• CPG MBA
  • Posts
  • Manufacturing & Retail Strategy

Manufacturing & Retail Strategy

ISSUE NO.29

Manufacturing & Retail Strategy

Welcome to the CPG Expert Series!

This week, we’re talking about manufacturing and retail strategy with Mark A. Samuel, founder and CEO of IWON Organics. Mark has founded ten different businesses and is currently in his 7th year of growing IWON, an organic, plant-based snacks brand.

Let’s get started.

You used a co-manufacturer for your first product at IWON. What are some things you’ve learned about how to effectively interact and vet co-manufacturers or co-packers?

“You know if you have a good fit [with a co-packer]. If pricing is aligned with what the going market is for your product, if the facility is clean, if the people working there are happy, communicate well, and answer your emails, if production starts somewhere around the times that they think it should, if they finalize product in the fashion that you expect them to, etc… All of these things that I just mentioned have to be within the pot.”

“Just keep in mind that the pot gets stirred around a lot when you're dealing with a co-acker because the reality is manufacturing sucks. It's a sucky business. There are a lot of moving parts on top of brand expectations.”

As a follow up to that, as a brand, what gives you peace about your relationship with a co-packer?

“If the quality is consistent. I think that's got to be the most important. Depending on what the products are, it’s really hard to nail consistency sometimes.”

“Take the example of what we do: we use an extruder with legumes. It gets finicky sometimes. But you need to ensure consistency because, in the end, that’s what the customers expect when they open a bag.”

How many SKUs are you guys selling right now?

“Well, we have a couple of sizes, so we have on-the-go individual packs and then our family size. And we're launching a new crisps product, which I'm flying out tonight to do, which is going to be amazing. So, in total, we've got 14 or 15 SKUs.”

You said the first one you launched with is no longer out there. How did you know when you had a SKU that was a winner that you could build around (versus one that isn’t really hitting the mark)?

“Honestly, when everybody tells me that it's amazing. That's the only way to do it. I wish I could say that it was built into our velocity story, but we don't really have one. And honestly, unless you’re Fritolay, like Cheetos or something, there usually isn’t a velocity story.”

By “velocity story,” Mark is talking about an amazing product that just sits there on its own, without promotion and at its current pricing, that sells many times more than everybody else. Apart from large outliers, these stories are rare.

That’s why for smaller companies, Mark suggests relying on consumers’ opinions.

“For IWON, we have our barbecue sticks, for instance. They’re an amazing product. They taste good, the texture is great, and the nutritional value is there. If I go to my kid’s soccer game, I'll have three people walk up to me to ask about them. That’s how you know.”

Let’s talk about retail strategy real quick. You launched in 2016 and have scaled up quickly. How did you get from where you were to where you are now?

“Distribution, distribution, distribution. It's a long journey. It takes a long time to get into specific stores, and it takes shorter times to get into others. And then, of course, you may have some specific type of product that just so happens to fit that particular retail's needs and your timing is right, or you may have a personal connection that will plug you in… Those things affect timing.”

“Some of these sales cycles are really long, especially if you're just some guy or gal who has a product and you're waiting on the resets and all that. It could take an entire year from the time that you're looking to get with the buyer.”

You mentioned resets. Mind elaborating on that?

“Take Whole Foods as an example. If you’re trying to get into Whole Foods nationally, I think our meetings are in January. And, it's for a September reset, right. That's a long time.”

Not keeping these timelines in mind can lead to big issues in planning, cash flow, and more.

“If you didn't get activated, which you find out basically in February or March, you have to wait all the way until next January to come around, and you aren't even in store until September of that year. That's like an 18-month cycle.”

Going national at Whole Foods is big. How do you get to these discussions in the first place?

“It took us four years or something like that to get activated in that. We got a regional. Sometimes you get what's called cut in, but it's usually on a regional scale for that. And we're lucky we got into a regional for Whole Foods to get our relationship started.”

Wow! There’s so much good information here. One last question: What resources would you recommend for CPG founders and entrepreneurs to help them on their business journey?

“The question should be, where does somebody get real information? Here's what you do. You call founders that are in the trenches, okay? Because most people know they can get a hold of me somehow, and I'm always willing to give a couple of minutes if I can. That's the best route, finding those that are right ahead of you. So if you just started, find somebody who just started like a year ago. If you do $2 million in business, find the person who's doing like 4 or $5 million. If you’re doing 5, find the person who’s doing 10.”

“That, to me, is the most valuable asset you have.”

Until next time,
— The CPG MBA Team

P.S. Was this email forwarded to you? Get your own dose of CPG knowledge next week by signing up right here.