In this episode of the Omni Talk Retail Spotlight Series Podcast, hosts Chris Walton and Anne Mezzenga dive into the world of private brands with special guests Brandon Warren and Bethany Davis of the Barcode Group.

Discover why private brands are crucial to retail growth, who’s winning the private label game, and how retailers like Costco, Walmart, and Target are adapting their strategies. Brandon and Bethany also share actionable advice for manufacturers and retailers looking to elevate their private label programs.

Key moments to look for:

• [00:00] Intro and overview of the Barcode Group
• [05:21] Why private brands are booming in retail
• [13:42] Comparing Costco, Walmart, and Target private label strategies
• [24:30] Challenges for manufacturers in adapting to private label growth
• [34:45] Winners, sleepers, and areas for improvement in private brands
• [39:55] Actionable advice for retailers and manufacturers

Don’t miss this insightful conversation full of expert takes and innovative ideas!

#privatelabel #retailstrategy #target #walmart #costco

Music by hooksounds.com

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This podcast uses the following third-party services for analysis:

Podcorn - https://podcorn.com/privacy

Anne Mazinga: 00:00:08

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Anne Mazinga: 00:00:20

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Anne Mazinga: 00:00:27

And today's podcast is just one of the many great podcasts you can find here from us at omnichalk Retail, alongside our Retail Daily Minute, which brings you a curated selection of the most important retail headlines every morning and our signature podcast, Retail Fast Five, that breaks down each week.

Anne Mazinga: 00:00:42

The top five headlines making waves in the world of omnichannel retailing that comes your way every Wednesday afternoon.

Anne Mazinga: 00:00:48

I'm one of your co hosts for today's interview, Anne Mazinga.

Chris Walton: 00:00:51

And I'm Chris Walton.

Anne Mazinga: 00:00:53

And Chris, you know, we've been hanging out in the same circles as our next guests for quite a while, but we finally today get the chance to interview them and share them with our Omnitalk retail audience.

Anne Mazinga: 00:01:07

So I could not be more excited, especially when we dive into the topic that we're going to tackle today.

Anne Mazinga: 00:01:13

We got slammed last week with Q3 earnings from the likes of Walmart, Target and others.

Anne Mazinga: 00:01:19

And one of the key differentiators, Chris, I'm wondering if you can guess this.

Anne Mazinga: 00:01:22

One of the key differentiators that many of those retailers talked about was this thing.

Anne Mazinga: 00:01:27

Do you have any idea what that could be?

Chris Walton: 00:01:30

I think, I think I know where you're going there, Ed.

Chris Walton: 00:01:32

I think I know where you're going.

Chris Walton: 00:01:33

For some it was wicked, but I think I know where you're going there and what is it.

Anne Mazinga: 00:01:36

Yes, we are going to talk today about private brands because all of those retailers that I mentioned are very into that as their growth strategy.

Brandon Warren: 00:01:45

So.

Anne Mazinga: 00:01:45

So it's with great pleasure that we introduce today's guest who will give us the ins and outs, the winners and the losers, and most importantly, the steps that retailers should be taking to develop their own private brand strategy from start to finish.

Anne Mazinga: 00:01:57

We have the Barcode Group's Chief Growth Officer, Brandon Warren, and President, Bethany Davis.

Anne Mazinga: 00:02:02

Brandon.

Anne Mazinga: 00:02:03

Bethany, welcome to the show.

Anne Mazinga: 00:02:06

Brandon, I've been so excited.

Anne Mazinga: 00:02:08

We've met a long time ago and we're finally here.

Anne Mazinga: 00:02:11

How excited are you to talk about private brands today?

Brandon Warren: 00:02:14

The moment has finally arrived.

Brandon Warren: 00:02:16

Thank you so much for having us.

Brandon Warren: 00:02:17

We're super excited to be here and share a little bit about the private brands world to your audience.

Brandon Warren: 00:02:21

So thanks so much for having us.

Brandon Warren: 00:02:23

Super excited for today.

Anne Mazinga: 00:02:25

Excellent.

Anne Mazinga: 00:02:26

And Bethany, welcome to you too.

Anne Mazinga: 00:02:29

I haven't known you quite as long, but in the time that I have known you and in preparation for this call, you blew me away.

Anne Mazinga: 00:02:36

There's a couple of points in this conversation where I think I'm going to totally geek out a little bit on some of the things that you said in that meeting.

Anne Mazinga: 00:02:42

So we're really excited to have you with us as well.

Anne Mazinga: 00:02:45

Thanks.

Bethany Davis: 00:02:45

I'm super excited to be on.

Bethany Davis: 00:02:46

It's a good time to be having this conversation, I feel like.

Bethany Davis: 00:02:49

So.

Chris Walton: 00:02:50

Yeah, it is, it is.

Chris Walton: 00:02:51

I'm loving this energy already.

Chris Walton: 00:02:52

And this is great.

Chris Walton: 00:02:53

This is great.

Chris Walton: 00:02:54

We got, we got it.

Chris Walton: 00:02:54

This is going to be a great interview.

Chris Walton: 00:02:55

I can tell.

Chris Walton: 00:02:56

We got a great, great group of people here.

Chris Walton: 00:02:57

So.

Chris Walton: 00:02:58

All right, Brandon, let's start with you.

Chris Walton: 00:02:59

So why don't, why don't you give the audience a little bit of background about your role at the Bar Barcode Group first and then, and the, and then the team that you, that you cover a lot in the retail landscape.

Chris Walton: 00:03:09

So what, what, what all does the Barcode Group do?

Chris Walton: 00:03:11

Let's just back up and start there.

Brandon Warren: 00:03:13

Yeah, we certainly do cover quite a bit.

Brandon Warren: 00:03:15

So again, I'm the chief growth officer here at the Barcode Group.

Brandon Warren: 00:03:18

I'm located in Bentonville, Arkansas.

Brandon Warren: 00:03:20

Been with the company about 11 years now, so been a little bit on this side for quite some time now.

Brandon Warren: 00:03:25

But the short answer is what the Barcode Group does.

Brandon Warren: 00:03:28

Listen, we're an omnichannel agency that really helps brands and manufacturers break into the retail space and succeed there.

Brandon Warren: 00:03:33

So we help suppliers not only get in, but really stay in and grow.

Brandon Warren: 00:03:37

And we do that through a lot of the back end operations, logistics, supply chain, as well as backed by a lot of our data, investments and consumer insights.

Brandon Warren: 00:03:44

And that's, that's the growth, growing portion of the business.

Brandon Warren: 00:03:46

So whether you're really just trying to get products on shelves at major retailers or just need guidance on kind of navigating the complexities of retail, we really got you covered.

Brandon Warren: 00:03:54

So we specialize in everything from crafting, go to market strategies to building partnerships with top retailers, really ultimately just setting your brand up for long term success.

Brandon Warren: 00:04:04

So you can kind of think of us as really your boots on the ground partner, the kind of extension of your team that happens to be located in the markets where these retailers really exist.

Brandon Warren: 00:04:12

So again, we're a full service agency supporting sales, operations, data, consumer insights, creative, all of it.

Brandon Warren: 00:04:18

We do it for both brick and mortar as well.

Brandon Warren: 00:04:20

As the digital side of things.

Brandon Warren: 00:04:22

So we touch a little bit of all of it is true omnichannel approach.

Brandon Warren: 00:04:25

We have offices in Bentonville, Minneapolis, Chicago, St.

Brandon Warren: 00:04:28

Louis and a team of a little over 185 people now located in about 25 states.

Brandon Warren: 00:04:33

So it's a pretty big team out there servicing a lot of these key retailers.

Chris Walton: 00:04:38

All right, so, so Bethany, you have, you have president in your title.

Chris Walton: 00:04:41

Tell us about your role too.

Bethany Davis: 00:04:43

Yeah, so I'm the president of our Walmart division here in Bentonville and also run our Barcode intelligence insights team.

Bethany Davis: 00:04:50

So I manage our Walmart strategy and then also lead our insights team that takes all of our data investments and turns them into actionable insights and then also executes our qual and quant research studies that we do for our suppliers and for our retailers.

Bethany Davis: 00:05:05

So can manage all that.

Chris Walton: 00:05:07

Wow.

Anne Mazinga: 00:05:09

Well, and Bethany, I want to get some of like dive into a little bit more some of those insights that you have uncovered with your extensive work with brands and retailers at the Barcode Group.

Anne Mazinga: 00:05:23

We talked about this at the beginning.

Anne Mazinga: 00:05:24

Private brands, they're a huge component to retailers growth strategies right now.

Anne Mazinga: 00:05:30

But can you just set the table for us a little bit like explain to our audience again what, what are, what are customers drawn to about private brands and why are retailers putting so many eggs in this basket?

Bethany Davis: 00:05:43

Yeah, absolutely.

Bethany Davis: 00:05:44

I think this is super fascinating and I have been reading a lot of data points behind this because I think there's some very specific things that are going on.

Bethany Davis: 00:05:54

It is really reminding me of E commerce during COVID Like you had the consumer behaviors that were already there, you had the basis of it, but then you send everyone home, you make it so they can't go outside.

Bethany Davis: 00:06:06

And then you see E commerce, shopping and adoption.

Bethany Davis: 00:06:10

Fast forward five to almost 10 years in some cases.

Bethany Davis: 00:06:14

And I see this same thing happening here where over the last 20 to 30 years you've got this massive evolution in how people are viewing store brands.

Bethany Davis: 00:06:25

So like think about when my parents shopped.

Bethany Davis: 00:06:27

It was true.

Bethany Davis: 00:06:28

Opp.

Bethany Davis: 00:06:29

Opening price point, get the lowest price point on the shelf that you can.

Bethany Davis: 00:06:34

But over the last, you know, KIRKLAND Signature, about 25 years old, 20 years, you've got Trader Joe's, you've got Target that come in with this.

Bethany Davis: 00:06:42

We're going to give you the best value on the best quality product.

Bethany Davis: 00:06:47

And so you have these like generation by generation now where this understanding of what own brand is has changed.

Bethany Davis: 00:06:56

And then you have Gen Z that's come in and they've amplified it even more so you know, they've got dupe culture now where they're not just accepting private brands, they're celebrating them as a smarter, savvier option and they understand the market a little bit better.

Bethany Davis: 00:07:11

So when you look at, I look at specifically, I was just reading this report from Mintel that was sharing by generation and by age what shoppers look for and own brands when they go into the store, do they specifically look for new items?

Bethany Davis: 00:07:26

You could see this boomer over 65 age demographic, less than 13% of the time are looking for new owned brands.

Bethany Davis: 00:07:33

For those under 25, it was over 34% were consistently looking for new own brand consumables and food items.

Bethany Davis: 00:07:41

That is a gigantic change in shift.

Bethany Davis: 00:07:44

And so you have this younger generation coming in who is thinks that this is the best way to save money.

Bethany Davis: 00:07:52

It makes you smarter, there's more fun.

Bethany Davis: 00:07:54

They've, they've grown up in a retail industry where there are fun owned brands out there.

Bethany Davis: 00:08:01

And you just see it exploding right now with the financial pressures that we're experiencing where it's now driving people to those brands for other reasons.

Bethany Davis: 00:08:09

But it's really just a catalyst for what I feel like was already being set up in the industry.

Chris Walton: 00:08:15

So.

Chris Walton: 00:08:15

So Bethany, is it, is it.

Chris Walton: 00:08:17

Are you seeing that change in the demographic solely because of the income dynamics, the macroeconomic pressures of that generation needing to save money?

Chris Walton: 00:08:24

Is that the majority of it or is there more to it?

Bethany Davis: 00:08:27

I think that's a piece of it.

Bethany Davis: 00:08:28

I mean, I think that you have these younger people that don't have the ability to go out and purchase at the same price points.

Bethany Davis: 00:08:35

Right.

Bethany Davis: 00:08:36

But I think more than that is that you have social Media, you have TikTok where they are really celebrating the good find and you have this wanting to go out and find the good find and they're being more excitement behind it.

Bethany Davis: 00:08:48

So like with Costco, Kirkland Signature, there's this very treasure hunt mindset to those brands.

Bethany Davis: 00:08:54

I think Target historically has done a good job of that, that treasure hunt mindset.

Bethany Davis: 00:08:59

And so it's more that they've grown up in that culture.

Chris Walton: 00:09:03

And pride too.

Bethany Davis: 00:09:04

Yes, the pride behind it.

Anne Mazinga: 00:09:07

Brandon, do you see other.

Anne Mazinga: 00:09:09

Do you see this like more the private brands being like more well loved or adopted at certain retailers over others?

Anne Mazinga: 00:09:18

Like Bethany mentioned Target being one.

Anne Mazinga: 00:09:20

But what is the experience like for you when you look at this across when you're examining multiple retailers?

Brandon Warren: 00:09:27

Yeah, I mean for me, obviously, look, Kirkland Signature is sort of the gold standard there in terms of what's happening with Private brands.

Brandon Warren: 00:09:35

Right.

Brandon Warren: 00:09:36

Really, they're okay.

Brandon Warren: 00:09:37

Yeah.

Brandon Warren: 00:09:38

I mean, listen, if you can take loyalty from golf balls to chicken, you're doing something right in private brands.

Brandon Warren: 00:09:44

Right.

Brandon Warren: 00:09:45

Let's be honest.

Chris Walton: 00:09:47

Well said.

Chris Walton: 00:09:48

Well said.

Brandon Warren: 00:09:50

So when I, when I think of it in that, in that capacity, look, I think, I think Costco is leading the pack there.

Brandon Warren: 00:09:55

But I want to go back one thing to talk about, you know.

Anne Mazinga: 00:09:58

Yeah.

Brandon Warren: 00:09:58

To Bethany's piece here on, you know, sort of why consumers or what they're drawn to and really why these consumers are putting so many eggs in their baskets.

Brandon Warren: 00:10:08

And I think one thing we'd be remiss to talk about sort of the control aspect of what's going on.

Brandon Warren: 00:10:13

And one of the things that I feel that addresses sort of the question of that is, you know, these retailers are putting a lot of their eggs in the private label basket and it all comes down to control.

Brandon Warren: 00:10:24

And what I mean by that, that's really their secret sauce.

Brandon Warren: 00:10:27

From research and development to the ability to dual source programs to spread out that and ensure stability of supply, to quality assurance and ultimately, look, profits.

Brandon Warren: 00:10:38

Right.

Brandon Warren: 00:10:38

Let's all be honest with each other.

Brandon Warren: 00:10:39

So they just have a much tighter grip from start to finish on the, on the final product that reaches shelves.

Brandon Warren: 00:10:45

And ultimately these retailers are kind of in control of their own destiny and really not relying upon brands to innovation anymore.

Brandon Warren: 00:10:52

So that's, that's part of the reason I feel like a lot of these retailers are getting super aggressive on the private brands front and doing things that they, bringing things more in house and doing things that they feel that is, makes them a little bit more in control of their own destiny there.

Anne Mazinga: 00:11:06

And Brandon, are you seeing.

Anne Mazinga: 00:11:08

You know, you just made me think of something like in theory, retailers know their customers better than anyone.

Anne Mazinga: 00:11:12

They're not getting data from Pepsi.

Anne Mazinga: 00:11:14

That's deciding like these are the flavors that you should be doing.

Anne Mazinga: 00:11:17

The retailers know, like these are the things that, that our consumers like in this region of the country.

Anne Mazinga: 00:11:23

How much does that play into this?

Brandon Warren: 00:11:26

Yeah, absolutely.

Brandon Warren: 00:11:27

I mean, they, again, they know flavor profiles by region.

Brandon Warren: 00:11:30

They know, you know, what products are appealing.

Brandon Warren: 00:11:33

And you know, in the Walmart world, they call it store of the community a lot.

Brandon Warren: 00:11:36

But they understand their shoppers.

Brandon Warren: 00:11:37

They know exactly what they're looking for in which markets and they're developing to.

Brandon Warren: 00:11:40

That they've got.

Brandon Warren: 00:11:41

Not only that, they're developing to the competitive landscape as well.

Brandon Warren: 00:11:44

Right.

Brandon Warren: 00:11:44

They're attacking.

Brandon Warren: 00:11:46

Certain retailers are putting out an offering now that competes across the entire retail landscape.

Brandon Warren: 00:11:51

So it's not just competing with the dollar stores in private label anymore.

Brandon Warren: 00:11:55

You're competing with the Trader Joe's and some of the other ones with their offerings there.

Brandon Warren: 00:11:59

So they know a lot more about their own shoppers.

Brandon Warren: 00:12:01

They are getting very strategic on how they compete and how they bring products to market that are going to, that are going to win pretty much against anybody.

Bethany Davis: 00:12:09

Would just add on to that though that I think with the workload of what they've taken on, they have a lot of data and insights, but I don't know that they always have the time to dig into that.

Bethany Davis: 00:12:20

So I think that's one thing that we've seen on the manufacturer side.

Bethany Davis: 00:12:23

They are expecting you to know the business from a group of people who have historically just made the product and shipped it.

Bethany Davis: 00:12:29

And so they expect you to know a lot more about that and what's going to work.

Bethany Davis: 00:12:33

So I think there's a lot of that data and insights work that's getting pushed on the manufacturer side though.

Brandon Warren: 00:12:38

Right?

Chris Walton: 00:12:39

Right.

Chris Walton: 00:12:39

Yeah.

Chris Walton: 00:12:39

But that is a skill set that the retail in theory could learn.

Chris Walton: 00:12:41

I mean, that's why I guess I love, that's why I love doing this show because it brings up epiphanies for me in the moment too as you guys are talking.

Chris Walton: 00:12:48

Because the other aspect of this too is the media and advertising landscape is changing to a very large degree right now.

Chris Walton: 00:12:55

And so that makes me actually think that private label brands will become even more important when you factor the media spend and the ad spend into the equation too.

Chris Walton: 00:13:03

And who has the data, you know, in the future going forward, that being the retailers and the retail media network.

Chris Walton: 00:13:08

So.

Chris Walton: 00:13:08

So yeah, really interesting when you start thinking about all the angles at play here that I've never thought about from a private label brand perspective.

Chris Walton: 00:13:14

So.

Brandon Warren: 00:13:15

Wow.

Brandon Warren: 00:13:15

Bring up another.

Brandon Warren: 00:13:16

Yeah, you bring up another good point though, Chris.

Brandon Warren: 00:13:18

In terms of media, the retailers that are winning are the ones that are really pushing their own private brands in a big way.

Brandon Warren: 00:13:24

You know, historically, you look back, it used to be just dead net costing, dead net pricing.

Brandon Warren: 00:13:28

Let's just put the cheapest product out there or not cheapest product, but you know what I mean, put the most affordable product out there for the customer or gu and compete.

Brandon Warren: 00:13:39

What they didn't do at the time was promote it very well.

Brandon Warren: 00:13:41

They didn't get out in front of it.

Brandon Warren: 00:13:42

There wasn't a lot of dollars reserved and the costing there to push it either on E Commerce or just in traditional end cap or promotional activities that were happening in the stores.

Brandon Warren: 00:13:52

So I think that shift is changing quite a bit on the retail landscape.

Brandon Warren: 00:13:56

When you look across all these brands, the retailers are realizing that there is a big profit grab in pushing their own private brands out there in a much more meaningful way.

Brandon Warren: 00:14:06

And so they're getting behind them a lot more.

Chris Walton: 00:14:08

Yeah.

Chris Walton: 00:14:08

And to Bethany's point too, with the rise of the social influencer and them playing a larger role too, there's people out there doing it for them at a very low cost or a very.

Chris Walton: 00:14:16

And they're very accessible too, because influencers are not hard to find.

Chris Walton: 00:14:19

There's just tons of them out there.

Chris Walton: 00:14:21

So.

Chris Walton: 00:14:22

Wow.

Chris Walton: 00:14:22

Wow.

Chris Walton: 00:14:23

Really great stuff.

Chris Walton: 00:14:23

All right, so let's shift gears a little bit.

Chris Walton: 00:14:26

So you know, Bethany, you mentioned it too.

Chris Walton: 00:14:28

Like the one question I always have whenever I talk to people about private label strategies, like, okay, what are you actually talking about?

Chris Walton: 00:14:33

Because there is, there's the opp, there's the differentiation play, there's all kinds of things in between.

Chris Walton: 00:14:38

Brandon, let's go to you first.

Chris Walton: 00:14:40

Like what do you, what, how do you, how would you kind of map out the landscape of how different retailers are approaching their private brand strategies?

Brandon Warren: 00:14:50

Yeah, yeah.

Brandon Warren: 00:14:50

So I'll start, let me just start with Walmart.

Brandon Warren: 00:14:52

I'll kick it off there and I'll tell you, okay, when you take a couple steps back, a really high level look, their overall strategy is to just expand their private label footprint and offer value focused products.

Brandon Warren: 00:15:02

Right at the end of the day, that's what they're trying to do.

Brandon Warren: 00:15:04

But they've been pretty vocal about aiming to keep private label brands priced low to really lessen the impact, impact of inflation on their customer.

Brandon Warren: 00:15:11

And I think that's really resonating with their customer in a big way.

Brandon Warren: 00:15:14

You can see, I mean, they're winning in grocery in a big way.

Brandon Warren: 00:15:17

And you can see that through the data where they're picking up quite a bit in terms of share gains.

Brandon Warren: 00:15:21

So again, they're focused on offering their shopper something that can compete no matter where he or she might be looking.

Brandon Warren: 00:15:26

And I think they're doing a good job of introducing new products that are really solving that equation.

Brandon Warren: 00:15:31

Now, when you look at Target at a high level, again, they're focused on exclusive to target items that are on trend but really affordable.

Brandon Warren: 00:15:38

And they're leveraging their own brand products really to attract and retain customers, primarily in some of their frequency categories, if you think about it like essentials and consumables.

Brandon Warren: 00:15:47

But you know, those categories have shown some growth out there despite some of the broader challenges.

Brandon Warren: 00:15:52

Let's be honest, we all know about it's in the news quite a bit lately.

Brandon Warren: 00:15:55

But listen, their ability to push new innovation is really what's working for them and they're doing a pretty good job there.

Brandon Warren: 00:16:01

Again, when it comes to Costco, we start thinking about they've had some recent shakeups in terms of their overall strategy and what they're doing with Kirkland Signature.

Brandon Warren: 00:16:09

Now, I'll tell you, they are still the goal gold standard for private brands.

Brandon Warren: 00:16:13

They absolutely stand for quality and value.

Brandon Warren: 00:16:15

But they have recently done some things that historically they haven't done.

Brandon Warren: 00:16:19

They've adjusted some of their pricing strategy to really allow them to capture some of that discretionary spendering spending by offering price reductions that are really resonating again with a cost conscious shopper.

Brandon Warren: 00:16:29

So I'll give an example of the chicken tenders program.

Brandon Warren: 00:16:32

I don't know if you guys saw that in the news, but they took some example.

Brandon Warren: 00:16:35

This is just one of the examples.

Brandon Warren: 00:16:36

They did it across several different items out there.

Brandon Warren: 00:16:38

But you know, they dropped the price of a chicken tender program by like 13%, but the pounds purchased increased by 21%.

Brandon Warren: 00:16:45

So that shows that demand was out there in terms of pricing and really going after that cost conscious shopper.

Brandon Warren: 00:16:52

Even though they're paying to shop there, they still need some relief and inflationary times.

Brandon Warren: 00:16:56

And I think that's the Kirkland Signature brand has given them that.

Brandon Warren: 00:16:59

Now with some of their, some of their adjustments to strategy.

Brandon Warren: 00:17:03

Now they're also going back to some things that we've heard a lot of in the Club Channel, which is what I consider the treasure hunt opportunity.

Brandon Warren: 00:17:10

They're across some categories with Kirkland Signature.

Brandon Warren: 00:17:13

They're, they're, they're putting a new focus and emphasis on the treasure hunt opportunity.

Brandon Warren: 00:17:18

And that's really just to draw some excitement and get members back engaged in the warehouses and really, you know, find that hit or miss item.

Brandon Warren: 00:17:25

They know they have to buy it then otherwise it's not going to be available to them and in six weeks.

Brandon Warren: 00:17:29

And so that's really creating a lot of buzz around the Kirkland Signature brand treasure hunt opportunities.

Brandon Warren: 00:17:34

And then the most recent kind of shift in strategy that we've been hearing a lot about is their incorporation of really Costco International into the equation.

Brandon Warren: 00:17:44

Now that's something fairly new.

Brandon Warren: 00:17:45

But, and I don't know if you want to call it an edict or not, it could be considered that, I guess.

Brandon Warren: 00:17:49

But the direction we've been hearing is that all new Kirkland Signature items that are developed now have to have a standard that they can cross international borders.

Brandon Warren: 00:17:57

So whether it be ingredient decks or whatever product qualifications go into it.

Brandon Warren: 00:18:01

They now have to expand across international lines.

Brandon Warren: 00:18:05

So it's going to put a lot of pressure on bringing the right items, the right innovation.

Brandon Warren: 00:18:09

Everybody knows Costco International is a large opportunity out there right now, but this new introduction of products that are going to cross borders is going to shake up things a little bit with that brand.

Brandon Warren: 00:18:20

So.

Chris Walton: 00:18:21

Well, so.

Chris Walton: 00:18:22

So, Brandon, so let me step back.

Chris Walton: 00:18:23

So then my question for you is like you just laid out three of the biggest retailers there are right in the US and which is a great way to break out their strategies.

Chris Walton: 00:18:32

Would you say that in review of those three, are their strategies more similar or dissimilar at when you step back from the whole thing?

Chris Walton: 00:18:39

Because it sounded like for the part to me that the strategy is actually very similar and there's just maybe slight tweaks to how they're executing it.

Chris Walton: 00:18:46

How would you sum that up?

Brandon Warren: 00:18:47

I think you're exactly right.

Brandon Warren: 00:18:49

Listen, I think everybody's focused on getting shoppers in the door with affordable products, right?

Brandon Warren: 00:18:52

At the end of the day, let's be honest, inflation's impacting everybody and everybody's trying to shift consumer, consumer shopping habits a little bit to win over that shopper.

Brandon Warren: 00:19:01

They are very similar in that aspect.

Brandon Warren: 00:19:03

What I will say though, is it if we're going to address it one by one, private label strategy as a whole is to do that.

Brandon Warren: 00:19:10

But when you see there's certain pieces of the store, let's take Target, for instance, I think they're doing really a really good job of putting unique and innovative items within the grocery segment.

Brandon Warren: 00:19:21

Now, when you look at the general merchandise segment of that, of that business, I struggle a little bit to understand kind of what they're doing there, because I think they are.

Brandon Warren: 00:19:30

I think there's been, you know, there's some rumors of quality degradation where when you start looking at some of the things that are happening across the home department at the expense of profitability.

Brandon Warren: 00:19:38

So they're trying to focus on really winning through profit as opposed to what they're known for, which is great quality value products out there.

Brandon Warren: 00:19:47

So there is a little bit of a back and forth there that I think.

Brandon Warren: 00:19:50

But at the end of the day, look, you're right.

Brandon Warren: 00:19:53

There's some very overarching similarities that everybody's trying to win over this new shopper in an inflationary environment and do what's right to adjust the shopper habits and win their fair share.

Anne Mazinga: 00:20:03

Well, Brandon, I want to ask you just one more question.

Anne Mazinga: 00:20:06

And when we're on the topic of Target, one thing that we saw them do within the last year or so is introducing even lower private brand, like Deal Worthy.

Anne Mazinga: 00:20:15

I think it's called Deal Worthy.

Anne Mazinga: 00:20:16

In addition to their up and up brand, especially in some of the general merchandise categories that you're talking about.

Anne Mazinga: 00:20:21

Is that like, explain that strategy to me and kind of what your thoughts are.

Anne Mazinga: 00:20:26

And are we seeing other retailers doing this?

Brandon Warren: 00:20:30

Yes, I think, look, again, they're going after that Walmart shopper, right?

Brandon Warren: 00:20:34

I think in a lot of ways.

Brandon Warren: 00:20:36

And being able to compete from that aspect.

Brandon Warren: 00:20:38

Again, it goes back to the overarching macroeconomic things that I see happening out there.

Brandon Warren: 00:20:43

Discretionary spending has been cut back in a lot of areas, a lot of households.

Brandon Warren: 00:20:47

And so they're trying to bring products to the forefront that will allow their customers to feel more comfortable shopping their aisles and find products that they can afford.

Brandon Warren: 00:20:57

At the end of the day, I think Target, I think they're just trying to figure out they've got a lot of different consumers in their store.

Brandon Warren: 00:21:04

But I'll tell you, I think the Costco shopper and the Target shopper are the same person.

Brandon Warren: 00:21:08

Right.

Brandon Warren: 00:21:08

So I think they've got a lot to think about in terms of how do they compete with Kirkland Signature, who's offering such deep discounts in terms of retails and affordable products and all that kind of stuff.

Brandon Warren: 00:21:20

So they've got to figure out some things in terms of who they want to be, what they want to stand for and in what categories.

Brandon Warren: 00:21:27

Right?

Chris Walton: 00:21:29

Yeah.

Chris Walton: 00:21:30

The other thing, Bethy, I'm curious to get your take on this is as Brandon, you're describing it, like, what is the impact on the supplier, the manufacturing community, as they're thinking through, like, all the different strategies that are at play here across the retailers.

Chris Walton: 00:21:41

What color can you add there?

Bethany Davis: 00:21:43

There is a lot that I think that goes into that because we have suppliers that are great.

Bethany Davis: 00:21:49

Costco, private label suppliers that struggle when they come to Walmart or suppliers that are great at Walmart, and it doesn't translate to Target.

Bethany Davis: 00:21:57

So I do think there are some things there that are challenging for the supplier community.

Bethany Davis: 00:22:02

On that side of things.

Bethany Davis: 00:22:03

I think with Target, they're so focused, you have to be very adaptable.

Bethany Davis: 00:22:08

You know, if they want a lilac zipper instead of a plum zipper, you gotta make that change, Right?

Bethany Davis: 00:22:13

And.

Bethany Davis: 00:22:13

But I think they're making them themselves work harder too, because they bid out some of these programs that, like, does body lotion really need to be bid out every single year?

Bethany Davis: 00:22:24

So for the supplier, they have to keep up with that constant, ever changing cycle.

Bethany Davis: 00:22:28

Which in some trend categories totally makes sense.

Bethany Davis: 00:22:31

But I feel like in other categories makes it very difficult for them to be bidding out programs.

Bethany Davis: 00:22:35

They can't amortize the packaging costs and some of the program costs over a longer period of time, which they can at Walmart and at Costco.

Bethany Davis: 00:22:45

So I think that is, that is an issue with Costco.

Bethany Davis: 00:22:49

Man, they are ride or die with their suppliers.

Bethany Davis: 00:22:53

Like you have to work yourself out of the job if once you have that at Costco.

Bethany Davis: 00:22:57

And their institutional memory is so strong there.

Bethany Davis: 00:23:01

And I think that's a huge positive with Walmart.

Bethany Davis: 00:23:05

They almost want you to bring the insights to them and so they lean on their supplier partners a little bit more.

Bethany Davis: 00:23:11

Whereas Costco and Target are going to tell you here's, here's what our store is going to look like and this is what we want.

Bethany Davis: 00:23:16

Walmart's going to be a little more collaborative of like what's working in the industry.

Bethany Davis: 00:23:20

And so that pivot is difficult sometimes for suppliers to make.

Bethany Davis: 00:23:24

So there's just different pieces.

Bethany Davis: 00:23:27

You know, Costco and Target move very slow.

Bethany Davis: 00:23:30

That's.

Bethany Davis: 00:23:30

You have to get everyone aligned in those organizations and that's a lot of people to get on the same page with one sku.

Bethany Davis: 00:23:37

So you have to be able to, I think be very transparent.

Bethany Davis: 00:23:40

You have to be able to customize with them.

Bethany Davis: 00:23:43

You have to be able to wait and get everyone's alignment with Walmart.

Bethany Davis: 00:23:46

It's more do you have the insights?

Bethany Davis: 00:23:48

How quickly can you move and what can you bring to the table from a knowledge and insights perspective?

Bethany Davis: 00:23:53

So they all have their different ways of approaching it that definitely impact the manufacturer a lot and how they approach these programs when they're bidding them out.

Chris Walton: 00:24:03

That's.

Chris Walton: 00:24:04

This is fascinating because the other thing you get me thinking about there is like there's been also a trend which we haven't talked about yet in this podcast.

Chris Walton: 00:24:10

There's also been a trend of re platforming or rebranding the private brands too, just with a new label and everything.

Chris Walton: 00:24:17

And so that's got to be difficult for the suppliers and that's got to be more costly.

Chris Walton: 00:24:20

And you can only go the.

Chris Walton: 00:24:22

My big takeaway from what you just said too is you can only go to the well on that strategy so often or to be going to become more costly over time.

Chris Walton: 00:24:28

What are you, what are your thoughts there, Bethany?

Bethany Davis: 00:24:31

Yeah, I wonder a little bit.

Bethany Davis: 00:24:32

With Target, they have over 45 private label brands to your point, they keep adding them in and I Wonder if there isn't a little bit of a degradation and understanding from the consumer and from the guest on what each of these brands mean and what they bring to the table.

Bethany Davis: 00:24:46

So I get a little bit concerned about that with them and with Walmart on better Goods.

Bethany Davis: 00:24:51

A little bit.

Bethany Davis: 00:24:52

I get concerned to your point too about are the brands that they no longer have, like, are they missing out on the, on the marketing and the customers and the guests that these brands are in knowledge that these brands are driving to the shelf, are they going to start missing out on that?

Bethany Davis: 00:25:11

So I think about that quite a bit with Walmart on better Goods.

Bethany Davis: 00:25:18

I think they're starting to bring a different, they're filling the need of a different consumer.

Bethany Davis: 00:25:22

They've got that, that more higher income consumer now in their aisles and in their stores and so I think they're doing a good job of keeping that.

Bethany Davis: 00:25:31

But it's the consistency and strategy that I wonder about with these retailers.

Bethany Davis: 00:25:38

You know, Sam's Club about five years ago started cutting out all of their different private brands and really focusing on members.

Bethany Davis: 00:25:45

Mark, you've got Costco is Kirkland Signature, you know, and that's what they do with Walmart.

Bethany Davis: 00:25:52

I think they're getting their better goods.

Bethany Davis: 00:25:53

Launch was super interesting.

Bethany Davis: 00:25:55

And Target, it just feels like there's a lot of different change.

Bethany Davis: 00:25:58

I don't know that they're bringing the guests along with them sometimes.

Chris Walton: 00:26:02

Yeah.

Chris Walton: 00:26:02

That's interesting.

Chris Walton: 00:26:03

Wow.

Anne Mazinga: 00:26:04

Well, this is, I, this is so fascinating.

Anne Mazinga: 00:26:08

You too.

Anne Mazinga: 00:26:09

Thank you for spending the time with us.

Anne Mazinga: 00:26:11

One thing I have to be sure that we get to, which is my favorite part of the show is talking about the real winners and losers.

Anne Mazinga: 00:26:21

Who are they?

Anne Mazinga: 00:26:22

Who's doing this best in class?

Anne Mazinga: 00:26:23

We've kind of gone through a few case studies but do you have any even like more specific examples?

Anne Mazinga: 00:26:28

Because I think this is the best part for us, the audience to get to hear and get to go check out.

Brandon Warren: 00:26:35

Yeah, so I'll jump in and take that one.

Brandon Warren: 00:26:38

I think.

Brandon Warren: 00:26:38

Listen, when I start thinking about winners and losers, you heard me say a couple times, Costco really kind of being the gold standard.

Brandon Warren: 00:26:44

And I think they are the winner, let's be honest, just based on overall, overall quality and value.

Brandon Warren: 00:26:50

I mean, you heard me say it, Chris, golf ball's a chicken.

Brandon Warren: 00:26:52

Right.

Brandon Warren: 00:26:53

If it translates across that they've got a, they've got a cult following.

Brandon Warren: 00:26:55

Let's be honest, the value proposition strong there right in the, in some of the recent changes in price points.

Brandon Warren: 00:27:01

They're just doing a lot of things right.

Brandon Warren: 00:27:02

One of the things that I thought was pretty cool, I don't.

Brandon Warren: 00:27:05

And a lot of your listeners may not know this, or they may, I don't know.

Brandon Warren: 00:27:07

But, you know, Kirkland Signature makes up about 23% of all Costco sales, which is astonishing if you really think about it.

Brandon Warren: 00:27:13

So.

Brandon Warren: 00:27:14

And that what they also may not know, that Kirkland Signatures is a standalone brand, is larger than Nike and Coca Cola, which I didn't know that for the longest time.

Chris Walton: 00:27:24

I mean, I never thought about that.

Brandon Warren: 00:27:26

Yeah, it is a massive, massive brand.

Brandon Warren: 00:27:29

So, you know, for reference, that's about twice the size of Walmart's great value brand.

Brandon Warren: 00:27:33

So which we all know does incredibly well.

Brandon Warren: 00:27:35

It ranks number one household penetration.

Brandon Warren: 00:27:38

So it's a big number.

Brandon Warren: 00:27:39

So to say they're really not winning would be, would be a struggle for me to put out there.

Brandon Warren: 00:27:44

But I have to say, listen, I'd be remiss to say if Walmart wasn't a really second close in terms of their focus again on driving down retails and inflationary environment, I think they're doing the right things there.

Brandon Warren: 00:27:55

Also in terms of household penetration, Walmart owns the top five spots for private brands.

Brandon Warren: 00:28:00

So they're clearly doing something right with their offerings and putting the right products out there and consumers are gravitating towards that offering.

Brandon Warren: 00:28:06

So, you know, they're again, they're looking to expand that footprint.

Brandon Warren: 00:28:10

They've done it with better goods.

Brandon Warren: 00:28:11

They're winning with the household, the affluent households.

Brandon Warren: 00:28:14

Households over 100,000 a year.

Brandon Warren: 00:28:16

I think they're already, a lot of those shoppers are probably already in there, but they're really converting them now, which is a lot different than where they used to be.

Brandon Warren: 00:28:22

Some of those people might, might go there for essentials, but they're trading up to some other, you know, more premium, the sprouts of the world or the fresh markets of the world or something like that for some of their more fresh or premium offerings.

Brandon Warren: 00:28:34

But I think the better goods is addressing a lot of some of the needs that those affluent households are looking for in their aisles.

Brandon Warren: 00:28:40

And they're doing that.

Brandon Warren: 00:28:42

And I'll tell you, Walmart has a commitment to stick with that.

Brandon Warren: 00:28:43

They put a lot of energy into that.

Brandon Warren: 00:28:45

That brand's not going anywhere.

Brandon Warren: 00:28:47

They may tweak some products along the way in certain categories where it may not be resonating as much as others.

Brandon Warren: 00:28:53

They're really winning in some categories.

Brandon Warren: 00:28:54

I think they may have gone a little too niche in some of the other categories, but they'll tweak, but I'll Tell you, better goods is here to stay and it's doing pretty darn well for them.

Brandon Warren: 00:29:02

So again, they're, they're balancing affordability with premium offerings to really compete across the entire landscape.

Brandon Warren: 00:29:09

So I think they're doing it right.

Anne Mazinga: 00:29:11

Okay, who needs to improve?

Anne Mazinga: 00:29:13

Who's.

Anne Mazinga: 00:29:13

Who's your, who's your loser for room for improvement.

Brandon Warren: 00:29:18

I hate the word loser, but listen, I figured this, this question was coming.

Brandon Warren: 00:29:24

So let's be honest here.

Brandon Warren: 00:29:25

Within our portfolio of retailers that we service, look, I think Target just seems to be struggling the most.

Brandon Warren: 00:29:30

And to be fair, I almost feel like it can be categorized as collateral damage a little bit when you look at grocery and kind of what they're doing over there.

Brandon Warren: 00:29:38

Listen, they have some of the best, well developed private label products in retail.

Brandon Warren: 00:29:43

Like, I think they're doing a really, really good job with innovation ingredient panels, you know, unique to target.

Brandon Warren: 00:29:48

SKUs that look great, they taste great, they sell great.

Brandon Warren: 00:29:52

But when you just look at the rest of the pad, I think they're struggling in terms of, you know, quality versus profit.

Brandon Warren: 00:29:59

They're trying to grab some dollars out there, and I think it's coming at the expense of quality, quality that Target's been known for in the general merchandise space.

Brandon Warren: 00:30:07

So I think that is the, that is the struggle that we have that they're going to have to overcome here, you know, in address relatively soon.

Anne Mazinga: 00:30:15

Yeah, without a doubt.

Anne Mazinga: 00:30:16

Okay, Bethany, I'm going to you next.

Anne Mazinga: 00:30:19

Who's your winner?

Anne Mazinga: 00:30:20

And so that we don't say loser.

Anne Mazinga: 00:30:22

Room for improvement.

Bethany Davis: 00:30:23

This is very opportunities.

Anne Mazinga: 00:30:25

Everyone would say everyone gets a trophy.

Bethany Davis: 00:30:28

Podcast here in Bentonville.

Chris Walton: 00:30:32

Yeah, I'm already surprised at the candidates we're getting.

Chris Walton: 00:30:34

This is great.

Bethany Davis: 00:30:35

Yeah, I'm going to hide behind Brandon a little bit.

Bethany Davis: 00:30:37

On mine.

Bethany Davis: 00:30:39

I would agree on the Kirkland signature.

Bethany Davis: 00:30:42

I mean, I think that I always think back to.

Bethany Davis: 00:30:45

I'm going to make a football analogy, but like, how important is an elite running back in the NFL, right?

Bethany Davis: 00:30:50

Like, how important is it to have individual SKUs that just absolutely perform and deliver?

Bethany Davis: 00:30:55

They do that every single time.

Bethany Davis: 00:30:57

If they put an item out there, it's going to do more than 15 million.

Bethany Davis: 00:31:00

Like, they just know what their members want and they're going to deliver that.

Bethany Davis: 00:31:05

So I like the consistency in the strategy, too.

Bethany Davis: 00:31:08

They've had the same strategy for, you know, over 20 years and that's impressive.

Bethany Davis: 00:31:12

They have the institutional knowledge to back that up.

Bethany Davis: 00:31:14

So I love that.

Bethany Davis: 00:31:15

From a sleeper perspective, I think Sam's club is getting over the fact that for decades they had no Standard for what members Mark meant.

Chris Walton: 00:31:22

Right.

Bethany Davis: 00:31:22

They're getting over that.

Bethany Davis: 00:31:23

They're bringing all together.

Bethany Davis: 00:31:25

It's going to take them I think five to ten years to really, you know, get over that.

Bethany Davis: 00:31:29

But they're doing social media and marketing on members, Mark, in a way that's much better than anyone else's.

Bethany Davis: 00:31:36

And so, you know, you see it in so many social ads and my reels of recipes.

Bethany Davis: 00:31:42

And so I think that they're doing a really good job there so far.

Bethany Davis: 00:31:46

I would guess maybe I would call it a sleeper in members Mark and what Sam's club is doing there.

Bethany Davis: 00:31:53

I like, I like what Walmart is intending with better goods.

Bethany Davis: 00:31:56

I think the longevity of the execution and strategy is what's going to matter.

Bethany Davis: 00:32:01

Feels like they went like one or two steps too far with some of the items and flavor profiles.

Bethany Davis: 00:32:06

Like I don't know if figs in a blanket is needed at, at Walmart.

Bethany Davis: 00:32:09

It's delicious.

Bethany Davis: 00:32:10

But so I think that there might be a couple, you know, pivots and, and steps there.

Bethany Davis: 00:32:15

But there are some items that they chose that were phenomenal from a data perspective.

Bethany Davis: 00:32:20

Like from an insights and data perspective.

Bethany Davis: 00:32:22

Someone was in deep and they made some great decisions.

Bethany Davis: 00:32:25

So I think that they're getting that consumer in the building and they're going to keep them with, with what they're doing with better goods.

Bethany Davis: 00:32:33

So I think that's great.

Bethany Davis: 00:32:34

Target is doing some really cool things in seasonal.

Bethany Davis: 00:32:38

Like they deserve some kudos for going up.

Bethany Davis: 00:32:40

I don't know that you can necessarily call Target David versus Goliath but what they're doing is seasonal with candy is really cool.

Bethany Davis: 00:32:47

They're going into what like year 34 of this strategy of, of having my favorite day be a staple in seasonal.

Bethany Davis: 00:32:54

They're doing fun things and you know, I'm going To quote my 8 year old, she told me the other day, can I do what you do?

Bethany Davis: 00:33:00

But I want to do it at Target.

Bethany Davis: 00:33:01

So I actually like what I sell.

Bethany Davis: 00:33:03

So you know, they still got that consumer there.

Bethany Davis: 00:33:07

They're coming with fun trendy things and I like that.

Bethany Davis: 00:33:10

I do think to Brandon's point there's some strategy alignments and some things with Omni that they need to focus on to bring that home.

Bethany Davis: 00:33:19

But yeah, that's.

Bethany Davis: 00:33:20

And I wouldn't say that there's necessarily like big losers.

Bethany Davis: 00:33:23

I think there's some strategies within Target that they've got to align on.

Bethany Davis: 00:33:27

They talked about the great performance of beauty, which is the one category that they don't over index in brand on.

Chris Walton: 00:33:34

Right.

Bethany Davis: 00:33:34

So the dichotomy of that was super interesting to me.

Bethany Davis: 00:33:39

So I think that there's some things that they can do there.

Bethany Davis: 00:33:42

And I'll be interested to see how Walmart pivots as the next year or two goes on with better goods to really cement how I feel about that.

Bethany Davis: 00:33:50

But I think from a strategy perspective, I like where they're going with it.

Brandon Warren: 00:33:55

Wow.

Chris Walton: 00:33:55

It's really.

Chris Walton: 00:33:55

Yeah, there's a couple of takeaways from what you just said.

Chris Walton: 00:33:57

I mean, one, you know, you know, Target's kind of falling off the private label pedestal in a lot of ways.

Chris Walton: 00:34:01

I think that's the big takeaway I've got so far.

Chris Walton: 00:34:02

And then, and then the Sam's Club call, it's really good, too.

Chris Walton: 00:34:04

I mean, we interviewed, and remember we interviewed Chris Nicholas at grocery shop, and he was very much overtly talking about their private label program.

Chris Walton: 00:34:14

So it's good to hear that resonate that you think that's resonating with consumers, because it sure looks like it from the financials, too, that Sam's Club has been putting out there.

Chris Walton: 00:34:20

All right, Bethany, let's close out things with this last question.

Chris Walton: 00:34:23

So you had a quote as we were preparing for this podcast that Ann and I just absolutely loved.

Chris Walton: 00:34:30

You said you have to delicately, I like the word delicately, explain to clients all the time, quote, it's not your fault, but it's your problem.

Chris Walton: 00:34:39

So what exactly did you mean by that?

Chris Walton: 00:34:41

And what advice would you leave to retailers listening on taking the first steps to solving their private label problems or, you know, maybe capitalizing on their private label, too?

Bethany Davis: 00:34:51

Yeah, I would say, you know, it's usually the manufacturers that.

Bethany Davis: 00:34:54

I'm saying that too, in fairness, of, like, look, it's not your fault that you're in this position, but we do have to fix our, you know, we have to fix our way out of it.

Bethany Davis: 00:35:03

I think there's a couple of things I think you have to know, your data and insights as a manufacturer nowadays.

Bethany Davis: 00:35:10

Like, there is not an excuse of, well, they wanted it and I made it and it didn't work, so it's on them.

Bethany Davis: 00:35:15

Like, that is not going to work.

Bethany Davis: 00:35:17

And you have to be responsible for that.

Bethany Davis: 00:35:19

And you have to be willing to hang your hat on what you believe is going to work and what you don't.

Bethany Davis: 00:35:23

So I think that is one thing that I would say, you know, have a realistic point of view on what are, what is this really going to do from a velocity perspective and what can we comp it to?

Bethany Davis: 00:35:35

And I think that that's really important from a, a supplier and a retailer angle.

Bethany Davis: 00:35:41

I mean, I think with all of these trendy items, you're losing the value and the benefit that private label and own brands gave to manufacturers and that they could give you the best cost because they were able to amortize costs over two or three years.

Bethany Davis: 00:35:56

They were able to be stable and dependable and you knew you were going to have that business.

Bethany Davis: 00:36:01

And so I would say from a retailer perspective and then also from a manufacturer perspective, one don't get caught in the, in the wave of these very incremental and trendy own brand items of thinking you're going to have that item three years from now because you might not.

Bethany Davis: 00:36:17

And then from a retailer perspective, I think recognize that, that it does put a financial burden and an operational burden on these manufacturers and suppliers when you're these changes all the time.

Bethany Davis: 00:36:28

So I think having that loyalty of being able to go back to them knowing that if this doesn't work, there's a next step to it and we can work it out together and iterate on it is important for both sides in this equation and where we're at today.

Bethany Davis: 00:36:42

And then this, I would say, the last thing I would say, and this is, goes against what everyone would tell you to do.

Chris Walton: 00:36:52

All right, let's hear it.

Chris Walton: 00:36:54

Contrary it.

Chris Walton: 00:36:55

I love it.

Chris Walton: 00:36:55

Let's do it.

Chris Walton: 00:36:56

Totally my mom.

Bethany Davis: 00:36:57

It's just such a small operational thing.

Bethany Davis: 00:36:59

But even if you're going to launch an own brand, leave some money aside to operationally execute that item at the store level.

Bethany Davis: 00:37:08

And I know that it's the retailer's problem if it doesn't get operationally executed on the floor.

Bethany Davis: 00:37:15

I know it's a dead net program, I know that you don't have funding for that, but just leaving a little bit of money to the side to make sure that your product gets on shelf on the floor and execute it appropriately, amortize it or justify it however you feel like you need to.

Bethany Davis: 00:37:30

But you know, I think that is going to allow your product to be successful and it's going to allow you to have the ability to pivot and work with these retailers.

Bethany Davis: 00:37:40

Whereas if you go in with like nothing planned, you're not going to be able to help them in any way.

Bethany Davis: 00:37:45

So, you know, really think of this as a partnership and, and consider doing that would be some of my advice.

Chris Walton: 00:37:53

Got it.

Chris Walton: 00:37:53

So if you're a manufacturer, your job is not just to produce it and ship it.

Chris Walton: 00:37:56

You've got to think about more and more, more of the, the whole you've.

Bethany Davis: 00:37:59

Got to be more holistic.

Chris Walton: 00:38:00

Yeah.

Bethany Davis: 00:38:01

Yes, you've got to be more holistic.

Chris Walton: 00:38:02

That's, that's great advice.

Chris Walton: 00:38:03

All right, Brandon, any parting words from you?

Brandon Warren: 00:38:06

Well, I'll just tag on to that operational excellence piece.

Brandon Warren: 00:38:08

You know, I like to, I like to say you may not own the cells, but you own the people behind the sales.

Brandon Warren: 00:38:13

And so at the end of the day, you have to have a team in place that's going to pro prioritize operational excellence like these retailers expect it.

Brandon Warren: 00:38:21

I mean, if you can't get it there when the retailers need it, they're going to find somebody who can.

Brandon Warren: 00:38:25

So you have an obligation to their shopper and as just as much as they do.

Brandon Warren: 00:38:29

So get the right teams in place, you know, prop it up.

Brandon Warren: 00:38:33

That's where a group like the barcode group can come in and help with a lot of that stuff.

Brandon Warren: 00:38:36

But ultimately, you know, prioritize operational excellence within the organization.

Brandon Warren: 00:38:40

Then secondly, I would say, you know, we've come across this, this a couple times in our, in our business.

Brandon Warren: 00:38:46

But, but manufacturers need to know their walk away point.

Brandon Warren: 00:38:50

And a lot of times these guys and gals are pretty eager.

Brandon Warren: 00:38:54

The excitement can get the best of them.

Brandon Warren: 00:38:56

They see the opportunity, size in front of them.

Brandon Warren: 00:38:59

And we all know private brands have huge margins for a reason.

Brandon Warren: 00:39:02

But sometimes these guys and gals can get out over top of their skis a little bit.

Brandon Warren: 00:39:06

So they're so eager to get the business that they may make a little bit of poor decisions around costing and ultimately that can be detrimental to the company.

Brandon Warren: 00:39:12

So be smart, ask the right questions, make sure you're capturing everything in your cogs.

Brandon Warren: 00:39:17

And again, that's something we can help with and coach people through in terms of making sure you're taking everything into consideration so that it is a fair and equitable product that you're launching for both sides of reseller as well as you as a manufacturer.

Brandon Warren: 00:39:29

And then, and then lastly, I just, I just say this.

Brandon Warren: 00:39:32

Look, speed to market is paramount.

Brandon Warren: 00:39:35

We just left the PLMA show.

Brandon Warren: 00:39:37

There's a lot of innovation out there.

Brandon Warren: 00:39:38

There's a lot of exciting things happening in the market right now.

Brandon Warren: 00:39:41

A lot of new things that are shaking up spaces and giving buyers reasons to get excited.

Brandon Warren: 00:39:46

Again, if you can bring products to market quick, you would be and commercialize them quickly.

Brandon Warren: 00:39:52

You would be amazed by how quickly these retailers can adopt some of these products that if you bring something that's going to be a disruptor, they're going to find a way to get it on shelf and make a bet with you in an early stage.

Brandon Warren: 00:40:02

So I would just tell you, open up that R and D pipeline, show them what you're working on, bring some exciting things to the table.

Brandon Warren: 00:40:08

And you'd be.

Brandon Warren: 00:40:09

You'd be amazed by how quickly they can react.

Chris Walton: 00:40:12

Yeah, that's a great point.

Chris Walton: 00:40:13

It reminds me of an anecdote.

Chris Walton: 00:40:14

I remember I was walking the floor with somebody from Heinz, and I asked him.

Chris Walton: 00:40:17

He was kind of a mentor of min.

Chris Walton: 00:40:19

The time I asked him, I said, what's the one question every merchant like me asks you?

Chris Walton: 00:40:22

And he said, what's.

Chris Walton: 00:40:23

What's new?

Chris Walton: 00:40:24

What's new.

Chris Walton: 00:40:25

Right.

Chris Walton: 00:40:25

Brandon, that gets exactly what you're saying, like, what's new?

Chris Walton: 00:40:27

The merchants will always look at something new, and they'll decide if their assortment needs it or not.

Chris Walton: 00:40:32

So, wow, that was.

Chris Walton: 00:40:33

That was absolutely wonderful.

Chris Walton: 00:40:35

Love that conversation.

Chris Walton: 00:40:37

Bethany, if people want to get in touch with either one of you, get in touch with the barcode group.

Chris Walton: 00:40:42

What's the best way for them to do that?

Bethany Davis: 00:40:43

Yeah, I would say check out our website at the barcode group.com and or email us at info the barcode group.com and we'd love to have a conversation.

Bethany Davis: 00:40:54

And we don't want people to get stuck in a pickle.

Bethany Davis: 00:40:56

So reach out to us before there's a problem.

Anne Mazinga: 00:40:59

You do want people to create pickle flavored products.

Anne Mazinga: 00:41:03

However, let me clarify.

Anne Mazinga: 00:41:04

You can help them with their pickle flavored products.

Bethany Davis: 00:41:07

Everything.

Bethany Davis: 00:41:08

We just did a whole flavor profile project about that.

Brandon Warren: 00:41:11

So you just did a seg and you also did a segue into the PLMA recap that's on our website.

Brandon Warren: 00:41:16

I mean, pickles are everywhere.

Brandon Warren: 00:41:18

Flavored pickles were all over the place at plm.

Anne Mazinga: 00:41:20

Oh, my gosh.

Anne Mazinga: 00:41:21

I cannot wait.

Anne Mazinga: 00:41:22

I cannot wait.

Chris Walton: 00:41:24

Why don't you just sell pickles, not get in them?

Chris Walton: 00:41:26

All right, well, that wraps us up today.

Chris Walton: 00:41:28

Thanks for.

Chris Walton: 00:41:28

Thanks for sitting down with us both Brandon and Bethany.

Chris Walton: 00:41:31

And thanks, everyone, for listening in.

Chris Walton: 00:41:33

As always, on behalf of all of us at Omnitalk, be careful out there.