Q + A With FDG – Working With A Broker!

The goal of becoming listed in the grocery sector is becoming a greater challenge for small to medium-size business. Grocery banners are indulged with so many brands at a time they are reducing shelf space. Even if you are successful, retailers today provide new brand entrants with short probationary periods (12 months) to prove themselves. No easy task given the level of competition. The brand’s success will require the services of a food broker and/or distributor as they provide insights to gain entry into the Canadian market. Yet when I make mention of a broker, many do not understand what a broker is and the role they play.

AS May is a leading Ontario based food broker with over 100 years in the grocery sector. This past week I interviewed Mr. Dave Hibbard, Vice President Business Development, AS May to provide insights into:

1. The role of a broker.
2. What they seek when appraising new clients’ principles.
3. What they feel is the greatest challenge new brand entrants face.

I had the honour to have worked with Dave managing Tabasco Brand Pepper Sauce in Canada.

Working with a Food Broker – Our Q&A with AS May!

   1. What is a food broker?

A food broker is your sales and service agent. We act as an extension of your “salesforce” providing client guidance and sales execution at head office and store level.

   2. What is the role of a broker?

A broker is a cost-effective approach for upstart and medium-size companies. We work for a commission on net invoice sales so the client does not have to invest heavily up-front in head office or a retail sales force. We have an infrastructure that supports the sales initiative. We have established strong working relationships with the trade that helps open up new sales opportunities.

   3. What does AS May seek when evaluating new principles to represent?

We seek out innovative new products that play a specific role for both the retailer and the consumer. Concerning for the retailer, how does the product benefit the category to  increase sales? With regards to the consumer, the objective is to satisfy the quality /price value proposition.

   4. What do you feel is the greatest challenge new brand entrants face?

The greatest challenge new brand entrants face is the costs of doing business in the grocery sector. There are 4 cost factors they must take into consideration:

1. 1. Retailers listing fees – The cost per sku to secure a spot on the retailer’s shelf.
   2. Retailer support: How will they support the retailer to drive product sales? i.e.
      1. Pricing allowance.
      2. In-store demos.
      3. Shelf talkers to attach consumers’ attention.

3. Consumer support: How will they generate brand awareness and stimulate trial purchase                  with the consumer?

4. Account merchandising: Display shipper program and / or end isle presence, key to driving                incremental sales.

   5. What are the misconceptions new brand entrants have about the grocery sector?

The greatest misconception new brand entrants have about the grocery is the cost of doing business. Retailers listing fees will put a financial burden on the business.

   6. For the brands, you have managed, what has been the key to their success?

The key to their success has been:

1. 1. 1. Playing a key role in their category – from a retailer and consumer perspective.
      2. Strong shelf presence with charisma through their packaging.

   7. What is the average lead time a new brand entrant can anticipate their first order after you have signed a contract?

This is very dependent on the account and how often they re-set their retail planograms. For most categories, it is done once a year.

Most new brand entrants wish to make an immediate impact while forgetting their businesses’ success is a journey, not a sprint. Commence business with the independents and work your way to the national chains. If your product is as good as you think it is, it will hit their radar screen.

 

Richard Baker is the founder and President of Food Distribution Guy. Seek assistance Getting and Staying Listed, forward us an email: richard@fooddistributionguy.com. Or contact us here – we’re here to help your brand succeed!