“You really have to check a lot of boxes, knowing that you are ready to go to that retailer — that large-chain account — and be able to present a product that tastes great ... [and] that has great ingredients that are clean and unique. We are ... looking for that category disrupter, something that is new and different in the category.”
‘Funding is a huge part’
At Expo West last month, KeHE hosted one of its TRENDFinder events, where the distributor awarded 23 startups, including cacao brand Rigello and functional beverage brand Bear Maple, coveted golden tickets. These golden tickets grant CPG brands access to the KeHE onboarding process and a deal with the distributor.
KeHE hosts TRENDfinder events each quarter, and brands meet with the distributor to showcase their products, Sewell explained. During these meetings, KeHE evaluates the business on several criteria, including the uniqueness of the product and whether the company is well funded, she added.
“We do a little research before we have those meetings and make that decision on the spot if we know that ... they have the right ingredients, that product [disruption, and] they have the right pricing and promotions,” she said. “Funding is a huge part of that, too. It costs a good amount to get into a large retailer, so if they have got all of those things, we hand them a golden ticket.”
Early-stage startups can also register to be a part of KeHE’s ELEVATE program, which provides resources and mentorship for new brands, through the product discovery platform RangeMe. Brands are usually part of the program for about two years, but some brands, like frozen-meal company Kevin’s Natural, finish it in less time.
“We brought [Kevin’s Natural] to market pretty quickly, and they had all of the tools that they needed and great branding and such a great product — sometimes the magic just happens. So, they have got KeHE pushing them, and we do give additional guidance and funding to help them advertise. ... Our typical brand is in the ELEVATE program for two years, and I want to say [within] maybe nine months or so, [Kevin’s Natural] was at a sales amount that had them graduate from the program.”
Focusing on the business fundamentals before approaching KeHE
To secure KeHE distribution, CPG brands must ensure that they have a fully built-out team and can scale quickly within the first year, Sewell said.
“You [have] to have the people behind the business. So, that is not just the salesperson, but it is also a supply chain person, and you [have] to have your finance person. You really [have] ... to build out that team, so that you come to KeHE, and you are ready to work with us and work with all the great retailers that we sell to.”
CPG brands should also be ready to support 200 or more stores within the first years, Sewell explained. To get experience in scaling up, brands should already have experience in their local markets, testing out their products and packaging size, before approaching KeHE, she recommended.
“So many suppliers will come in not thinking about every detail that they need to plan before coming to KeHE and a large retailer,” she added.
