account managers. Now, these are people at UNFI who work hand in hand with their accounts, with the retailers that you're trying to get into. And there are some that are dedicated to a specific retailer in California wanting to get into.

19:28
Daniel Scharff
There are others that do like the e commerce channel and have great relationships there. And sometimes they can almost be more impactful for you getting into a store than the buyer themselves because the buyers look to them as trusted advisors to bring them innovation to put things in front of them, to really do a lot of the legwork and paperwork for them. What do you think about that overall? Relationships and how have you seen brands do a good job of building them?

19:51
Aaron May
Absolutely. That's so true that they are trusted advisors, especially in a space that they haven't really explored. We have a lot of innovators. Like you said, category disruption, emerging brands. You're not just selling your product to go next to another just like it. You might be selling a concept that resonates through your product. So there is that extra education needed. So what I would say is you work with your supplier manager on our side to say, hey, here's who I'm targeting. What would your approach be? Because some of the chains, you could have something that's going to be flying off the shelf that they're going to want on an end cap because it's the greatest thing that they've added, but they don't review that category until February, and that's the end of the conversation. Be ready in February, and that's great.

20:37
Aaron May
You'll have some others that we actually present every quarter to our NCG sales team because with that account that spans so far over so many warehouses, this natural co op, or group of natural co op stores, they have white space to sell your product in for you. And that's been incredibly successful for our brands. And it's really passive. It's our team doing that legwork and then just asking for a connection to these accounts. It's a lot easier for us at unfi to communicate with those who also havenfi.com, finishing up their email addresses, and we can put you in contact and kind of like act as an interpreter in between. Like, you know, they're saying this and that. If you're in the warehouse, they could pull it in.

21:24
Aaron May
So that means that they aren't willing to be that anchor account, but they'd be happy to pull through. It's all these things that why, as a founder who's just getting started with UNFI, why would you know that? So you should ask the question and we'll even kind of prod you to do so. And then at the show is meeting these people saying that you're a part of the up next program. It really is like taking all these floating names and kind of connecting them in your conversations. Like, hey, I talked to this store and this was the person I said, I'm in, up next.

21:56
Aaron May
And they asked if I worked with Aaron or I've worked with Joan and that really just seems to be the nature of our industry, is meeting folks, making a good impression, having your product do the talking for you, and then using the resource through the up next program to bring it home.

22:15
Daniel Scharff
Yes, that's very well put. And it is the job of most salespeople to do exactly that about knowing who those account managers are. Even that's, I think, the first step for a lot of people. So whether you're in the up next program or nothing, how can you even figure it out? Like, I know at least for, okay, for Kehe, there is a list of all of the account managers, but you don't even know what a lot of them do. And I was guilty of just emailing that entire list, which definitely rubbed some people the wrong way because my sales guy at the time was like, dude, you emailed, like, the janitors there. They're all like, just forwarding your email around to the same person. So. But for the, you know, unfi, it's like you got to work a little bit harder to figure out.

22:55
Daniel Scharff
And it makes sense to me why you wouldn't want to just have those emails described. Yeah, guilty. So, but, you know, yeah, what is a good way to figure out, like, okay, I tried to get to the buyer and they wouldn't respond to me, but I'm really interested in this account. I think we could partner with them in a great way. How do I figure out who the right person at unify is?

23:15
Aaron May
So you're right, that list does not exist at this time. I may or may not have something saved on my desktop, but that's for my eyes only. But I don't want to make it like we're shrouded in mystery or that we're trying to put up barriers because it's not that. It's not spamming these folks with the same offer every week and a half. So the goal is to work with your supplier manager to say, hey, I think Freshdirect would be a perfect fit. Could you let basically use them to make that connection? And in sales, like, you guys are tough when you hear no or you hear nothing, we're moving on to the next thing.

23:54
Aaron May
Our sales team, I will say, and I think a lot of it, is a credit to our up next suppliers and the up next team, they want to hear from brands. Now, that doesn't necessarily mean that you will then get an hour and a half with the buyer at Wegmans. That's probably not going to happen, but you are going to find out the steps in the category review and where you can end up. And some of the merchandising questions, what your SRP is going to be, how you're going to achieve that. We can all do it together as long as it's in a place of good faith and not purely. If only I had this half hour, they would be falling all over themselves to bring my product in, but use it more as an educational opportunity. Hey, we're here.

24:36
Aaron May
And I'll keep going with Wegmans. We're already in York or York warehouse. I've been here 15 years. I'm going to speak Unfi language at. I'll have Daniel translate for me when needed. But we can help you make those connections for sure. And the cool part is that we're starting to hear it from that sales side as well, working backwards. So now we're both working towards the same.

24:57
Daniel Scharff
Yeah, it does make all the difference. I remember, yeah, I was trying to pitch Wegmans and just not getting anything back from trying to hit the buyers. Couldn't really even figure out who the buyer was. It was not so clear. And then one day, somebody introduced me to the UNFi guy at the time was Josh Cannon. And he responded right away to me. And we had a call and he's like, yeah, okay, let's get the product in front of them. I'm like, oh, my gosh, this is amazing. Josh has no. I know. Josh now is at cultivate. He's a broker partner of the store.

25:26
Aaron May
I just talked to him last week. Yeah, it is. But I've gone up. I won't stay with Wegmans too long, but I've gone up to pitch brands in New York. And when I've talked to Josh or Sarah Trifoso or Gretchen, who just retired. Yeah, these were all amazing unfi account managers. And a lot of it is, yeah, send something in. We'll leave it on their desk. And that was, like, the answer that I kept getting over and over. And I was like, what a cool place to work. You, like, come in on, you know, a Tuesday morning and you've got an energy drink next to, like, a better for you donut option. Like, seemed pretty cool to me, but that does seem to be their preferred method. And those are the sort of things that you'll find out about all these accounts.

26:04
Aaron May
This is how they would like product presented to them. And in their case, it's a very passive way where trial will then generate conversation.

26:13
Daniel Scharff
Okay. So that is a huge benefit in my mind, is having somebody who can help be your guide through some of that, like, hey, look, I really need to talk to Wegmans. Can you connect me with the account manager? If you think it's a good fit. Yes. Okay. Boom. Like fast track. So how do you get to be one of these brands lucky enough to be in this program, right? I mean, there's a website, right, that you can apply on and, you know, we can share it in the show notes here, but it's just discover unfI.com, backslash upnext. But, okay. People are sending submissions in there. How can they be a good candidate to work with you?

26:47
Aaron May
I'm so glad we got to this because we've just talked about how great something that's not accessible is. But it is accessible, I swear. So what we do is we have this application and it gets into the nitty gritty and it's really grown where we are trying to figure out who you are, what you make, and what the timing is going to be. We ask questions about funding. How are you funding this? Basically the same pitfalls that we see through the industry. We want to be prepared for, but also in like, not a judgmental way, but a way to establish trust with your supplier manager, with the up next team to say, like, here's what we're coming in at. Here's the SRP that we think we should have. Here are the three top retailers we have.

27:34
Aaron May
And yeah, if number one is target, we are not going to be getting that distribution. But I want to know that you are working with other distributors, with other markets and that it's been resonating. It just helps us to believe in the growth trajectory of the brand. So you fill that out, and then you will receive, within a month, you'll get confirmation within two weeks, but within a month, someone on my team will review it. And there are three criteria that we are looking for, and that is retail preparedness, how you fit in with our emerging, diverse, sustainable, three main pillars of our program. And then your vibes like, is this someone that I want to work with? Is this someone I want to be that brand champion for? So that's how we vote.

28:23
Aaron May
Once we review that initial one, you will either get a rejection with instructions because we have a ton of people who reapply, like, six months later and do get into the program. Like you said, chicken or the egg. We are trying to be an in house accelerator program, which means that we need to start that clock at the exact right time because we want you. The goal is to be in the program for about two years and then graduate to what we call a broadline desk, which is what I managed before with those 200 lines, category specific, and then the other piece. So we see what the application says and like it. We will ask you to provide us two to three minute video about like, what you want to accomplish with up next, who you are, why you do what you do.

29:07
Aaron May
And we're not asking for production value, people. I mean, we appreciate it if you could put it in there. But we get a lot of just first person on the iPhone say, I've heard good things about up next. I think I have these opportunities with these retailers, and here's who I am and here's why I do what I do. And that naturally. So when we vote on those three things, after reviewing the videos, which we do the first Wednesday of every month, it's monthly submissions, we did have to cap it at 20 per month. And we probably get ten to twelve videos and bring in to the average about four brands per month. So we're picky.

29:41
Aaron May
But we also will reply to all 20 of those with our unfiltered thoughts and saying, if you would like to be considered in the future, this is what we'd look at. You sell pasta sauce in a twelve pack. Well, like I just said before, we look at case movement per week. So if you can get that down to a six pack, you're going to generate more case turns, which I am aware we're selling the same amount of pasta sauce. I'm only here to deliver the rules I don't need. So we go through that, and then after we watch the videos, everyone votes. And on Friday of that first week, I'll go through, we'll average everything out. I'll work with someone on my team and figure out, okay, we're going to select these four to be a part of the program.

30:23
Aaron May
And this one I noticed Joan had the highest ranking for. So let's assign this brand to Joan because we already all agree that they should be in, but now we know who, like, who really believes in this, who wants to jump into this person's line and their success, and we're just already invested before a single case has been purchased.

30:46
Daniel Scharff
That's. It's so interesting to hear that and also makes me just think, the next time I launch a CPG product, I'm going to have a case size of one and then I'm going to crush it. Did I just figure out the unify hack?

31:01
Aaron May
There's a few, and that's definitely one of them.

31:05
Daniel Scharff
Right. So you mentioned funding, which I think is pretty interesting also because we do a lot of giveaways with partners and I see a lot of them focused on that too. And it's not that they necessarily need to see you've got 50 million in the bank. I think it's more. They're just like, look, if we work with you and get you big opportunities, do you have a real way to pay for those things? Right, because you want to work with brands that are going to really go for it, at least in some way. You know, they don't need to get target the first year. But like, if you get a 2030 store chain, do you have the money to pay for the promotions you need to do well with that account? Is that the kind of stuff you're looking for?

31:41
Daniel Scharff
Like, what do you want to see that's going to make you comfortable on the funding part?

31:44
Aaron May
That's exactly it. Thank you. Because I might have just stepped in it there until you corrected my answer, but that's okay. I really. That's exactly what it is. It's not that we're looking for someone that has to have the funding to run every marketing program with UnFi. That's absolutely not the case. We are looking for intentional growth mindset. We're going to go an inch wide and a mile deep in a certain region of the country and we're going to support that to our very best ability. Because what we're worried about is that if the concept as currently constructed doesn't work, we're seeing good products go out of business or exit distribution or really have to shrink their footprint. And that's the last thing that we want to be a part of.

32:26
Aaron May
And that's why we dig in so deeply on these things, because we do know the support that's required at the store level as far as ramping up manufacturing. It's hard right now, and I've had some real great conversations with brands where I kind of like, take my unfi hat off and ask them to take. We're not talking about our business, I'm talking about, are you good? Is your business good? What is hard right now? Because that helps us inform other brands that come in because that's the nature of the program. We're going to review 20 ish brands every single month. So we see all sorts of beginnings and outcomes and I think are establishing some expertise in what is needed to succeed through UnfI, at least.

33:10
Daniel Scharff
And what about stage of the company? Are you equally happy to look at stuff that is pre market and they want to start strong with you versus they've been in the market for a couple of years and have some good traction. Does it matter?

33:21
Aaron May
Both. But what my goal has been since day one here is to much like you've done with startup, like establish a community where like, we can talk to a brand when they don't even have packaging yet and just kind of coach them up. It's free consultation. But at the end of the day, if everything goes right, UNFI has an awesome partner to get their product to retailers. Now, I'm not saying that if you're a not ready to produce, no, we're not going to have you sign a supplier agreement and bring in whatever product in like a glass mason jar that you have. That's insane.

33:57
Aaron May
But we are going and are willing to coach you even if we're not, you know, exchanging, you know, if we're not in a business relationship yet, like we want to open the doors for communication to UNfI and say what in your category has been successful and what those people have done and just create this free flow of information.

34:16
Daniel Scharff
Okay, so here's an off the wall question for you, which is, let's say Aaron May launches his own CPG product and you can now give yourself all of this advice that you've been giving brands through these consultations. So you're launching, maybe it's a pasta sauce. I don't know what it is. What would you do then in the first year or two? Let's say you want to work with UnFI. What are you going to do to really crush it with your brand in the UNFI up next program to get to that point where you can graduate from it and be part of the broadliner team?

34:48
Aaron May
Sure. I'm going to reach out and introduce myself first and foremost. And I'm going to say, this is where I am. This is where I see myself going. And then open things up for discussion. I'm going to get on the startup CPG Slack channel, which I'm already on there, but I would be in there because what I have found with this that I didn't understand before I got to up next is it's not when am I ready for the next step? It's like I don't know if I'm ready. And there are 360 different next steps that I could take right now. Move sideways, we go direct to consumer at the same time can reduce our case pack. At the same time can apply for non gmo status.

35:36
Aaron May
It's this order of operations that is different for everyone and understanding, like, what is the most important, next thing that I can do and then the other thing I would, I think in this case I'm preaching to myself. So I'd look in the mirror and I'd say, be patient. Like, I love this thing that I have created. I want to create such a critical mass that people are begging me to take this next step. And I want to make sure that I understand everything associated with that. I don't want to walk into a retailer and they say yes. And I just immediately call that a win.

36:11
Aaron May
Without realizing that they're expecting five case free fills and a fee and to be on deal at an SRP that I can't possibly maintain because those are where the, that's where the backlash against retail and against distribution comes in. And a lot of it, I think, is better executed on the front end. Now, if you have a broker, what have you authorized that broker to do to win a retail account? And what does that actually mean? And as working with us, you can attest to it when you say, I'm giving a free fill to these ten stores and then it's billed back to you through UnfI at a price that is not the cost of your case, it is billed back at wholesale cost.

36:54
Aaron May
A lot of people, that's the way that they find out that is the UNFI and pretty standard across the industry distribution. When you understand that upfront, you can brace for it. When it's dollars coming out of your pocket after it already happened, that just sets our relationship in a negative direction. So again, self, these are all things that I would look at because it's amazing how many different variables you have to consider. But I would make sure that I knew as many of them as I possibly could going into it.

37:28
Daniel Scharff
All right. So I mean, I heard a lot of different things there that I think also probably signal some other criteria for brands that you like to work with. But just to kind of summarize, like, yeah, good, you know, good brand, good kind of funding growth mindset, I heard. And, you know, product and packaging that's set up well, also probably that they do understand how to budget for what's going to happen and knowing that they're going to get billed back at wholesale cost, which, yeah, that's a lesson that's important to learn. And any other like things that you're like, oh, I love it when I see that. That's the kind of brand that really, you know, tickles us that we want to get into the program.

38:05
Aaron May
It sounds really simple, but empathy and kindness, I mean, in all things in life, but be someone that understands that, you know, we're in a business partnership, but there's people behind that business. And I stress it to my team. I don't have to worry about them. I really blessed to have such a caring and kind and generous team with their time and with their work with these partnerships. But being someone that we want to root for is huge. You know, it's. At this stage, a lot of it is storytelling and relationship building, and to just have that sort of thing. I hosted a boot camp event in Boulder, Colorado.

38:49
Aaron May
We can get into what our boot camps are later, but it's basically just like a community gathering where we bring industry experts and unfi experts to talk to these brands, and we do it every year. And when I got back from that one of the brands, House of Kajana, who I think is just fantastic, wonderful team. I had a handwritten note just saying thanks. That was a really great event. I'm so glad that I went and you put it together. And I was like, I am now. I was rooting for that brand, and now I will never stop rooting for that brand. Not everyone needs to write me a handwritten note. I'm just saying that these little acts of kindness and that we're all in this together, I think go a long way.

39:28
Daniel Scharff
That's very beautiful. I love to hear that. And I think also, I mean, yeah, any business partnership, like, when I was going into it with my brand, I wanted people to understand that, like, whether it's the coma and, like, hey, I know stuff's gonna go wrong, and I just want you to know I'm gonna talk to you like a human and a partner when it happens and not just, like, freak out and, you know, throw crap your way. And, yeah, the world of physical product is a very difficult one. Stuff will. There is an unlimited number of things that can actually go wrong, and that will go wrong. And, you know, just having people who can help you and whether it's like, oh, my. Like, for the relationship manager, like, hey, we're having a problem with the pricing.

40:09
Daniel Scharff
Can you help us out with this? Like, I I know, I wish all the stuff just worked, but, like, you know, hey, help us out if you can. Thank you. I mean, that went a long way. And I think just, yeah, maintaining a really good, trusting relationship and, you know, everybody. Everybody at all of the companies, like, are good people. And, you know, I think, like, yeah, sometimes, I mean, you know, sometimes just, like, you know, hey, candidly, like, sometimes people complain about deductions right through distributors and whatever.

40:34
Aaron May
They're like, this is the first I've.

40:35
Daniel Scharff
Heard these people like, f these people. I'm like, man, I know the people who work there, like, they're good people and they care about your brands and they care about doing their jobs well. You know, they're like, the individuals that you talk to are not out there trying to screw, you know? And I think if you go to, especially the trade shows, then you get a big opportunity to meet them. And I am always really impressed by how all the people I meet who work for the distributor across the board, whether they're the account manager or your relationship manager or the social media manager or somebody who works in marketing there, they want to learn about your brand and they're really excited about it and they're interested. They work in this industry the same way that we do.

41:14
Daniel Scharff
And also, by the way, all of them can help you. But almost anybody at that company might have some idea for how they can do something with you. So I think that's just a really good approach to have overall in business. So I really like hearing you say that. Okay, so another thing that I wanted to ask you about is just, you know, overall, what do you think is, speaking of deductions, like, what's a good way to stay on top of it? Because I know, like, okay, budgeting for it is really important. Right. And, like, having some of these plans. And I also would love to hear, like, if Aaron's pasta sauce is in the market, like, what are the things that you want to execute on? Like, the highest roi stuff that you see out there working with unify?

41:56
Aaron May
Yeah, absolutely. So for deductions, fees, promos, it really occurs at the front end. It occurs with promotions that you're running at retail. So instead of saying, great, we can give retailer x, you know, 15% off because we're trying to hit 499 on shelf. Then come back and ask your supplier manager, how is that actually executed? Like, be interested in learning the business practices that sees your my jars of pasta sauce from production to shelf and understand that because that will help with the budgeting process. And then if it doesn't come through at the time that you expect it or it came through sooner, ask those questions about that. With our new simplified supplier approach, SSA, a lot of fees that came together all under the one percentage for your brand are taken away. So it is getting easier. But that's still so recent.

42:54
Aaron May
Now, that was five one launch that some of those things aren't yet reflected by activation. Fees and certain fees within the warehouse have been taken away. So I would say ask a lot of questions, make sure you're getting your backup. I think there's a misnomer out there that you have to request your backup for some brand. You have to have the correct email on file which your supplier manager can help you with and you will receive backup for each deduction is taken. And then also empower yourself through the deductions dispute process if you feel and you've talked with your supplier manager that something was not executed correctly because like were just talking about, behind all of these emails and automated reports and things that are sent to you, there is real data loaded in by real people.

43:39
Aaron May
So like, I just had a repay request because a brand was billed for a program, but it's because there was a keying error with a their remit number. And those are simple and we can just take care of those because we've understood the process and hey, this one sticks out because it's not mine and we can get that repaid quickly. It is frustrating. I totally get that. Like, you have invoiced somebody for x amount and you are receiving much less than you expected, but it's building up the why, which helps you inform your budget for year two that you're in this endeavor, but curious and kind is the way to go about it. Learn it from the beginning through then the second part of that ROI through programming.

44:21
Aaron May
So up next does offer discounted programming on pretty much everything for the couple of years that you're in the program, which I think is really important and shows that we know that at the beginning of this journey, cash on hand and being able to pivot and do as many things as you can to get your product to retailers, to consumers is super important. Important. The trade shows probably do represent the greatest ROI, even if it's not for directly like we talked about before, selling a truckload to somebody, but finding a new customer, finding a new region of the country that you can really thrive through are very important takeaways, even if it doesn't always lead to direct sales. But I say that with the kind of sounding like I'm implying you won't have great sales.

45:09
Aaron May
We've had some really incredible sales numbers this year from, you know, we wrapped up our 2024 shows and they were very successful. We also, at the trade shows have opportunities. I'm going to shout them out because I think this brand is amazing. Painterland sisters, organics, gear, yogurt, they are in our program. They are incredible partners. They sponsored our breakfast. So at the trade show, so it was their yogurt going, two folks who were going to get breakfast to power up for the day. And it was a mob scene, their table all day, both days. And so that provided you're not going to probably be able to put a direct percentage on that. But when you have 30, 40 different customers and sales reps coming up and starting the conversation with, I tried your yogurt with breakfast and this is amazing. Where are you guys?

46:01
Aaron May
That's a pretty solid ROI, I would say.

46:04
Daniel Scharff
All right, that's some really great advice. And I love hearing about brands like Painterland sisters just out there crushing it. And, yeah, I mean, overall, I just really want to thank you, Aaron, for coming on and just giving the 411 on up next, which I wanted you to come on here because I got to do the program and it was hugely helpful for me and I just wanted everybody to know more about it. And I'm sure that you'll be getting flooded with some new LinkedIn requests and applications through the mailbox. And so I'll just highlight a couple things for everybody. So if you want to check out more about the program, you can go to discover dot unfi.com upnext. And then if you want to apply, it's discover dot unfi.com upnext supplier the number one.

46:52
Daniel Scharff
And if you have questions, then you can also email unfi. Up next. Any other good ways for people to follow up or any final things that you want touch on? Aaron?

47:06
Aaron May
No, I would say this was great and thank you for the opportunity. I so appreciate it. And you're saying that like tongue in cheek about the LinkedIn requests and email flood the inbox. Folks, we're here to talk to you. Yeah, we're here to talk. I want to learn, you know, as much as you want to learn about the up next program, I want to learn about what this industry is doing. We're literally called what up next? So I should probably be informed on growing trends, hot brands, and we're here to help. We're here to help. We're here to partner. We're here to help you grow. Because when you grow, we grow our offerings for our customers and get your products to the consumers. And that's a beautiful thing.

47:44
Daniel Scharff
All right. And then lastly, I just want to highlight a resource for everybody. So startup CPG put together something called the retail sales tracker. What this is, I mentioned there's a lot of stuff you don't know when you're starting out and for me, it was, what are all the accounts out there? I would just have to rely on the broker to tell me or just ask around. I created a list of all of the chains out there in the country that I think are relevant for emerging brands. Many, many thousands of doors are represented there, hundreds of retailers. And I have also mapped it to the distributor. So you can actually go in there and filter, for example, to see which of these chains work with which Unfi distribution center. Aaron had mentioned the kind of conventional side of the business.

48:28
Daniel Scharff
It's not so much on that. It's really more of the natural side. But these are, you know, chains that are again, relevant for emerging brands. So this is free for you guys to access. Our sponsor, we talked about them before. Cultivate helped us release this year. So the link for that is, it's a bitly link. So you go to bit ly backslash retail sales tracker. It's free. Honestly, it's the best thing I've ever done was create this thing. And so it's like the one place you can see, I think, what are all these doors you can go after once you unlock a specific DC? And I know your team wants people to unlock those additional doors, too. So just a shout out and thank you again to Aaron so much for being here and also for being in our startup CPG slack.

49:08
Daniel Scharff
It's just, it makes it so meaningful when game changers like you are there interacting with brands and trying to help them out. So thank you so much.

49:18
Aaron May
Absolutely, man. This was a lot of fun. I appreciate it.

49:20
Daniel Scharff
All right, looking forward to seeing you soon at the trade show. Bye, everybody. All right, everybody, thank you so much for listening to our podcast. If you loved it, I would so appreciate it if you could leave us a review, you could do it right now. If you're an Apple podcast, you can scroll to the bottom of our startup CPG podcast page and click on write a review. Leave your company name in there. I will try to read it out. If you're in Spotify, you can click on about and then the star rating icon. If you are a service provider that would like to appear on the Startup CPG podcast, you can email us@partnershipstartupcpg.com. Dot lastly, if you found yourself grooving along to the music, it is my band. You can visit our website and listen to more. It is superfantastics.com. Thank you everybody.

50:06
Daniel Scharff
See you next time.