Jonathan Skaare - Brokers, Fractional Sales & the Real Mechanics of Retail Execution

welcome to shelf help today we're speaking with
founder and CEO at Scout CPG
fractional sales and channel support firm
really specifically built for better for you CPG brands
before launching Scout
Jonathan spent over 20 years in sales leadership roles
at some of the most well known brands in
in the space Kellogg's
Annie's Acme Provisions
Vital Farms just to name a few
and now
he's just really channeling all of that experience
to help other emerging brands
really scale smarter with
without really breaking the bank
so yeah really excited to get into it
Jonathan maybe just kind of first off
for the listeners
that aren't that familiar with Scout CPG
love to just kind of get a quick lay of the land
in terms of origin story and the why behind Scout CPG
course services and and what makes Scout different than
I just I don't know
let's just say a traditional broker as an example
or maybe sales agency and then um
if you just want to throw out
you know a
a um
the kind of
the types of brands you typically work with and
and where they are in their journey
and then we'll go from there
yeah great
and thanks for having me
I appreciate the opportunity to talk about Scout CBG
and the people that work with me are outstanding
and we couldn't be happier
with the brands that we work with today
Scout CBG you know
oftentimes businesses are built
before there's true intention
and understanding of what's happening in the market
and we sort of took a different approach after 20 ish
25 years ish experience now in CPG
from everything
from bagging groceries in a grocery store
to being part of some great acquisitions and some
well seemingly everything in between
working for giant billion dollar companies a year and
and pre revenue businesses
and one of the things that we found that we
we felt
is the biggest pain point for brands as they grow
is the financial investment
and the managing of expectations
to bring a product to market
and what I've found through my own experience
as well as the people that work with me here at Scout
is that brands as they come to market
may or may not have the right expectations
of what their business can and cannot do
whether that's driven by operations
whether that's financials
whether that's the support structure
whether that's the organization of the brand itself
and so there's lots of amazing
there's out there that come up with these amazing ideas
and they've got great branding
and they've hired great designers
but they might not have the price architecture correct
they may not know the route to market
they may not know how to work with distributors
and I think often people get advice that
you've got to have a broker
and I think that in some cases that's true
and in others it's not and so what I
what I found is the biggest gap
is actually understanding the overall business acumen
that is needed to actually bring a brand to CPG
and we build Scout CPG to help with just that
and so the stages at which we tend to work best with
we have some pre revenue
we have some that have been in market for a year or two
and sometimes five
with brands that may have some distribution
may have ADC may have a new leadership team
may have a different need to bring a market
to bring the product to market
in a way that is sensible
and not just fully scalable
and so often times brokers
the difference between us and brokers
is a handful of things
brokers are good at the right stage
there's lots of great people out there
there's lots of great companies
there's lots of regionals
there's lots of nationals
there's all kinds of great brokers that do great work
but you have to understand what their role is
their role is not to build your strategy
it's not to help you understand pricing
in some instances
they don't understand the cash flow of the business
and they don't understand the true
true work that takes behind building a real
ground up forecast
and actually helping you build a production model
as such and so
that typically comes with a sales leader
that you have in your organization
but unfortunately to get that level of experience
that tends to come with a pretty high price tag
and so and often times
they hire someone who maybe
doesn't understand part of it
as someone who came from big CPG
I made a switch from big CPG to
to a very small business and I will tell you firsthand
that struggle is hard
and the things that you don't know
you really don't know
and so we build Scout CBG with the brand in mind first
essentially saying what does the brand need
and so what we traditionally do
is run an assessment in partnership with the brand
to understand the job functions
and where some of the real hurdles are
whether that's in experience
whether that's understanding
how they bring something to be
it could be as simple as what do I do when I get a Po
how do I fill out this unifi paperwork
do I check the free fill box
like what are the elements of it
can I negotiate terms what are the dcs to get into
what are the next dcs to get into
and there's different people out there
doing different things to help brands
there are some master brokers out there
that may be quasi defractional
that help a lot of brands get into anchor accounts
there are traditional brokers that are helping you
at ground level regionally
there are national brands that want to scale you
maybe faster than you can
for a number of reasons
whether it's product availability
operational understanding
the cash flow that's actually needed to finance that
sort of a for scaling moment
and we try to help our brands understand
where is the point in which you can run
and so
we traditionally start with understanding operations
understanding their finances
understanding their cards build
understanding their price ladder to bring it to market
and then actually building a strategy
that they can afford to do
at a pace that they can afford to do it at
and so we built it with them in mind first
without Scout in mind so when you call us and say well
what can scout do for us I often say I
I don't know what you need yet
and so there's an array of services that we can provide
with you but it really starts with you
and understanding what your brand needs
and every brand is different
so the Assumption that I can just
hand over a capabilities deck
we say this is a great rate
and we get going I don't ever want to do that
we really want to have a discussion about what you need
as a brand
to help bring it to market at the right pace
for your category for your bandwidth
for your opportunity that's great
with the traditional broker model
for emerging CB yeah
I do say the broker model isn't broken
if you're the broker and
and what I mean by that is the expectations when
when you are the broker
they feel that they're articulating their services
and the cost for that service
in a meaningful and impactful
way right and so they don't feel that it's broken
brands often come in to the conversation
not truly understanding how to manage a broker
how to utilize them how to understand what they can do
and what they can't do
and so a lot of brands come to us and like oh
we've hired this broker it didn't work out
and we tend to ask them questions like
so what do your assets look like
what were the direction was there a scorecard
how did you communicate with them
how often did you communicate with them
and so
there's a different way to manage that conversation
and I think that a lot of brands come into CPG
with this grand expectation
that brokers are gonna solve all of your problems
and unfortunately that's not really their role
and so managing expectations for you as a brand
as well as
having a clear communication with the brokers
to what their role is is really the key
and that's often the driver for when people say
the broker model is broken
not really
I think that people just don't come to the table
understanding
exactly what each other is supposed to do
hand in hand totally
standard broker compensation structure
whether it's some mix of retainer
commission and maybe just
at least from your perspective or or
and or just what you hear
from other brands that you speak with
where you feel like maybe there's some misalignment
between the incentives that the broker has and
and what the brand actually needs
yeah first
I think the conversation starts with
you're both trying to run a business
and I think it needs to be grounded in that
and understanding that that's what it is
you can get emotional about the connectivity
but the reality is you're both running a business
and so both sides need to understand that
at hello and so if you can get past that point
understanding
what the compensation model for brokers is
is a wide array of options
yeah and it
you know it could be
in some instances you're great
a great regional broker in Northern California
and it's a relatively small retainer
and maybe it's and or commission
not that everybody understands how that gets funded
cause yeah
that it's retainer and or commission every month
some people believe you come off commission
you get on the commission
you stay on commission that isn't always the case
to help you have someone in the market
bring your product in some cases in the front door
there are other brokers
who give you a national agreement and
and sort of tend to do the same thing
that retainer is built to help cover their sort of
operating expenses people
their SGA on their own people
and understanding how many people they've got on salary
they need to cover those pieces
and then the commission may or may not benefit
different people this
everybody has a different bonus structure
every broker's different
and how they incentivize their people
which is fine that's their business
not mine but what it tends to do
is put you in a sort of Rolodexes of brands
for category views
and brands often don't understand what that means
and I can see and understand why
you're paying a broker a amount of money a month
and you are expecting them to work on your business at
or better than the rate in which you are paying them
that isn't always true
because there are busier times of the year
based on your category and your calendar
than there are others
and so there's ebbs and flows of workflow
in connectivity in communication
and what you're trying to accomplish
when you hire a broker
is to actually get into their book
so that you can utilize their relationship
to go talk to a retailer that may or may not be today
that may or may not be in two or three months
yeah be in six or nine months
and I think what often happens to brands is they
they don't ask the broker the question of
does my calendar what is reviewed
when is the right time to start with you
and so often times
people will sign up too early with brokers
to help them get into a market that isn't readily
available or reviewing the category
and so
there's a lot of wasted time and energy and money
which isn't the group's fault
and often times it's the brand's fault
and I think that's sort of where
like someone like Scout
CBG comes in we
we sort of build and scale with you
and we
we financially take incentives to sort of go with that
we we literally build a plan with you
based on where you're going
based on the timing
based on the urgency of the business
rather than hey
we're just gonna kind of put you in a book
and we're gonna bring you to a category review
and we're gonna get you a meeting
and they're very good at that
um
and so it's just a different approach
in terms of how brands actually view the urgency
now I'll say this
every brand and every early stage founder I've ever met
every day is urgent and every day is
is important and every day
we want to feel like we're making progress
and as as someone
who's been part of many of those early starts
I feel and empathize with people who
who look at it that way
you have to find a way to make progress every day
in fractional sales and
and as a broker that isn't always the case
now in some instances
people can have you know 50
100 sometimes 200 brands on their desk
across multiple categories and multiple attempts
and their primary function
is focused on the thing that's being reviewed today
and you can't knock them cause that's the way to do it
right that's important for the brand
and it's important for their efficiency
our our model of compensation
works slightly different than that
in terms of how our team is paid and incentivized
and how we actually build our financial relationship
with each brand where it isn't always a retainer
it isn't always a commission
sometimes it's a smaller retainer and a commission
sometimes it's a commission at a different rate
sometimes it's just a straight retainer
really varies by brand and I like to tell folks like
I don't know
that any two contracts here at Scout CPG are the same
yeah and that's intentional
because no two brands are the same
and no two brands have the same bank account
in the same category and the same velocity
there are things here
that sell it one unit a store a week
there are some things here
that sell it 10 units a store a week
there's a great divide between those
we have some brands that sell amazing
in the southwest region over 100 units a store a week
and then they're in the pack northwest
and they sell five right
and so there's a huge disconnect
and an Assumption made
that the business is gonna perform the same way
everywhere and I think you have to be aware of that
as you go into a relationship with a brand
to help them understand exactly what's needed
to make the pack northwest
maybe move quicker but then
to even tell the story of a brand
that's in the southwest that's actually doing amazing
yeah that makes total sense
that are actively trying to just figure out
at the stage that they're at
whether they need a fractional sales leader
fractional head sales
I think it's kind of what Scout CPG really is
versus bringing an in house full time GPO sales um
versus a traditional broker
or maybe it's a combination of all or some of these
how should they be kind of thinking about that decision
and what's gonna be right for them
yeah it's
that is a that is an intersection
that a lot of brands stumble upon
and don't have a clear understanding of what it is
we have brands here at Scout that have brokers
and we manage the brand as a fractional head of sales
and we manage all the brokers
we have brands that want to have brokers
and so we will act on the brand's behalf and
and actually go out and interview and negotiate
and try to find the best connection for them
understanding whether you should have a broker
whether you should have a fractional sales team
is sort of part of the assessment we do for you
there's no obligation to work with us long time um
long term I should say
we want to understand what's the right fit for you
maybe that's us maybe that's not
there are some categories
we don't have a lot of experience in
our business is built different that we don't
we don't actually hire people until we have brands
so you it
it is not often that you just come into the business
and we just say hey
we can get you on board in two weeks or 30 days
sometimes we want to find the right mix
sometimes
we have someone who has experience in that category
and sometimes we don't and so
helping brands understand
what is the need of their business today
and actually give them an honest
well tends to be my honest opinion on like
where you are in the stage of growth
and what you should use sometimes that's not us and
and you've heard me say this in the past
like we are not amazing at brokering businesses
and we are true fractional salespeople
we have some brokering relationships
they tend to be friends of friends or
or sometimes even personal friends of ours
that we're trying to help
at a pace that makes sense for them
but we're not great at it
we're not great at it cause we don't have 200 brands
and we don't have five or six brands in a category
and a category manager at pick
any retailer in the US
wants to talk to us about five brands in one meeting
and that's where brokers tend to shine best
they get your brand in a small environment
a one pager
and a quick two or three page deck in front of a buyer
they spend 10 minutes on it
they flip the page and they go to the next brand
we don't have that many brands in the same category
in fact we
we tend to have a non compete
so meaning if if you're our salsa company
we don't have another salsa company
we have a frozen entree business
and we aren't gonna sell any frozen entrees
beyond that business and so
we stay very loyal and dedicated
to the brands that we have partnerships with
and so that's just a unique understanding
of what brokers can do
and I think one of the things that brands tend to miss
and I think it's a struggle for a lot of brands
is a lot of the big brokerage houses
have competitive brands on their desk
we have a handful of them that we actually manage
and they have a competitive brand that's much
much bigger than us also on the same broker's desk
and understanding like what are the challenges there
and how to communicate that becomes a real a rope key
it's also really challenging for maybe
a founder LED business that might not understand
the intricacies of making both things work
and so
understanding all of those dynamics to help a brand say
hey maybe you wanna do this may
maybe you take this structure
and we do fractional sales
and then over time
you wanna bring your own salesperson in
and maybe we help you staff that too
um it's not about protecting our business
it doesn't start with us it starts with the brand
we always have to remind ourselves of that
we're here to help the brand succeed
and in their success should
so should ours but
we don't put ourselves first
in any of those conversations
running an assessment we're running one tomorrow
on a brand with a few people on our team
to actually help a brand understand what do they need
one of the things that I found
and the reason that we do that
I didn't always do it
and I owned a consulting business before
that was just me
and it was easier to understand what brands needed
when it was just me
cause it was either I could do it or I could not
and now there's a whole team of people
that's not the same case right
and so we didn't always run an assessment
we do today to help brands understand
where is the challenge in their business
and what's the right scope and agreement
that you should financially sign yourself up to
to bring your product to market
signing a national broker deal
if you only want to be in the state of Florida
is a bad idea right
signing a national deal when you can't actually scale
because your product can't scale
you don't have the packaging
you don't have the financing
you're going through a redesign
all the different things that are happening today
and you expect to happen the next three to five years
actually play into whether you can scale with a broker
or even with a fractional sales team
now we've taken a frozen entree business
blues on kitchen from zero cases
and built with Scott and Abby in the team
a very consistent flow of information
in a scaling Salesforce it started with me
and then it added we added Jen to our team
and then we added Luke to our team
and then we added Kathleen into our team
and we continue to add resources onto that business
as it scales to help it actually come to market
at the pace that it can go
and at the financial
financial investment that it can afford to do
based on how it's scaling
that's a very different model
than anything I've ever seen
and it's exactly what we intend to do
yeah um
you mentioned
you just mentioned how it's probably not a good idea if
you know it's small brand
going with a national broker
if they're just focused on
you know one specific area
and of a similar question
do you think it makes more sense
or it might be just situational
but does it make more sense to use multiple brokers
and that each one has their own specific um
specific thing greater than a specific retail group
as an example like
I know there's based out here in Minneapolis
I know at least of one broker that's
obviously a lot of them are former target employees
and they're really focused just on working with target
specifically like
does that also seem like it makes more sense um
than going with one general
one that focuses on everything
yeah I um
I say this a lot and I've said it for a long time
no fractional sales no broker is good everywhere
yeah doesn't exist
we have aspirations to be that
the reality is we're just not
and sure in
in my experience there is a weaker link in the chain
everywhere and everybody's business
and I think we're constantly trying to address that
and make it stronger
that's part of running your own business right
identify your weakness and try to
you know eliminate and maximize and improve that
understood that um
I personally like big retailer
specific brokers
who are specialties on those businesses
especially at early stage
but that my personal experience
I've seen it go a lot of different ways
but I tend to like that more
your example of target um
we have a group that we tend to work
with a little bit here more than other brands
x target buyer office across the street
you know looks out the window and is looking at like
there's a a lot to say about the connectivity to target
in that manner and I've worked with other ones
that have the same sort of piece
I feel the same way about Kroger
I feel the same way about Publix
where it gets a little bit more interesting
and the reason that I think that exists is there is a
there is a language there is a portal
there is a review calendar
there are there are hardships for a brand
if you didn't actually know how to do that
big brokers tend to have that
but people who work there
tend to understand how the building actually works
and so I I do like that in those big pieces
first and foremost if you have the scalability
but I think before you get to how do I call in target
and how do I call in Walmart
you have to ask yourself what store
what channel do you want to be in first
yeah and if you're thinking about hey
I wanna be in Northern California
in all of the independents and maybe some midsize
strong regional players
maybe your best bet there is a Norcal broker
who actually knows all those buyers by first name
and can essentially
walk in the front door at any moment in time
and maybe that's
maybe that's not the case for big broker
or maybe it is
and there's variability across every one of them right
yeah um
if you wanna be in the northeast in
you wanna start there well
you have to understand there's a
there's a lot of big chains
you know it's heavily
heavily saturated by Aldi banners and stop and shop
then there's Wakefern with all the buying groups
there's a number of more conventional retailers
in that market and there's some Whole Foods
but there's really no sprouts and there's moms
and that's a whole different game
and so you know how do you communicate with this
well it starts with which
which retailers which channel do you wanna be on
and who's gonna service that now
over time and this has happened to many
many brands regional brokers start and grow a business
and then as the business grows
it becomes I would say
focused on growth but also a little bit risk averse
they tend to make a change to a national broker
cause it's less points of contact
there's less variability like
there's efficiencies in communication
and being able to drive strategy across one company
instead of 10 but I
I really like if you have the ability
and you've got someone who can do it
you know
a patchwork of brokers early stage is a great idea
and there's some really really
really amazing regional brokers and some really really
really great retailer specific brokers
who can help you do the right thing
and have your intentions in mind
Costco is the same way there's a lot of great Costco
like Costco specific brokers out there
I met another one at Expo I never even met
and there's a whole family
dad has three kids and I couldn't believe it
I was like this is
this is actually a great group of people
they were wonderful
they knew exactly what they were talking about
and I never heard of them
so like I want to take that card cause I
there are brands that ask us for things all the time
totally
so I want to know that that's an option for people and
and where do they go and how do they do it
I have someone that calls on like our business today
he's wonderful
he reps a few other Scout brands as well in Costco
he's amazing we're very fortunate to know him
but sometimes there will be a conflict on his desk
with something else and so
it's good to just know
and be able to have those conversations
with the regional and the retailer
specific brokers to know what it is you need
and not just have them provide a service
that you may not understand how to work with
or even find value in yeah
there's a lot of reporting
people out talk about data
and how much of it do you need
and who has it
and I think big brokers tend to have some level of data
we at Scotchy we don't buy any
right if you are
if you're buying data we'll tell you how to do it
we'll work it navigate it
we'll help you understand what it is
we'll read it for you we'll use it to our advantage
we'll sell against it and utilize it
yeah but we don't buy any
and big brokers tend to
and so are you a brand that needs that
I don't know
are you a brand that wants a target specific broker
I don't know we just don't know
until we actually get in the leads with you
and understand what your business needs
let's talk about retail execution a bit
and you you
a month or two ago when we chatted
you said something to me that
that stuck with me and you said
a lot of lots of brands have really good ideas
but have really bad implementation
from your you know
20+ years selling into retail
now working with emerging brands
what does retail execution actually
actually look like
I know that can be a bit of a broad question
so I'll let you take it
however you feel like is the most helpful
sure um
every every brand's example of that is different
and I don't mean that to sound
my original name is not to sound negative
that brands don't know how to execute
but if you've
if you've come from tech and you come to CPG
it's a different world
if you were a lawyer and you come to CPG
it's a different world you have a great idea
but how you execute in CPG is specific to CPG
and there's lots of ways to do it right
and so building a strategy that makes sense
and that you can execute with the people you have
the resources you have the finances you have
is where execution tends to go wrong
I have found a handful of brands in my life
where they found themselves in a retailer
in every DC across the country
so they've got one person that's opened UNFI Rockland
and they've got another person that opened Khe Portland
and they've got someone who opened Khe Dallas
and someone who opened UNFI like
Hudson Valley
and there are these anchor accounts
they get it but
but they can't market across the whole country right
because they don't have the infrastructure to do that
so you did the first step
which is to get on shelf but how do you get off shelf
and that's part of the execution right
and so knowing when you can go far and wide
versus going a mile deep is
is actually
really critical to the true execution of the business
and there are struggles with distributors
you have a velocity by DC
by sq that you have to stay on or the distributor will
will sort of happily exit you out
because they're also running a business
and they need to be efficient
and so when you find yourself
with a bit of a shotgun approach
all across the country which for some brands works
let's be honest it works if you're funded to do so
and you have the resources
you can do that um
if you don't that's a big struggle
and what often happens is
brands will come to us and say
I'm in all these places
and I'm losing my shirt on freight
and we're doing this and we're doing that
and we're delivering but we're not on time
and we have all these lump fees
and we have all these things in the sales team
like got us in the broker got us in
or maybe even sometimes the
the old fractional salesperson got us in here
but now we don't know the category manager
we're not selling as well as we'd like
and we don't know which levers to pull
and so understanding that element of
there's a distributor who needs to make money
I think most people in the industry know that
the distributors don't make a whole lot of money
selling product to retailers
true
and so there's an idea that you need to support that
there's I think some
some fun and interesting ways to have real
honest conversations about that
but
executing doesn't just start with putting it on shelf
it's about having a real strategy
that starts here
and extends through with multiple checkpoints and
and a real need to monitor that business
unfortunately for some brands
they get on shelf and they forget about it
they move on to the next step and that's
that's terrifying
because you can easily find yourself off the shelf
and if you don't
talk to the category manager every once in a while
I'm not saying email them every week
in fact I'd strongly advise brands
not to email your buyers once a week
but to to find the right cadence of information
and be a value add that helps in your execution
I think that's a big struggle
that people find themselves in today
cause they get a little over their skis
and there's ways to manage it back
but understanding how to do that can be tricky
and if you've been part of early stage brands
there's price increases there's case back change
there's design changes there's flow through
there's markdown in certain retailers
there's all these things that sort of surprise you
if you're not understanding
what it takes to actually do a price change
and a pack range what are the
what's the timing on that
how does it flow does it create a new item code
does it not
where does that fit in your overall strategy
and sometimes you know
you may feel pressured to
to take that you might not be able to yeah
for a variety of reasons
and the distributor might have promotions in place
and you can't change it till that's over
and this you may have to cover the price difference
and all these different things
execution starts with strategy
and not the other way around
and I feel like we we often don't have a good strategy
for what the brand wants to do
in the order in which it can do it right yeah
into retailer actually having a clear plan in place
and not getting kicked off the shelf after a while
like what
what should the the first 90 days ish
look like from an execution standpoint
if the brand is doing things right
and kind of what should they be measuring
I mean velocity is king
I think everyone's always said the same thing
understanding what that is
and what the guard reels it around
your category specifically by retailer is
is significantly important
you need to know what you're supposed to be selling
are you expected to be a unique product
and therefore
your velocity expectations are not the highest of like
a private label skew
are you competing against a big brand
understanding velocity and what that expectation is
early stage yeah
and is it growing is
is step one
I think everyone will tell you the same thing but
but how do you do that right
and so coming from big CPG there let's
there's always been like the hey
let's put it on shelf for 30 days
let's not touch price there's
there's a strategy let's get it on for 30 days
let's make sure it's on shelf
let's make sure the resets actually done
retailers they have people
and people call in sick and so
sometimes those things don't happen according to plan
and I worked in a grocery store for a long time
so that that happens
that's real um
so maybe you don't
you want to get on the shelf on Tuesday
and maybe it doesn't get on the shelf till Thursday
you don't want to be on sale
if the product's not on the shelf
and there's lots of different retailers
that are using some sort of computerized assistant
ordering right
and so there's no baseline for your business
so if you go on sale
it doesn't know how to order for you
and so then you're sort of reliant on people in store
and there are regional retailers
who are excellent at that
and then there's larger retailers who are not
and so there's it just depends on the infrastructure
what they do generally
we say get on shelf for 30 days
promotion or demo
depending on what the strategy of the business is
by making a dip that's sort of like other dips
but maybe has a different variant
as a start you may want to focus on
getting it into people's mouths right
because
they may know that they're buying the same old dip
they've always bought
but you need to get them to buy yours
and price may not be enough
right because it's a high taste category
and then there's things like
even in commodity sometimes price can be a factor
so is that what drives the consumption in that category
and so you know
is it a dollar off is it $2 off
is it buy one get one free
is it buy one get one free
it depends on the category and the brand
so to say like
what is that but there should be some 96 months
9 months 12 month check in for like
how you're actually doing by retailer
so look at it now if you buy data
you're gonna probably buy it every month
you can buy it every week
I don't know why you would do that
but you can you can buy it every month
and you can check on those things
for the people that report
for the people that don't
sometimes it's easier just to ask the category manager
at the retailer
it's in their interest to sell more stuff
and so they want to do that
and so by having a clear understanding of their time
and their needs and maybe just simply shooting an email
hey see
we're using our distributor
he says we haven't really shipped a lot of cases
like what can we do better
how can we partner they're gonna have some ideas
like they want to sell more product
now there are giant retailers who may not answer you
right cause they've got thousands of brands
and thousands of people and they're a big ship
and they got 2,000 stores
and they may not have the time
to talk to you about your individual needs
and in those instances you might seen some
like a fractional sales and maybe even a broker
but knowing like where you're going
what you're starting I mean
if you're starting at Jimbo's in SoCal amazing
people love the stores
if you haven't had a sandwich in Jimbo's
go to the go to the deli
order a sandwich amazing
and I love everything about it
but it's a handful of stores
and you can get into them right
you can get in and see how it's going
and the people who work there are very communicative
Central Market here in Texas
same thing get into the store
see how it's selling talk to the people
educate them you know
do some demos get some coupons in people's hands
like drive some trial organically
and into a little bit of a grassroots movement
if you're in target that's not gonna happen
if you're in Wegmans
you're not doing a demo there either right
so the the way you do it
is really contingent on where you went on shelf
and how to actually understand what the guardrails are
for 90 day success yeah
on the topic of retailers
or how should they think
about when and how to make that jump from natural
specialty to conventional
and you know what signals tell you that
that a brand is ready to make that jump
yeah what a great question
and probably a hundred ways to answer it
um I'll tell you what my preferred path is to do that
um if you are a highly indexing natural channel product
you're in sprouts you're in Whole Foods
you know you're in mom's
you've probably figured out Natural Grocers
and maybe you're still working on NCG
cause it takes a little longer
and in front
you've got a really high indexing product there
will you survive in a albertsons
maybe maybe not
yeah I think you have to look at the price
architecture for what's there
and understand the brands and the pricing
are you gonna be two and three dollars more on shelf
that that may not work
it might that may not work
is there like mind your brands in that chain
so do you have four or five brands that you idolize
are they in there what I prefer to do is find a smaller
regional
more conventional indexing retailer and test it out
okay don't go big and sign with someone gigantic
find a good like regional
conventional facing retailer
who you can have real clear communication with
and hopefully has a buyer that wants to like
understand that you you may need to over invest here
because you don't know what you're doing
this may not be the greatest financial reward for you
short term
but it's gonna teach you a lot of life lessons
about what your brand needs to do
when it isn't in you know
in a high a retail with a higher basket ring
and people who are less conscious
about the price of things
when you get to those places
you know start small
test with a retailer
that has that person walking in the door
and don't put yourself in a predicament
where you're paying two three
sometimes four cases of store and slotting to
to figure out if it's gonna work
that's a long return on slotting
if any at all
if you're selling one or two units a store week
it's probably not paying out for the year
yeah maybe not in two years
depending on the category
that that's our preferred method
find the right retailer test the waters
understand if you need to change pricing
understand if you're ready to run digital coupons
are you ready to do in store theater
there's a lot of retail media now that is happening
more in conventional retailer than I've ever seen
I think there's people on the actual channel
doing it pretty well too
but the conventional retailers certainly has a
well traditionally a bigger footprint of store
and so they have an opportunity to leverage that
a little bit faster than other folks
and are you ready to do that
and can you invest there
and those marketing programs are very expensive
and can you afford to do that
and do you want to do it I always say
you know if you're a natural indexing product
do you want to be in the fuel program
where people buy this
this and this and save 10 cents on gas
those programs work incredibly well for a lot of brands
yeah incredibly
but they can be very expensive and
and do you want to be associated with that
that's what it takes to work there
and you're not willing to participate in it
is that the right place for you
right yeah
oh that's really helpful
what a that's a really dialed in
kind of a buyer presentation and meeting look like
and then on the flip side
what are some of the most common ways
you see brands really shooting themselves in the foot
during a buyer meeting okay two
there's two really two questions there
one a 30 page deck is never needed
if you have one and you want to send it to somebody
save yourself a lot of time and effort
you've got a 30 minute meeting
you can talk to about one page in one minute
and ever ask a question
five to six pages is generally enough
what I often find and there's a lot of
there's a number of people out there talking about this
in LinkedIn and all over social media
about what does it really take
understanding what the retailer is looking for
and how you fit into the category
should really be the start of what you're doing
now I say that
but if you're a brand no one's ever heard of
you need to
you need to put a stick in the ground and say
this is what my brand is this is why it exists
and this is what we want to become
and hopefully you've understood that
that's what the retailer also wants to do
or is willing to take a risk on that
because every facing matters
every brand matters
and they have to believe that you can do it
yeah but making sure that like
there's a page on the story
and you sort of get through that well
often times early stage entrepreneurs and founders will
will spend too much time on the backstory
and not enough time on the product fit
and why it makes sense
and you need to demonstrate that you
first of all if you've never presented to a retailer
you've never been in their store
that's a really bad starting place
so someone needs to like
actually have gone in the store and walk to set
and maybe talk to the store manager
and like
do a little bit of groundwork before you're just like
hey I'm pitching to moms and
and I've never been in a moms
like that's a bad idea
don't do that right right
um you've never been to Central Market
you don't know how busy it is
you don't know what it looks like
you don't know that they have an in house design team
in every store and they're doing
so if you've never seen that
and you don't know how they come to market
it's gonna be very hard for you to articulate
how to be successful and so understanding that
and then building your deck around how do I fit in
why is it incremental
what am I gonna bring to the table that's different
and making sure that's that's at the forefront of it
now there's two ways to build decks
you can do what some big CBG's do
and the first page is the ask
it works people are trained to do that
um the more traditional way
is to tell a little bit of a story
one page on your brand one page on like
maybe two about like
where the data is and what the white space is
some page on activation and a thank you
like four
five six pages is enough
with a ask at the back end
and if you're a new and emerging brand
and you don't have significant funding
to put in the first page I'm gonna do $1 million
I'm gonna pay you $400,000
and here's how I'm gonna do it
some brands can do that most brands can't
and so just understanding what you can actually do
and what they want to do and then I'll give you
like a sneaky little hint
there's MCB's there's Oi
and there's scans some retailers can take all three
some retailers don't
some retailers have minimum levels of investment
in one of those three buckets
and sometimes a combination of that
if you don't know that don't put it on the side
the worst thing you can do
is make an Assumption
about how they're gonna take your investment
and then a buyer and I've seen this happen
is like we
we don't do MCPS like
we only do scans this Oi
we're actually not gonna get it
so understanding those elements to
like how the retailer wants to engage with you is
I think is critical
and something we strongly advise to all of our clients
yeah totally
very helpful last question for you
and we're coming up on time
but I want to cover this one in
in terms of I think that between your trade spend
margins brokerage fees slotting
yeah brands just fine
growing retail distribution profitably or even
just break even in the early days is
is really difficult and I think at Scout
one of the things you do is
you kind of run up a pretty detailed financial model
for each account before brand sells into it
what does this look like
to helps kind of ensure that the
the numbers make sense yeah um
built out a necessity back when it was just me
and I had a handful of new brands
and I asked the question
are we gonna make any money here
and I I don't I
I think I was the only one in the room
asking that question I thought when I asked it
lots of people like yeah
are we gonna make any money
we build a customer we call it a customer planner
it probably could have a different name
and it could sound really cool
but that's what it's called
um we do that in advance of actually building a deck
and so what we want to do is capture your cogs
rate of velocity number of stores
any and all add fee TPR fees
we cover your cash discounts
we understand what the distributor fees are
any and all the things that are coming in
we capture whether or not we're shipping it
if it's picked up we understand landed costs
we understand retail margins to the retailer
depth of discount on the retailer
we actually get a bit of like promo
non promo percent of sales
to help guide whether or not
we're actually gonna be a sustainable business
long term we do that on A1
essentially a year to look to help you understand
as I would say we can make bad decisions
and by bad I mean financially unsound
if it's a gateway to something else
but we have to know yeah
we shouldn't make a decision
if we don't know what we're doing
and so if we're going to overinvest
because someone is like
three cases of soldering instead of one
or two cases instead of one
and there's a velocity measure
which is the biggest variable in a customer planner
I mean I always tell folks
like if you put in 1.1 and
and 1.2 10% difference
like you just called your business up pretty fast
without doing anything
besides changing a decimal point right
and that's incredibly impactful
so understanding what you're gonna do when you go in is
I think is the big key
can we make money in year one
what is our trade rate what is our gross
what is our net
what is our actual penny profit on this business
and we can build it
with or without your operating expense
and your s G a we can do a bunch of different things
for you to actually tell you
where does this go
and we actually have a pretty good pulse
on the top line so we've got a pretty good forecast
we've got a pretty good bottom line
and we know the things that we're expected to do
and then if we can afford to do those things
that sort of transcends
and transitions into a promotional plan
to support that retailer
what can happen and I would say for many brands
it's probably one out of five maybe
maybe sometimes two two out of five times
it's actually not sustainable
and so we don't submit because we won't sell that well
and we although love that store
we can't do it
it's just not a sustainable business in year one
we're not making money in year two
and none of us want to be out of business in year three
so when you start with the brand in mind
and you help them understand their investment level
it makes for a better relationship
I think long term and short term for everybody
yeah totally
what's the best place to follow along with you
you got so much so much great uh
insight into this world and then
what's the best place for people to follow along with
anything that that's going on with Scout as well
yeah I mean
LinkedIn obviously is there
and you can find me at Jonathan Scar
and then I'm I'm not a very
I don't I don't boast myself well on social media
I don't post a lot on Instagram or Facebook
or any of those things you can go to scoutdashcpg.com
check out our website that'll link you right to us
you can kind of
get a feel for how we're trying to modernize the CPG
fractional sales business and be a true partner first
that's probably the best way
I met almost every trade show
we as scout we do that for our clients
so we're not just at the show
we're behind the booth you've seen that yourself
yep to help people like to be
to be in we're in the trenches with our brands
you can always email me at Jonathan at scout
dash cpd dot com happily take calls
we give we give a lot of advice for free
right
and so part of what we do is give people an idea of
is this a good thing for you or not
and it's not about whether it's building our Scout
CBG business
we really just want the business to move forward
together and I honestly
want other founders to really be successful
and that's why we built it
not happily give people my time
we're pretty busy
but I like to talk to new people about new things
and new challenges and maybe we never work together
but I hope that you're successful all the same
totally that's great
that's a great way to close it
well appreciate John
isn't it great I think that's the pod
today we're speaking with Jonathan Scar
can you kind of walk through that kind of
for those founders who are listening
when a brand gets on shelf in
this is an awesome really appreciate the time

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