Reply To: Selling to chain supermarkets

Hey Shayna – Good morning. Selling to supermarkets has got both easier and harder recently – in Foodstuffs (PaknSave, NewWorld) you have a North Island and South Island structure and with Countdown, you have one National structure. In the past the owner operators had a lot of flex in the Foodies stores, not so much these days. Any product they want to stock, still requires going through the ‘national approval structure’ to be able for that owner operator to sell it in their stores. Also for the National ‘approval’ to get ranged across stores, it requires the category manager to run a range review, which is when they look at their existing products and decide if they want to have any new products in the range.

First thing to do – take a trip to the supermarkets, and look at the products in your category – see if you can observe what the competing products are like, where they sit on the shelves, what observation you can get around sales of these products – look at how the products and pricing are different in each supermarket. This insight and honestly will help you work out whether you have a pricing and point of differentiation to get in there.

What many people do when they want to sell into Supermarkets – is get their brand moving outside ie farmers markets or online, they get their production going, they get their brand moving and they build their reputation and processes before they go to the Supermarket. Often they also get spotted by supermarket owners that then might in time recommend to the category managers.

In terms of dealing with the Supermarkets – the Category Manager (National) are the key people in your category – they make the calls on what gets ranged and what does not. Do you know any other suppliers to supermarkets who might find out for you the names of the key people in these roles? In terms of your other questions, the best avenue is to identify another supplier who deals with the supermarkets and ask them to take you through your questions and their experience – remember that the margins that the Supermarkets expect given the volume they give means you can be quite squeezed on your own margins – which really means you have to think about whether the Chain supermarkets are for you now, at the stage in your journey.

In terms of production – right now, you have this under your control which is a good thing. Before expanding or outsourcing, it would be a really good idea to get greater certainty around volume – I do like the idea of finding an Owner Operator of a supermarket who would be prepared to run the mixes in their store, as it will help you assess possible volume from one store, not 50 – it just takes a lot of time, because even to do that a New World owner will still need to get your Mix approved for sales through the National system, and i have seen that take 6 weeks to 3 months time – it does rely on the local owner, one of their category leads and the national system working in unison. In terms of outsourcing, makes a lot of sense – I just don’t know who would do this, I know the people at Blue Frog Breakfast however and I know they get their porridge blended by someone, so we could ask them when the time is right as to who they use.

Hope that helps – Andy