Selling to Supermarkets -- any suggestions?

[expat]

This is a very open question and the market where I am in Ireland is much different than elsewhere (and I know most of the audience of this forum is in the U.S.) but if you have experience selling to supermarkets and chain-stores any 'best practice' suggestions you may have I'm sure, at least to a fair degree, would translate to this market.

I guess I should clarify because here, selling isn't the problem. Growing and intelligently managing the growth is the problem.

We're a family business. We roast, grind, bag and deliver the coffee. We do in-store tastings every Friday and Saturday. We're not there yet but in the foreseeable future we'll run out of bandwidth.

So we'll need to hire someone.

We'll need to buy a bigger vehicle for deliveries. Or do we hire that out? Do we get with a distribution network, or build our own?

I may need IT help. At some point I'm going to have to give up my Excel spreadsheets and move to some sort of accounting system. Which one?

And the stores, the chain stores talk about EDI (electronic data interchange). This is a computer system where by all my paperwork -- invoices, statements -- electronically stream into their computer (and hopefully I get paid). One chain has their own EDI portal. Using it is free. Another has a recommended EDI supplier that charges. I'm completely lost. Well, maybe not completely, but would love to hear from someone who has experience with this.

And the list goes on. Right now I deliver my bags of coffee loose. Soon I'll ship to a distribution warehouse and the bags of coffee will need to be boxed. So more overhead and packaging and logistics to think about. Not a problem, an "opportunity", right? :decaf:

Anyway, if any of you has successfully 'climbed this mountain' I'd love to hear from you and benefit from your experience.

 

[wmark]

My experience/ $0.02 cents in Canada

You need to sharpen your pencil.
If you want any semblance of quality, you will not make money. This is the point where you have to make that decision to roast for quality or go commercial.
Coffee is a commodity like anything else they sell.
If it is anything like North America, it costs you to be on the shelf. Here, you might also be required to maintain a minimum inventory on the shelf. Falling below that level means being fined.
If you are a one trick pony (how many skus do you have?) you will have a very hard time distributing and may need a middleman who will require more of any left over margins you might have had.

 

[expat]

Fortunately the market here is a lot less mercenary than it is in the U.S. I like to think it is like the U.S. 60 years ago.

I was in a business in the U.S. (Rug Doctor) where we dealt with the big supermarket chains and they were animals. So I know of what you speak.

But here no slotting fees, no green handshakes, no minimum inventories, no fines (I've been through that with Lowe's and Home Depot when I was in the door business -- the original HD owners were great, a handshake was all you needed, but after they brought in the bean counters it went to hell in a hand basked [whatever that means] - deliver a day early, or late, and here comes a $5,000 fine, in fact they'd fine you just to see if you'd dispute it or if they could get away with it . . . and they said we were their "partners". Right!).

The folks I've dealt with here in Ireland have been delightful. They ask: "What would you like to do? How many stores? How many SKUs?" They are genuinely glad that you're trying to start a business and they want to help.

That does bring up a question you alluded to -- I guess the more SKUs I can put on the shelf the more, in essence, times I get up to bat? Is that the idea? More options for buyers? Right now I've got 5 SKUs. Brand 1 and 2 ground and whole bean. That's four. Then a limited edition ground coffee. Five SKUs total. Or would you drop one of the whole beans and add another coffee, like a single origin Columbia that has nice taste complexity but gives me a bit better margin on price.

As to the middleman yes, there isn't a lot of margin and it could all disappear with an arrangement like that. That's why we're trying to grow slowly. That way we can strategically choose the best growth pattern with the least distribution overhead (diesel here is $8.20 gallon U.S. so what a delivery is costing is always on your mind). Right now there are stores I've chosen NOT to get in because while they may turn over good volume for me, driving there and back, because they are off the beaten path, would be a money loser (although I am willing to break even on those stores).

Anyway, that should give you more of the picture as to how things are over here so if you have additional commments or suggestions I'd love to hear them.