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Going Big Picture

There are intersecting, tangential, & parallel parts & pieces of growing food 'brands". From the farm all the way through to stores, there are forces we reckon with both knowingly, & unknowingly.

This Small Bites issue goes up 30,000 feet addressing just a few variables impacting decision making from farmers, food manufacturers of Consumer Packaged Goods (CPG) brands. Global & national variables at the procurement, distribution, & store levels impact local & regional sales & economic vitality. Consolidation, homogenization, financial pressures, & where levels of risk reside are factors. So, here we have some not so random glimpses into outward pressures impacting "local food sales".

When Sales Means Ouch

We are in the food "industry" where sales are "king".

Yet, building sales is an act of perseverance that requires staying on the pulse of industry trends while navigating variables way beyond your control. (read on!) Making sales means learning the ropes of getting in front of store & distributor buyers. This can become a hugely expensive enterprise, especially when seeking to present on the national stage.

Remember it’s not how

many stores you are in;

it’s how many people are buying your product.

The annual Natural Products Expo West is often seen as a "must do". Food brands have the products, the tradeshow set up, the pitch & maybe 30 seconds with a potential buyer. Then another 30 seconds, on & on it goes for several days.

The return on investment (ROI) is getting harder for non-venture capital (VC) backed brands to make the numbers work. At large tradeshows the competition among brands is equally extreme, with everyone clamoring for visibility. Varying strategies are utilized to get a share of the wallet with pricing "deals", "free fills", etc. Then, there is a huge amount of follow-up in the weeks after the show. Smaller & emerging brands are returning exhausted, but with lessons learned to either keep returning to build their brand or re-evaluating strategies to obtain sales by nurturing prospective accounts closer to home & with existing accounts.

With much outside pressure from nationally (or even internationally owned large corporate chains), word on the street is to focus on gaining sales locally & regionally. The money spent on “30 second meetings” in California can be better spent expanding in-store demos, "drive alongs" with distributors to existing stores (though this sales tactic is fading away with distribution consolidation) . You can increase sales with store buyer-partnerships & a suite of promotions geared to your existing customers.

Daring to break the trend of Expo West might be the "best" option to increase sales. This is especially true for micro & emerging brands which might not be fully prepared operationally to meet the pre-arranged shipments & with pricing deals. Lacking capitalization to meet potential sales can be an unintended consequence of the large national shows. 

"Come home broke,

tired & frustrated. It’s definitely

a money & time sucker". -former Expo attendee

When Sales Means Trash

Speaking of trade shows. And making sales. Let's address the CPG waste stream at retail levels. Every customer-facing interaction for sampling or demoing products generates unsustainable waste as you strive to make sales. At the large shows such as Fancy Food or Expo West, vendors create a huge waste stream promoting products. In addition, there is "promo swag" collectively generated to make the sale & honestly, which often just gets trashed. 



"Paying more attention to the environmental impact of 100's of thousands of people flying & driving to Expo & other huge shows as well as factoring in the food, paper products & plastic waste generated during the show, should be of paramount concern to our industry. It's a massive hit to a healthier ecological footprint. -MP

“Disposable is convenient” but inefficient & “ripe for disruption,” -Matt Prindiville, of Upstream, a nonprofit organization dedicated to closing the chapter on our single-use culture. 

Methods & Madness

When exactly did the natural products 'industry" become all about the "snack & beverage" categories. There is rumbling around the incessant grab & go products & the push & pull of store buyers promoting & encouraging single serve usage. Has the CPG "industry" created the plastification culture?

Research into shopper preferences

crosses demographics & indicates they want more "sustainable"

packaging. There is no doubt that plastic packaging is convenient & equally, no doubt that it threatens our environment. Ah, but it is so convenient creating easy packaging options for the natural food merchandiser. It also allows

for ease of data tracking via UPC codes. & efforts to reduce shrink.

Alan Lewis has some great info on the consolidation of the grocery sector & UNFI, (see 29.31 in this video) This is in alignment with the 'hidden" factors impacting producers across all food categories along with "trendy" Better for You Products.

Mergers & Acquisitions

"Despite the illusion of variety, most grocery categories are dominated by a handful of consumer packaged goods (CPG) companies that own troves of familiar brand names."

Are you more of a podcast person? Check out The Checkout Podcast

Errol Schweizer has an insider's view on the entire food industry & willingly shares his insights. A recent article he authored in Forbes provides excellent data with a framework of the impacts of consolidation. Errol shares the sentiments of others about the designed ripple effect from a lack of competition across the food sectors.

Alex Turnbull, a commodities analyst, echoes this, “When you go from 15 to 10 companies, not much changes. When you go from 10 to 6, a lot changes. But when you go from 6 to 4 – it’s a fix.”

In another article & in his podcast Errol covers the deleterious impacts of a Kroger-Albertson merger on the entire grocery sector- even if we don't have those stores here, the effects are far reaching.

A Threat to Humanity

CPG waste has been extensively documented & consumers are increasingly aware of the impact product packaging has on the planet. Waste & pollution generate during production, including chemical residues, air pollutants, packaging, & wastewater are becoming more of a concern.

Boots on the Ground

In 2021 Maine became the first state to require producers of consumer-packaged goods (GPG) to finance the maintenance & expansion of municipal recycling programs.

Under the new law, Maine’s Department of Environmental Protection oversees a packaging stewardship program that will reimburse & assist municipalities in providing recycling services throughout the state. CPGs will pay fees to the stewardship organization based on the costs of recycling for each packaging material used, to fund the infrastructure investments or resident education needed to capture materials statewide. Read the article from Packworld

“Maine residents will save millions of dollars & finally be on a path to a stable recycling system,” said Scott Cassel, CEO &founder of the Product Stewardship Institute (PSI). “It will also provide producers with the financial incentive to make more sustainable packaging.”

"It’s time to push the needle on systemic investment & embrace the power of strategic collaboration. The problem with traditional impact investing is that it is predicted on a single asset paradigm and single asset solutions are not fit for the challenge of solving large systemic issues." -RFSI

In the regenerative agriculture & food revolution there is a lot of attention on companies, their suppliers, individual hero farmers, policies, certification schemes. Billions of investment capital will try to enter the regenerative agriculture space in the next 10 years & fund managers will play a key role in getting capital to the right places & operators.



Look at 19 funds that could transform agriculture.

Venture capital

A form of private equity investment for startups & emerging companies with high growth potential. They are typically made in exchange for equity, or ownership stakes, in the company that receives the investment. “VCs” effectively partner sharing the risks & rewards of performance.

VC Funding & Outcomes

"If you're getting investment at seed stage from a Venture Capital funder they're wanting to turn one penny into 100. They have a formula for deciding how you're going to do that for them. They have terms that protects their interests. When you see new brands getting money & major product exposure, know the the funders are taking bets, knowing that most of the food brands launched will fail." -Errol Schweizer

In the meantime, local &/or regional brands trying to capture sales are pushed aside for the shining new VC funded product with deep pockets & its behind-the-scene support. But shoppers don't always respond to that new shiny product. There may be product packing that is going against shopper trends. Check out

Food & Tech Connect & Regenerative Food Systems Investment Resources for food trends being funded.

Balancing Growth with Reduction

ALDI, a discount grocer with a wide reach, has announced a goal to open 800 more stores in five years. It is being called a massive expansion flooding nearly every corner of the country & will clearly have an impact on shopping habits. Having purchased Winn Dixie & Harveys chains in the South, conversion is in process to expand "affordable, quality products".

At the same time expansion is

underway, ALDI is becoming a leader in plastic reduction in CPG category. The products carried are nearly 100% exclusive, allowing ALDI to influence products sourcing production & packaging.

Here is a short list of some current

goals happening in parallel to expansion: By 2025, 100 percent of ALDI packaging, including plastic packaging, will have reusable, recyclable, or compostable;  packaging material of all ALDI-exclusive products to be reduced by at least 15 percent. 

Goals for 2020 have included 100

percent of ALDI-exclusive consumable packaging to include How2Recycle label; all private-label product packaging is easier for customers to reuse; ongoing commitment to improve product packaging by internal expertise & external evaluations. 

“ALDI has never offered single-use plastic shopping bags. And while we’re pleased that we’ve helped keep billions of plastic grocery bags out of landfills & oceans, we want to continue to do more. The commitments we’re making to reduce plastic packaging waste are an investment in our collective future that we are proud to make.”

- Jason Hart, CEO, ALDI U.S. 

Distribution Readiness

Take note of this talk with Alan Lewis & Linley Dixon of Real Organic Project. They provide valuable clues into production, distribution, & sales at grocery stores & how the "greater" industrial system works. This is a "must listen to" for folks taking the Distribution Readiness Series.

The industrialized, concentrated corporate food system cannot digest small deliveries from one-off vendors. -Alan Lewis

Grocery Homogenization 

Consolidation across the food system has created distress at many levels.

The immediate impact is fewer

choices. (think about Associated Buyers being sold to Rainforest). Across the full spectrum of food-aligned businesses the fallout comes down to financial gains & losses.

There is a 'need for consistency'

& with that comes ‘pressurized decisions’ looking for the most appropriate margin gain. Corporate category buyers are overworked with too many decisions & loads of data to funnel. The consolidation of the grocery sector by nature, limits choice rather than expanding it.

How do products get chosen for

retail? Across all food categories, there are about 600,000 unique UPC codes on packaged goods with 120,000 registered as natural, & of that about 25,000 are organic. Corporate stores wield a lot of pressure that leads to standardization of products which then become placed in uniform plan-o-grams resulting in each store having a similar look. If your brand is picked up, you will have increased sales (we'll talk about the downward pricing on your product at another time). Getting shelf space is hugely risky as the retail store or distributor parlays all risk onto its vendors.

How can small farmers & small or

emerging CPG brands gain ground? Smaller stores & local distributors are a better value as the risk level is reduced for the vendor. However, if your aspirations are to grow nationally & sell to a larger company, understanding the pressure to perform & consequently assuming high levels of risk is part

of the process.  

Good News?

You Tell Me

In 2022-2023 Kraft-Heinz profits

skyrocketed from $225 million to $887 million, an increase of 448%. Gross profit margins reached 34%, up 400BP over Q3 2022.

Soft drinks provide a textbook example of CPG domination. The top 3 companies, Coca-ColaKO +0.1%, Pepsico and Keurig Dr. Pepper, control around 90% of the soda market.

Two thirds of consumers are spending significantly more on groceries than last year. US household purchasing power slipped 7% in the first half of 2023. Over 70 percent of Americans are financially stressed, with 58% living paycheck to paycheck. Food insecurity impacts 27 million Americans, up 12% over the last year. -ES Forbes

Listen to Alan & Linley it's worth all the knowledge they share. So much good stuff!

Small Bites comes to you via grants & is created for farmers, food manufacturers, distributors, & grocers to increase VT food sales. We support the New England State Food System Planners Partnership effort to strengthen the regional food economy

Contact: Annie Harlow

[email protected]

All info is subject to change; thank you to all who contributed to this issue.

Created with support from the Canaday Family Charitable Trust