How the Pandemic Changed Meetings – w/Special Guest David Biernbaum

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Welcome everybody, to another edition of CPG Insiders. I'm. My name is Mark Young and Justin Gerard is my co host and we're, we're looking at each other over zoom today. We're normally in the office together, but Justin is in sunny Detroit enjoying the beautiful weather in Michigan. And I'm down suffering through the weather.

And how many inches of snow are you going to get, Justin?

Oh, no, we, no, it's ice.

Oh.

My car right now and my car is literally ice. The whole thing is ice. I'm going to chisel my way in to get home.

So, yeah, and that, folks, that third voice you hear is my dear friend David Berenbaum. Let me tell you a little bit about David real quick. David and I have been friends for decades. He is one of the preeminent experts in consumer packaged goods, especially in the area of the world of master broker relationships. And I can tell you that David has forgotten more about distributing CPG products and most people in the industry actually know about CPG products. He and I have launched many products together and taken products in number one. David, you've worked with P and G. You've worked with all the big guys. And so we're going to do a series of shows with David. But today what we're going to do is we're going to talk about the pandemic. And when I say the pandemic, we're not going to talk about COVID 19 and we're not going to talk about, you know, vaccines. We're not getting into any of that. What we're talking about is how COVID 19 changed the landscape in consumer packaged goods. Because it has had a dramatic effect. And I don't mean just on the consumer. We're not talking about the consumer right now, which it has had a big effect on. We're talking about the effect that it has had on the retailers. How is Walmart, Target, Walgreens, cvs, Rite Aid, Kroger, Albertsons? How are they conducting business differently now because of this? How is ECRM different now? Because of this. So, David, welcome to the show. Let's start off in, let's start off at ground zero. It used to be pre pandemic, all the retailers would have an annual review. We'd meet them at ECRM or we'd meet them at meet at nacds. We would set an appointment, we would go meet them in person and we would present our product and we'd go through our pitchbook and then they'd go through a review period and Then we would, you know, fight our way onto the shelf. Those meetings aren't happening now, are they?

No, not in the same way. There are meetings. 70% of them are on Zoom or meetings on Microsoft or else the retailer's own systems or programs. It was like 95 to 100% in the peak of the pandemic. There are retailers now starting to see people again, but frankly, the companies that they're seeing are the very, very large ones, the very large partners. So most of them are on Zoom now or one of those type of programs. And there's a whole different way of doing business with retailers, and they have all new concerns and different opportunities and different worries. So.

And first off, let me say Zoom is a different vibe. Yeah, it's not the same. I mean, it's absolutely better to be on video than it is to be on a conference call.

Yes.

But it is not a substitute for sitting across a table from someone and being able to shake hands and being able to calibrate their body language and being able to see what the rest of the room is doing, what the rest of their body's doing, what the other people are thinking. You lose all of that.

You do, Mark. And so one of the things that, you know, I'm teaching my own clients, I mean, Zoom is a reality. We're not going to change that back anytime soon, maybe never. So the reality is we have to learn in practice on how to make the best of it, maybe even turn it a little bit to our advantage. And I think there's ways to do that if we want to play ball in this industry. So, you know, just some basics. You're basically going to present your brand or your item in the same logical sequence. You still need a deck, which you obviously can present on Zoom or meetings, there's still a logical order to present your brand. But some of the things that you need to know in advance, or at the very least in the first minute, is who is in the room with me? Because you might not be able to see them all, right? There might be people there that you see that you don't even know, who normally wouldn't be in these meetings. You also, as a courtesy and bring comfort to the retailer, you should tell them who's in your meeting and who might be not on camera, if that's to your advantage. You know, sometimes it is, sometimes it isn't. But there's some really common sense things that you should follow that you would not believe how many suppliers, manufacturers and companies aren't following. Since most of These meetings are generated from somebody's house or their office in the house. You know, really and truly find a place in your house where you can make it office. Like don't be sitting on your lazy boy, you know, in the living room.

With the kids running around and back.

Kids running around and certainly checking your.

Text messages while you're having a meeting.

I was going to mention that because you and I have had some meetings with some clients where, you know, the client like disappears, you know, only half with you. Yeah, like where, where do you go?

The other thing I want to suggest to people too is when you're presenting in person, let's say that your broker is sitting next to you and you're with the broker. It's easy for you and the broker to interact with each other and to work off of each other. So the broker is opening the meeting and now you're talking about the company. And the broker starts talking about the offer that we have and what kind of margin we're giving. And you're talking about the features of the product. You don't have that ability to calibrate the body language. So you need to rehearse your pitch ahead of time.

That's a great point.

You and your broker or whoever's in the room, you all need to know what your part is so that you're not stepping all over each other trying to give a presentation.

Well, definitely have a zoom meeting with the broker long before them. I would have two of them. One a couple of weeks in advance to prepare what you're going to present and then another one maybe the day before the meeting to plan who's going to be the main speaker. It's very frustrating for the other party when two or three people are talking at the same time. So think of it the same way, as if you're in somebody's office or in a conference room. You wouldn't all try to speak at the same time. Like you said, you would catch on to signals and say, oh, I better be quiet. So plan that ahead. Have the person that really has the most information that will be needed in order to get the retailers make a positive decision. Have that person be the speaker or have the person that has the most experience talking to retailers in the most background, learn the important points or have notes in front of him or her and let that person present. Then that person serves as the host and we'll bring the broker in at the appropriate times, or certainly the manufacturer, the client at the right times. But that makes the call go a lot Better now in terms of presenting samples and you know, visuals, most visuals you can present on Zoom. But as far as samples, it's not effective to just show the product or the line of products in front of the little tiny camera on the computer. I mean that just doesn't work at all because you can never see the whole thing unless you pull it far away. So send samples at the right time before the meeting ever happens. The right time is not three weeks in advance because then the buyer and his or her team has too much time to decide they don't want it.

Or just lose it.

Or just lose it. So the time to present, to send samples is to arrange so that they arrive, arrive, arrive about maybe two or three days before the.

So don't use the US mail, you UPS or you FedEx it so that you know it shows up.

Never use, you need it. Don't ever use the US Mail for anything.

Now, David, are we still, are we still talking 20 minute sharp meetings with most people?

Well, at ECRM they're 20 minute meetings still. ECRM now is having brick and mortar hotel meetings and probably most of the meetings, I think according to the ones that I've been doing, I'd say about 60 or 70% of them now are Zoom conferences. ECRM has their own Zoom, but most of them are virtual. They still have some that are at the hotels, but the virtual ones are still 20 minutes, just like the brick and mortar ones have always been. When you're doing an actual meeting with a retailer, aside from ECRM, 30 minutes is the typical amount. But one thing retailers have learned from the ECRM is, is that they really could get by with a 20 or 25 minute meeting. And in most cases that's really true. But sometimes you need a follow up meeting to that, especially if you have a lot of different things to present. But you should present. That's like a whole nother topic. Maybe we discussed another day, but how you prepare that 20 or 25 minutes, ECRM or otherwise.

Yeah, you need to prepare, you need to be able to do it in 20.

Absolutely.

You can always fill the extra 10 minutes if you get it, but you can't. But you can't unwind the clock if you find out you only have 20 and you plan a 30 minute meeting.

And you know what a lot of newcomers do at ECRM or when they finally get appointments that are by the broker or the master broker is they spend the whole 20 minutes on features and benefits. Yeah, and that isn't going to get the job done.

Now that's about, that's about two to three minutes of your meeting.

It is because the retailer is interested in the features and benefits, of course. But what they really want to know is if I put this product on my shelves or on my dot com, what are you going to do to make it move?

So, so let me give you an example here. I was in a meeting and Justin's heard me say this one. I won't say who the retailer is, but I was in a meeting with a broker. This was a product you and I were doing together. The buyer is staring at a laptop with a set of reading glasses and almost never looking up. And the broker is saying, you know, this is a great product and it works so well and yada yada. And she looks up over her glasses and she says to him, do you think people are coming in here telling me their product doesn't work?

Oh, I love it. That's a cliche from a buyer, but that is so true. So you need to fill up that 20 minutes with what other, other presenters aren't saying and that what they're not saying is how your product is going to be advertised when how budgets are kind of funny and presenting because everybody exaggerates them. I don't think there's any problem with quoting your ad budget based on what it would cost if you were working with some ad agency other than Jekyll and Hyde and you're paying the full price. I have no problem with presenting budgets in the list price.

But bottom line is they're going to ask you how are you going to bring new people in the doors of my store? That's what I want to hear.

This is great.

So you've got a new product, you got a patent, your product can do X. I get it. Now tell me how you're going to bring people into my store and tell me how you're not going to steal the money from my other products that I already have on the shelf.

I had for you. David was on this same topic. Now that we're in Zoom, right. We've talked about some of the limitations of Zoom or video. I'm assuming that their attention span is even shorter, so.

And distracted.

Yes. So are there any techniques or that you are seeing and what you're doing to say, okay, here's how you have to do this meeting different to keep their attention, to keep them engaged because they're doing it like this now.

Well, look at the, you know, every computer is different as far as where the camera is mine in talking to you happens to be on the very top. So instead of looking at the screen when you're speaking, look right into the camera just like you're on television. Because that's more like. Then they will see you talking to them the way they're used to talking to people. If you look at the screen itself, it comes across like you're looking down.

Now, the little trick to that is to get a little further away from your screen and you'll look, even if you look at the screen, you'll look like you're looking at the camera. If you kind of get a little bit away from the screen too.

Yeah. And then.

Or buy a good camera, buy a better camera than the one that comes.

On your laptop and use very effective visuals for a web type meeting. Rehearse that a thousand times because the worst thing that happens in using your 20 minutes is a technical problem or I can't find that slide, or you know, it's not showing up right. Go through every possible problem that could happen and prepare that in advance so that it's smooth.

You log on to the meeting in advance and make sure your technology is working for sure.

And you know, realistically, a lot of times, for all different reasons, and it might not be your fault, it might be their system. As great as ECRM is and they're the best organization in the industry, even their system at times just malfunctions. And you have to be prepared if that happens on how you're going to strategize to play that if it does cut you off or cut off the retailer, you need to be prepared when you get back on to say, it doesn't look like we're going to have our full meeting. So when can we reschedule an additional meeting? Because otherwise you just haven't had enough time. Visuals are great online just as they are in person. But of course online you're not necessarily going to see the other party when you're presenting them or you won't see them when they're presenting a visual. So if you can either cut the visual periodically and look right at the people in the room again, or if you can put the visual on the side somewhere and create your visuals knowing that you might be doing that. So you can't put a whole lot on any given slide because they won't be able to see it when you're in a conference room. You know, a lot of times we use a large screen in the conference room, but that's not going to be available. I mean, it would be great if it is. And that's another thing you should ask the retailer right in the beginning or preferably have the broker find out from the retailer's assistant or somebody what will be the setup for the retailer? Will they be looking maybe at a big screen as you present? That's possible. Will they be at home looking at a small laptop? That's even more possible. Just know as much information as you can about what you're walking into. The more you know, the more successful and effective you're going to make. The right plan for that meeting. And I can tell you that 95% of new companies and entrepreneurs don't do even one of the suggestions we just made. Not even one.

And by the way, don't spend your 20 minutes talking about your company either. The fact that you started as a, you know, poor southern child and you grew up in poverty and then you started making this in the backyard and you're still. Just save that for another day.

And don't say, I really need this business. I really need this order.

The other thing that, that I think people need to do is don't put up PowerPoint slide after slide filled with data and PowerPoint presentation. To me, if you have a lot of data that, that the buyer needs to get, go ahead and put it in the, in the PowerPoint slide and tell them up front, yes, when the meeting's over, I'll send you the digital copy of this, of this entire presentation so you have it. But for the time being, I don't want to bore you with who our company is and how we got here. It'll all be in the deck. Let me flip through those pages now. Let me get to what the product is we're presenting now. Let me tell you why you need this product. And you know what?

They don't, they don't care.

Of course, they don't exactly know. Your whole meeting, if you're putting this together, is, here's how I'm going to make you more money. And it doesn't answer that question. Don't spend time on it.

Now, David, I'm, I'm getting told from a lot of buyers or a lot of clients now that some of the smaller categories, that some of the buyers in the smaller categories are even deciding now to skip the annual review and do a, do it biannual, do a two year review. That's happening too.

That's happening. And actually in the Food Channel mostly, there's, there's starting to be no scheduled category review any year. It's just every now and then the category manager wants to see what else is out there and make some adjustments. Maybe 5% of their planogram, they send out some notes or they attend ecrm. So you've always got to be ready for those opportunities. Now, they're not going to fall in your lap because nobody's going to call you. I mean, if you have a good broker and a good master broker, you'll know way in advance of when they're going to look at the category because you're. They're constantly in contact with the retailer so they know, you know, what the retailer's got in mind and you know when they're probably going to review or how long they're going to put it off. But even if they're going to put it off, you still can find a way to make a presentation. Because at any given time now, and this is an advantage we have in, like I said, especially in food, at any given time, if a food retailer is told or presented or finds out that there's something they would really like to carry and have a lot of good reasons for it, they may put it in now, when it's not anywhere near the time they do a category review. What do you do with it?

What do you do with the HBC categories when you find out they're only going to. They're going to do a review in two years instead of one year?

Well, you have to. You can't accept that. You know, in your own mind, you have to accept that that's what the retailer thinks they're going to do. But you can't wait two years. So you have to plan strategies with your broker and master broker as how do we get some airtime way before two years? How do we get airtime this year or in the next six months? There are ways. The thing is, is that there's a lot of reasons now why they wait two years, but they really have nothing to do with why you can't present. We have so many problems in America right now that are affecting retail. The supply chain crisis is really a challenge to work around. One of the things retailers didn't used to worry about when they're looking at new products and new lines is they also want information now on your infrastructure. Yeah.

Should that be part of the presentation now we have to show how we have the ability to deliver now.

It has to be in here. Sometimes an opportunity that comes up, sometimes a product or brand that's already on the shelf can't ship. They just can't ship.

We've had that happen during the pandemic. We've had clients that have opened up doors because they could produce.

That's right.

When some big brands couldn't deliver.

Well, several, several years ago, when we had Zarby's, which is a children's cough syrup, I remember this Robitussin had dextromethorphan and in fact, almost all the brains did, and they were all recalled by the fda. So Zarby's, who, you know, would not have had much of a chance of getting distribution, at least not easily. We hit every retailer, like almost overnight. And they were.

That's what put them on the map was. Was. Yeah, recall.

And by the way, now they're owned by Church in Dwight and they sold it for about $750 million. So that worked out pretty well.

That's a nice payday.

It really is that. That's an example of a company that started literally at a kitchen table in Utah.

Now offline. When we were talking, David, you were talking about how the pandemic has changed the way that the retailers are looking at the small manufacturers versus the large manufacturers.

Yes.

So kind of tell people that whole story about the golden age of CPG that happened up until 2020.

Yeah, exactly. As I said it was. It was the most incredible, wonderful Disneyland ride that I've ever had since I've been in the business, which has been 45 years. And there was never an era like 2000, you know, 2016, until the pandemic.

2016 or 2006.

2016 is when 2016.

So we're talking about. So we're talking about like a four year window, five year window.

There was a. Yeah. And really if you go back to 2006, with the exception of 2008 and 2009 and 2010, that was a pretty good era, too. But the era that started in around 2016, and frankly, so much of it had to do with the added, the consumer attitudes, this consumer confidence we had going on in that four or five year period. The economy was fabulous. And all those things made for a perfect opportunity for companies to get in. As we all know, things aren't really like that right now. So there's challenges, you know, that you have to work around, just like we did in other eras in the past, only this one's a doozy. Think about it this way, too. Retailers live in the same world that you do, and they're concerned about rising interest rates and they're definitely concerned about inflation and the rate of inflation. And those are all, all the economic Ingredients are considered as part of how they have to change their business model. So right now. Oh, let me back up a second. In the golden age era, you know, a few years ago, retailers were looking for small companies to come in with innovation. They were gladly welcoming new partners, new companies, new brands. They saw all the advantages in that because the economy was doing so well, their business was so good, that what they really were focused on is how do we get most of those consumers to come into our stores to see something they haven't seen before. And it was just a wonderful ride. I couldn't wait to wake up every morning and go to work. During that whole era, I'm serious, all of my client companies were growing, even the brand new brands, all of them were doing well, very well. We were having double digit growth, you know, in, in some of my client companies, almost all of them.

And then Covid hit.

Yeah, then Covid hit. And some categories are actually have increased in business during COVID but retailers are a lot more aware now of risk. And risk is divided now into will the product sell? Will it move? Can I trust this company? Can they ship? Do they have the manufacturing and the operations ability to do business with us?

Let me address that risk for a minute. Part of what happened, part of what happened was no one anticipated they were going to close the country down for months on month.

They sure didn't know.

And so now the fear you have is what if it happens again? Because exactly now businesses large and small have come to the conclusion, I can't predict if this will happen again.

And I can't take the risk of dealing business with unknown brands or unknown companies because I don't know how they're going to handle it. And there's actually an advantage now for the companies that did do business with them during that shutdown because they have the experience now of dealing with that ridiculously unnecessary situation that we all had to deal with. Fortunately, that part of it is over. But, but the permanent shifts that happened, you know, now they have the customer pickup outside at almost every store. As a consumer, I love it, but as a marketer, I hate it.

Because we've really gotten into this idea that we can't, we, we're now uncomfortable with the future. Yeah, uncomfortable with the future because it's like, when's the next crazy thing going to happen and am I going to have to close stores down? Is Amazon going to continue to erode my business? Is will my, will my vendors not be able to fulfill? Are the trucking companies going to get off the road or fuel supplies going to happen. And all of a sudden there's no way to move semi trucks. This is, this is the panic that everybody's living.

All of that, which is exactly right, leads to going back, or I should say, to how you, how you're going to use that 20 minutes. Yeah.

And it leads, it leads all of these retailers back to the PNGs and the palm Olives, because we know they have scale, we know they own their own trucking businesses, we know they own their own manufacturing. Mitigation odds, yes. The odds that they're going to be able to deliver and withstand another disaster is much better. But I don't know that you have this capacity.

That's exactly right. And so it's just more of a challenge now and it's harder. And you know, they're like any other part of human life. They don't want to take the risk. I once had a cup of coffee with a buyer, I'll say it, at CVS. And he was the buyer for 19 years in the category we were working in. He retired during the pandemic, but in having a cup of coffee, I asked him how he's been able to survive almost 20 years in his position when otherwise there's such a high turn with category managers and buyers. And he said the most disheartening thing I've ever heard, but I learned so much from it. He said, david, it's because I never take a risk.

Because that's easier to keep your job. Yeah.

I've never been the number one category manager at cvs. I've never had the most profitable category of anybody here. I've never won any awards or plaques or medals for being a superstar. But I keep my job every single year because my category doesn't lose money. And the way that it doesn't lose money is I just do business with PNG and Colgate and, you know, Chad, producers. Yeah, all producers. They're not high margin producers for me, but they're consistent. And I'm never going to have an unexpected disaster or problem with those companies. So I'm just never going to lose money. I'll be fine.

I'll stay with the devil I know, not the devil I don't know.

Yeah. And all of them advertise all the time. I never have to worry about that. Any PNG brand is going to be advertised every hour of every day of every year. You know, with the small guys, I don't know can, you know, are they going to do that at all? Are they Smart enough to know that they have to invest in promotion and advertising in order to even get started.

Or will they. Or will they really do it? They came in and presented an ad campaign to me. But now, did they go and execute on it or was it just talk.

In your opinion, David? Because this is the conversation we have with every, every brand that we speak with. If you go into that meeting and you show them a plan, you better execute on that plan. Don't you dare show them some false plan to get you in and not do what you said.

And it has to be effective the minute that product hits the shelf. You cannot say, well, we'll get the product on the shelf and then we'll start planning our advertising. You're already dead in the water. Yeah, you might as well just call your competition and say, I just did you a big favor.

But. And that was. And one of my questions, too for you, David Sar, on that topic is, I guess, in your experience now, I guess, how are, are the buyers now becoming more educated on marketing and advertising? Are they learning more so you're not walking in there and you can't give them some snake oil? They know what you're talking about. Talking about is, Is that something you're experiencing?

Yeah. You know, some buyers are very smart. Some buyers are just average intelligence, and some aren't smart at all. But they're the minority. Big data has made every buyer in the country, if they choose to be a marketing genius. It's almost like it's taken all the mystery out of who's my consumer? So you better know who your consumer is. You better have your own data source to know who your consumer is or will be. It's not everybody. There's absolutely no product or brand where it's everybody. And so many entrepreneurs think that everybody.

Thinks who can use your product. Everybody wants my product. No, they don't.

Or they tell them how many people.

You know.

Like, my favorite is if you ever watch the show Shark Tank, which I love because I've been on both sides of that, and they'll say, well, 98 of everybody in America uses toothpaste. And that shows you the potential of our new toothpaste. No, it doesn't. No, it doesn't. If I can get 5% of that category, we're all millionaires. But no. Yeah, yeah, everybody does use toothpaste, but most people are not going to use yours.

So let me circle you back around innovation, huh? The big retailers, they're looking for innovation. They're looking for category expanders. So they're looking for products that will sell for a larger amount of money. So it's not about being a lower price, it's about being a premium product. About being able to increase the size of the ring for that category medium. To get somebody to say I'm going to skip the five dollar item and buy the ten dollars.

Yeah. Because they're looking to exp. Expand their categories.

Right.

As you said earlier Mark, the last thing they're interested in and the most ineffective thing you can say in that 20 minutes is that consumers prefer us to brand X. Yeah.

Especially if brand X is, is higher price than you or the same price as you. Because now if consumer Product X is $2 more than you, the buyer is going to say you're going to get all my pro, you're going to get all my customers to stop spending $12 and now spend 10 do.

Yeah.

Cool, thanks.

And I want to do that.

Why? First of all, I would say this to everybody who's listening. Don't be a commodity. Let the commodities belong to the real big, you know, multinationals. Just don't do it. Don't be a cheap or low price or lowest cost in the category. There's so many reasons for that. That would be a whole different podcast. But be a premium brand or at least on the premium side for the reason Mark just said that's the only way. One of the only ways you're going to expand the category is in dollars. You can also expand the category and being very innovative if you have determined that even with all your innovation there's somebody who's going to buy it or who wants it, but be both. Be innovative. And also if you're a premium priced item, one of the advantages right off the beginning is you're going to generate enough cash flow and money and profit to reinvest into building your brand. That's number one. Number two is you're going to represent the opportunity to expand a category in dollars and hopefully also an innovation. And number three, I mean you can't just have a high price item that's just like every other item on the shelf. But if you have a premium priced item, there is an instant perception by consumers right off the bat like that's expensive. But then they pick up the product, they look at your packaging, they look at your benefits and they go, oh, that's why it costs, that it's worth it. So that also gives the product a much better image if it's not a commodity. First of all, if you go out with a commodity You've got no chance. Every retailer right now, one of the changes since the pandemic is private label is twice as big as it was pre pandemic. That's not good news. But if you're a commodity item, I mean, you're competing with private label. If you're a premium item, you're not. You could care less what private label is doing. Or generics, it doesn't matter, because you're not really competing with them. There might, if you're real successful with your product. Yeah. There will be a day where CVS or Walgreens or Walmart or Target wants to have a private label of your brand. But that's not a bad problem to have either, because you're doing really well when it gets to that point where they want to private label a premium item. So you worry about that later. But it's. It's really a good thing that it got to that level, man.

We've gotten there with a lot of products.

We sure have. And, and it.

And it makes the retailer, to be honest with you, it turns a retailer into a frenemy because you have to have them, you need them, but they're also knocking you off.

And here's the beauty of it. They can't discontinue your brand labeling it, because they don't carry any. Unless you're Trader Joe's, they don't carry. Right. Yeah.

So they do have to keep you. And in many cases, they'll actually come to you first and see if you want to make the knockoff.

They will. Absolutely they will. And you know, that can be profitable and not compete with your own brand. So there's a. There's ways in this industry, even now, with all the challenges, this is still. The consumer products business is still the greatest industry, really, of all. Even fortunes.

Fortunes are made here, aren't they?

Probably more in this arena than any other. I mean, I've sat and thought about this for hours. I mean, Elon Musk is doing really well because he had the first electric car. Now he's got tons of competition. And now, you know, well, we won't go down that road. But in consumer products, you've got just loads of opportunity. And yet, even with that said, 95% of new brands and new items in small brands that are presented to retail either don't get accepted in the first place or they don't make it beyond a year. But if you do everything the right way, it will succeed. If you have the right product and you have the right advertising and the right marketing and the right brokers and the right master broker, you absolutely will succeed. And the reason is because so many others don't do it the right way. So, so you will stand out as the brand that makes it to the shelf. Now E Commerce is bigger than ever. They're all Amazon's, their biggest competitor and you have to learn. And I can teach this to you, Jekyll, and I can teach this to you, how to manage your Amazon business. Let's face it, no matter who you are, Amazon is going to take your product. So you're going to be there, but you have to manage that. You can't start selling your product to a whole bunch of unknown third parties who are going to end up competing with you on Amazon. You have to have full control of your business on Amazon.

You just, we become so dependent on Amazon. I mean, I literally. True story. I literally Woke up at 2 o' clock in the morning last night because I knew I needed something and I reached over and grabbed my phone and ordered on Amazon so I would have it by the end of today.

Yeah. And as a consumer, I mean, Amazon's fantastic. But as a consumer, if you go to a brand and there's like nine different options as to who to buy that brand from, it's frustrating for a consumer. You think automatically I'm going to overpay for this because I can't seem to identify the best value. I mean, oh, here's one that's the lowest price, but they're going to charge me, you know, $18 for shipping. And they're not prime. You just have to control your Amazon business. And when you could go to a retailer and tell them that I'm controlling my Amazon business and here's what I'm doing. I'm not letting third parties come in. I'm controlling the price points, I'm controlling the promotions. That retailer's got a thousand percent more confidence in you.

I'm defending my trade, my, my trade registry. I'm going after knockoffs.

Yeah.

Because people, if you're doing well on Amazon, people will knock off your product and going after stolen product because people will go to the store and steal your products and put it on Amazon.

It happens so often. You know, you turn on the news today and you hear about all these grab and go thieves and you know, thievery is the highest right now, it's ever been in our country's history.

We have a brand right now, David. I'll tell you who it is offline. But you and I have Worked on it together and it's a high priced topical and they've had $400,000 in products stolen from Walgreens.

You know, because the.

Product'S easy to steal and it's, and it ends up back on Amazon for sale.

And there's so many ways it can be stolen. It's not just stealing, you know, in the store. It's stolen out of the DCs, out of the warehouses. I, I'm, I'm not going to say that it could be internal. I wouldn't say something like.

But it shows up on Amazon for less than wholesale.

Exactly. I mean it used to be only ebay that that would happen, but now it happens on Amazon. So you just got to control every part of your business. You've got to control diverting. You even have to be careful about who you're sending lots of samples to. Because all I need are two samples of something in order to put it on Amazon. And you know that I don't need to have more than that, but I'll sell thousands of these things, you know, once I get rolling. So you have to control every part of your business and a retailer will not do business with you or have confidence in you if they don't think that you know how to control your business. Those are all factors that they look at before they really take in a new product or keep it, you know, realize too that a lot of items that do get in, get deleted and it's not always because sales are low. It could be for something we just discussed because you can't control your product. And so I'm not going to keep it on my shelf because I don't want to have stress over that because.

So last, last thing I want to cover with today before we wrap up and that is before the show we were talking about innovation, how they're looking for the big people to innovate. We all know from being in the industry that innovation at png, at PNG is now, now comes in strawberry or now comes in a, or now with our drip proof bottle.

Yeah, right.

I mean that's innovation there.

Yeah.

So real innovation comes from inventors.

It does.

So what you were saying was that a lot of small CPG companies today have really turned into incubators.

They are, that's what they should be.

And expand on that a little bit.

Well, right now the trend, as you said, you know, the retailers are looking to the large mainstay, you know, mass companies to do the innovating and they're not going to do it, they just don't do that. That's not what they do. They do line extensions. So it's really your opportunity to invent, get the distribution, get lots of distribution and build your brand. And then maybe is, it could be just three years or four or five years. The PNGs of the world are going to come to you because they need innovative products now. And even if you're doing at that point, you know, only 50 million or something, maybe even less than that. But if you have distribution already on an innovative product, they're going to be at your doorstep making offers to you that are way above what you even think is the value.

We had a 40 million dollar grossing client sell for $325 million last year.

Yeah. Now we all know that once Procter and Gamble or Church into White or Colgate, we all know that once they get your product in their hands, you know they've got zillions of advertising dollars. And so it really will grow to be a much larger brand than it is right now with you having it because you can't possibly build it to the level they can. And that's okay because you already got paid or launching that brand. So that really should be your objective in the very beginning. Whereas a few years ago I would have said well that's, that can happen. But PNG is only going to be interested if you're already doing 250 million. You're better off to build a brand yourself and make lots of money so.

You don't fall in love with your product.

Yeah, maybe you'll put it on the stock market or whatever, but now it's not that, that's, that has changed. And so play the game that you have the best chance to win. And right now that's your best chance. Build a brand really and truly. Don't even expect to make a whole lot of money, you know, in the first 18 months. That shouldn't be your objective. Your objective is to build the brand, build your brand equity and you will be well rewarded for that type of investment. It's better than any investment you can make on the stock market.

Oh my goodness, yes.

Or on in gold or anywhere else. Invest take a little, but it does.

Take a little long term thinking. You have to be willing to do a little sacrifice now and think three to five years out and it takes.

A lot of persistence.

Look, I was on a meeting, I was in a meeting last week with a fairly new brand and we even took a minute of the 20 minutes to tell the retailer that our objective is to build this brand, build distribution, build consumer demand, expand the category. And there's no secret retailer. In three years, we want to sell it to Procter and Gamble. And the retailer said, you guys are really smart.

Right.

And they liked it and they'll be.

Happy when it flips over to P and G. Because it's one relationship they have to manage.

Right.

That's what they want to happen. So transparency, you know, really works in your favor to. There's so many things to talk about along these lines. But just in summary of, you know, the post pandemic, most important things I think to remember is that communication has completely changed inside the retail headquarters, inside the stores even, and certainly the way consumers buy.

Yeah, a lot of buyers aren't back in the office five days a week.

No, they're not. In baby boomers, which I'm proud to be a member, they didn't used to really buy that much From Amazon or CVS.com or Target.com it was surprisingly low in pre pandemic. Now it's like four times higher than it was pre pandemic because they learned out of necessity during the pandemic, and especially when they were told they have to stay at home, they have the only way to get merchandise. So they learned how to do it. The next thing we talked about was web appointments with retailers and how critical it is to do that the right way. And then we talked about ecrm. Probably not as much or enough. We could do a whole separate podcast on that. ECRM is a golden opportunity. And yet I've observed this. In any given year, probably only about 5% of the companies that were there last year are. Are there again. Wow. But that's not ECRM's fault. No, it just means they didn't, they didn't really get the kind of help that they needed. I mean, ECRM will train you on how to use their software and, you know, they got some best practices and all that, but they're too busy.

Well, we've covered the math.

Yeah.

Doug, what was saying, Doug? Justin, do you remember what the math equation were that we covered? There's what, a hundred? And how many new units, new products introduced and how many are remaining?

Oh, gosh. Well, the math turned out that less than 5%, actually.

Yeah, we did the math on it, David, that there's, you know, 35, 35, 000 new products introduced every year and only about 150 of them survived.

Oh, absolutely. Not surprising at all.

I mean, it is phenomenal how big the, the, the drop off rate is of new products. And that includes, by the way folks, new products rolled out by P and G. They roll new products out every day that fail.

As Mark said, bubblegum flavor.

Yeah, absolutely. Well, David, this has been great. I hope you'll come back because we need to do some more topics with you.

I really enjoy it, folks.

If you want to learn how more about David, go to the Show Notes at CPG Insiders and we'll have links to David's social media where you'll be able to follow him because he's very active in social media and you can. Are you still doing the. The. The groups and the coffee talks?

Yeah, I am, but guess what? They're now on Zoom.

They're now on Zoom.

Yeah.

No surprise.

I used to bring everybody into St. Louis where I'm based and I used to buy all the coffee and get a real comfortable conference room. No, we do them now on Zoom and it works fine. And I was. We've got a really good record of our attendees surviving and thriving in the CPG business. If you've got the funding available to really invest in a brand, I promise you, and I'm sure that Mark and Justin will promise you as well, you can absolutely be a success and eventually make a lot of money.

As always, folks, if you have any questions for Justin or myself, you can reach out to us at CPG Insiders or Jekyll hydelabs.com or if you are topics that you want us to cover. And we're going to bring David back and I encourage you to go follow David on social media and get involved in his forums. David, awesome. Thanks for being with us. Thank you.

Pleasure to be there. And you guys didn't ask me to say this. You never do because you have so much integrity. But if you're listening out there, there's really only one advertising agency in the CPG industry for entrepreneurs and introductory and innovative brands as Jekyll and Hyde. And I can back that up with about 20 years of experience with them.

Well, I appreciate that, David. And folks, I want to tell you something. There are thousands of people listening to this show and I want to just personally thank you for it. We, we take that very seriously. We're not here just to try to self aggrandize or to self promote. I mean it's wonderful. We do get to meet people through here, but we love this industry and we love the people that are in it and we're here to try to bring value to it. And that's why I want you to feel comfortable that if you have questions, you can reach out and we're happy to answer them. That's it. We'll see you on the next episode of CPG Insiders. If you're looking to greatly increase sales on your CPG product, don't hesitate to contact us at Jekyll and Hyde Advertising and Marketing. By the way, the only advertising agency with a guaranteed result. Just go to jekyllhideagency.com or feel free to give us a call at 800542.

Sam.