The struggle startups face getting listings with supermarkets

Gaining a national supermarket listing signifies a major milestone for any food and drink brand. As much as I’d like to reveal some industry secrets to gaining a national listing for your product, I’m afraid that’s not the case.

At Rejuvenation Water we compete in one of the most fiercely competitive segments in the world; the drinks market. The buyers at the big nationals are well aware of the power they have over the fledgeling brands.

We had the opportunity to launch with two nationals when we started up in spring 2016. But we were offered terms that equated to us selling each bottle for 30% of the cost of production. There is an argument to say that the credibility factor of such a launch could propel a startup but, for me, success would have actually meant failure.

I’ve seen many small brands launch with these companies (I can only suspect the same commercials terms were offered). Needless to say, a large proportion have disappeared into the wilderness.

The long journey to our first supermarket listing

Fast forward to early 2017, we were in a much better position to negotiate. Building up over 200 listings gave us the proof of concept buyers require as a prerequisite. We had hard sales figures to show initial traction, growth and consistency of sales.

In all of this data, the rate of sale is key. This can be extrapolated to create sales and revenue assumptions for the national retailer. As such we were given an opportunity to launch in John Lewis.

We grabbed this opportunity with both hands. I personally sampled with the John Lewis customers in their Oxford Circus Food Hall and we guerrilla sampled at tube stops in the vicinity. We sold almost 1,000 bottles in a single store in June 2017 alone.

This traction led to me being invited to meet a Waitrose buyer in February 2018, who agreed to give us an opportunity within the front of store, the most in-demand fixture for drinks within Waitrose.

My advice on working with supermarket buyers

As all brands will likely admit, dealing with large retailers isn’t an easy task. The key for us was, and still is, persistence. Trade buyers get inundated with presentations, emails and calls on a daily basis. Your brand can easily get lost in this noise.

Know your market and know your buyer’s market. Buyers will usually have to find space on their shelves to fit you in. This means delisting other products. Make sure they know where your product fits in their portfolio and what value you can add over and above what they already have on offer.

Also, as part of a commercial proposition, buyers will want a marketing commitment. Be very careful that you don’t over commit here. You’ll end up with a supermarket listing that yields no commercial benefit. This could be fatal to your overall cash flow. Use your sales revenue assumptions to agree on a marketing commitment based on a percentage of revenue.

At each stage, leverage your traction and successes to take your business to the next level. Once you get one listing at a major retailer it makes others take note. Use this to your advantage and act quickly. Just because you are on the shelf today, it doesn’t mean you’re going to survive the next category reset. This will also allow you to reduce dependency on one national retailer.

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