Going Big.

I hit send on a LinkedIn post last week that struck a nerve with a few people in the comments.

I touched on how multiple fast-growing brands that I work with were now focusing more on a handful of large retailers instead of building out regional density through multiple smaller retailers first.

When I first started in CPG, it was always preached to build out your backyard and then expand to a new like-minded region once you have a clear idea of your retail playbook.

This usually meant building primarily through small chains and independent accounts.

Now, the top brands we work with are mostly focused on BIG retailer launches and some as early as day one.

Most of these brands are well capitalized and have strong product-market fit online, but surprisingly the strategy isn’t just being implemented at this end of the spectrum, we are seeing brands that are a year or two into their lifecycle and mainly focusing on supporting larger chain business instead of following every word of the regional gospel I heard in my early years.

My post outlined a trend and a subtle shift I was seeing in the market, it was in no way my advice to all brands, as I do still believe there is validity to being regional, but doing so in a way that scales.

Optimizing your store count through a few banners that have more stores instead of managing a very fragmented group of accounts has immense benefits and we are going to dive into this a bit more today.

With that, let’s talk about what is needed to succeed if you want to go big, early on, both regionally and nationally, but first, a CPG horror story to set the mood…

When I started at Delighted By, I had one directive from our CEO which was to grow our door count at all costs.

That’s exactly what I did. I took our brand from 1,500 stores to over 7,000 in one year. We opened up major accounts like Safeway, Target, Costco, and Aldi within months of each other.

What I realized shortly after was that our leadership didn’t have a plan for after the doors were opened. They assumed the organic social growth of the brand would translate into stores and outside of the bare minimum trade spend plan, we didn’t do much else.

Sales sputtered, and I eventually started WeStock before the house of cards crumbled on Delighted By.

It was a true spray-and-pray method and although I was hesitant about it, the new door count only served to get investors excited, and unfortunately, the brand eventually reaped what it sowed.

I think this strategy is what people thought I was championing when I said the top brands were focusing on large retailers to start, and it couldn’t be further from the truth.

I think doubling your store count annually is a good goal and one that can be sustainable as you grow. We grew more than 4x in one year with no trade spend plan and spreading ourselves too thin nationally.

This is the complete opposite of how brands are implementing a go-big strategy now which is hyper-focused on growing their door count responsibly but through fewer retail partners.

If your goal is 1,200 doors in a year and someone told you you could accomplish this through one account or several, the decision would be easy, but there is a stigma still in this industry that you need to wait until you're ready for that one account.

One of my favorite brands and founders right now is Will Nitze at IQBAR who shared his thoughts on this go-big approach for their brand.

“We realized a few years in just how true the 80/20 principle is with regard to retail accounts. Rather than chasing 10-store chains we now throw the vast, vast majority of our time and energy into 3-4 accounts that deliver virtually all of our brick-and-mortar revenue,” Said Will.

The team at IQBAR is seeing that by taking this approach they are saving time and money in other areas of their business, Will added, “Doing so also helps us to stay ultra-lean, headcount-wise.”

The truth is that the fear around this strategy comes from the dead bodies that we have all seen. We can all name a brand that expanded too quickly and by doing so went to zero. This approach takes a divine amount of focus and it gives you the ability to hone in on a handful of accounts instead of too many.

IQBAR is now a rocket ship, so I wanted to chat with a few other brands who were a bit earlier in the process.

Spritzal founder Taylor Walker who relaunched her line in May 2023 and focused her retail strategy on larger accounts said, “Focusing on larger retailers like Kroger and Costco has allowed us to reach a wider audience and ensure our cookies are available in high-traffic, well-regarded stores. This strategy enables us to support our growth effectively and provide consistent quality to a broad customer base.” She has since increased her revenue by 5x focusing on larger accounts only.

This go-big philosophy can be applied on a smaller level. You can still implement a regional approach, my point is to expand your thinking with this approach to include larger regional players.

Sydney Chasin of Chasin’ Dream Farms said, “We’re excited to one day be a national brand with major retail banners. Our step one is to prove ourselves on a regional level with national natural, conventional, and club accounts, using data to expand region by region.” 

The focus here is to concentrate your door count across as few retail banners as possible so that you can focus your trade spend efforts to the best of your ability.

Crushing your velocity metrics in retailers like Wegmans, HEB, Publix, Stater Bros, Shnucks, Fresh Thyme, The Fresh Market, ShopRite, and many more dominant regional players is a great way to stay focused and show future investors that you can expand your strategy nationally.

“Everything is ultimately in service of scale. Eventually, a company is going to need proof of velocity in some combination of Kroger, Safeway/Albertsons, Walmart, Target, Costco, and then depending on the product, convenience” said Carlton Fowler, managing partner at Goat Rodeo Capital.

He added, “Regional success can be a great indicator, especially if it is one of the regional chains that can be extrapolated to some extent, like HEB or Wegmans.”

There is no one right way to win in retail, and I want to be clear that this is not my advice for your brand, in my mind there are three distinct playbooks based on your goals.

• You can go regional with larger accounts

• You can go national with larger accounts

• You can go regional with smaller accounts

But… I feel strongly that the hardest pathway is going national with smaller accounts. If you have 10-15 doors in a region, you have no doors in that region.

I see this a lot when brands sign on for a platform like Faire and they get excited about orders coming in, but those orders are scattered.

That is not a strategy that will translate to long-term success and it makes it very difficult to support the accounts that are ordering.

If you are bootstrapping or trying to show early traction, I think you can apply this go-big method the same way, but honing in on 5-15 store chains in your area instead of spreading yourself across multiple independents. You can build up enough data here to create a compelling story for investors.

“There are a few reasons why it’s smart to “own your region” or a small market first before you get excited about big retailer interest let alone pursuing them too early. One is obviously that new brands don’t have that much funding to support larger retail expansion and you don’t want to take on massive purchase orders without inventory and marketing support let alone inexperienced executing,” said Kevin Lehmann of Goods Partners, “But importantly, focusing and servicing small accounts while driving consumers to those accounts can yield you powerful data points like velocity, velocity growth, and distribution growth. Once you feel you have solidified a core baseline consumer in a small area that you can defend and sustain, you take those data points to the next retailer or next market, and so on,” he added.

Everything comes back to the fact that there are multiple pathways for brands to win at retail and scale their business, but you have to be honest about what your expectations are for your business.

Going big early doesn’t mean circumventing the importance of regional density and it doesn’t exclude regional banners. You can also go big in an even smaller way by looking into well-known smaller chains like Lassen’s, Gelson’s, Central Market, Kowalski’s, etc.

My point is to shed light on the fact that more and more brands are focusing their go-to-market strategy around 8-10 national retailers and pairing that with a great online strategy. It’s fascinating to see that playbook take shape and I am excited to continue to monitor the brands implementing this tactic.

The key is understanding early on what you envision your brand being in 5-10 years and developing your strategy from that endpoint is the best way to approach this.

In closing, if you’re goal is to eventually be a big brand, to have that once-in-a-lifetime outcome, it might be worth approaching a go-big strategy early on and doing so responsibly and methodically so you can focus on fewer accounts with higher results.