Learn How to Sell Food Products to Walmart
If you want to become a Walmart vendor, your first step might be to speak with an expert. Erik Rosenstrauch, the President and CEO of FUEL Partnerships, knows all about selling food product to the giant Walmart. The company especially encourages women who create healthful foods.
Walmart is the Moby Dick of retailers and an amazing whale to capture. "When you hook that whale, your boat better be equipped to handle it. I see mistakes with companies that have a great product, land Walmart as an account, and then realize…how do I fulfill the orders!" Rosenstrauch says.
How Does FUEL Help?
As Rosenstrauch explains, "At FUEL, we build our client's business by creating exclusive programs at retailers to increase transactions…we focus on helping consumer brands drive sales at a retailer. We don't sell into a retailer, we create programming that comes to life in the retail environment. Research consistently shows that 75 percent of purchase decisions are made at the shelf. We help brands influence consumers to select your brand."
Here are six steps you should complete and master if you want to successfully sell to Walmart.
Develop Your Products to Be Relevant to Walmart Customers
Walmart loves to be the first to market new products that are relevant to its customers. Walmart's supplier page, "Get to Know Walmart," makes it clear what they want you to do:
"Compare your product or service to existing ones. Look at the types of products and services we sell and use. Does what you have to offer seem like a good fit? Would your product be appropriate on Walmart's shelves? Is your product or service the most innovative, best quality and at the lowest price?"
Rosenstrauch gives an example of a successful client. "Walmart is a brand-building retailer…they want new brands in store and not just those that focus on low cost." One of FUEL's clients, Sheets, represents a brand that delivers what Walmart wants. It's new, innovative, and it delivers a real consumer need. Sheets is a cross between a Listerine breath strip and a 5-hour energy drink, all in a convenient, edible strip. There's nothing else like it out there.
Make Sure Your Product Is Different, Innovative and Substantially Better
It's worth repeating—Walmart clearly states to new vendors: "Is your product or service the most innovative, best quality and at the lowest price?" You must present your product in one of two ways when you're pitching to the Walmart buyer:
- As something new: Your product should be very innovative because Walmart loves to be first to market.
- As something distinctly better: Think of this as a product line extension, taking an existing product and adding features and benefits that your competition doesn't share.
The rumor that "if Walmart sees that it is too expensive, they won't take it" simply isn't true. That said, Rosenstrauch advises, "If you can't do either of the above, you had better be cheaper! However, this can be 'a race to the bottom' because your competition can always go lower and then what do you do? Go even lower? This is probably not a smart place to go."
Early stage food entrepreneurs do not want to be in a price-sensitive category, so leave this arena to the big guys.
Understand Walmart's Key Initiatives for That Quarter or Year
Rosenstrauch identifies three key initiatives at Walmart that you should be aware of and include in your Walmart sales pitch:
- Social media: Walmart focuses on building a social connection with their customers. Their commitment to social marketing is best illustrated by their Facebook page "MyLocalWalmart." Be prepared to explain how you will engage in social media marketing. FUEL developed a unique program based on innovative use of social media, gamification, and a celebrity endorser, Pitbull.
- The Hispanic market: Walmart is very focused on the Hispanic market, so if you have a product that can be positioned to Hispanics, bring this into your program.
- Being green: Walmart is also very focused on sustainable and green products. Think about your packaging in terms of waste, shipping containers, and even your pallet configuration. Walmart expects vendors to have this all figured out before they make the call to the Walmart buyer.
Know Walmart's Buying Calendar and Promotional Cycles
Retailers do not buy all categories all year long. They have buying calendars where they frame a time range for considering and then authorizing new products on their shelves. Identify the best timeframes within which to sell your products. Only the smallest retailers will buy without a calendar.
So where do you get your hands on the Walmart buying calendar? Rosenstrauch says, "You will need help from a broker or a marketing agency such as FUEL Partnerships that specifically work with Walmart."
Almost every product has a seasonal component as well, so get to know what category your product fits into and the seasonality of that category. It's not always obvious.
FUEL's client Hydroxycut has a health and wellness product which you might not think has seasonality. In fact, the first quarter is their best promotional season because the New Year's resolutions of many consumers involve losing weight. Rosenstrauch explains, "When I'm building promotions for clients and these are for the first quarter of any given year, I must work eight to 10 months ahead of the product promotion launch date. If you miss your window of opportunity, you miss it for an entire year."
Develop a Shopper Marketing Program
It takes more than great-tasting food to get on the shelf. Shopper marketing encompasses all your support programs that capture the attention of the consumer. Remember, 75 percent of brand decisions happen at the shelf.
You've heard the question as to whether a tree makes noise if it falls in a forest where there's no one to hear it. Walmart wants to know that your innovative marketing message means your tree makes a sound. Rosenstrauch says, "Hydroxycut targets moms. Their brand positioning makes moms feel good about themselves. So their social media effort was a contest to win a vacation during school spring break. They achieved selling more product as well as making mom feel like a hero. Mom achieved her personal goals of losing weight and treating her family to a great vacation."
Work With Walmart's Merchants and Marketing Team
Merchants are the buyers and merchandisers. A merchant or buyer is responsible for what comes into the store and he'll be focusing on your price points, deliveries, and the unit turns weekly or monthly. His objective is to maximize sales and profit on the shelf.
As a food entrepreneur, you should combine merchant issues and marketing issues—the tactics that support your in-store program—in your retail sales pitch. One without the other will not get you onto Walmart shelves.