Natural Products Going Strong - Report From Expo West – Part I – Distribution Strategies
I spent most of the last two days touring the exhibit hall at the Anaheim Convention Center, fighting crowds (an unusual occurrence these days) and marveling in how healthy the natural products industry still is. This is my second year at The Natural Products Expo West, one of the largest trade shows for the industry and it was, if possible even more crowded than last year.
In addition to the expected retailers, Whole Foods, Sprouts and various regional and local natural food stores, I spotted a number of badges proclaiming the wearer was from traditional grocery, drug and discount chains. Though, during a conversation I had with one vendor, I was told that they were not planning to approach Wal-Mart because there current vendors would be upset. Ah, yes, I’ve been there.
In the early stages of an industry’s growth or in times of change in the retail landscape, smaller dedicated stores will do everything possible to keep you, as a vendor from selling to the big guys. I went through this in the late ‘80s/early ‘90s when the country was populated with small office supply store and wholesale distributors. As Big Box retailers Staples and Office Depot came onto the scene and then Wal-Mart started expanding across the country, larger office supply dealers threatened to pull the products of office supply vendors if they sold to these category killers. They were, of course able to use their muscle for awhile, but in the end, it made more sense for manufacturers to sell to the big guys, if they didn’t they risked being sidelined as the industry grew and changed.
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As Whole Foods and small to mid sized regional players are joined by Sprouts, Fresh& Easy and even traditional chains, Kroger, Safeway, natural food products manufacturers need to get smarter and develop a distribution strategy that takes into account this changing landscape. This is the time to bring in experts who understand selling to these new channels of distribution. Navigating discounts, incentives and rebates, as well as POP and in-store sampling and promotions and being able to develop strong relationships with these new buyers is key to long term success.
As much as we believe that natural foods are the purview of the truly green and want to support smaller retailers, the market is moving ahead and moving mainstream. Both natural food retailers and natural products manufacturers need to be aware of and prepared to participate in these new trends.
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