Talking Shop With Insiders From Walmart, Sprouts & Gelson's

0:10Hello friends, I'm Ray Latif and you're listening to the number one podcast for anyone building a business in food or beverage, Taste Radio. This episode features a trio of interviews with executives representing mass, specialty, and natural grocery retailers. If you've ever wanted to get inside the mind of a retail buyer or merchandiser, this podcast is required listening. In this episode, we sit down with key members of the coveted retail chains. Will McDonald, the Vice President DMM Beverages for Walmart, Kristen Alice, a Category Manager for Gelson's, and Brian Albert, a Senior Category Manager for Sprouts, reveal how each retailer evaluates emerging brands, assesses innovation and trendy ingredients, and cultivates successful relationships with founders.

1:10Hey folks, it's Ray with Taste Radio. Right now I'm honored to be sitting down with Will McDonald, who is the Vice President DMM of Beverages at Walmart. Will, great to see you. Yeah, thanks for having me today. Great to be here. Indeed, we're here in Manhattan Beach. It's a beautiful day, I think. I'm, you know, looking outside the window. It seems to be sunny, but we're inside a hotel lobby at the Beverage Forum event here in Manhattan Beach. And I hope to get outside at some point. I mean, we flew all the way out here for the sun, right? Yes, we did. No, the weather is phenomenal, even though we're in a podcast studio in the hotel.

1:43We are in a podcast studio. Our team did an amazing job creating this studio. We've got a backdrop. We've got tables. We've got professional microphones, cameras. We've got the whole thing going on here. It's an honor to be here. It's an honor to have you. Thank you so much again for joining us. Walmart, you've been with the company for some time. Yeah, 13 years now. Okay, awesome. Yeah. I have to admit, I was scrolling through your LinkedIn page, looking at your experience. And I saw one of your first jobs at Walmart was being in charge of gift cards. Yes. Okay, gift cards. How does that work?

2:14Yeah, so actually my first buying responsibility was being over gift cards. So if you think about everything from Walmart gift cards to Starbucks to PlayStation and all of those things that we sell at the front of the store near the checkouts, that was the program that I got to manage. And so I learned a lot about the restaurant industry and gaming and also just how the details of payments work behind gift cards. So a little bit of a non-traditional merchandising category, but it was really cool to jump into merchandising and learn that way. Yeah, for sure. I mean, I think when you see those displays, there's just so many businesses out there.

2:56I imagine it can probably be difficult to pick and choose what you want to have in your stores. Yeah, totally. One of the biggest things that merchandising that we work through at Walmart is just managing our assortment. So how broad do we want to carry things? How many stores do we want items in? What items make more sense to be in certain geographies versus other ones? So you can imagine with gift cards, there's different restaurants that are different in different parts of the country. And so being really choiceful in how we make our decisions and what we offer to customers is kind of the bedrock of what we do.

3:31I imagine it's not too dissimilar from the beverage industry with so many things evolving in terms of what people want, the nutrition that they are trying to incorporate into their own personal lives for their families. and I imagine it's pretty complicated at this point, no? I mean, how do you assess, evaluate emerging trends and the brands that represent them? Yeah, it's very, very complicated, but it's also not on the other hand. So, I mean, I'll start with the simple and then work to the heart. From a simple standpoint, what we are trying to do at Walmart every single day is offer our customers the brands and the items and the ingredients and all of those things that they want and that they're looking for.

4:17And so we have a lot of different tools and resources and data to search through those things and to find what they're looking for. And then it's our job to make sure that we get it on the shelves and present it to them so that they can purchase it. So on that standpoint, it's pretty simple of what we're trying to accomplish. I think where it gets really tricky and a little bit more difficult is the how. And that is, there is, as you mentioned, there's no shortage of brands, no shortage of trends, no shortage of the next ingredient, the next thing that is coming. And so what we focus on every single day is trying to be really choiceful in how we go about that and make sure that in our environment, every single thing that we offer to customers is what they want.

5:04And we feel confident that we can give it to them and supply it to them every day. There's a lot of brands here that would love to have their products on shelf at Walmart, whether it be locally, nationally, what have you. And if I were a founder and I was thinking, okay, how do I get in touch with the Walmart team? I think my product would be great on shelf in this store or that store. I kind of feel like I would be overwhelmed a little bit because Walmart is a behemoth. It is the largest brick and mortar retailer in the country. you have so many stores and just the thought of that first step, taking that first step to introduce yourself and your brand to Walmart, again, feels like it'd be a little overwhelming.

5:46How do you talk to emerging brands and emerging founders about that first step and subsequent ones after that? Yeah, definitely kind of understand how people feel. I think that when you look at Walmart, it's very easy to say, oh, they're really big. They must be hard to work with. It must be a challenge to make a connection and break through. But in reality, it's actually not. My team is super focused on making sure that we're meeting with everyone that we possibly can and that we're attending events like today and that we're doing things in the industry to where we can make connections. Again, the organization and the store count and all of those things may be overwhelming at the onset, but at the end of the day, we're still people too.

6:31We're merchants that are trying to find really cool, great items and meeting with founders and trying to find that is a big part of what we do. On the how that happens, yes, again, there is, I think I have a total team of 10. And so the count of founders and people in the beverage industry versus just the amount of people that we have to meet is challenging sometimes. But I do think that there is overall a really good opportunity to have dialogues with us, to seek us out and to talk about your products or anyone's products at Walmart. At the end of the day, how many of your brands on shelf, how many of the brands at Walmart are the result of you reaching out to founders versus inbound inquiries to Walmart?

7:19That is a great question. I would actually say that it's pretty mixed. We have a lot of really good examples that my team sees things either in the news or out in... On BevNet.com, perhaps? On BevNet. Maybe you heard it on Pace Radio. That's right. And out when they're traveling and are looking at things in the marketplace. And we do have a lot of examples where our team has just reached out and said, hey, I would love to talk with you. I'd love to hear your story. But then we also have a great mix too of people reaching out to us, getting our contact information, reaching out, making connections through other people who know us as well and connecting that way.

7:59So it is a mix of both. You always see these, I don't know, I wouldn't call them horror stories, but you always see these stories on LinkedIn or Instagram about founders reaching out to buyers at the various retailers across the country. and it's like, I emailed this retail buyer a hundred times or I called them a hundred times. And I wonder how effective some of that stuff is. If someone emails you, Will, and says, hey, I would love for you to try my product. I think I have a great brand that would really fit in well with the selection of Walmart. How much value do you place on an email versus, say, an in-person meeting at an event like this?

8:36I mean, if you say you spend five minutes with someone at an Expo West or at a BevNet Live, You know, how impactful is that versus an email or a phone call? Yeah, I would start off by saying that whether it is an email, a LinkedIn message, any type of communication contact like that, we definitely view all of those means as just ways to connect. And so if you think about, you know, I want to make a pitch, I want to put my best foot forward, I want to, you know, provide all of these things. We use a lot of those ways just to make connections to set up further dialogue. So not very often is my team or I would probably say anyone just going to get an email and make a buying decision on, OK, these stores or this area of the country.

9:22A lot of those things have to be worked through and like really thoughtfully discussed with emerging suppliers. And so I would say use all of those things as a way to just communicate with us and try to find time that we can either have a 10-minute dialogue or a phone call or something like that to really get deeper into plans for the brand. How long does it typically take from initial meeting, initial email to on-shelf at Walmart? Yeah, it all depends on the timing of our cycles. And so as you can imagine, with the footprint that we have in the merchandising processes that we have, we typically relay our stores once or twice a year.

10:04It's called a modular reset. And from that process, I mean, you're looking at anywhere from six to eight months on introduction, dialogue, conversation, going through the process and then ending up in a store. I would classify that as normal or the middle ground, if you will. There are often times too, though, that we have a lot of new tools and capabilities. If we want to move faster, and also I would say digitally too, if we want to move faster and get something online or do something that is not necessarily in a modular in a store, there's a lot of opportunities for us to move much faster than that if we need to and if that's something that both parties feel good about.

10:45The other thing that I would say, too, is that sometimes it also takes a lot more time. We've had a lot of dialogue and conversations with brands on, hey, we're going through the process. And then we both kind of agree that, hey, this may not be the right time. We're having some things that we're working through or the brand is working through marketing or manufacturing or fill in the blank. And sometimes those conversations have to happen over months and years to make sure that we get the timing right whenever we're ready. Yeah, clearly, you know, with some early stage brands or even emerging brands that are two, three years in, they may not have the production capacity, may not have the distribution muscle that they need to be able to be in Walmart or any other retailer for that matter consistently enough for your needs and for your customers' needs.

11:31I have to wonder, though, whether or not that affects your interest in the brand sort of long term. I mean, if they can't fill a need, if they can't fill your shelves in the timeline that you want them to, I would think perhaps there's another brand out there that will do that instead. So how competitive is it for, and specifically as it relates to early stage brands, you know, a year to five years in, how competitive is it to get on shelf at Walmart? I would say a couple of different things there. I first want to kind of address what you were talking about on, hey, if we're delayed or how, you know, does Walmart or does anybody lose confidence from a merchant standpoint on my team on we had to delay or because we're still working through things.

12:19I can tell you 100 % that we would much prefer doing it right at the onset as opposed to moving too fast and then having challenges. It is very difficult to overcome not being ready, launching anyway, and then having kind of ongoing challenges. And so our preference, no matter what, is that we want to do what is right by brands. We want to do what's right by us and our customers. And the best path forward is to go when everyone is looking at it and saying, okay, we're ready. The second thing I would say is that we truly can be as small or as big as we need to be. There are a lot of things that we do every single day that are big launches, innovation.

13:04And it is an easy decision to say, hey, this is something that we're going to take nationally. Or this is something that we're going to go in a pretty significant amount of stores in. We also have the ability to be as small as we need to as well. We can test in certain markets. We can test in certain categories. We have the ability to be very micro-focused as well. And oftentimes, feedback from brands and from suppliers helps us shape that dialogue and how we want to go to market. What's the benefit of going micro? What's the benefit of being in a handful of Walmart stores? Because Walmart is a volume retailer.

13:42I mean, you sell not just pallets, but truckloads of pallets of products. So for a brand that's, you know, relatively new to the market, maybe selling, you know, a bottle a week per store or two bottles a week per store. I mean, it doesn't seem like that has much of an impact for Walmart. So what's the benefit of your retailer, of your company doing such a thing? Yeah. The main thing that I would say is that it doesn't. Yes, there's a lot of brands that are big and that move a lot of volume. But also, we look at metrics that measure output per store or output per item per store. And so even if you're a brand that's in 100 stores and you are building momentum in those stores, it's very easy for us to have a dialogue that's data-driven that says, hey, we can make a strong projection that you, when you expand, will move from here to here because of how you're performing in these specific stores.

14:40Even though the overall case quantity or movement may be smaller, there's ways to equivalize it. We look at that a lot. I do think that the other piece, too, is kind of like the phased approach is that in a smaller group of stores or markets, we both have the ability to learn. There's a lot of things that our supplier partners and founders and emerging brands, once they get in the store, sometimes the variables are different than what they may have expected, especially if they've never been in a Walmart store. What the product looks like on the shelf, how is the packaging catching consumers' attention, how is our supply chain running seamlessly?

15:23You know, a list of questions go on and on. And so a lot of times the ability to get a real-world environment helps people make adjustments and changes for the better too. Lately on the podcast, I've enjoyed doing some more dissociation with guests, and I'd love to do that with you as it relates to specific categories in the beverage industry. You ready? Yeah. Okay. Let's do it. Let's do it. Let's do it indeed. All right. A tangential category, energy drinks. Great category. Yeah. Will was very excited when he said great category, by the way. It's very interesting. One of the things that we'll kind of explore a little bit deeper on the stage later is that industry has just seen so much change, so much innovation, and customers are responding to it.

16:11We talked a little bit about ingredients, enhancements, meeting needs through function, and that category continues to be one that there's a lot of activity in. I just want to explore that just a hair more. A lot of times when we are introduced to new energy drink brands, they will talk about specific ingredients or formulation, not necessarily flavor, but how much do ingredients move the needle for you and your team within that category? It definitely is a combination of a lot of factors. Whenever, anytime that we talk with our customers and engage with them in store walks or in just looking at data and how they purchase, there are a lot of factors that influences customer purchase and how they think about brands, categories, or how frequently they buy it.

17:00And so for us, all of those things tend to be important depending on the customer group that you're talking to. And so in energy, whether it is a specific function, a specific ingredient, or very flavor focused, a lot of those things are going to resonate with different customers. And so, again, there's been a lot of innovation there and a lot of brands that are doing different things on all of those that customers are responding to. Let's do a catch-all for this one, sort of mid-calorie functional soda. A lot of innovation, a lot of growth that everyone can see there. there definitely continues to be more brands, more excitement.

17:40And that one has been really interesting to watch. And it's going to be going to be great to see where that goes in the future. Okay. I wish I had more of a crystal ball. No, no. I mean, I think it is exactly that. It's a developing category and it's going to require a bit more development, I think. Yeah. Yeah. Cans slash ready to drink, ready to pour cocktails. That one is interesting. So not technically in my space. And so me and my team don't manage that. So I just kind of get a more of a more of a side view of that business in that industry. But everything that I do see, I think that ready to drink and on the go in general is a trend across a lot of categories.

18:21Now, I think that people are looking for those types of options. And there again, continues to be a lot of innovation and a lot of newness over there to functional beverages as a whole functional emerging any label that you want to put on it that is more of the kind of up and coming thing is it's really really interesting and it's ever changing i would say so even the term functional beverage or the category as we would have described it four or five years ago we're talking about different brands different items and different functions. And so we look at all things emerging and all things functional as an opportunity just to get them in the store and see what customers respond to.

19:05And then from there, we kind of build out a plan on, is this going to stick? Is this a trend that's going to stick? And then is this something that is also can be incorporated into more mainstream areas? kombucha? I would say that our chilled space in general, we have the ability in our chilled portfolio to offer a lot of different items and kombuchas is one of them. And so I would say that overall chilled beverages for us, there's a lot of different brands and a lot of different categories that we have to offer to customers up there and all of them are doing pretty well. That includes juice? Our set, I would just tell you, is, you know, you could walk into a store and see is everything from chilled juices, everything from protein, shake type of offerings, everything from chilled, healthier, better-for-you soda.

20:05We have in that set also kombuchas and a lot of different other things, too. All right. This is the last one, and this one's near and dear to my heart. Kids beverages. Yeah. Yeah, near and dear to my heart as well. So I also, in addition to Walmart World, I have four kids. Wow, that's amazing. Yeah, and so it's something that we have a passion for as well. There is a lot of opportunity in space as it relates to kids. And we continue to see, you know, talk about emerging. We continue to see brands and people coming up with ideas that we have never thought of or seen. And we're working to bring all of those things to stores.

20:46Kids in general, that occasion, whether it's around Lunchbox or Summer or On The Go, as we referenced, there is a lot of great occasions to tap into there. And so everything from great brands and mainstream offerings to new and exciting emerging brands is something that we are keeping our eye on. I got to ask, Will, because I feel like you have a lot of influence with your suppliers. You can say, look, we love your brand. We love your product. We don't love your sugar count. Is that the way it might work? I mean, let's say you go to one of these big kids brands and say, we appreciate what you do for us.

21:25You know, we appreciate the fact that you're a great supplier for Walmart, but, you know, we want to help America be healthier. Is there anything you can do about your sugar count? Is there anything you can do about your calorie count? Do you have that kind of influence? I mean, do you have that ability to advise brands on how to make kids healthier? Yeah, I think that as we think about all of those things and better for you and healthier options, our focus primarily is to offer like the broadest assortment that we possibly can. And so for us, it's much more about breadth of assortment. And we want to make sure that we're working with all of our vendor partners to offer the best possible products that we can.

22:08As far as anything on, and again, too, the one thing that we haven't talked about, we've talked a lot about emerging and different things today. We also offer a lot of great private brands that we get the opportunity to work closely with our product developers and with our teams as well. And so that is a opportunity for us to look across all of the industry and really offer everything that we possibly can on meeting customer needs. Well, Private Label, if you're creating a Private Label Kids brand, I would be excited because I'm hoping and look, you know, there's really a handful of big kids beverage brands.

22:49I mean, I can think of three, really. And two of them, I'm not huge fans of what's in there. And I'm just hoping that when the next time I go to a soccer game or, you know, some sort of after school events and I see parents passing out beverages, they're not the ones that are 150 calories, 25 grams of sugar per six ounce juice box or a pouch. And I'm just like, there's got to be a way to make these things better. And I if Walmart is coming out with a private label on, I'll be the first in line to buy it. So. All right. Thank you for that. There you go. Will, I said I'd sit down with you for a ride.

23:23I told your team, 15 minutes. I think we've been chatting for about 25. Thank you so much for taking the time. I really appreciate it. And I'm sure our audience does as well. Yeah, thank you. I appreciate it. Thank you.

23:36Hey, folks, it's Ray with Taste Radio. Right now, I'm honored to be sitting down with Kristen Alice, who is a category manager with Gelsons. Kristen, great to see you. Hi, thank you so much for having me. It's a pleasure. It really is a pleasure to be sitting down with you because Gelson's is one of my favorite stores here on the West Coast and more specifically in Southern California. Love to hear that. Thank you. Yeah, I always try to visit a Gelson's when I'm in town. I typically shop Gelson's via Instacart. Okay. That's very common, actually. Is it? Yes. A lot of customers, especially after COVID, has gotten used to Instacart.

24:12Yeah, I feel like it's really easy to shop your stores using that platform. And it's great that Instagram has the same prices and sales typically, right? Or is it across the board always like that? For the most part, yes. But I still encourage you to actually go inside of the stores. So then you can see what our new products are and pricing. So maybe we have a really cool display and you can see all the items that are on the display. Yeah, I love going into a store like Gelson's for discovery. I'm always visiting the chilled beverages as often as I can. I always feel like you have a good shot selection, juice shot selection at Gelson's and you're clearly in charge of that.

24:54But how do you think about making the store a place of discovery for consumers? So I always try to look for something unique to the set. So you do have your everyday teas. You have your very common national brands. But what I try to differentiate from the set are those unique items that maybe could be local, better for you, lower sugar, or have really cool packaging that makes it stand out from the shelf. And just to be clear, you are a category manager for quite a few categories. Before you hopped on the mics, I think you listed like nine different categories. So beverages, candy, jerky, mixers, bread, salty snacks, checkling, chips.

25:38So half the store. About half the store, yes. When you're talking about something that's unique, how do you define unique? Especially right now, adaptogens, those added benefits to beverages are huge and trending. So prebiotics, probiotics, postbiotics, but most importantly, that it tastes good as well. I'm so interested in this idea of functionality as being an important part of your assessment of a brand and its products. Because functionality is sometimes really difficult to explain to a consumer. So does the functionality have to be easily understood? Does it have to be functionality like, caffeine is an easy to understand functionality, but maybe prebiotics are not so much.

26:23So how do you take into account education and awareness and communication of these ingredients when you are deciding whether to bring a brand into the stores? That's a great question. So I look for vitamins and also what it does for your body. And that's the tricky part because a lot of beverages are jumping onto that bandwagon of being a functional drink. So they want to play into that category. So hydration is not really functional, I would say. I would put that more into hydration set versus functional, as I mentioned, the vitamins, the adaptogens, lion's mane. These are things that your customers, they understand because they're already aware of these kinds of ingredients.

27:10Or is it that your customers still need to be educated about a functional ingredient like a lion's mane or a reishi? I mean, do you feel like they have a good sense of what they're getting into when they walk into the store or do they still need quite a bit of education? Yes and no. So a lot of customers are looking for better for you items and maybe they're not quite sure what they're looking for. So maybe if they're about to grab a soda and then they see this functional beverage set where less sugar, maybe probiotics, prebiotics, they're not quite sure what it is. They pick it up, they try it, and that's kind of how they learn about it, just from tasting it.

27:49But also when I bring in new items, vendors have an opportunity to be featured in our What's New newsletter, which then they can put four to five sentences about the product, why it's so great. And that gives the opportunity for vendors to educate customers. Or if they do in-store demos, then that's another great opportunity to talk about their product and why it's so great. You said when you bring new brands into stores, how often, what is your new product cycle or what is your cycle for bringing new products into your stores? Monthly. Monthly? Wow. I try to always act very quickly when it comes to bringing in new items.