The Startup CPG Podcast

Heidi Traore
What differentiates NCG is that our stores are owned by the local community. They're owned by the people that shop there. And so the same way that NCG is accountable to its member co ops, these retail stores, those retail stores are accountable to their members. So what you're going to find when you walk into NCG stores is that, you know, our shoppers tend to index higher in organic, non gmo, fair trade, vegan, gluten free, animal welfare. So while the co ops are about servicing their local community and looking for ways to service everybody in the community, when we look at our sales numbers, that's what we see shining through for us right now.

00:57
Daniel Scharff
Welcome everybody to startup CPG pod. Today we are joined by two legends. It's Heidi Troweray and Jeanette Bloss from ncg. That's National Co Op Grocers. So National Co Op Grocers is collectively one of the biggest customers in the natural channel, serviced primarily through unfi. And they are a collection of tons of really high end loved tastemaker co ops around the country. Heidi is the supplier relationship development manager. She works on a lot of the core sets and co op deals, promotion programs and is an introductory point for a lot of brands looking to sell on their shelves. We also have Jeanette Bloss who manages a bunch of categories in NCG that you will learn all about. Prior to ncg, she was a category manager for Good Eggs and before that a regional grocery buyer for Whole Foods Market.

01:44
Daniel Scharff
So today we're going to talk about how does NCG actually work? How do they work with stores, how do they work with brands? What are the logistics and distribution side like, how do they source products like yours to fill store needs and how can you do well with them? They are such an important player in this ecosystem. I am excited. Let's dig in.

02:06
Daniel Scharff
All right, ladies, thank you so much for being on the podcast. First of all, could we get some intros for each of you and also how do you spend your days at ncg? Heidi, I'm coming to you first.

02:16
Heidi Traore
All right, great. Hey everybody. I'm Heidi Troweray and my role at NCG is supplier relationship development manager. And a lot of what I do, I'm kind of like an intro point for brands that don't know much about ncg, know much about co ops. I help support our category management team and I manage our inclusive trade program. I manage all of our primary communications out to the trade. So I'm kind of like a centralized information point for NCG and I face mostly the industry. So that's what I do at NCG every day.

02:49
Daniel Scharff
All right, perfect.

02:50
Daniel Scharff
Jeanette.

02:50
Jeanette Bloss
I'm a category manager here at ncg. I manage the shelf stable beverages, frozen meat and seafood and bread and baked goods categories. They're all very similar categories that should be classed together and my role is to interface with the brands in those categories, help them plan their business and co ops and promotions, coupons. Category management. We do have a full category management program called core sets, so.

03:17
Daniel Scharff
Okay. And Jeanette, how did it come to be over time that you had all of these different categories? Were they all part of the job at the beginning or did they start adding these ones on because you just made it look too easy?

03:29
Jeanette Bloss
So I started with McG about six years ago. Close to six years now. Previous to that I had done many other categories. So I'm actually starting to think of categories that I haven't worked in. Maybe on the wellness side only at this point. But when I first started they gave me kind of this starter desk because it was the open desk and it was main meals and baking and bulk. So our team expanded. Luckily we got some really great colleagues on the team and someone who'd been around a little bit longer. I got to choose my desk, so I chose all those categories.

04:04
Daniel Scharff
All right, and do they get busy at different times of the year or are you pretty much just always multitasking?

04:10
Jeanette Bloss
I feel like I'm always multitasking except for surprisingly, December gets a little bit less busy because everyone else is on vacation. I'm not on vacation, but everyone else is on vacation. I'm catching up on my emails.

04:24
Daniel Scharff
All right, well, the first thing I'm really excited to get into is just what is ncg? I think a lot of people know it as, oh, it's like one of the biggest natural channel type chains out there. Or maybe they don't really know what it is, but they know it's one of the biggest volume quote unquote customers. Let's say that you can pull through UNFI and that it's all over the country. But can we just start with a really nice entry level definition? Heidi, I'm coming to you.

04:51
Heidi Traore
Sure. So ncg, we are basically a retail services cooperative. So we're owned by 165 Co Ops with over 200 retail locations in 39 states across the country. And so basically you can think about NCG as doing like three primary things for our members. And by the way, we're owned by our members as well. So we're cooperative and our members Those stores, they're owned by their local show co ops. So some folks call us a secondary cooperative. And so there's basically like kind of three buckets that NCG works in. So procurement is more that industry facing side for us. And that's where you're going to find our core sets category management program. That's where you're going to find our co op deals program. That's where you're going to find our primary and secondary supply agreements with UNIFI and ca. And then we've got retail services.

05:42
Heidi Traore
And retail services really is our member facing. Right. That's the retail support teams that work with our co ops to help them be healthier businesses. Right. So that we're all operating to the best of our ability. So that's our retail services and then we also have a retail development arm. So when our existing co ops are going out in the market, looking at doing expansions or adding on, going to new locations and then any like startup co ops that are new to the system that falls more in that retail development arm. I can talk about our structure too. Like we're a national organization but we are structured in regions. So if brands come to work with us in our programs, we have east, central and west region for us as well. So yeah, we'll leave it there.

06:30
Daniel Scharff
Okay, so a co op, is that a fair way to say it? Yeah. Okay, so, and I know, okay, let's say you're one of these independent co ops out there by yourself, lonely in the world and then you find out about ncg. So the value proposition of joining NCG would be hey, we can help you. First of all we're going to interface with the distributors and with all these brands and get some more favorable terms, some more buying power. So put you into a bigger group for that.

06:59
Jeanette Bloss
Right.

06:59
Daniel Scharff
And then it sounds like on top of that you also do a lot of stuff to actually help them as a business.

07:03
Heidi Traore
Right. It's about economies of scale. Right. Is what brought all these co ops together under regional, first regional and then national organization, you know, in their trajectory. It is about that working together, collaboration for a greater goal.

07:20
Daniel Scharff
Okay, so and that's a lot of stores. I think one thing that a lot of people don't realize is the number of natural channel retailers out there in the country. I don't know the exact number, but I've heard it actually as low as like 1300 total stores. Probably it's more than that, but at least I think that's what you would get if you looked at spins reporting something like that's what they report on. So for you guys to be in the mid-200s is a very high percentage. You know, you take Whole Foods and then after Whole Foods I think you have the greatest number of stores, at least as far as I can remember. And you know, especially at least through unfi. So that is a very heavy chunk.

07:55
Daniel Scharff
And then you know, after that you start getting down to a lot smaller chains after that. So if you are the kind of brand that wants to be able to get into a lot of stores, run programs with a lot of stores, NCG is incredibly important to you. Okay, so anything, you know, just about understanding what NCG is, Jeanette, that brands typically ask you that we didn't just cover.

08:19
Jeanette Bloss
I think brands get on to know what our fees go to. And I think that's where NCG really shines and where I'm really proud to talk to brands about it because I've worked at Whole Foods, I've worked in E Commerce and NCG uses that money on the behalf of brands. In many ways. The strength of co ops is the strength of the natural channel, is the strength of brands. I view co ops as the alternative to like increasing centralization in the market, in the grocery market. So those fees go to obviously the programs actually executing in store. So when you're running a feature shelf at ncg, we're printing tags, we're putting together pricing files that upload into POS systems, but it also goes to some retail support staff that go out in stores and help those stores execute and help them run their business.

09:19
Jeanette Bloss
And it's not going into some big bank account that then goes out to pay shareholders with stock buybacks and whatever, you know, because we're owned by the co ops are owned by their consumers. It's going to benefit consumers. And when those consumers are getting the products they want at the pricing that makes sense benefits the brands too.

09:41
Daniel Scharff
Okay, so just kind of to summarize all of that from a brand's perspective. A big benefit to working with NCG is the ability to try to coordinate your placement in a lot of stores and then hopefully have that be executed well with all of the resources that you all have and just have access to some of these really tastemaker level co ops all around the country and have just a smoother time through distribution and getting things to happen on shelf the way you hope that they will. And then I know you also have a lot of marketing programs that they can have access to. As well. So can we go into more detail on what kind of stores are members of ncgs?

10:17
Daniel Scharff
What are these co ops?

10:19
Daniel Scharff
Like, how are they different from other stores that you might find in local markets?

10:23
Heidi Traore
Sure. So what differentiates NCG is that our stores are owned by the local community, they're owned by the people that shop there. And so the same way that NCG is accountable to its member co ops, these retail stores, those retail stores are accountable to their members. So what you're going to find when you walk into NCG stores is that our shoppers tend to index higher in organic, non gmo, fair trade, vegan, gluten free, animal welfare. So while the co ops are about servicing their local community and looking for ways to service everybody in the community, when we look at our sales numbers, that's what we see shining through for us right now.

11:09
Daniel Scharff
Okay. And then in terms of are they all single store, are there lots of big chains? Who are some of the ones that people might know?

11:16
Heidi Traore
Sure. So it ranges from single store to multi store operators. So some of the stores that folks might know are like Lakewoods Food Co Op in Richfield, Minnesota, Boise Co Op in Idaho. We've got River Valley Co Op in Massachusetts, Willie Street Co Op in Madison, Wisconsin. Pioneer Co Op in Iowa City, Iowa. Those are some of our members. Kind of gives you a variety across the country of. And we've got La Mancinita in New Mexico. So yeah, very variety.

11:45
Daniel Scharff
Okay. And some chains as well. Like I know you mentioned pcc that'll have quite a few locations.

11:52
Heidi Traore
PCC Outpost in Milwaukee. I mentioned Lake Winds, they're a multistore operator. La Montanita is a multi store operator. Who else? Said Jeanette. Who am I missing as multistore operators? How Weaver Street. Right. In North Carolina.

12:05
Daniel Scharff
Okay, so let's say if brands aren't trying to work directly with the NCG team and they're just trying to work with all of those stores, what are they doing? They probably have like street teams or their brokers and they're trying to go to all of these individual co ops that pull from these distributors individually. Right. Which can be pretty tough. I guess you probably hear about some of the challenges that they have when they try to do that.

12:27
Jeanette Bloss
Well, when brands work with members and like I'm just going to put out that everyone is working to the best of their ability and with good intent. The truth is you're going to go in, you're going to try and sell in and then right after you leave, the next broker is going to go in and try to sell in and then the next broker and the next brand and everyone's trying to sell into that space. And so there's perhaps some instability. And then there's also as much as you're trying to keep track of all those individual stores that you're running promotions and that you're demoing, the stores are also trying to keep track of all those outside of NCG program promotions and to execute that as a certain amount of work.

13:14
Jeanette Bloss
So there's labor savings and a consistency both for the brands and for our members when brands do work with ncg. Now that doesn't mean that every brand can work with NCG because there is a size component. Like I did mention that there were fees. You have to be doing enough business for those fees to make sense for your business. So therefore there's going to be a point where you are working with, you know, if you're a smaller brand, you're working with a few co ops at a time and then as you're looking ready, looking to expand, you're getting ready to expand, then you start looking to have conversations with ncg.

13:49
Daniel Scharff
I think that's a very fair answer in my experience as well. Also having done that work myself, like, you know, hey, I'm in Dallas, I'm going to hit a couple of the indies up and see how it goes. Like, yeah, they're tiff, they're happy to talk to you when they're there. Maybe they've heard of your product. Really hard to actually get them to engage on it, to take time away from the many things they need to do in their store, the operations, all of that, to actually engage with you, follow up with you via email, all of that stuff. So I definitely understand the benefit of working with a central group on that. So then when you start working with a brand, Heidi, I'll come to you on this. How does that typically work?

14:24
Daniel Scharff
What are the things that, what are the opportunities that they can have access to by working through ncg?

14:30
Heidi Traore
Sure. So I'm going to talk a little bit about brands approaching ncg. So I will say that starting at the local co op is great because our category managers, they are very fact based and they're always working in the data. So if you can start selling in our co ops and make sure that you're registered with spins, your brand is registered with spins, so that our category managers will have visibility to that data, that's a great thing to be able to do. Right. Start that local co op. But approaching NCG we actually host a twice a month get to Know NCG webinar session. It's only about 30 minutes long.

15:05
Heidi Traore
And for people who don't know anything about NCG or co ops, it's a great place to start because they can learn about us, how we're different from other retailers, get that landscape of the co ops and then it also gives a top line overview of our programs. And then there's an avenue coming out of that webinar for folks to submit items either through that process with that webinar or we work on a category review calendar and folks can submit for our category reviews as well. I will say though that if brands are submitting for a category review, you know, Jeanette talked about the fees and the programs. When brands submit for a formal review, they're signaling to the category manager that yes, I am in distribution, I'm able to manage my distribution.

15:51
Heidi Traore
I am ready to step up to a regional or national retailer and I have the admin capability to be managing the portals, to be communicating with my category manager when there's disruptions in supply or perhaps disruptions in a promotional plan that we've laid out.

16:08
Jeanette Bloss
So it's.

16:09
Heidi Traore
I know some entrepreneurs are really bootstrapped and it's like them doing a lot of the work and maybe they have some fractional help. But it's not just about like, yeah, let me get my product over to retailer. But you gotta have the team behind you that's going to support your ongoing work with not only the retailer, but as I mentioned, the distributor as well.

16:29
Daniel Scharff
Okay, I gotcha. And so Jeanette, then on the category management side, what is the earliest that you will look at brands right out of the gate? Do they need to have a certain amount of distribution already? Number of stores already for NCG members?

16:42
Jeanette Bloss
I will generally say that first of all, after several years of core sets being in place, I've been doing these category reviews. What I'm finding is that on cycle, product launches tend to do better than off cycle. So I'm really looking mostly within the constraints of a category review period, with some exception for, you know, just knock it out of the park products.

17:08
Daniel Scharff
Okay. And those can be pretty far in advance, right? I think I'm. Because I actually, I remember applying with you for the core set, which I got. Thank you. And I think it was like, yeah, we're applying for this one now and here's when we're going to review it in six months and it's going to be for the reset that is, you know, X many months later. So it was very organized.

17:26
Jeanette Bloss
It is very organized. It's very formal and that's perhaps typical, but maybe there's a little bit of time built in because we do need to work in member responses into part of this. Because it is not top down, our members are able to make the decision what they're going to carry. So to get back to the question, generally on cycles, better already having some business with co ops is better. A lot of our co ops want to be the place that brand new stores are. Brand new brands are starting with and be the tastemakers as you say. And they don't want NCG to come in and say, hey, we're the taste makers, we know what's going on. They want to be like the really innovative part of the organization.

18:12
Jeanette Bloss
Now it's not to say that like there's no path forward for like really innovative brands, but it has to be like the right brand at the right time with the right infrastructure to succeed. So I will give an examp of that, which is bio band dumplings. Like they started their retailer presentations, they weren't in any retail yet. They started their retail presentations right when I was doing the category review for appetizers. So it was the right time, the right product dumplings were like start of their peak and there was a need. So there are some dumplings, you know, some kind of old legacy dumplings that had been in the market for a while. But this was like kind of a new, higher end, higher ingredient, really authentic dumpling. And so it went great. Members are like, yeah, bring it on, let's do it.

19:05
Jeanette Bloss
Not every member, but a significant amount. And then from there, as the business with the brand has grown, more and more members have come on board with it. So you're not going to expect, even with those really innovative brands for 100% of members to get after it right away, but to continue to build.

19:22
Daniel Scharff
Okay, so you have of the hundreds of members, then you have the core set which is what you're applying for, right? Like hey, I from Lao Bao dumplings, I want to apply for your core set. Great, I'm accepted. And then you send out that offer to all of your member stores and they can choose whether or not to accept them. Now do all of them participate in core sets within that they can decide if that product they want to have in core set or is it just like binary? I either do core sets or not.

19:48
Jeanette Bloss
It's not 100% of members that are part of the core sets program. So they sign an agreement with us and say yes, we're going to be part of this, we're excited, you know, we're going to execute all these various aspects of it. And to be part of that core set gives them the benefits of the core set program as well. So SCG is doing that work. We're creating the planograms that they get access to. There's reset support that's part of that the stores have access to if they want it. So then they see the list of everything that the category managers are saying, you know, this is what we're recommending there. We typically do three set sizes. So like salts, small stores, medium stores, large stores.

20:27
Jeanette Bloss
And based on where we think their store is, based on the number of SKUs that they're carrying already, they're saying, okay, of this list that's within my set size, I want these items and no on these items.

20:41
Daniel Scharff
Okay, so that makes sense. And then what about the distribution side of that? Do they already have to be in a certain number of distributors that you know, your stores work with or do you ever help them get into some of those distributors?

20:53
Jeanette Bloss
They have to be in unfi. So the core sets program runs through UNFI and our co op deals program as well runs through unfi. They don't necessarily need to be in unfi but it is a lot easier if you already have started the relationship. You're not a new vendor to unfi. Maybe you're in a couple warehouses. But what we do need is significant member opt ins to be able to open additional UNFI warehouses. So the more UNFI warehouses you're in already, the easier the lift that it is. And we may it's a lot easier especially in shelf stable and frozen. It's really hard because turns that you need to be doing in frozen to maintain your slotting which means the forecasting we have to give to UNFI to get something slotted in a warehouse is much higher than shelf stable.

21:43
Jeanette Bloss
We say to unfi, okay, we have a significant amount of members maybe in Chesterfield that opted into this item. You don't have it slotted there, you don't have it activated. But we have enough to meet your forecasts so please open the warehouse. And so that is a pathway for brands to open up UNFI distribution through the core sets program. But a lot of the times NCG members aren't enough on their own. It can be the pathway in, but you can't just like let it go, assume everything's good. You have to go out and sell more into those Warehouses, what is the.

22:19
Daniel Scharff
Minimum that they would typically want to see for unfi? Do they like in terms of a forecast, do you have a number where you're like, yeah, I know it needs to be over this amount for them to bring it in.

22:29
Jeanette Bloss
I'm trying to remember my past life because the rules are a little bit different for NCG than they are generally for brands outside of the core set program. And I think it's five cases per warehouse per week to maintain slotting and shelf bin shelf stable. And that refrigerated in frozen I believe is 10 cases per warehouse per week. It's a little bit lower in the NCG core sets program because UNFI is a really good partner and understands what we're trying to do with our category review process.

23:02
Daniel Scharff
Okay, that's good to know. That sounds consistent, I think with what I've heard from people before. And it makes sense though I've never heard that number being higher for frozen refrigerator. That's really interesting to know. Okay, so to summarize, basically when they're applying to you'll look at, okay, what distribution do you have already you're going to make a decision about whether they or not they go in the core sets and you're going to offer it out to the members and you're going to see how many of them pick it up and then you're going to use that response to decide, are there places we need to anchor this to bring it in if we have sufficient demand and if not, you just may not be able to offer it in the core sets in the end to stores in that area.

23:39
Jeanette Bloss
Yeah. So obviously we want good things to happen, everyone to get what they want. Plenty of member opt ins but there are cases where, you know, I might think an item is great and members might be like, what is this? No, put the brakes on, we don't want this. And in that case we either cancel the item, if it's across the whole brand, we might cancel the launch with the whole brand. And if we do cancel the launch, we're canceling the program fees as well. So I think there's less risk for some brands knowing that, you know, NCG is not here just to take your money. That money is meant to go towards something and you know, if it doesn't work out with members, we're not just going to take your money for the fun of it.

24:21
Daniel Scharff
Okay. I did not know that was an option that it could be canceled afterwards if the brand, if the stores were like, nah, I don't really Want it. So I'm almost glad I didn't know. That would have given me a lot of heart anxiety even after were accepted. So sometimes it's good to just not know everything. But, you know, that's. It's a really interesting point and I actually think about this a lot where, you know, you have those case minimums. And I remember when I was launching my beverage company, we're like, hey, should we do a 12 count or a 24 count in a case? I'm like, I don't know. Like, I didn't really understand the difference, but when I hear numbers like that, I really understand how beneficial it is if you go with a smaller case.

24:57
Daniel Scharff
Because as far as I can tell, people don't really look into, oh, like, yeah, it's a five case per month minimum, but, oh, they have like a 24 count. So we'll give them a break on that. Like, it seems like they really just care how many cases it is. That's the thing that they look at because it's easiest. And so, hey, maybe have some smaller cases out there. Brands as well as you probably save a little bit on slotting.

25:17
Jeanette Bloss
Not only does having a smaller case size benefit you at the distributor, but it also benefits you in retail at the shelf. Because especially small stores and some of our members are quite small. If you're a 6, it's easy to get that slotted on the shelf. If you're a 12 now you need two facings, maybe three facings. If you're 24, that could be half a shelf. And it's hard for members that are very small to commit to that amount of space for one case, one product.

25:46
Daniel Scharff
Okay. And then just coming back to that Lao Ban example. So right out of the gate, you just knew because you had seen the data probably on dumplings or you had an intuition about it and what was it? You liked the branding or you just really liked the product? You like the founders? What was it for a brand that early got you to a yes on them?

26:06
Jeanette Bloss
I had a need. I had a need for a actual dumpling. And I think Aoban in the natural channel at least was really early to that trend and wanted to partner and demonstrated wanting to partner beyond that. Also, it really helped that they were backed by and the recipes were from Jack Ma. So there's an authenticity there. It's not just like, oh, I am noticing that a bunch of people are buying dumplings. So me being completely unconnected to dumplings, I'm just going to start making dumplings so it was, you know, even the founder had spent time in China, for a long time in China and is bringing back his experiences with that. So it was the story, it was the founders, the backing, the recipes is a good product, good ingredients, right time, absolute right time.

27:05
Daniel Scharff
And so you said I had a need. How did you know that you had that need? And you know, just more broadly speaking, how do you generally know? Like you're looking at it's data or it's requests coming from the stores or their particular trends that you're looking at?

27:20
Jeanette Bloss
It's data trends. It's when I'm going into a category review, I'm not going in saying, okay, I need soda and I have a hundred skus. I'm just going to pick the top hundred skus and go with it. You know, I'm looking at, okay, I need now in the soda category, being dynamic as it is right now, I need prebiotic soda and I need a diet soda and I need some juice based sodas and I need some sugar based sodas. Trying to get a broad assortment to meet consumer needs at the time for allowaban would I had pizza snacks. So many pizza snacks. Everyone had pizza snacks. I didn't need pizza snacks. I needed dumplings, I didn't have a dumpling. I, you know, okay, well so that.

28:07
Daniel Scharff
Makes sense, Jeanette, like learning that you really come at it from a need based perspective. You know, basically what you're hearing from consumers and seeing out there in the markets. I remember when I worked with you, so I was trying to launch an energy drink with you and I'm like sending you samples, like, hey, don't you love it? You're like, actually I don't drink caffeine. But you know, other people on the team will try it as well. So, you know, it makes sense that you're really like solving four needs and that's why you were interested in the product even though you personally weren't probably going to drink it.

28:38
Jeanette Bloss
Yeah, I think there's a lot of thought out there, a lot of different perspectives and how people run their categories. But my personal way that I run my category is like, what is the data saying? What are consumers saying through the data? That is a trend, that is a need and it doesn't have to be my personal taste. I will not eat nutrition bars because to me it's kind of like a bummer. That's a meal that could have been a meal. And so like, but I know that so many people love nutrition bars and are excited by them and so it's not my category now. It was my category in the past. I didn't just like give up on the nutrition bar category because I didn't eat it. It's just I don't think that you should make choices based on your personal flavor preferences.

29:22
Daniel Scharff
That's great. Definitely like to hear that. So, Heidi, coming back to you a little bit, I know you play a really visible role with NCG out there in the industry. A lot of brands know who you are and you must get outreach from a lot of brands just looking to make a good impression with you and get connected in with ncg. And then some of them end up getting up, like getting on shelf eventually. What would you say are the best ways that you're getting approached by brands in a way that makes you think like, yeah, this might actually be a good fit for us and I'm going to see if I can help connect them into the right teams.

29:54
Heidi Traore
Yeah. So brands that come well prepared, their pitch deck is buttoned up. It's got everything in there that the category manager might need to help them kind of suss out this product, you know, so you've got a visual representation, you've got your spec information, you've got your ingredients, you've got any certs. Right. So sometimes I'll see pitch decks come through and there's pages and pages of a lot of stuff that's unnecessary. Right. And if you think about a buyer like Jeanette, category managers, they need quick hits like, show me very quickly what is in this for me, what is new that you're bringing to the table. Also, you know, a well thought out placement and promotions plan. And then show us that you have the backing and the staffing, as I was mentioning earlier, to manage that throughout the year.

30:44
Heidi Traore
So it's really too, like, it's so important. And this is very cliche, but I think it's one of the hardest things for brands to get is how do you stand out? There's so much me too now, right? Like, what is the true new innovation that you're bringing to the table? And I'll just give a little advice here, like, how do you find out about that? It's a really great idea to go in store, get in front of your category, look at everything at that shelf site, look at the other packages, pick those packages up, what are the ingredients, what are the common certs you're seeing on the packages, what's the pricing, where do you fit in, what's the placement like?

31:20
Heidi Traore
And what does that say about the consumer that's shopping at the store, knowing, like being well versed in retail and being able to talk that way, know how your product fits in. That is something where, you know, I might see a brand and be like, I go over to Jeanette and I'm like, wow, you know, look at these people. I think they're ready to work with us. How would you like to engage with them?

31:43
Daniel Scharff
Do you notice anything about the kind of founders who end up getting that right? Like are they repeat founders who kind of know the business or is it just really diligent founders or just, you know, people you think have a little bit of a sharper eye for, you know, doing their homework? Anything that, any trends that you notice.

32:00
Heidi Traore
Well, what's coming up for me intuitively is like passion. People that are driven by a lot of passion and have a clear idea about what they're doing. Those I think are the people that really shine through.

32:14
Daniel Scharff
And how much do you care if they're in any co ops already and have the data from those co ops like your members? Because I know, I think that was a really important thing for me is hey, we got into a couple of your stores, here's what's going on in those stores, here's how we're sitting on shelf, what they say about it, and here's what we're doing to support it.

32:31
Heidi Traore
Yeah. So for me to bring information to the category manager, it's helpful to have sales at the co op and not just any sales, but positive sales. You know, there will be situations where brands come to me, I look up the data and they're in some co ops, they're not performing so great. Then the category manager is like, there's not really the consumer interest out there. So I'm not really interested in moving forward with these people. Unless of course the founder tells us something like we had a major supply chain disruption. If there's a reason for that day, dip in sales, then you know, that's a little different. But if it's just straight up sales and there's a dip, not so interesting to us.

33:07
Heidi Traore
So if you do have sales in spins, want to make sure you go in that right direction, doing everything you can with the local co ops. That's your promotions, that's your engagement with the local co op, with the staff, hoping if you have that opportunity to help educate the staff about your products. Remember, co ops are a little different because percentage of our shoppers and this varies by every co op, but a percentage of Our shoppers own the store, so they're in talking to staff. Staff can be your brand ambassadors, helping folks learn about your products. I mean it's, I don't know if you have walked into a local co op, I'm sure, but if you go up to a staff person and you ask them about something, they can give you information about the products. They'll walk you over.

33:46
Heidi Traore
It's a different kind of engagement.

33:49
Daniel Scharff
Yeah, absolutely. And that's something I always notice is just how engaged the employees are in the co ops with the products and you can really win them over and it can be incredibly valuable for your brand. So Jeanette, coming back to you and just the idea of some of these trends and things that you're looking for. What are some of the things that you're looking for now? Probably everybody wants to know. So in all of the categories that you cover, are there any specific opportunities like, hey, I need one of these. If you're out there, maybe hit us up.

34:16
Jeanette Bloss
I was all prepped to talk to you about trends, but I hadn't thought about what am I really missing. And I think that's maybe part of it is like as a category manager, I'm trying to use data to predict the future and that's a little bit limiting versus brands that are like, you know what, I've got an idea and I'm going to make it into reality. So I think some trends that are kind of going to impact some of my decisions in the coming year, kind of different way to attack. The question is, you know, like, okay, I'm probably going to go bigger in dumplings, probably. And that's because that initial bet on dumplings is paying off. We're also working with the pierogi brand Jaju for the past couple of years. Probably they're doing well. So it's showing an overall trend in dumplings.

35:07
Jeanette Bloss
We're starting to see soup dumplings rise. Momos are doing really well. So I think there's opportunity certainly in dumplings. Plant based meat is actually leveling up, which is maybe a surprise topic for those out there. So had a really big rise and then a really deep fall. But I think we're starting to see it level off. Plant based is still relevant in entrees and meal solutions. Dairy. So I don't think it's as dire as people think. Mushrooms everywhere, products with mushrooms in them, you know that are relevant. Don't just put mushrooms in it because I said mushrooms, which should be relevant to your product. And then right Now I'm doing a category review that includes mocktails and you know, certainly I'll be looking to partner there with some brand and or brands. However.

36:00
Jeanette Bloss
Yeah, I'm a little bit cautious too because what I see in the mocktail space is exactly what we saw in the plant based meat space. There's a limited pie of products and there were a few brands that were in it and crushing it. And now there's a rush of brands getting into mocktails that not all of them are going to be successful. So category managers are basically going to be placing bets on which brands they think are going to make it out of this.

36:24
Daniel Scharff
So for mocktails, how are you going to figure that out? Is it based off like, hey, I actually am just looking for who makes the best na Margarita or you just like, yeah, I'm trying to look at brands that have had some initial success or are you, Jeanette, just making your best decision about which you think is the strongest brand? You know, just is going to have the best presentation and the best addition to the set to offer to the stores.

36:48
Jeanette Bloss
I'm looking for a couple of things. One, I'm trying to divine whether I think a brand is relevant to the consumer. That can happen through a couple of ways. One, like what does their social media engagement actually look like? Is it, you know, authentic or you know, is it, does it not look like it's authentic? And then probably it's more than just the standard mocktail. Like, and it has tastes good too, you know, like that's so important that I, I think brands sometimes forget, especially in that plant based meat set which is part of the decline was brands weren't making sure their products tasted good before launch and then they have to want to partner. Like it's, everyone has said this, it's not about getting on the shelf, it's about getting off the shelf. And it's absolutely true.

37:37
Jeanette Bloss
You know, the brands are going to have to really genuinely want to partner to grow their sales. Given especially how competitive the set is.

37:45
Daniel Scharff
Is that's a great answer. And just one follow up on the plant based meat. Is it just anything, you know, featuring itself or anything promoting itself as plant based is hitting a peak or is it just like the things that promote themselves as substitutes, like hey, this is the plant based burger, this is the plant based steak, whatever. While maybe just things that are just veggie forward are still doing okay or do you see any differences there?

38:11
Jeanette Bloss
So not all the plant based categories got hit the same as some others. And but in my categories and Frozen plant based meat and plant based ice cream saw some declines. And what it largely was, you had some really established brands that were doing well and some of them were doing mock meat kind of alternatives and some of them were doing veggie forward. But the other products, they were very much in the mock meat sort of space. And the plant based ice cream, it was a lot of like very different milks that maybe didn't really resonate with the consumer. And not all of them tasted good. And that's just the honest truth of it. Can't tell you how many plant based ice creams I tried that were not going to satisfy a dairy consumer, let alone a, you know, a non dairy consumer.

38:58
Jeanette Bloss
So as those brands have exited the market now we are seeing a level off and those brands that weren't making good products that tasted right in the first place are seeing their sales come back.

39:09
Daniel Scharff
Okay, so speaking of performance in the stores, what's good performance, what's bad performance? If I'm applying to you and I tell you my velocity is X, like what, you know, what's, what would be passable and you know, what do you want to see that progression like on shelf.

39:26
Jeanette Bloss
So I can't give too much in specifics because it's really going to differ category by category. And also I'm sure there are some retailers that are going to be listening to this and I want to tip our hands too much. But what I can tell you is that if you're a brand that is in the hot sauce category, for example, I would never hold you to the velocities of the water category. So I am looking category by category. A lot of times I'm looking at dollars versus units. Sometimes I'm looking at units. And I just want to see that you are in line with the benchmarks for the category or if you're not because you're new, new, that you have a plan to get there.

40:07
Jeanette Bloss
Because anything that I recommend to members and they cut something out, that product that's going in has to do as well or better to make it worthwhile.

40:18
Daniel Scharff
So a lot of times people will say things like, oh, that's a really competitive category. But I don't know where I'm sitting. They all seem pretty competitive. But I wonder, since you cover so much stuff, let's say you had to launch a product tomorrow, like which category do you think would be easier to do it in? You know? Yeah, like hot sauce. I feel like there's so many out there and the velocity can be really low. If you're not one of the just top one or two brands, obviously water, the velocity is higher. There's going to be a lot of competition in something like that.

40:49
Daniel Scharff
Are there any categories you feel like, hey, if I was going to do it, I feel like this would be the category where I just don't, you know, whether it's the number of submissions that you get or just there's a lot more throughput in the store.

41:00
Jeanette Bloss
I think frozen meals are kind of having a moment, and there's, you know, a lot of change things coming out that make room for brands to go in. And I think you can also build a niche. That way you don't have to be doing the same meals as everyone else. It doesn't have to be Mac and cheese. It could be something completely different. And that kind of extends into, like, pizza and appetizers. That just kind of savory side. I think ice cream, in a way or novelty is too, are kind of having a moment, but it's also like, oh, ice cream is so competitive, man. I know you just said, everyone says that, but the velocities on that are so high. To compete, you know, you really have to have something special.

41:46
Daniel Scharff
Heidi, same question to you. If Heidi has to launch Heidi's brand, what do you think would be maybe a particular category that you'd be like, yeah, maybe that one. It looks a little bit easier than the others.

41:59
Heidi Traore
Wow, that's a loaded question. I haven't even ever thought about this before.

42:04
Daniel Scharff
Or what would you avoid this? Categorically?

42:07
Heidi Traore
I would like all the stuff we've been talking about, like beverage. Beverage is so ultra competitive, and it's such a dynamic space where you've got so much coming in and so much going out all the time. It just is a constant stream. Snacks, super competitive. I've seen so many snacks come across my desk that it just is like another snack and it's just the same as this other snack. You know what I mean? So those are a couple of areas where I think are just super competitive. I mean, you know. Yeah, I don't even want to say because there's just like. I feel like there's so much out there already. You know, if you're. Again, it just comes down to that uniqueness and really knowing your brand's role. Like, what are you doing in the space? And being able to articulate.

42:51
Daniel Scharff
Yeah. I mean, yes, everything is competitive. Everyone's like, if we knew which one wasn't, we would all do that one. And then that would be Competitive also. But Janet, I know what you're saying also about like, hey, you know, you see one brand in one category be really successful. And then a few years after that there are 1 million entrants. So, you know, with GIA and you know, some of those other ones in the mocktail space having some very visible success and seed lip and all those, now there is, it is flourishing, the categories flourishing. There are many people throwing products in there. And we're excited to actually do a lot of programming around that for dry January since, you know, just like really cool to see the preponderance offerings in that area.

43:33
Heidi Traore
Okay, so can I. I just thought of something. Throw this out and leave it in or take it out, whatever you want to do. But like, what's really resonating for me right now in terms of innovation and if I were an entrepreneur, I would be looking to bring a product in that is really looking to solve a problem. So myself as a shopper, I go into the wellness department. There's so much plastic there. We're seeing a lot of innovation coming in terms of boxes and shampoo and bars and lotion balms and that kind of thing coming in different formats. But as a shopper, I am looking for that innovation that is going to take plastic out of my shopping bag.

44:12
Daniel Scharff
I love it. It. Okay. And then I wonder, maybe I could just hear from each of you four brands that do then get into the core sets, into the stores. What are the programs and opportunities you recommend most highly to them to make the most of their opportunity to get good velocity in the stores, to try to pick up additional stores, to bring them in there. Just to like really get kicking in the whole NCG system. Jeanette, maybe I'll start with you.

44:39
Jeanette Bloss
Sure. I think once you're at shelf, the obvious to me is now you gotta promote, you gotta get people trying your products. So to me, the best pathway is through promotion. We have a couple of promotional pathways. One is co op deals and that's our primary promotional pathway. So we have a couple different levels of promotion there. We have a tpr, which don't get really wrapped up into the naming on that, but it is, you know, kind of an entry level promotion that you don't even need to be in the Corsa. You can be just a startup emerging brand starting to work with co ops to utilize them. Promotional type. Then we have feature shelves. That is like a shelf sale. How the industry understands tpr. Then we have our fire. Now our flyers are most effective There are some ACV limits to that.

45:27
Jeanette Bloss
We want you to be in enough stores regionally or nationally to run a flyer promotion with us because one, we don't want to just take your money to take your money, but also we don't want to hear from members, hey, we're not carrying this product. Why is it in the flyer? So those are really effective promotional vehicles. We also have our own coupon program that is specific to NCG Co Op. A lot of our members participate in both programs or either program. And the cool thing about our coupon program too is that it's distributor agnostic. So I said that meat and seafood is part of my categories. Well, meat is all over the place as far as distribution. And so having a coupon as an option enables me to run some promotions and meet that we otherwise wouldn't be able to run.

46:15
Jeanette Bloss
So Keiki brands can run coupons with us. Self distributed brands can run coupons with us.

46:23
Daniel Scharff
Okay, Heidi, same question to you. How have you seen brands really crush it on shelf? What kind of marketing tactics are they using?

46:30
Heidi Traore
And I'm going to approach this a little bit differently and I'm going to talk about our category managers. Right? Our category managers have a lot of expertise. Like I mentioned before, they are steeped in the data, they're working in the data every single day. And so they are experts in our programs and they're experts in the categories that they manage. So they can really help a brand understand. For our co op stores and our shoppers, this is the type of promotion that you need to have at this time. Right? Seasonality is important in that they're looking at price points, like what's really going to be the tipping point to drive that kind of velocity that we want to see on promotion.

47:07
Heidi Traore
So all of I think the other thing I wanted to mention was convergence is another opportunity, not necessarily to get in front of the shopper, but that is our basically trade show and there's a conference, vendor showcase component of that where brands can come and engage with our co op stores at a single time. So that's another great opportunity to engage with ncg.

47:28
Daniel Scharff
I like that a lot. And Jeanette, I know you had given me some really good advice when I was working with you. Are there any questions that you feel like brands are really smart when they ask you? Like maybe they figure out how they can, I don't know, reallocate some of the expenses towards marketing or something or they like work with you in a way where you're like, that was very smart for Them, I think they'll use their money very efficiently.

47:48
Jeanette Bloss
I think brands that really do want to work with me to figure out their timing, various levels of communication that we have with brands and brokers given like their interest in the business and their interest with ncg, brands that are really engaged, we can plan out some really cool stuff. We can plan out Bogos, we can, to Heidi's point, plan out off shelves if you're shelf stable, not if you're frozen. But we can work on, you know, some of our premium ads. We can work on the copy together and find copy that's going to resonate with co op shoppers. So I think just brands that really ask good questions, ask about seasonality, to Heidi's point, ask about what others are doing in the category so that you can compete as well as the brands that you're competing against.

48:40
Jeanette Bloss
And also I do my best to try not to run competitive promotions at the same time. So brands that are asking to move into specific periods, like brands that want to run ice cream in the winter because they're the only ones people still eat ice cream in the winter. Maybe not as many people, but if you're the only one on promotion, you're going to get all of that.

49:01
Daniel Scharff
That. Okay, makes sense. All right. And so just as we wrap up here, is there anything you feel like we didn't cover or just, you know, one thing I really want brands to know about NCG and its stores or how they approach us. Anything we didn't cover. Heidi, I'll start with you.

49:17
Heidi Traore
Well, I'm going to talk about NCG's growth. I missed that opportunity at the beginning. NCG, we're growing at 6.8% and that's organic growth, right? That's not inflationary. And so what we see with the general grocery retail space is that's at about 3%. So we think about our approach with our core, we think about our NCG's approach with core sets, category management, the way we manage that business on behalf of brands, the way that we collaborate with our cooperatives.

49:45
Jeanette Bloss
Right?

49:45
Heidi Traore
We're that collaboration where we're all working together and that collaboration includes our brand partners because it is a true partnership. We're looking to partner with brands for the long term. As you heard Jeanette say a little while back, it's not just, well, hey, I'm gonna take your money around this promotion. But it's like, let's look at that long term trajectory and what does it mean for our shared business, Right? So it's that collaboration is strength. And so it's what helps us be stronger in the marketplace.

50:12
Daniel Scharff
That's an amazing answer and congratulations on all that growth. That doesn't surprise me. So Jeanette, same question to you. Just, you know, anything else that you like? Man, I really wish brands would know this about NCG when they're talking to us or about our shoppers or stores or you know, how to talk to us.

50:27
Jeanette Bloss
I just want to double down on the partnership piece. Like really thrilled to be in my role with mcg because, you know, I get to do things from a partnership perspective to foster long term relationships. Yeah, sometimes things don't work out, but generally what I'm trying to do is work with brands for the long haul, continue to build their distribution with members, their distribution with unfi, both her sales. But it is a true partnership and you know, like, there has to be something on the other side too. They have to be invested in their growth with numbers.

51:04
Daniel Scharff
I love to hear that in a lot of respects you actually probably are like happier to have the communication. It sounds like in general and like want that long term partnership for us. You know, we like, oh, okay, we need to send her an email today. Let's spend all day thinking about it and like getting feedback on it. Is that just the right word or not? But it sounds like you're generally, especially with the partners you're going to work with, happier to have more versus less collaboration, communication, all of that.

51:28
Jeanette Bloss
Absolutely. The last five years or so have really taught us how much disruption there is in the supply chain and pricing and just to work together on solutions for members and for the brand, I think is super important.

51:45
Daniel Scharff
All right, well, those are all the questions that I had to ask for both of you today. I really appreciate you taking some time and just highly recommend to all the brands out there to get to know NCG and all the ways that they could be an important partner for all of you out there. Jeanette, how do people know when you're doing reviews? If they, let's say they don't have a broker, is there some way that they can get access to that information or be alerted when it's time to submit?

52:12
Jeanette Bloss
We do have our category review calendar posted on our partner connection portal as well as the submission paperwork. You do not need a login to access the category review calendar. And if you still can't figure out how to get to our partner connection portal, email one of us. Email a category manager, try to get the one in your category, but if you get somebody else, you'll Be redirected and they'll help you get the category review calendar.

52:37
Daniel Scharff
All right, and you'll be scoping out brands at Expo West. Any other places that people should look for you?

52:43
Jeanette Bloss
I'll be at the UNFI Orlando show Expo west. And if I can swing it this year, I'm really hopeful about doing a fancy Food in New York.

52:52
Daniel Scharff
All right, well, I hope that we will see you there. We'll have a very big section and a bunch of fun parties to invite you to featuring all the awesome brands from our community. Heidi, same shows for you. Anything else that you'll be at that people can look out for you?

53:05
Heidi Traore
Well, I'm going to be at the Fancy food winter show coming up here in Las Vegas in January. And actually something that we didn't necessarily talk about here, but a primary role for me is going to be engaging with brands in the fresh space because like Convergence, we have an event for our co op buyers and managers in the fresh space of our stores. So that's our one big opportunity for brands of folks, suppliers in that fresh space to engage with our co op shoppers. So it's called Focus on Fresh. So I'm going to be engaging with the fresh side of business over there at Fancy Food.

53:36
Daniel Scharff
Oh, amazing. All right. And I have an extra special invitation for you at Fancy Foods. Actually have a bunch that anyone going should look out for on Monday night there, our tea party which where we've rented out a bunch of topgolf Las Vegas, which is one of my favorite topgolfs and we'll have a bunch of emerging brands sampling. It's going to be a really excellent time. And then also I'll be really excited to invite you, Heidi, for our further female founders lounge which is happening on the floor. We've got a stage for an afternoon on Sunday where we're going to be doing female founder pitch practice, a retailer panel, and then also a really awesome mixer for all the CPG female founders and buyers, of course.

54:18
Daniel Scharff
So I'll be passing you along invites for all of those and everyone can see all of those on our Eventbrite which is just startupcpg.eventbrite.com so I just want to thank you, Heidi and Jeanette for all of the time today. I know you're going to be getting a bunch of LinkedIn outreach after this. Feel free to blame me for that and just thank you guys so much because I just, I know you to be one of just the best and truest partners out there. So thank you so much.

54:41
Jeanette Bloss
Thanks, Daniel.

54:42
Heidi Traore
Thanks Startups upg. Thank you Daniel.

54:44
Daniel Scharff
Thank you.

54:48
Daniel Scharff
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 Scharf. I'm the host and founder of Startup cpg. Please feel free to reach out or.

55:02
Daniel Scharff
Add me on LinkedIn.

55:04
Daniel Scharff
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. See you next time.