In part one of this blogpost, we spoke about our main business learning from the Covid-19 pandemic. The learning is that small companies are exposed to distribution risks from retailers and distributors, who can decide to discontinue their products. To mitigate this risk, small companies need to increase their control over getting their own products to their customers.
To answer the question of what small companies can do and how they can evolve, let us first walk you through the process of how a new product arrives on a shelf in your grocery store. Right at the beginning, it’s a tough chicken and egg game with distributors and retailers. Distributors will not carry your product, unless you have lots of stores buying your product. And stores don’t want to bring your new product in, unless you are already in distribution.
Even after you are in distribution, grocery managers (they are called buyers), are presented with thousands of products from hundreds of brands and they have to make tough choices with limited shelf space. The shelf-space often goes to the brand with the deepest pockets, one that offers the deepest and most frequent discounts and pays for the most advertisements.
You can do the best new product presentation, but at the end, the final decision about what products customers get to purchase on a store shelf is outside of your hands. No matter how good your product is, there is always a level of luck involved and again, the shelf-space often goes to the highest bidder, so to speak. It can take multiple presentations and years and years of trying, before a store says yes.
We are certainly not forsaking grocery stores, but there is no denying that it’s a game where the small companies are at an inherent disadvantage. If we create an amazing new product that we and you, our customers, are excited about, we have very little control over whether that product ever arrives on a grocery store shelf. That doesn’t seem right. As a small company, we realized we need that control to offer the products that you, our customers, want.
This insight let us explore a more direct way of getting our products to you — and that is e-commerce. Here, our control is much greater. We talk to you directly and there is only the delivery service between us. We can watch analytics, learn about our customers’ needs, have a two-way dialog and most importantly we have the power to act on those new learnings. In the end, this allows for much more collaboration with our customers and innovation as a result.
Any go-to-market strategy presents a set of inherent challenges and we’re certainly not saying online sales are the holy grail. But there is no denying that it’s a game smaller companies can play and play it well. The level of control to be able to put your feedback and our joint ideas to action quickly and directly, is incredibly empowering, energizing and just really feels like the right thing to do.
A great example is the recent privilege of hearing your feedback on the bake-at-home flour mix. We can take those suggestions, start working on a product, launch the product online even before it’s fully ready, test it, ask you more questions, adjust some more, and then fully launch online. There is nobody standing between us and together we can work as a community to create the best possible products.
We will certainly continue working with grocery stores, they are the lifeline of many communities and there are so many great people in the retail industry. We will continue seeking more grocery store partners with our goal to eventually be in as many stores as possible. We will proceed at a slower and more measured pace, mainly focusing on the right grocery stores which are supportive of smaller companies and are interested in a true partnership. Meanwhile, we will be placing increased focus and effort on our online store.
To begin that new direction, we have an ask we’d love to make of you. In online sales, customer reviews are perhaps the most important key to success. They’re the upper crust and the wholy grain! If you have a spare minute, would you help our business evolution with a quick product review? It’d mean the world to us and make a huge difference in creating even more healthy and happy campers! We thank you in advance and look forward to baking for you today and into tomorrow’s world!