story by Kim Souza
ksouza@thecitywire.com
A broad range of retailers from Wal-Mart to True Value to Whole Foods are using creative ways to connect their buyers with new suppliers – with 18 companies in the Fort Smith and Northwest Arkansas areas hoping the creativity helps them “get on the shelf” at Wal-Mart.
Getting product on a retailer shelf is no easy feat, said Fran Free, owner of Fayetteville-based Oh Baby Foods.
She remembers loading up her car with her infant daughter and traveling to Little Rock to get face time with Whole Foods back in 2009. That was after she got nowhere using the supplier portal on the company’s website.
The face-time was all Free needed to get one foot in the door because her organic baby food was a natural fit for niche player Whole Foods, who was seeking out local suppliers.
FORAGER & FINANCE
She worked closely with a local forager for Whole Foods and eventually got the baby food products in the Little Rock and Tulsa stores. She said the forager was a new effort by Whole Foods at that time, to have someone on the ground seeking out potential suppliers.
Free is now in 80 stores after working with brokers in several regions. And come September, the Oh Baby brand will be sold in 150 additional Whole Food locations. She said it has taken lots of demos and promotions to get the broad exposure but Whole Foods also came through with additional financing to help fund her expansion as part of its local producer loan program.
The Whole Foods local producer loan program, lends money to small, local, independent producers to help them expand their businesses. The company just closed out a total $10 million in loans to small suppliers, like Free.
“It’s a great program. I just returned from a summit they had in Chicago and got to meet with all the national buyers in my category while I was there. There were sessions on topics like distribution, brokering and finance because they have a vested interest in your success,” Free said.
In addition to loans for small suppliers, and employing foragers to seek out local product, Whole Foods also holds supplier fairs in areas where they aim to put new stores. Whole Foods recently held a supplier fair in Tallahassee, Fla., ahead of the chain’s new store opening in that city this later this fall.
Jason Long, CEO of Shift Marketing Group in St. Louis, said the supplier fairs are beneficial to both small vendors and corporate buyers given Whole Foods’ goal to source local.
Whole Foods said during these fairs they go over the required protocol and the mandatory quality standards, relating to ethical sourcing and freshness requirements.
BUYING DAYS
Hardware giants True Value and Ace each use a similar strategy to connect their buyers with potential suppliers through an event they dub “buying days.” The retailers each held a “buying days” event in the past nine months.
Potential vendors could sign up to attend the “buying days” events if they made a donation to the chosen charity of each organization — $200 to the Ace Foundation or $500 to the United Way Fund toward True Value’s corporate giving goal.
In exchange for the charitable donation, potential suppliers got 20 minutes with an Ace Merchandiser or 30 minutes with a category buyer at True Value. The Ace event was held in June, while True Value’s “buying days” occurred in November.
Neither of these retailers provided additional information about those events when asked on Monday (August 12).
Long worked with a supplier who attended a “buying days” event. More than anything, he said the charitable contribution buys them a brief guaranteed meeting in front of a merchandiser, which is becoming more difficult to secure at some retailers.
“There was good back and forth dialogue after the meeting with Ace. But, Ace eventually said the category wasn't something they were going to make any changes to currently. It was a good experience overall even though we didn't get desired result. It’s often a marathon and not a sprint on sell-in,” Long said.
With recent layoffs at Lowe’s and a push from other retailers for more local sourcing, Long said buyers are being saddled with more product items and work than before, so getting a meeting can be a quite a challenge.
These efforts like “buying days,” supplier fairs or crowd-sourcing with Wal-Mart are interesting ways potential suppliers can get exposure for their products, he added.
But Long urges those potential suppliers who take advantage of these quirky gigs to be fully prepared when they get a buyer’s ear.
“It’s a mine field to navigate, one slip and they could fall to the bottom if they aren’t fully prepared for the retailer’s questions,” Long said.
GET ON THE SHELF
Wal-Mart recently launched its second installment of the “Get on the shelf” crowdsourcing contest which offers inventors and entrepreneurs the opportunity for broad exposure of their products.
“We received thousands of entries for our ‘Get on the Shelf’ contest, 39 of which came from Arkansas. Voting runs until early September, and we’ll choose up to 20 finalists for the next round,” said Wal-Mart spokesman Ravi Jariwala.
There are 14 entries from Northwest Arkansas and four from the Fort Smith area. (Link here for a a complete list of the Arkansas entries.)
Jariwala said each of the 20 finalists will be featured in an original web series. The public will again have an opportunity to vote for the finalists choosing up to 5 winners to be carried online at Walmart.com.
Of the winning products, the one that garners the highest number of pre-orders on Walmart.com will be crowned the grand prize winner.
Long said the Wal-Mart contest is interesting because it leverages technology with social crowd sourcing. He said the audience who votes online may not typically represent the core supercenter shopper.
In last year’s contest Wal-Mart said there were more than 5,000 entries. Humankind Water was the grand prize winner. Humankind Water eventually got its product in 200 stores.