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Building your Business
  Effectively Through Distributors




Maggiore’s !
Sales & Marketing!
Presenter


John Maggiore

Maggiore’s Sales & Marketing
Contact: 781-233-5528
         john@maggsales.com
Agenda
    Role of the distributor
    How to decide if you should sell through a distributor
    What distributors look for in taking on new lines
    What information should be included in a distributor presentation
    Distributor marketing programs
    Pricing and margins
    Brief overview of representative distributors in natural and specialty
    Minimizing surprise deductions
    Q&A
Role of the Distributor
  Distributors buy products from suppliers and resell and deliver them to
  retailers.
  They usually provide marketing and sales services
  They buy pallets and truckloads and break them into smaller shipments to
  retailers.
  They often cut cases and sell half-cases or even single units depending
  on the category
  They can provide a variety of services to the retailer ranging from setting
  sections, order taking, packing out on the shelf, merchandising programs,
  sales analysis and flyers to store set up and point of sale systems
  For the supplier, consolidates shipping and receivables to fewer parties
  than selling direct to retailers.
How to decide if you should
sell through a distributor?
  Guiding principal – make product available how your retail customer
  wants to buy it.

  Who are your target retailer s principal distributor suppliers?

  Does your product lend itself to direct shipping (weight, perishability, pack-
  size, etc.?)

  Does your pricing and margin structure have room for a distributor
  margin?

  Can you efficiently scale up your business by going direct?
How many distributors do we
need?
  Understand that some distributors want you to sell only to them but what
  they don t tell you is that they don t service every customer in their
  market, thus if you don t sell to others you will not be able to get into
  some retailers.

  Know the territory and classes of trade that each of your distributors
  handle. Some distributors are regional, some national and some are
  region specific (i.e. NYC)

  There is no correct answer to this question, all distributors have their
  strengths and weaknesses you need to understand these and adapt
  accordingly.
Pricing and Margins Review
  So we are all on the same page




Maggiore’s !
Sales & Marketing!
Gross Margin Defined
  Gross margin is the difference between the costs related
 to manufacturing the product and the net price at which you
 sell product to your customers
Er…Margin or Markup?
What is the difference between margin and mark-up in
 terms of defining wholesales or retail pricing?
Retail Margin =     selling price - cost
                     selling price

Retailer Mark-up = selling price - cost
                       cost

In most all cases distributors work on margin not mark-up!
Example
Margin: With a product costing $2.00 and selling for $3.00
 ($3.00 - $2.00)/ $3.00 = 33.3% margin

Markup: With a product costing $2.00 and selling for $3.00
 ($3.00 - $2.00)/ $2.00 = 50% mark-up

So in this example if you thought a distributor was marking up your
  product 33.3% your belief would be that the price to the retailer
  would be $2.666 ($2.00 * 1.333%) but in fact they would be
  charging the retailer $3.00
Keep in Mind Distributors Make
  Money 3 ways




Maggiore’s !
Sales & Marketing!
Distributor Margins and Selling
Prices
      Selling price based on landed cost into distributor

       List price in catalog based on a 25% - 30% distributor gross
      margin

      Many customers on some kind of volume discount

      Whole Foods cost plus

      Supermarkets range depending on services offered
Marketing Programs
     Catalog/Price Book: . Product name, unit size, distributor code, wholesale and
     Suggested Retail Pricing (S.R.P.) are included in these listings. Catalogs are
     usually updated quarterly and are a good advertising vehicle for introducing
     your products to the retailer community

      Newsletter/Monthly Specials Bulletin: A listing of new products and monthly
     specials. Usually printed monthly, insertion of product selling information
     during the same month that a product is on sale is a great way for your product
     to get retailer exposure and give an incentive to purchase … a strong one-two
     punch. Be in contact with the advertising department six to eight weeks before
     the promotion begins to request that the ad appears adjacent to the product
     description and/or promotional announcement.
Marketing Programs
     Consumer Flyer: Distributors will solicit high volume, well-distributed
     products for participation in these monthly programs. Distributors
     usually request larger-than-normal discounts for these programs.

     Case-Stack programs: A program available to manufacturers of shelf-
     stable products is the case-stack program. These deals are listed in
     distributor catalogs and monthly newsletter/specials bulletins. As the
     name implies, retailers can get increasing discounts by purchasing
     larger quantities of product
Distributor Programs
  Promotional programs           Shipper allowances

  Incentive Programs             SPIFS

  Exclusivity Program

  Distributor Book Line & Ad
  Promotions
Types of Promotional
Discounts
  Off Invoice
                                     Hip Pocket Deal
  Bill-back
                                     Coupons
  Manufacturer Charge Back (MCB)
                                     Incentive Programs
  Case Stack Deals

  Scan Down
Objectives
  Create opportunities for consumers to buy your product

  Create incentive for the retailer to feature your product

  Drive Volume

  Capitalize on high usage occasions, and promote sales during weaker
  periods

  Maximize retail placement through distributors
Information Sharing Program and
National Marketing Opportunities

•  Supplier In-Site
   Information Sharing Program
•  MVP Program
•  Supplement Celebration Sale
•  Healthy Clippings
•  Truck Advertising
•  Customized
   Marketing Program
•  UNF Tabletop Shows
What a buyer looks for in a new
    item…
     Ingredients

     Consumer and retailer demand

     Pricing and promotional strategy

     Overall uniqueness and appeal of the product
Be prepared to answer:

  What kind of promotional support is being offered?
  What are the frequency and depth of the promotions?
  What is the manufacturer s plan to tell the consumer about the
  product? (demos, advertising, public relation campaigns, etc.)
  Has the manufacturer put a lot of thought into their strategy, and are
  they supporting our efforts by participating in our programs?
  Product presented in an attractive and concise way
  Sales effort – both direct and use of brokers
  How much existing distribution is there with our customers
Be prepared to answer:

  Media Research – Is there compelling information that has already
  been provided to the public with regard to important health benefits
  that an ingredient or product will provide to better one s lifestyle?
  Shelf life – Are spoils likely to be a problem? Will the vendor stand
  behind and guarantee any losses?
  Payment terms – Are we offered discounts for prompt payment?
  Extended Terms, Distributor requirements
  Frequency of delivery – What are service levels like, what are lead
  times, minimum order quantities, pick-up points, and how will the ease
  of receiving be?
  Pick-up location – Is it logistically sensible for costs?
  Exclusivity – Is there an advantage to our picking up a new item
  before our competition? Is there an opportunity to fill the pipeline and
  secure initial market share?
  Category management – New products should always open the
  opportunity to review a category and weed out the dull, slower volume
  items, paving the way for new and innovative selections
Issues/Costs of Doing Business
Overall similar to standard food distributors
     Set up fees
     Payment Terms
     Sample product
     Intro deals
     Ad programs
     Forward buying
     Participation in distributor shows
     Deductions
        MCB s – remember they come back at Dist wholesale
        Free fills
        Case stacks, EDV s, hip pocket deals
        Spoils/returns
        Unauthorized
          Double dipping
          errors
Upsides
   MCB audit – recover unauthorized deductions
   MCB report as data source
   Working with sales force
      Inside sales meetings
      Outside sales meetings
      Spiffs
      Ride with s
      Send samples, info
      Respond to special requests
   Key vendor programs
   Growth programs
Payment Terms
Policies regarding Payment Terms for new vendors has
 changed dramatically in the past few years before you
 ship a distributor be sure you know there policies.

-  Many distributors are asking for Terms of 2% 30 Days; Net 60 Days

-  Some distributors will not pay for there first order until they receive
   their second (or even third order) even if this is 120 days later.

-  Some distributors will take an early payment discount even well after
   the time period has expired and claim they ve done so because the
   invoice submitted was know done according to their requirements or
   pieces were missing, and thus delayed the processing time.
Summary
  What does a natural distributor typically expect from a
  new vendor?
   Some level of existing distribution to turn over and/or written
   requests by key customers
   Support for their marketing programs
   Promotional programs
   Terms (2%10, net 30) and extended for initial ship
   Intro deal (15% off for 60 days)
   Ongoing sales effort
Key Distributor
  Overview




Maggiore’s !
Sales & Marketing!
UNFI
  United Natural Foods, Inc. (NASDAQ:         Classes of Trade (Natural Food Division)
  UNFI) is the largest wholesale distributor   Supernaturals (32%) –Whole Foods
  to the natural and organic industry in the     Market, Inc., the only national natural
  United States. Carrying more than 40,000 product supermarket chain
  SKUs, the Company supplies to over
  17,000 customers nationwide and serves   Independents (43%) -Range from mom
  a wide variety of retail formats, including    and pop to regional chains. Examples
  supernatural chains, independent natural       include Earth Fare, Mrs. Greens,
  products retailers, conventional               Westerly Health and Fairway Markets
  supermarkets and food service                  SuperMarkets (20%) -Includes
  customers.                                     conventional supermarkets, mass
                                                 merchandisers, club stores, and
  $4.0B in sales                                 convenience stores such as Wegman s,
  Primary supplier to Whole Foods, many          Stop & Shop and Hannaford
  supermarkets                                   Food service (3%) -Includes Sodexho,
  In 2008 purchased Millbrook Distribution       Aramark, Med Assets and the Compass
  Services (renamed it UNFI SDS) and so          Group
  they are now in the Specialty business as   Other (2%) –International and non-
  well                                           distribution divisions
KeHE Foods
  KeHE Food Distributors is a leading U.S. distributor of natural and
  specialty food products that fit the lifestyle of today's consumer. They
  distribute more than 40,000 products - including natural and organic,
  international, specialty, perishable, Kosher, and Latin American food items
  - to more than 15,000 retail outlets in 49 states, Mexico and the
  Caribbean.
  On-Trend Category Expertise—Ethnic/International, Natural & Organic,
  Deli/Dairy & Perishable, Kosher, Gourmet & Specialty, Data Driven
  9 Distribution Center Nationally
  Key Customers – SuperValu (Nationally), Meijer, Target
  Programs
  Shows – Annually every July in Chicago, every January (different location
  each year)
  Kehe Tabletop Shows – held throughout the year in each market
Tree of Life
  Purchased by Kehe in 2010 now called Tree of Life a KeHE Company

  Tree of Life was a leading marketer and distributor of natural, organic,
  gourmet, specialty, and multicultural food products to supermarket chains,
  independent grocers, natural/health food stores, and specialty/ethnic
  stores throughout the U.S. and Canada.

  Kehe has done a great job of folding in the supermarket business into
  their model and has left the Natural Food business under the Tree of Life
  banner. They run separate promotional programs at Tree of Life which
  only their Natural class of trade can partake in.

  Tree of Life has three distribution centers in Canada. Product ships from
  KeHE, though certain warehouses are still referred to as TOL
  warehouses, since they were initially a TOL warehouse.
Haddon House
  Haddon House Food Products is a leading wholesale grocery distributor
  that specializes in ethnic food, gourmet ingredients, and organic products.
  It supplies more than 15,000 items covering more than 1,000 brands,
  including such in-house brands as Asian Gourmet, Jane's Krazy Mixed-Up
  Seasonings, Medford Farms, and Twin Tree Gardens. Haddon House
  serves specialty food retailers and other retail grocers nationwide.

  Distribution centers: New Jersey, North Carolina

  Sales $138M

  Key Customers: A&P, Fresh Market, Harris Teeter
Nature s Best
  Serves natural food stores in: Arizona, California, Colorado, Idaho,
  Montana, Nevada, New Mexico, Oregon, Utah, Washington, and
  Wyoming.
  Ocean-going container ships serve Nature s Best s customers in Hawaii,
  Alaska, and Asia.
  Our Product Categories include a full selection of Certified Organic and
  Natural Lines in Grocery, Refrigerated, Frozen, Bulk, Supplements,
  Personal Care, Herbs, Medicinal, and Pet Products Sales & Retail
  Marketing Support:
  Consumer driven promotional programs
  Merchandising Tools
  Field Sales Consultants
  Retail Service Merchandisers
  Category Management Assistance
Small to Medium Sized
    Regional Distributors
    DISTRIBUTOR NAME          REGION                   ADDRESS                           CITY      STATE Zip PHONE NUMBER CONTACT NAME
All Star Distributing       MW          5425 #108 Perry Drive                     Waterford          MI   48329    248-618-7746
Associated Buyers           NE          P.O. Box 399, 5 Commerce Way              Barrington        NH     3825    603-664-2424 Karta Owens - owner
Avenue Gourmet              Mid Atl     11445 Cronridge Drive, Suite Q            Owings Mills      MD    21117    410-902-5701 Patricia Lobel & Lee Cohen
Azure Standard                                                                    San Antonio        TX
Bear Creek Fine Foods       NW-N.CA     14660 NE N Woodinville Way - Box 1836 Woodinville           WA    98072    888-912-7335 Sharon & Mike Chittick
Chex Finer Foods            NE          39 F.R. McKay Drive                       Attleboro         MA     2703    508-226-0660 Jeremy Isenberg
Garden Spot Distributors    NE/Mid.Atl  438 White Oak Road                        New Holland        PA 1755-9778 800-829-5100 John Clough - President
Global Specialty Foods      SE          5305 Peachtree Industrial Blvd./Dock H Ste.1
                                                                                  Chamblee          GA    30341    770-399-0414 John Magnuson, Founder CEO
Gourmet Merchants           S. CA       16511 S. Main St.                         Gardena           CA    90248    310-808-0960 Bob Chavelle
Jerusalem                   MI          6470 Miller Road                          Dearborn           MI   48126    313-846-1701
Kehe Foods                  MW          800 N Schmidt Rd.                         Romeoville         IL   60446    815-886-3700 Chris Buckler
McMahon's Farm              NE NY       305 Jackson Road                          Hopewell Junction NY    12533    845-227-0120 Tom & Colette McMahon
Midland Foods               OH          4540 Commerce Ave.                        Cleveland         OH    44103    800-853-4460 David Gellin
Natural Farms               Wisconsin   2077 S. Stoughton Rd.                     Madison            WI   53716    608-663-1060 Jeff Barnhart
Nature's Best               CA, SW, NW 105 S. Puente Street                       Brea              CA    92821    800-765-3141 Russell Parker
Neshaminy Valley            NE/Mid Atl. 5 Louise Drive                            Ivyland            PA 18974-1525 215-443-5545 Phil Margolis
Regional Access, Inc.       Upstate NY? 125 Gayuga St.                            Trumansburg       NY    14886    607-319-5150 Gary Redmond, President
Reinhart Food Service       WI          1500 St. James Street                     La Crosse          WI   54602    800-827-4010
Renaissance Specialty Fds   N. CA       310 S. Maple Ave.                         So. San Francisco CA    94080    650-873-5400 Glenn Seymour, President
Rock Island Foods           N. CA       38 Hamilton Drive                         Ignacio           CA    94949    415-883-2375 Peter Mello
Soderholm Wholesale Fds     WI          1100 Wilburn Road                         Sun Prairie        WI   53590    608-834-9850 Dave Guelzow
Steiner Foods               NE          510 North Avenue                          New Rochelle      NY    10801    914-235-2300 Peteer Steiner
Trudeau Distributors        MN          25 West Cliff Road, Suite 115             Burnsville        MN    55337    952-882-8295 Mike Reineck
Unique Food                                                                       Atlanta           GA
Wythe-Will                  VA          3612 La Grange Parkway                    Toano              VA   23168     7575665360 David Mastricola, Dir. Sales
Handling Deductions
  Based on the NASFT s White Paper on Deductions




Maggiore’s !
Sales & Marketing!
What are we talking about?
  INVOICE DEDUCTIONS (also called chargebacks): The difference
  between a supplier s invoice amount and the payment remitted by a
  distributor.
  Typical examples:
     Slotting/free goods
     Unsaleables
     Advertising
     TPR s
     Scan downs and their admin fees
     Demos
     Cut case charges
     Damaged cases and short shipment
  Deductions happen…we want to minimize unauthorized deductions
  Huge amount of time, effort, money devoted to clearing these up – makes
  sales process highly inefficient
Key
  Clarity about the sale terms is paramount and may be the
  single best piece of advice for minimizing deductions.
Steps
  Be realistic and think through the costs that will be necessary to
  support sales in each class of trade in which you compete.

  Understand the customer s sales policies and clarify your own.

  Make it clear that you are top of these and mill be closely
  monitoring them
Steps
  Make sure broker understands your policies and is clear on what they can
  commit to on your behalf.

  All commitments must be documented (as in the SEA form described
  earlier.)
Do your homework!
  Understand common trade spending and likely deductions for
  each class of trade before you begin.

  Your leverage:
     Consumer demand
     Saying no
     Stop shipping
5 steps towards minimizing
  surprise deductions
1. During the initial sale, ask for the distributor s written policies.

2. Have your own standard procedures policy.

3. Determine together what is negotiable, what the retailer requires, and
   what may
be systemic for that distributor.

4. Do not leave the meeting without clarity of the terms of sale, particularly
   the:
   • pricing list
   • delivery and shipping policy
   • the specific number of store placements versus store authorizations.
5. State in your policy what your broker is authorized to determine and that
   all promotional agreements or offers must be documented.
Before Entering the
 Distribution Network:
1.  Build your brand.

2.  Research the retail segment.

3.  Talk to your peers.
Causes for Unexpected
  Chargebacks:
• Miscommunication – make sure broker is clear on policies, also zealousness
to make sale, weak on details
• Human Error
• Inadequate Order Management – not rotating, ordering too much
• Orders on Promotional Allowance
• Delayed Chargebacks – makes it difficult to track
• Post-Audit Claims
• Transitional Charges – buying out the line you are replacing
• Over Shipping for Promotions
• Delivery/Shipping Discrepancies (you are in the system at FOB and buyer asks
   you to ship product)
• Payment Terms
• Distributor Fees or Administrative Charges – warehouse set up fees, C&S
   crossroads
• Creative Deductions – if excessive, ultimately do you stay or walk
• Unsubstantiated Deductions – says it all
Disputing and Reimbursement
1. Get documentation.
2. Have a tracking system in place.
3. Be vigilant.
4. Highly perishable – try to resolve quickly, older they are, more difficult to
   recover
5. Ideally have one person dedicated to managing this (preferably in
   accounting)
6. Sales should get involved especially if good relationship with buyer, but be
   wary of time sink and developing unwarranted adversarial relationship
   with customer
Some alternative solutions
  Spoilage allowance
  Flat rate programs such as C&S Crossroads
  One national supplier instituted an innovative program that has
  helped the company avoid unauthorized deductions. Two years
  ago, it established a Funding Fee program under which it will
  annually pay each of its distributors 5 percent of gross sales.
  When it receives a deduction other than those approved in its set
  policies, the company takes it out of that distributor s Funding
  Fee. Calculations are done monthly by invoice, so a distributor
  knows when a charge has been posted against his fee.
Your recourse
  When faced with a surprise deduction, you can reject it, or note that
  any unauthorized deductions may result in an administrative hold
  being placed on the account.
  One national supplier s guidelines state: Unauthorized deductions
  that are not repaid within seven working days will be subject to a
  penalty fee, administrative hold on orders, reclassification to
  wholesaler pricing and loss of credit terms. Penalty fees can range
  from $100 - $1,000 and must be paid before future shipments can
  be allowed to ship.
  Obviously so much depends on how much leverage you have
Training and Networking
  Seminar for Companies in the
  Natural & Specialty Industry




Maggiore’s !
Sales & Marketing!
Two-Day Seminar
  Presented by: John Maggiore and Bob Burke
  Tuesday May 17th and Wednesday May 18th
  Where: Hilton Garden Inn, San Mateo, California
  Day 1 – Sales Planning, Trade Promotions, Working with Distributors, Working with
  Brokers and more!
  Day 2 – Trade Spending, Navigating Whole Foods, Understanding Syndicated Data,
  Social Marketing and more!
  Special Guest Speakers include Tim Sperry (former Whole Foods buyer), Matt Koch
  (TurnTree Solutions) and others.
  Come for either day or both days (special discount for attending both days).
  For more information visit www.naturalconsulting.com or e-mail John Maggiore at
  john@maggsales.com
Summary
  Do your homework
  Have a policy in place
  Set the tone early…you are on top of this
  Choose your fights
  Act quickly with well documented response
  Network with your peers
Q&A
  What haven’t we answered that you hoped we would
  cover?

  What pressing questions do you have about your business
  that you would like to put out to the room?
Distributor Marketing Programs &
Advertising – UNFI example
  Wholesale Catalogs
  Monthly Specials Catalogs
  Foodservice Advertising
  Table Top Shows
Wholesale Catalog
 Eastern Region


  Use catalog advertising to develop brand
  recognition and loyalty, and to educate retailers
  on your products key selling points.
            Catalogs are the primary reference and
            ordering tool for Retailers –catalogs are spiral
            bound with scannable barcodes.
            Color inserts and black & white ads are
            positioned with your product listing and bound
            into the book.
            Organized by major category, then Brand.
            Major categories are: Bulk, Frozen, Perishable,
            Grocery, Personal Care and Supplements. Tab
            Pages separate major categories.
            Published 3 times per year (Jan-Apr; May- Aug;
            Sep-Dec).
            6 Editions printed for the Eastern Region,
            corresponding to United s Eastern Region
            Distribution Centers: Chesterfield/Dayville, New
            Oxford, Atlanta, Iowa, Greenwood, Sarasota.
            2 Volumes printed for each publication:
                 Volume 1 (Bulk/Foodservice, Frozen, Perishable,
                 Grocery)
                 Volume 2 (Personal Care, Supplements)




For more information contact your United Natural Foods® Buyer
Monthly Specials Catalog
 Eastern Region



                                                                Focus Retailers attention on your promotions,
                                                                displays and new product introductions with
                                                                Monthly Specials Catalog Advertising.
                                                                        The Monthly Specials Catalog is the Retailer s
                                                                        primary source of information about monthly
                                                                        promotions, new products, case stack deals
                                                                        and displays.
                                                                        Got a good story to tell? Contact us to
                                                                        propose an article. Each month we publish
                                                                        several articles focusing on sustainable
                                                                        practices, fair trade and environmental
                                                                        initiatives.
                                                                        Color inserts and black & white ads are
                                                                        positioned within and bound into the book.
                                                                        Introduce new items & educate retailers about
                                                                        your products and promotions.
                                                                        Contains special sections for New Products,
                                                                        Case Stacks, Displays and monthly specials
                                                                        listings for each major category.
                                                                        Printed on environmentally friendly 100%
                                                                        recycled newsprint with high post consumer
                                                                        waste component.
                                                                        6 Editions published monthly for the Eastern
                                                                        Region: Chesterfield/Dayville, New Oxford,
                                                                        Atlanta, Iowa, Greenwood, Sarasota.




For more information contact your United Natural Foods® Buyer
Foodservice Advertising
 Eastern Region


  Reach the rapidly growing and influential
  foodservice market with Foodservice Pricelist
  advertising. As consumer demand for natural
  and organic items increases, United is working
  with foodservice professionals such as Sodexho
  and ARAMARK to meet the growing needs of
  this market segment.
            Used by restaurants, cafes, convenience
            stores, schools and institutions providing
            meals, snacks, grab-and-go, etc.
            Published monthly.
            Flexible advertising programs help you build
            brand loyalty in this growing market.
            Organized by Product Subcategory (such as
            Snack Bars, Cereal, Beverages, etc.) then by
            Brand.
            The monthly pricelist includes all Bulk, Frozen,
            Perishable and Grocery items, with monthly
            specials where applicable.
            Feature educational material and/or large
            batch recipes to promote usage of your
            products.




For more information contact Valarie Rozokat at 1-603-256-3000 x42409
Table Top Shows
 National


                                                                  Meet retailers and write orders at these
                                                                  cost-effective events! United s Table Top
                                                                  Shows provide an opportunity for you to
                                                                  showcase new items, build sales, promote
                                                                  seasonal items and meet Retail buyers
                                                                  face-to-face.
                                                                          2008 Table Top Show Locations:
                                                                               Jacksonville, FL
                                                                               Denver, CO
                                                                               Hawaii
                                                                               Ledyard, CT (Foxwoods)
                                                                               Northern California
                                                                               Chicago, IL
                                                                          Opportunity to network with a large number of
                                                                          Retailers at one time.
                                                                          Shows are cost-effective compared to larger,
                                                                          multi-day shows.
                                                                          Concise Show format.
                                                                          Opportunity to generate large number of sales/
                                                                          orders.
                                                                          A great way to introduce new-to-UNF products
                                                                          to multiple customers.




For more information contact Len Lynch at 1-603-256-3000 x42202
Supplier of the Month
 National


  Builds brand recognition and increases
  sales by highlighting Suppliers as leaders in
      their
  category.
            National, monthly program.
            Three non-competing food suppliers (grocery,
            frozen and/or perishable) and four non-
            competing, non-food suppliers (general
            merchandise, personal care and/or
            supplements) featured each month.
            Participation includes special promotion to
            Retailers and to United s sales and marketing
            teams.
            Benefits include publication of your logo and
            selling points on the cover of the Monthly
            Specials Catalog, a full-page black & white
            advertisement in the front of the catalog and
            publication of your promotions.
            Your participation is highlighted in the News
            You Can Use – United s internal publication for
            the sales and marketing teams.
            Color posters are available for retailers.




For more information contact Alana J. Mahdalik at 1-860-779-2800
Truckload Deal
 National


                                                                   Volume sales and marketing program for top
                                                                   selling products encourages case stacking and
                                                                   price point driven promotions at retail.
                                                                           National, monthly program.
                                                                           Limited to six non-competing food suppliers
                                                                           (grocery, frozen and/or perishable) and four
                                                                           non-competing non-food suppliers (general
                                                                           merchandise, personal care and/or
                                                                           supplements) each month.
                                                                           Full color case-stack/end-cap signage and shelf
                                                                           talkers are available to retailers to maximize
                                                                           program impact and effectiveness.
                                                                           Benefits include publication of your logo and
                                                                           selling points on the cover of the Monthly
                                                                           Specials Catalog, a full-page black & white
                                                                           advertisement in the front of the catalog and
                                                                           publication of your promotions.
                                                                           Your participation is highlighted in the News
                                                                           You Can Use – United s internal publication for
                                                                           the sales and marketing teams.




For more information contact Alana J. Mahdalik at 1-860-779-2800
Consumer Marketing &
Advertising
  Consumer Circular Program
  Customized Marketing Program (CMP)
  Healthy Clippings Program
  Celebration Programs
  Truck Advertising Program
  Buying Club Advertising Program
  Grocery Bag Advertising Program
Consumer Circulars
 Eastern Region


  The United Natural Foods® Consumer Circular
  Programs – the Natural Connection and Healthy
  Advantage – drive sales for Suppliers and
  Retailers, providing significant lift and visibility
     to
  consumers. Promote your items and educate
  consumers through circular distribution in
  hundreds of retail locations throughout United s
  Eastern Region.
            Regional, monthly program.
            A proven track record of driving volume sales
            through to consumers!
            Exceptional market penetration with our
            Independent Retailers – hundreds of
            participating retailers and over 1 million copies
            printed and distributed monthly!
            Appealing new design features eye-catching
            graphics and enhanced product visibility.
            Customized with the retailer s store logo.
            Produced monthly with seasonal themes,
            products, articles and recipes.




For more information contact your United Natural Foods® Buyer
Customized Marketing Program
 (CMP)
 National


                                                                        The CMP is an exciting web-based tool for
                                                                        retailers. Drawing from a library of
                                                                           product
                                                                        images from participating suppliers,
                                                                        retailers can customize the Natural
                                                                        Connection circular and create handbills
                                                                        and store signage to promote products
                                                                        and educate consumers.
                                                                              A low cost, pay-for-performance
                                                                              opportunity for Suppliers!
                                                                              A great way for Suppliers to partner with
                                                                              leading independent natural product
                                                                              retailers for effective consumer
                                                                              promotions and new product launches!
                                                                              Retailers work with your existing
                                                                              promotions.
                                                                              Participating Suppliers receive valuable
                                                                              reports of advertising activity and list of
                                                                              participating Retailers.
                                                                              Ongoing, national program.



For more information contact Valarie Rozokat at 1-603-256-3000 x42409
Healthy Clippings® Coupon Book
 National



  Coupons for a Natural Way of Life!
  Promote your items and build brand
  recognition with consumer coupons. This
  exciting addition to United Natural Foods®
  Marketing Programs has proven to be very
  successful for both suppliers and retailers,
  providing them an opportunity to promote top
  selling products by offering coupon-based
  discounts to consumers.
            National, thematic/seasonal program, 5 issues/
            year – Winter (Jan-Mar); Spring (Mar-Apr);
            Summer (Jun-Aug); Fall (Sept-Oct); Holiday
            (Nov-Dec).
            Each coupon booklet includes a maximum of
            44 value-savings coupons.
            Booklets also include product/brand education
            and consumer information.
            Published on 100% recycled paper!
            Complimentary color posters and shelf talkers
            are available to retailers for increased program
            impact.




For more information contact Alana J. Mahdalik at 1-860-779-2800
Celebrations Program
 National


                                                                   The Supplement and Body Care
                                                                   Celebration programs offer you an unique
                                                                   opportunity to connect with and educate
                                                                   consumers about your products.
                                                                         Current Editions:
                                                                            Supplement Celebration – January &
                                                                            September Editions
                                                                            Natural Body Care Celebration – May
                                                                            Edition
                                                                         The Celebration booklets focus on
                                                                         consumer education in an attractive,
                                                                         educational booklet.
                                                                         The Celebrations are a unique
                                                                         opportunity to provide in-depth
                                                                         information to help consumers
                                                                         understand, appreciate and adopt your
                                                                         products.
                                                                         Complimentary poster and shelf talkers
                                                                         increase visibility and effectiveness at
                                                                         retail.
                                                                         Booklets customized with store logos
                                                                         build loyal participation by Retailers.




For more information contact Alana J. Mahdalik at 1-860-779-2800
Truck Advertising Program
 National



  A billboard on wheels, a moving
  advertisement that can t be missed in
  target markets of your choosing.
  According to the American Trucking
  Association, the average truck-based
  advertisement generates over 10 million
  impressions per year.
            Customize your campaign – select number of
            trailers, target market by United distribution
            center and time frame.
            Graphics by 3M – large, bold design with
            limited usage of copy are highly effective. The
            United logo will be featured on a small portion
            of the ad.
            High quality color graphics, full coverage on
            both sides of 48-foot trailers, top quality
            application.
            Made to be long lasting and great looking! 5
            year limited warranty – graphics guaranteed
            against color fading, peeling, chipping,
            cracking, loss of adhesion or shrinkage.




For more information contact Alana J. Mahdalik at 1-860-779-2800
Buying Club Advertising Program
 Eastern Region



                                                                        Advertise directly to over 40,000 end
                                                                        consumers as they shop the monthly
                                                                        Buying Club Pricelist. Increase sales,
                                                                        build your brand, educate consumers
                                                                        and draw attention to your items
                                                                        through this flexible and effective
                                                                        program.
                                                                              Monthly, Eastern Region.
                                                                              Contains all items, listing monthly
                                                                              specials as applicable.
                                                                              Flexible program lets you mix and
                                                                              match ad types.
                                                                              Got a good story to tell? Contact us
                                                                              to propose an article. Each month
                                                                              we publish several articles about
                                                                              our suppliers.




For more information contact Valarie Rozokat at 1-603-256-3000 x42409
Grocery Bag Advertising
 Program
 National


  An effective and affordable way to
  promote your brand and message to
  natural product consumers – where they
  shop! Promote your brand or advertise
  your products on these grocery bags used
  by independent retailers.
          Annual program with national and
          regional options.
          Limited to 1 ad per product category per
          bag – let it be yours!
          Over 22,500,000 bags printed annually –
          low cost per impression.
          3 varieties of bags available – Grocery,
          Vitamin and Product Bags. Each bag
          has a limited number of Advertising
          slots.
          Annual contracts available – sign up and
          lock in your ad for an entire year!




For more information contact Valarie Rozokat at 1-603-256-3000 x42409
Speed to Market Program
  Retailers are waiting for your new products!
   Through the Speed to Market program you can get your new products
   placed in about 70 Eastern Region A & B accounts.
   A accounts receive a free fill and B accounts get 50% off their first
   case.
   These accounts have signed agreements to place the product for 3
   months.
   To qualify a product must be slotted in all 6 Eastern Region DC s and
   the ingredients must be clean.
   Cost $750, plus an additional 30 day introductory discount.
   Contact your Eastern Region Buyer for additional information.
Supplier In-Site
  Supplier In-Site (SIS) is designed for UNFI suppliers as a web based
  reporting tool, providing sku specific, store specific detail for UNFI s top
  500 independent retailers (the Top 500 represent 60% of independent
  channel sales).
  Reports are highly actionable, specific to a supplier s territories and sales
  reps.

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Building your business with distributors

  • 1. Building your Business Effectively Through Distributors Maggiore’s ! Sales & Marketing!
  • 2. Presenter John Maggiore Maggiore’s Sales & Marketing Contact: 781-233-5528 john@maggsales.com
  • 3. Agenda   Role of the distributor   How to decide if you should sell through a distributor   What distributors look for in taking on new lines   What information should be included in a distributor presentation   Distributor marketing programs   Pricing and margins   Brief overview of representative distributors in natural and specialty   Minimizing surprise deductions   Q&A
  • 4. Role of the Distributor   Distributors buy products from suppliers and resell and deliver them to retailers.   They usually provide marketing and sales services   They buy pallets and truckloads and break them into smaller shipments to retailers.   They often cut cases and sell half-cases or even single units depending on the category   They can provide a variety of services to the retailer ranging from setting sections, order taking, packing out on the shelf, merchandising programs, sales analysis and flyers to store set up and point of sale systems   For the supplier, consolidates shipping and receivables to fewer parties than selling direct to retailers.
  • 5. How to decide if you should sell through a distributor?   Guiding principal – make product available how your retail customer wants to buy it.   Who are your target retailer s principal distributor suppliers?   Does your product lend itself to direct shipping (weight, perishability, pack- size, etc.?)   Does your pricing and margin structure have room for a distributor margin?   Can you efficiently scale up your business by going direct?
  • 6. How many distributors do we need?   Understand that some distributors want you to sell only to them but what they don t tell you is that they don t service every customer in their market, thus if you don t sell to others you will not be able to get into some retailers.   Know the territory and classes of trade that each of your distributors handle. Some distributors are regional, some national and some are region specific (i.e. NYC)   There is no correct answer to this question, all distributors have their strengths and weaknesses you need to understand these and adapt accordingly.
  • 7. Pricing and Margins Review So we are all on the same page Maggiore’s ! Sales & Marketing!
  • 8. Gross Margin Defined   Gross margin is the difference between the costs related to manufacturing the product and the net price at which you sell product to your customers
  • 9. Er…Margin or Markup? What is the difference between margin and mark-up in terms of defining wholesales or retail pricing? Retail Margin = selling price - cost selling price Retailer Mark-up = selling price - cost cost In most all cases distributors work on margin not mark-up!
  • 10. Example Margin: With a product costing $2.00 and selling for $3.00 ($3.00 - $2.00)/ $3.00 = 33.3% margin Markup: With a product costing $2.00 and selling for $3.00 ($3.00 - $2.00)/ $2.00 = 50% mark-up So in this example if you thought a distributor was marking up your product 33.3% your belief would be that the price to the retailer would be $2.666 ($2.00 * 1.333%) but in fact they would be charging the retailer $3.00
  • 11. Keep in Mind Distributors Make Money 3 ways Maggiore’s ! Sales & Marketing!
  • 12. Distributor Margins and Selling Prices   Selling price based on landed cost into distributor   List price in catalog based on a 25% - 30% distributor gross margin   Many customers on some kind of volume discount   Whole Foods cost plus   Supermarkets range depending on services offered
  • 13. Marketing Programs   Catalog/Price Book: . Product name, unit size, distributor code, wholesale and Suggested Retail Pricing (S.R.P.) are included in these listings. Catalogs are usually updated quarterly and are a good advertising vehicle for introducing your products to the retailer community   Newsletter/Monthly Specials Bulletin: A listing of new products and monthly specials. Usually printed monthly, insertion of product selling information during the same month that a product is on sale is a great way for your product to get retailer exposure and give an incentive to purchase … a strong one-two punch. Be in contact with the advertising department six to eight weeks before the promotion begins to request that the ad appears adjacent to the product description and/or promotional announcement.
  • 14. Marketing Programs   Consumer Flyer: Distributors will solicit high volume, well-distributed products for participation in these monthly programs. Distributors usually request larger-than-normal discounts for these programs.   Case-Stack programs: A program available to manufacturers of shelf- stable products is the case-stack program. These deals are listed in distributor catalogs and monthly newsletter/specials bulletins. As the name implies, retailers can get increasing discounts by purchasing larger quantities of product
  • 15. Distributor Programs   Promotional programs   Shipper allowances   Incentive Programs   SPIFS   Exclusivity Program   Distributor Book Line & Ad Promotions
  • 16. Types of Promotional Discounts   Off Invoice   Hip Pocket Deal   Bill-back   Coupons   Manufacturer Charge Back (MCB)   Incentive Programs   Case Stack Deals   Scan Down
  • 17. Objectives   Create opportunities for consumers to buy your product   Create incentive for the retailer to feature your product   Drive Volume   Capitalize on high usage occasions, and promote sales during weaker periods   Maximize retail placement through distributors
  • 18. Information Sharing Program and National Marketing Opportunities •  Supplier In-Site Information Sharing Program •  MVP Program •  Supplement Celebration Sale •  Healthy Clippings •  Truck Advertising •  Customized Marketing Program •  UNF Tabletop Shows
  • 19. What a buyer looks for in a new item…   Ingredients   Consumer and retailer demand   Pricing and promotional strategy   Overall uniqueness and appeal of the product
  • 20. Be prepared to answer:   What kind of promotional support is being offered?   What are the frequency and depth of the promotions?   What is the manufacturer s plan to tell the consumer about the product? (demos, advertising, public relation campaigns, etc.)   Has the manufacturer put a lot of thought into their strategy, and are they supporting our efforts by participating in our programs?   Product presented in an attractive and concise way   Sales effort – both direct and use of brokers   How much existing distribution is there with our customers
  • 21. Be prepared to answer:   Media Research – Is there compelling information that has already been provided to the public with regard to important health benefits that an ingredient or product will provide to better one s lifestyle?   Shelf life – Are spoils likely to be a problem? Will the vendor stand behind and guarantee any losses?   Payment terms – Are we offered discounts for prompt payment? Extended Terms, Distributor requirements   Frequency of delivery – What are service levels like, what are lead times, minimum order quantities, pick-up points, and how will the ease of receiving be?   Pick-up location – Is it logistically sensible for costs?   Exclusivity – Is there an advantage to our picking up a new item before our competition? Is there an opportunity to fill the pipeline and secure initial market share?   Category management – New products should always open the opportunity to review a category and weed out the dull, slower volume items, paving the way for new and innovative selections
  • 22. Issues/Costs of Doing Business Overall similar to standard food distributors   Set up fees   Payment Terms   Sample product   Intro deals   Ad programs   Forward buying   Participation in distributor shows   Deductions   MCB s – remember they come back at Dist wholesale   Free fills   Case stacks, EDV s, hip pocket deals   Spoils/returns   Unauthorized   Double dipping   errors
  • 23. Upsides   MCB audit – recover unauthorized deductions   MCB report as data source   Working with sales force   Inside sales meetings   Outside sales meetings   Spiffs   Ride with s   Send samples, info   Respond to special requests   Key vendor programs   Growth programs
  • 24. Payment Terms Policies regarding Payment Terms for new vendors has changed dramatically in the past few years before you ship a distributor be sure you know there policies. -  Many distributors are asking for Terms of 2% 30 Days; Net 60 Days -  Some distributors will not pay for there first order until they receive their second (or even third order) even if this is 120 days later. -  Some distributors will take an early payment discount even well after the time period has expired and claim they ve done so because the invoice submitted was know done according to their requirements or pieces were missing, and thus delayed the processing time.
  • 25. Summary   What does a natural distributor typically expect from a new vendor?   Some level of existing distribution to turn over and/or written requests by key customers   Support for their marketing programs   Promotional programs   Terms (2%10, net 30) and extended for initial ship   Intro deal (15% off for 60 days)   Ongoing sales effort
  • 26. Key Distributor Overview Maggiore’s ! Sales & Marketing!
  • 27. UNFI   United Natural Foods, Inc. (NASDAQ: Classes of Trade (Natural Food Division) UNFI) is the largest wholesale distributor   Supernaturals (32%) –Whole Foods to the natural and organic industry in the Market, Inc., the only national natural United States. Carrying more than 40,000 product supermarket chain SKUs, the Company supplies to over 17,000 customers nationwide and serves   Independents (43%) -Range from mom a wide variety of retail formats, including and pop to regional chains. Examples supernatural chains, independent natural include Earth Fare, Mrs. Greens, products retailers, conventional Westerly Health and Fairway Markets supermarkets and food service   SuperMarkets (20%) -Includes customers. conventional supermarkets, mass merchandisers, club stores, and   $4.0B in sales convenience stores such as Wegman s,   Primary supplier to Whole Foods, many Stop & Shop and Hannaford supermarkets   Food service (3%) -Includes Sodexho,   In 2008 purchased Millbrook Distribution Aramark, Med Assets and the Compass Services (renamed it UNFI SDS) and so Group they are now in the Specialty business as   Other (2%) –International and non- well distribution divisions
  • 28. KeHE Foods   KeHE Food Distributors is a leading U.S. distributor of natural and specialty food products that fit the lifestyle of today's consumer. They distribute more than 40,000 products - including natural and organic, international, specialty, perishable, Kosher, and Latin American food items - to more than 15,000 retail outlets in 49 states, Mexico and the Caribbean.   On-Trend Category Expertise—Ethnic/International, Natural & Organic, Deli/Dairy & Perishable, Kosher, Gourmet & Specialty, Data Driven   9 Distribution Center Nationally   Key Customers – SuperValu (Nationally), Meijer, Target   Programs   Shows – Annually every July in Chicago, every January (different location each year)   Kehe Tabletop Shows – held throughout the year in each market
  • 29. Tree of Life   Purchased by Kehe in 2010 now called Tree of Life a KeHE Company   Tree of Life was a leading marketer and distributor of natural, organic, gourmet, specialty, and multicultural food products to supermarket chains, independent grocers, natural/health food stores, and specialty/ethnic stores throughout the U.S. and Canada.   Kehe has done a great job of folding in the supermarket business into their model and has left the Natural Food business under the Tree of Life banner. They run separate promotional programs at Tree of Life which only their Natural class of trade can partake in.   Tree of Life has three distribution centers in Canada. Product ships from KeHE, though certain warehouses are still referred to as TOL warehouses, since they were initially a TOL warehouse.
  • 30. Haddon House   Haddon House Food Products is a leading wholesale grocery distributor that specializes in ethnic food, gourmet ingredients, and organic products. It supplies more than 15,000 items covering more than 1,000 brands, including such in-house brands as Asian Gourmet, Jane's Krazy Mixed-Up Seasonings, Medford Farms, and Twin Tree Gardens. Haddon House serves specialty food retailers and other retail grocers nationwide.   Distribution centers: New Jersey, North Carolina   Sales $138M   Key Customers: A&P, Fresh Market, Harris Teeter
  • 31. Nature s Best   Serves natural food stores in: Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.   Ocean-going container ships serve Nature s Best s customers in Hawaii, Alaska, and Asia.   Our Product Categories include a full selection of Certified Organic and Natural Lines in Grocery, Refrigerated, Frozen, Bulk, Supplements, Personal Care, Herbs, Medicinal, and Pet Products Sales & Retail Marketing Support:   Consumer driven promotional programs   Merchandising Tools   Field Sales Consultants   Retail Service Merchandisers   Category Management Assistance
  • 32. Small to Medium Sized Regional Distributors DISTRIBUTOR NAME REGION ADDRESS CITY STATE Zip PHONE NUMBER CONTACT NAME All Star Distributing MW 5425 #108 Perry Drive Waterford MI 48329 248-618-7746 Associated Buyers NE P.O. Box 399, 5 Commerce Way Barrington NH 3825 603-664-2424 Karta Owens - owner Avenue Gourmet Mid Atl 11445 Cronridge Drive, Suite Q Owings Mills MD 21117 410-902-5701 Patricia Lobel & Lee Cohen Azure Standard San Antonio TX Bear Creek Fine Foods NW-N.CA 14660 NE N Woodinville Way - Box 1836 Woodinville WA 98072 888-912-7335 Sharon & Mike Chittick Chex Finer Foods NE 39 F.R. McKay Drive Attleboro MA 2703 508-226-0660 Jeremy Isenberg Garden Spot Distributors NE/Mid.Atl 438 White Oak Road New Holland PA 1755-9778 800-829-5100 John Clough - President Global Specialty Foods SE 5305 Peachtree Industrial Blvd./Dock H Ste.1 Chamblee GA 30341 770-399-0414 John Magnuson, Founder CEO Gourmet Merchants S. CA 16511 S. Main St. Gardena CA 90248 310-808-0960 Bob Chavelle Jerusalem MI 6470 Miller Road Dearborn MI 48126 313-846-1701 Kehe Foods MW 800 N Schmidt Rd. Romeoville IL 60446 815-886-3700 Chris Buckler McMahon's Farm NE NY 305 Jackson Road Hopewell Junction NY 12533 845-227-0120 Tom & Colette McMahon Midland Foods OH 4540 Commerce Ave. Cleveland OH 44103 800-853-4460 David Gellin Natural Farms Wisconsin 2077 S. Stoughton Rd. Madison WI 53716 608-663-1060 Jeff Barnhart Nature's Best CA, SW, NW 105 S. Puente Street Brea CA 92821 800-765-3141 Russell Parker Neshaminy Valley NE/Mid Atl. 5 Louise Drive Ivyland PA 18974-1525 215-443-5545 Phil Margolis Regional Access, Inc. Upstate NY? 125 Gayuga St. Trumansburg NY 14886 607-319-5150 Gary Redmond, President Reinhart Food Service WI 1500 St. James Street La Crosse WI 54602 800-827-4010 Renaissance Specialty Fds N. CA 310 S. Maple Ave. So. San Francisco CA 94080 650-873-5400 Glenn Seymour, President Rock Island Foods N. CA 38 Hamilton Drive Ignacio CA 94949 415-883-2375 Peter Mello Soderholm Wholesale Fds WI 1100 Wilburn Road Sun Prairie WI 53590 608-834-9850 Dave Guelzow Steiner Foods NE 510 North Avenue New Rochelle NY 10801 914-235-2300 Peteer Steiner Trudeau Distributors MN 25 West Cliff Road, Suite 115 Burnsville MN 55337 952-882-8295 Mike Reineck Unique Food Atlanta GA Wythe-Will VA 3612 La Grange Parkway Toano VA 23168 7575665360 David Mastricola, Dir. Sales
  • 33. Handling Deductions Based on the NASFT s White Paper on Deductions Maggiore’s ! Sales & Marketing!
  • 34. What are we talking about?   INVOICE DEDUCTIONS (also called chargebacks): The difference between a supplier s invoice amount and the payment remitted by a distributor.   Typical examples:   Slotting/free goods   Unsaleables   Advertising   TPR s   Scan downs and their admin fees   Demos   Cut case charges   Damaged cases and short shipment   Deductions happen…we want to minimize unauthorized deductions   Huge amount of time, effort, money devoted to clearing these up – makes sales process highly inefficient
  • 35. Key   Clarity about the sale terms is paramount and may be the single best piece of advice for minimizing deductions.
  • 36. Steps   Be realistic and think through the costs that will be necessary to support sales in each class of trade in which you compete.   Understand the customer s sales policies and clarify your own.   Make it clear that you are top of these and mill be closely monitoring them
  • 37. Steps   Make sure broker understands your policies and is clear on what they can commit to on your behalf.   All commitments must be documented (as in the SEA form described earlier.)
  • 38. Do your homework!   Understand common trade spending and likely deductions for each class of trade before you begin.   Your leverage:   Consumer demand   Saying no   Stop shipping
  • 39. 5 steps towards minimizing surprise deductions 1. During the initial sale, ask for the distributor s written policies. 2. Have your own standard procedures policy. 3. Determine together what is negotiable, what the retailer requires, and what may be systemic for that distributor. 4. Do not leave the meeting without clarity of the terms of sale, particularly the: • pricing list • delivery and shipping policy • the specific number of store placements versus store authorizations. 5. State in your policy what your broker is authorized to determine and that all promotional agreements or offers must be documented.
  • 40. Before Entering the Distribution Network: 1.  Build your brand. 2.  Research the retail segment. 3.  Talk to your peers.
  • 41. Causes for Unexpected Chargebacks: • Miscommunication – make sure broker is clear on policies, also zealousness to make sale, weak on details • Human Error • Inadequate Order Management – not rotating, ordering too much • Orders on Promotional Allowance • Delayed Chargebacks – makes it difficult to track • Post-Audit Claims • Transitional Charges – buying out the line you are replacing • Over Shipping for Promotions • Delivery/Shipping Discrepancies (you are in the system at FOB and buyer asks you to ship product) • Payment Terms • Distributor Fees or Administrative Charges – warehouse set up fees, C&S crossroads • Creative Deductions – if excessive, ultimately do you stay or walk • Unsubstantiated Deductions – says it all
  • 42. Disputing and Reimbursement 1. Get documentation. 2. Have a tracking system in place. 3. Be vigilant. 4. Highly perishable – try to resolve quickly, older they are, more difficult to recover 5. Ideally have one person dedicated to managing this (preferably in accounting) 6. Sales should get involved especially if good relationship with buyer, but be wary of time sink and developing unwarranted adversarial relationship with customer
  • 43. Some alternative solutions   Spoilage allowance   Flat rate programs such as C&S Crossroads   One national supplier instituted an innovative program that has helped the company avoid unauthorized deductions. Two years ago, it established a Funding Fee program under which it will annually pay each of its distributors 5 percent of gross sales. When it receives a deduction other than those approved in its set policies, the company takes it out of that distributor s Funding Fee. Calculations are done monthly by invoice, so a distributor knows when a charge has been posted against his fee.
  • 44. Your recourse   When faced with a surprise deduction, you can reject it, or note that any unauthorized deductions may result in an administrative hold being placed on the account.   One national supplier s guidelines state: Unauthorized deductions that are not repaid within seven working days will be subject to a penalty fee, administrative hold on orders, reclassification to wholesaler pricing and loss of credit terms. Penalty fees can range from $100 - $1,000 and must be paid before future shipments can be allowed to ship.   Obviously so much depends on how much leverage you have
  • 45. Training and Networking Seminar for Companies in the Natural & Specialty Industry Maggiore’s ! Sales & Marketing!
  • 46. Two-Day Seminar   Presented by: John Maggiore and Bob Burke   Tuesday May 17th and Wednesday May 18th   Where: Hilton Garden Inn, San Mateo, California   Day 1 – Sales Planning, Trade Promotions, Working with Distributors, Working with Brokers and more!   Day 2 – Trade Spending, Navigating Whole Foods, Understanding Syndicated Data, Social Marketing and more!   Special Guest Speakers include Tim Sperry (former Whole Foods buyer), Matt Koch (TurnTree Solutions) and others.   Come for either day or both days (special discount for attending both days).   For more information visit www.naturalconsulting.com or e-mail John Maggiore at john@maggsales.com
  • 47. Summary   Do your homework   Have a policy in place   Set the tone early…you are on top of this   Choose your fights   Act quickly with well documented response   Network with your peers
  • 48. Q&A   What haven’t we answered that you hoped we would cover?   What pressing questions do you have about your business that you would like to put out to the room?
  • 49. Distributor Marketing Programs & Advertising – UNFI example   Wholesale Catalogs   Monthly Specials Catalogs   Foodservice Advertising   Table Top Shows
  • 50. Wholesale Catalog Eastern Region Use catalog advertising to develop brand recognition and loyalty, and to educate retailers on your products key selling points.   Catalogs are the primary reference and ordering tool for Retailers –catalogs are spiral bound with scannable barcodes.   Color inserts and black & white ads are positioned with your product listing and bound into the book.   Organized by major category, then Brand. Major categories are: Bulk, Frozen, Perishable, Grocery, Personal Care and Supplements. Tab Pages separate major categories.   Published 3 times per year (Jan-Apr; May- Aug; Sep-Dec).   6 Editions printed for the Eastern Region, corresponding to United s Eastern Region Distribution Centers: Chesterfield/Dayville, New Oxford, Atlanta, Iowa, Greenwood, Sarasota.   2 Volumes printed for each publication:   Volume 1 (Bulk/Foodservice, Frozen, Perishable, Grocery)   Volume 2 (Personal Care, Supplements) For more information contact your United Natural Foods® Buyer
  • 51. Monthly Specials Catalog Eastern Region Focus Retailers attention on your promotions, displays and new product introductions with Monthly Specials Catalog Advertising.   The Monthly Specials Catalog is the Retailer s primary source of information about monthly promotions, new products, case stack deals and displays.   Got a good story to tell? Contact us to propose an article. Each month we publish several articles focusing on sustainable practices, fair trade and environmental initiatives.   Color inserts and black & white ads are positioned within and bound into the book. Introduce new items & educate retailers about your products and promotions.   Contains special sections for New Products, Case Stacks, Displays and monthly specials listings for each major category.   Printed on environmentally friendly 100% recycled newsprint with high post consumer waste component.   6 Editions published monthly for the Eastern Region: Chesterfield/Dayville, New Oxford, Atlanta, Iowa, Greenwood, Sarasota. For more information contact your United Natural Foods® Buyer
  • 52. Foodservice Advertising Eastern Region Reach the rapidly growing and influential foodservice market with Foodservice Pricelist advertising. As consumer demand for natural and organic items increases, United is working with foodservice professionals such as Sodexho and ARAMARK to meet the growing needs of this market segment.   Used by restaurants, cafes, convenience stores, schools and institutions providing meals, snacks, grab-and-go, etc.   Published monthly.   Flexible advertising programs help you build brand loyalty in this growing market.   Organized by Product Subcategory (such as Snack Bars, Cereal, Beverages, etc.) then by Brand.   The monthly pricelist includes all Bulk, Frozen, Perishable and Grocery items, with monthly specials where applicable.   Feature educational material and/or large batch recipes to promote usage of your products. For more information contact Valarie Rozokat at 1-603-256-3000 x42409
  • 53. Table Top Shows National Meet retailers and write orders at these cost-effective events! United s Table Top Shows provide an opportunity for you to showcase new items, build sales, promote seasonal items and meet Retail buyers face-to-face.   2008 Table Top Show Locations:   Jacksonville, FL   Denver, CO   Hawaii   Ledyard, CT (Foxwoods)   Northern California   Chicago, IL   Opportunity to network with a large number of Retailers at one time.   Shows are cost-effective compared to larger, multi-day shows.   Concise Show format.   Opportunity to generate large number of sales/ orders.   A great way to introduce new-to-UNF products to multiple customers. For more information contact Len Lynch at 1-603-256-3000 x42202
  • 54. Supplier of the Month National Builds brand recognition and increases sales by highlighting Suppliers as leaders in their category.   National, monthly program.   Three non-competing food suppliers (grocery, frozen and/or perishable) and four non- competing, non-food suppliers (general merchandise, personal care and/or supplements) featured each month.   Participation includes special promotion to Retailers and to United s sales and marketing teams.   Benefits include publication of your logo and selling points on the cover of the Monthly Specials Catalog, a full-page black & white advertisement in the front of the catalog and publication of your promotions.   Your participation is highlighted in the News You Can Use – United s internal publication for the sales and marketing teams.   Color posters are available for retailers. For more information contact Alana J. Mahdalik at 1-860-779-2800
  • 55. Truckload Deal National Volume sales and marketing program for top selling products encourages case stacking and price point driven promotions at retail.   National, monthly program.   Limited to six non-competing food suppliers (grocery, frozen and/or perishable) and four non-competing non-food suppliers (general merchandise, personal care and/or supplements) each month.   Full color case-stack/end-cap signage and shelf talkers are available to retailers to maximize program impact and effectiveness.   Benefits include publication of your logo and selling points on the cover of the Monthly Specials Catalog, a full-page black & white advertisement in the front of the catalog and publication of your promotions.   Your participation is highlighted in the News You Can Use – United s internal publication for the sales and marketing teams. For more information contact Alana J. Mahdalik at 1-860-779-2800
  • 56. Consumer Marketing & Advertising   Consumer Circular Program   Customized Marketing Program (CMP)   Healthy Clippings Program   Celebration Programs   Truck Advertising Program   Buying Club Advertising Program   Grocery Bag Advertising Program
  • 57. Consumer Circulars Eastern Region The United Natural Foods® Consumer Circular Programs – the Natural Connection and Healthy Advantage – drive sales for Suppliers and Retailers, providing significant lift and visibility to consumers. Promote your items and educate consumers through circular distribution in hundreds of retail locations throughout United s Eastern Region.   Regional, monthly program.   A proven track record of driving volume sales through to consumers!   Exceptional market penetration with our Independent Retailers – hundreds of participating retailers and over 1 million copies printed and distributed monthly!   Appealing new design features eye-catching graphics and enhanced product visibility.   Customized with the retailer s store logo.   Produced monthly with seasonal themes, products, articles and recipes. For more information contact your United Natural Foods® Buyer
  • 58. Customized Marketing Program (CMP) National The CMP is an exciting web-based tool for retailers. Drawing from a library of product images from participating suppliers, retailers can customize the Natural Connection circular and create handbills and store signage to promote products and educate consumers.   A low cost, pay-for-performance opportunity for Suppliers!   A great way for Suppliers to partner with leading independent natural product retailers for effective consumer promotions and new product launches!   Retailers work with your existing promotions.   Participating Suppliers receive valuable reports of advertising activity and list of participating Retailers.   Ongoing, national program. For more information contact Valarie Rozokat at 1-603-256-3000 x42409
  • 59. Healthy Clippings® Coupon Book National Coupons for a Natural Way of Life! Promote your items and build brand recognition with consumer coupons. This exciting addition to United Natural Foods® Marketing Programs has proven to be very successful for both suppliers and retailers, providing them an opportunity to promote top selling products by offering coupon-based discounts to consumers.   National, thematic/seasonal program, 5 issues/ year – Winter (Jan-Mar); Spring (Mar-Apr); Summer (Jun-Aug); Fall (Sept-Oct); Holiday (Nov-Dec).   Each coupon booklet includes a maximum of 44 value-savings coupons.   Booklets also include product/brand education and consumer information.   Published on 100% recycled paper!   Complimentary color posters and shelf talkers are available to retailers for increased program impact. For more information contact Alana J. Mahdalik at 1-860-779-2800
  • 60. Celebrations Program National The Supplement and Body Care Celebration programs offer you an unique opportunity to connect with and educate consumers about your products.   Current Editions:   Supplement Celebration – January & September Editions   Natural Body Care Celebration – May Edition   The Celebration booklets focus on consumer education in an attractive, educational booklet.   The Celebrations are a unique opportunity to provide in-depth information to help consumers understand, appreciate and adopt your products.   Complimentary poster and shelf talkers increase visibility and effectiveness at retail.   Booklets customized with store logos build loyal participation by Retailers. For more information contact Alana J. Mahdalik at 1-860-779-2800
  • 61. Truck Advertising Program National A billboard on wheels, a moving advertisement that can t be missed in target markets of your choosing. According to the American Trucking Association, the average truck-based advertisement generates over 10 million impressions per year.   Customize your campaign – select number of trailers, target market by United distribution center and time frame.   Graphics by 3M – large, bold design with limited usage of copy are highly effective. The United logo will be featured on a small portion of the ad.   High quality color graphics, full coverage on both sides of 48-foot trailers, top quality application.   Made to be long lasting and great looking! 5 year limited warranty – graphics guaranteed against color fading, peeling, chipping, cracking, loss of adhesion or shrinkage. For more information contact Alana J. Mahdalik at 1-860-779-2800
  • 62. Buying Club Advertising Program Eastern Region Advertise directly to over 40,000 end consumers as they shop the monthly Buying Club Pricelist. Increase sales, build your brand, educate consumers and draw attention to your items through this flexible and effective program.   Monthly, Eastern Region.   Contains all items, listing monthly specials as applicable.   Flexible program lets you mix and match ad types.   Got a good story to tell? Contact us to propose an article. Each month we publish several articles about our suppliers. For more information contact Valarie Rozokat at 1-603-256-3000 x42409
  • 63. Grocery Bag Advertising Program National An effective and affordable way to promote your brand and message to natural product consumers – where they shop! Promote your brand or advertise your products on these grocery bags used by independent retailers.   Annual program with national and regional options.   Limited to 1 ad per product category per bag – let it be yours!   Over 22,500,000 bags printed annually – low cost per impression.   3 varieties of bags available – Grocery, Vitamin and Product Bags. Each bag has a limited number of Advertising slots.   Annual contracts available – sign up and lock in your ad for an entire year! For more information contact Valarie Rozokat at 1-603-256-3000 x42409
  • 64. Speed to Market Program   Retailers are waiting for your new products!   Through the Speed to Market program you can get your new products placed in about 70 Eastern Region A & B accounts.   A accounts receive a free fill and B accounts get 50% off their first case.   These accounts have signed agreements to place the product for 3 months.   To qualify a product must be slotted in all 6 Eastern Region DC s and the ingredients must be clean.   Cost $750, plus an additional 30 day introductory discount.   Contact your Eastern Region Buyer for additional information.
  • 65. Supplier In-Site   Supplier In-Site (SIS) is designed for UNFI suppliers as a web based reporting tool, providing sku specific, store specific detail for UNFI s top 500 independent retailers (the Top 500 represent 60% of independent channel sales).   Reports are highly actionable, specific to a supplier s territories and sales reps.