Podcast

Episode 9: The Economics of a Grocery Brand

By April 27, 2021May 1st, 2021No Comments

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The Economics of a Grocery Brand — Kyle Oglesby

Pick up a jar of jam in your kitchen — can you guess all the people involved in its supply chain, and who makes how much money? Today we’ll grant you “X-ray vision” into the business and supply chain of grocery brands.

Kyle Oglesby is the owner of a barbecue sauce company called Daddy Sam’s, and has slowly grown to nationwide distribution in the USA. We talk about everything from the margins on different types of grocery products, manufacturing, packaging, copackers, sales and distribution channels, marketing strategies, relationships with grocery stores, and much more.

As always, we cover a lot of ground on this podcast so here’s a list of the topics we discuss!

 

01:49 — Categories of groceries as seen from a store’s perspective

05:42 — How exactly does a product get classified as “shelf-stable”?

07:46 — Distribution channels for a grocery brand: direct to consumer vs wholesaling

10:05 — Differences between supply chains for B2C and B2B sales: selling directly to consumers or to the foodservice industry

12:32 — Does selling to restaurants increase direct to consumer sales too?

15:05 — Copacking challenges of selling B2B and B2C together

20:34 — The business model of grocery stores (stocking fees etc)

24:00 — Negotiating with stores to put your product on the shelves — navigating slotting fees and free fills

28:18 — Distributors’ relationships with stores; how it varies for different types of chains

35:41 — Selling barbecue sauce online: pros, cons and important considerations

41:49 — Cost breakdown of a jar of barbecue sauce

47:37 — Margins differences in slow-moving vs fast-moving groceries

50:31 — Why selling on Amazon is a mixed bag, different types of fees etc

54:03 — Business implications of using high-fructose corn syrup vs sugar, and plastic packaging vs glass

58:20 — Pricing of Gourmet vs Commodity products

1:01:27 — Important packaging considerations

01:06:35 — Storage, warehousing, shipping & transport: how product density affects these costs

01:08:44 — Selling off your grocery brand

01:12:13 — Access to capital for different purposes

01:16:26 — The glass shortage in 2020, and how it affected the grocery brands!

01:19:42 — Warehousing economics, and pricing model

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