Ocado Roots: Genevieve Fitch on why Ocado's backing challenger brands

0:14Hello and welcome to the Tomorrow Brands podcast, where we explore what it takes to build a brand of tomorrow. I'm your host, Ruth Vitock, and today I'm joined by Genevieve Fitch from Ocado Retail. Genevieve joins me to pull back the curtain on Ocado Roots, their accelerator and community for challenger brands. We get into what buyers actually look for, what founders get wrong in a pitch, how to use retail data to make smarter decisions, and why founder energy might matter just as much as the product itself. If you're an early stage food or drink brand figuring out UK retail, this one's for you.

0:43Let's get into it. Hello, Genevieve. Thanks so much for coming today. Before we get into it, it'd be great to hear a bit more about your background and how you got to where you are now.

0:53Genevieve Fitch:Yeah, of course. Hi, thanks for having me. So my name is Jen Veep, I currently work at Ocado Retail and I lead on lots of small supplier projects including Ocado Roots which we're here to talk about today. But how did I get there? I've always worked in retail really. When I left university I joined Majestic Wine and I worked in their retail stores for around four years managing the last sort of half of that retail store in Finchley. So getting very close to the customer and the product and I then moved across to the commercial team where I worked effectively as a national account manager. and selling wine all over the UK to all sorts of different interesting locations like sports stadiums and national caterers and things like that.

1:34Genevieve Fitch:But I absolutely loved it of course because working with wine is very fun. But then actually Covid came and it felt time for a different thing to do. Lots of those places were shutting down and things were quieting down so I decided to pivot a little, stayed in retail, moved over to avocado retail and actually started out in their data team. So I was what we call data partners and effectively still an account manager, but managing data packages and sending data to our suppliers and got really close to lots of food and drink brands and founders and absolutely loved it. I think working with founders is fascinating.

2:05Genevieve Fitch:So when the opportunity came up for this role almost two and a half years ago now, I absolutely jumped at it. And so, yeah, I work at the moment on a card of routes and a number of other small supplier projects, but really helping to elevate them on site. And as I say, working founders which I just love. So tell us a bit more about Ocado Roots. So Ocado Roots is our community and accelerator program which we have put in place to help nurture and grow our smallest brands at Ocado. So those are the innovative real challenger brands trying to make it in the food and drink industry and we offer them a selection of benefits as a result of being in the program.

2:40Genevieve Fitch:So things like matched media funding, free data, enhanced payment terms, things that hopefully should really help drive their growth on Ocado. And yeah, to date, it's been really good. We've absolutely loved it. And I think there's a lot of benefits in there that are doing really well. I think what really sets it apart is two things. First of all, it is the way that I guess we're not very restrictive. So there is criteria to join the programme, but it is relatively open door. We want to be able to help as many brands as possible that come through Ocado. And there are lots of them because we tend to be the first place that founders come to when they're starting out in retail.

3:17Genevieve Fitch:We want to be able to help as many as possible succeed. So we currently have 140 brands in the program, which keeps us very busy. So that's the first. And then I'd say the second thing really is that a prime focus of the program is the community. And so really helping founders connect and build meaningful relationships with others and really lean on each other to learn and fuel that growth. And so that does set us apart. I don't think other accelerators really deliver that in the same way. And why does Ocado do this? Why are these brands important? They're important actually because our customers really love them.

3:49Genevieve Fitch:We have the broadest range in the market, but we do want that range to be differentiating. So not just lots of duplicates and lots of products that are the same. And our most loyal customers and the ones that actually spend the most with us over-index quite highly in adding those more innovative sort of challenger brand products to their basket. So they're really important for our customers. And as I say, because we deal with so many of them, because founders tend to start with us, we do work with a lot of them closely. If you're into food and drink, which I imagine lots of your customers are, you want to try new things.

4:22And it's being able to see something on Instagram or TikTok and then actually find it and have it delivered to your house is quite unusual.

4:31Genevieve Fitch:Yeah, we find actually that a lot of our customers might find these products elsewhere. So say in like farm shops or fairs or things like that. They come across them when they're out and about and then they go home, try it, love it, want to buy it elsewhere. So we find that a lot of customers then come to Ocado and start looking for them, sometimes before we've even listed them, which is an even better, obviously, sign of a new trend or new product that might succeed. And do you guys track that? Does that help you? Yeah, we track that very closely. Yeah. Yeah, it's really important. And we see lots of trends coming through in that way, including M &S as well.

5:01Genevieve Fitch:Obviously, we stock M &S, a lot of M &S products that quite often are searched manically on site before we've managed to launch them. I mean M &S are just so innovative aren't they? I really feel like they've been at the cutting edge. It's amazing how quickly they're adapting. They're definitely ahead of the curve yeah. The way they track trends is quite amazing actually and the way that they innovate with their food if you go into their offices they have kitchens and things there where they're constantly developing new products so yeah we're lucky to have them as a partner. So has the programme been running two years?

5:30Genevieve Fitch:It's about 18 months. I think you're on your second cohort is that right? Yeah. What have been some unexpected challenges or unexpected successes from that first cohort? Just to clarify, add brands that quite often. So whenever there's new brands who join Ocado who are eligible, we add them to the programme. But we are into what we call our second year, effectively. So the first year was all about setting up for success and giving brands what they need within Ocado. And year two is building on that. In terms of successes, I think overall the programme has been really well received. and I think the benefits particularly enhanced payment terms as you can imagine but there are things that we did want to improve on for year two one of those being and we actually did sit down with members last summer and we asked them their feedback so we are we do like to listen and act on that where we can and one of the things that came out of that session was that we do quarterly meetup events and what we did in them was really meaningful we share lots of information about Ocado and ways to grow but they actually wanted those events be a bit more structured in terms of building networking opportunities.

6:32Genevieve Fitch:I think there's a tendency at these things like gravitate towards people. And so how could we enable them to meet, particularly we've got so many brands, how can they meet more people that they might not otherwise be able to and connect with other founders? And the second thing is that one of the key things that we want to deliver as part of the Roots programme is really enable those brands to go on and be successful in the wider UK grocery industry. As we've already said, we know we're a bit of a stepping stone and people tend to come to us first. So how do we really help deliver for brands in that space?

7:01Genevieve Fitch:And so help them build knowledge outside of Ocado, not just within our sphere, but wider sort of industry knowledge. And so that's what we really wanted for year two. And we partnered with Mission Kitchen to help us deliver that this year. So we're about halfway through at the moment in terms of our year two with Mission Kitchen. And they've really helped us bridge some of those gaps. If you don't know who Mission Kitchen are, you should go and look at the marks. They're really fantastic. They have exactly the same ethos as us in terms of nurturing and helping small brands grow. So there was a really sort of natural affinity there.

7:30Genevieve Fitch:And so far, that's going really well. We've been hosting masterclasses with them. We actually had one just this week, which was really well received. What does success look like for a brand graduating from the Roots programme? Success for us really is brands going on and doing other things elsewhere. So getting those listings and growing elsewhere in the industry. And that's what we want to deliver. I think in terms of graduating from the programme, there's actually no hard stop to a brand being involved. So after the end of their first year of trading with the Cardo within the program, their sort of monetary benefits do end.

8:01Genevieve Fitch:So their free data and free media does come to an end, but they can then continue to stay in the community for as long as they find that beneficial. So benefiting from, like you say, our champions who are effectively our mentors, things like the Mission Kitchen Masterclasses, the events that we put on and other resources, they continue to do that really for as long as they want to. and I think for us we recognise that journey is different for every single founder and every single brand and you might want support from us a bit longer, some will than others, but we are starting to see that some brands are making it elsewhere and are maybe becoming less engaged than they were at the beginning of the programme so we're starting to see that evolution at the moment.

8:39Genevieve Fitch:Shows it's working. Yeah, so far so good. And you also are involved with Buy Women Built. You've got a dedicated space online where you can go and shop those brands. How did that partnership come to life? Really naturally, actually. Hannah Gibson, who's our CEO at Ocado Retail, she's worked at Ocado Group previously, who are one of our shareholders alongside M &S. But she's always been known throughout her time working within the Ocado Group, Ocado Retail, as being somebody who's really passionate about women in the industry. And then Amisha, who's head of partnerships at Byron Build, is actually ex-Ocado and so has knowledge of Hannah's but also our wider sort of celebration of females within food and drink.

9:21Genevieve Fitch:And so I think there was a really nice infinity there for both Hannah and Sahar, who's a Buy One Built founder, when they were approaching where they might want to sort of launch a project like this. And yeah, the Buy One Built aisle overall has worked really well for us. Our main customer demographic tends to be women. And actually there's a stat that something like 85 % of households when it comes to food and drink is controlled by women. So there's a really strong affinity there for us. Do you think female-led brands are facing the same barriers as they have in the past, or are we starting to see real systemic change?

9:54Genevieve Fitch:There's definitely still the same barriers. I think the tide is changing, and I think obviously what Byron Built are doing in this space is really important in driving that change. Yeah, there is a lot that, and we want to help drive that change as well. I think there's the stats that Byron Built quite often say it's about 81 % of 11 to 18 year olds actually can't recognise a female founder, which considering how many food and drink businesses in the industry are actually female built is quite incredible. And so we really want to help drive that change in that space as well. And what do female founders not get access to generally that you're trying to correct?

10:33Genevieve Fitch:So I think for us in this space, it's all about visibility and helping create a space where customers can find and engage with these brands. And we're quite proud that we lead in the industry, really, in this space. Each female founder now has within their carousel imagery on site, they've got an image which calls out if they're female founded. So helping drive awareness there. And we also run things like promotions and so on to help drive sales growth for those brands. The last promotion that we ran in October, over half of SKUs that were brought by customers were actually first-time purchases.

11:08Genevieve Fitch:So it shows that those things like that are actually driving customers to engage in and find more of those products. But I think also more broadly, there's a really good movement in this space led by Buy Women Built. But we've seen this year that actually Tesco, for the first time ever, were doing displays in store that Buy Women Built. We like to think that, you know, we've led by example in that space. But there's a lot that's coming through. We've also got for International Wednesday this year, we're doing a lot of celebration of Buy Women Built, including a supper club where we're hosting founders alongside Buy Women Built.

11:38Genevieve Fitch:And we've also got a really special collaboration, which I can't say any more about here. But we've got some really exciting news coming up as well to help continue to drive change in this area. So let's talk about what a Cardo looks for in a challenger brand and what brands should be thinking about potentially if they're in the early stages. What is often missing when early stage founders pitch to retail? I think most often actually it's just that they get the messaging wrong and perhaps their pitch isn't honed well enough we're obviously known for having the widest range in the market but that doesn't mean it's unlimited and we do have capacity limitations in our warehouse so when buyers are looking at a product and deciding whether they're added to their range they have to understand what the key differentiator is that the key USP and what you know and what a customer would be getting differently if they were to purchase that product.

12:27Genevieve Fitch:And customers need to know as well that they'd be getting something meaningful out of buying a new product. So how do you get that across in a pitch? And I think lots of people tend to miss that slight nuance. You have to be able to convince us that whatever we're stocking is actually adding something new and something different. And what for you signals real long-term potential versus maybe short-term hype? I actually think that for Ocado, we're actually part of indicating maybe where there's a long-term potential and helping to build that. As we know, we tend to engage with brands a lot earlier in their journey than other retailers.

13:01Genevieve Fitch:And so we really are a part of that growth journey and actually a part of their success stories. So I think for us, we are an indicator of success on Ocado could well be an indicator of long-term potential. That's not to say that if you don't get lists for Ocado, you can't be successful because we've certainly seen that is the case. But certainly with the Brutes program, for example, we are actually really helping to drive proof of concept and that rate of sales for brands. What can a newly listed brand do to, one, get shoppers to buy their product for the first time and two, continue to grow within Ocado?

13:33Genevieve Fitch:So we have what we call the Ocado wheel, which I think anybody who knows Ocado will probably have seen at some point in our presentations, supply conferences and things. But it's effectively a toolkit that shows you all the different levers and campaigns that you can use on Ocado to help growth sales and I think brands at different stages in growth would use different parts of that toolkit. So probably for brands that are newer on the website we recommend doing things like star reviews to help get reviews on your products. We know how important that is for customers. Sampling to get your product into more houses and then also feature products which really help drive visibility on site and all that then has to be backed up by a promotional plan.

14:13Genevieve Fitch:So the way that our algorithms work on site is if you've got promotion you're more likely to be shown at the top of a search term so that our customers are engaging with the products which are offering the best value. So having really good promotional plan, particularly for first six months of trading is really important. But as always, it has to be, those things have to be built on what we call brilliant basics. And again, I think lots of brands maybe don't get that quite right. So making sure that your product imagery is correct, that your titles look good, that you've got the right information in there, the dietries, maybe slightly more boring bits, but if you don't get it right then you lose customer credibility so that's probably that you know the key bits for newer brands then as you scale there are other bits of toolkit you can use which are things like more media placements banners coupons socials other ways to expand brand awareness i think even if you're a bit better established just going back and having a look and making sure it's all as best it can be because those are the sorts of things that you forget when you're in a brand yeah and your product does change a bit over time you might have a slightly updated packaging or ingredients might change slightly you do have to make sure that for a customer that is correct and that you know that they're buying something that they can then trust in and I think that's one of the main reasons actually where yeah people can fall down accidentally without meaning to.

15:27Or even if you've just learned a bit more about your consumer and your kind of key messaging hierarchy has changed or you've got like a USP that you didn't know before. Tagging is really

15:36Genevieve Fitch:important in Ocado so if you are gluten-free or vegan or organic your products you're obviously going to appear more to customers who have an affinity to buying that sort of product, then if you're not tagged correctly, you won't show up in search terms. So there's a lot to think about, but it is important. Retail is detail, as my old boss used to say to me. So thinking about what makes a brand incubator ready, from your perspective, what separates the brands that thrive in Roots from those that don't? I think for me personally, it does all come down to the level of engagement and really making sure that you're making the most of the benefits that we offer and that you're really enthusiastic about the way you work with us.

16:16Genevieve Fitch:We offer free data as part of the Roots program, but getting under the skin of data is really important because what works for one brand doesn't work for another. So understanding what promotions or which campaigns, it does vary per product, per category, per customer sort of demographic. And so you really have to understand what does and doesn't work for a brand like yours. There's no one size fits all. And I think sometimes perhaps people you know forget perhaps forget that and don't get under it enough and then the other thing I would just add actually is having a really good level of communication with us whether it's bad news or good news we can work together usually to fix anything that goes wrong but even if it's for example supply issues if you don't tell us we can't and we promise your product to a customer it doesn't turn up that can that can let people down so making sure that you're being really clear and enthusiastic and I think also asking questions and being really positive and curious so curious is one of our values at Ocado so asking questions absolutely fine and actually even from other maybe other group members or other brands you can always learn something new by just being a bit more curious.

17:20You mentioned from the outset that you love working with founders how much do you think of the brand success comes down to founder mindset versus product proposition?

17:29Genevieve Fitch:Product proposition is obviously incredibly important because if it's not delivering something new and it's not meaningful and customers don't understand what benefit they're getting from buying the product then obviously they're not going to buy it but in my experience it really is a mix and I think you can have the best product with the best innovation but if you haven't got the right backing if you've not got a founder behind it cheerleading it being really passionate having belief in that product it may well not succeed founders to me are incredibly important and as I say like when you speak to founders and you see the passion they put into their products it really is very inspirational we actually now on Ocado can use those founder stories as well on site to help drive visibility and stories of products we updated our sort of back-end website recently to be able to do more of that and so actually our customers really engage that content on site as well so as I say yeah for me founders are a big part of it I was going to ask why you like working with founders they're just incredibly inspirational but passionate people always very lovely in my opinion but always with such a strong belief in their products that I find just yeah really fun to be around and usually the products are all fantastic as well which obviously helps but yeah they're great people.

18:38Genevieve Fitch:Contagious energy. Yeah exactly that's exactly it. Is there such thing as too early for to join an incubator? Yes and no I think to be stopped in retail you obviously have to have some things you need to be accredited you need to have manufacturing in place you need to have a supply chain but that doesn't necessarily mean that Ocado we wouldn't engage with a brand before those things were there we are sort of risk takers in that respect and we like to find brands at early stages on their journey and help them grow and be a part of that journey and we've been known to do that from earlier stages I think a really good recent example is Kindoco which is a vegan cheese made from cashew nuts so it's a spread it's delicious but they probably met the buyer at an event almost 18 months ago now and so the buyers kept close to them while they've been setting up to be retail ready and so we've been close to them on that journey and wanted to be the first to launch them when they were ready and so we've definitely there are definitely lots of occasions where we have done that basics we have to do to launch but I think we if we see the right product we will stick to that journey as they become retail ready are there any sort of specific categories or criteria that you are actively looking for so right around health and wellness or sustainability yes both big health and wellness is big there's a massive range we're going on that area about how we make sure that we offer the best possible range to customers sustainability and i think the future of food in terms of good for people good for planet there's another big one but another piece of work we're doing at the moment within ocado is actually now focusing a bit more on the non-food categories So pet, baby and home, which perhaps have been a bit underloved in recent years, but we really want to be able to live in that whole basket experience for customers.

20:28Genevieve Fitch:So how do we make sure that we do that? And so, yeah, a big part of my wider team is looking at how we bring newness and excitement into those categories. Can you share a time when a founder had to radically pivot or rethink their strategy inside the program? Yes, one of our Roots members recently shared that they had used the data, which is great that we'd given them as part of Beats. and looked at the reviews and realized that actually they wanted to bring a new, I guess, add something new to the range as a result. Marley Bones, they're a dog food brand, which I have a dog, so I love them. But they realized that actually customers were usually buying multiple SKUs at a time.

21:06Genevieve Fitch:And so they decided to actually develop a new multi-pack to fill that customer need and fill that gap that they have within their range. And that's obviously all through the Roots program data that we've given them. So there are more examples and yeah, we love hearing really how we can help with things like that. Yeah, I think that's a good another sign for long term success is a brand who's able to pivot and listen and pivot without, you know, changing course every 10 minutes, but taking proper consumer insight and then adapting and refining. What are some of the less glamorous but essential parts of building a brand that Roots helps with?

21:40Genevieve Fitch:I think two key things here we've covered sort of brilliant basics already but stock availability is obviously a very key one if you're not able to fulfill orders then obviously you're not going to sell and that means that you haven't got the revenue to reinvest in growth and you actually be surprised at how many times that can become an issue for brands not just keeping an eye on that. I think the other one is obviously again linked to revenue but managing P &L really effectively especially as you do start to supply more grocers or more channels because it can become a bit confusing but again that's something which we want to help brands with so we actually ran a masterclass this week with Mission Kitchen all around managing multiple P &Ls so there are ways that we are trying to support brands as they do go through that growth journey.

22:25so cardo is doing really well growing fast i believe it's been the fastest growing retail

22:30Genevieve Fitch:every month oh i think it's 23 months wow yeah wow and has a cardo roots played a part in that i mean it definitely has when we look at the how roots brands perform on average so the sales of roots brands have gone up over 50 from the first six months program versus the second and actually the penetration of customers into customers have gone up fourfold. So customers are really engaging, finding these products, wanting to buy them, which is really important. And I also think that a big part of that is that customers, as I said before, our customers, our most loyal and biggest basket spenders do tend to over-index in these products.

23:08Genevieve Fitch:So being able to deliver that for customers and continue to give them that innovation is really important. So yeah, it has been, we think, a really important reason why our customers and our biggest loyal customers, I guess, do continue to come back and shop with us. What do you want to be true of the brands on Ocado's digital shelves in three years? I think the key thing for us is that they're continuing to grow, obviously, but also innovate and then drive that innovation in the wider category. You quite often see that a challenger brand coming through in one space helps drive change more broadly, even with the larger brands out there.

23:42Genevieve Fitch:So that's definitely part of it. And we want to be obviously supporting them while they do that. And we love MPD. So it's really important to us and our customers.

23:54How do you think retailers can use their power more responsibly, not to just respond to demand, but to shape it?