Full Transcript

Sari 0:04
I'm Sari Kimbell and I've done just about everything in the food industry. I have helped hundreds of packaged food business entrepreneurs and now I want to help you make your delicious dream a reality. Whether you want to be successful at farmer's markets, online, or wholesale on the store shelves, Food Business Success is your secret ingredient. I will show you how to avoid an expensive hobby and instead run a profitable food business. Now let's jump in!

Sari 0:39
Hey there, everyone, welcome back to the podcast! This is a really special one for me. I get to interview longtime friend, mentor, woman I really admire and just an all around badass, I get to talk with Tania Ellis. And Tania is a natural foods retailer and enthusiast for over 30 years, with 15 years in grocery store leadership. She's also plant based eater and a small business owner as a side hustle. I forgot about that. I love it that you're an entrepreneur as well. So welcome Tania. I'm so happy to have you here.

Tania 1:19
Thanks, Sari. Thanks for inviting me.

Sari 1:20
Yeah, so Tania and I go way back. She was the associate Store Team Leader when I was at Whole Foods Market. And now you are the store leader, or what's the right title for you at Lucky's Market?

Tania 1:37
At Lucky's we call that Floor Director.

Sari 1:39
Floor Director, great. And you have been in the grocery industry for a long time, you want to get just give us a little quick timeline of your journey?

Tania 1:51
Absolutely. My journey is a, you know, long like everybody's, but when I graduate from college in Missouri, I graduated from Mizzou, in the early 90s. And I had met my husband, he was my boyfriend then and he had two years still left so I quit my job as a bartender and pizza hustler and got a job as a little local natural food store and never looked back! Man, I started working in natural foods in a tiny shop in Missouri and then my husband and I ended up moving to Colorado when we had yet to get married just for the outdoor life and when we moved here I got a job at Wild Oats so it was column by market and Wild Oats and then three weeks later got a job at Alfalfa's and then I stayed at Alfalfa's until Whole Foods opened in town and then I left Alfalfa's to open Whole Foods and then stayed with Whole Foods for 14 years and left Whole Foods to open Lucky's so it's been a really fun journey just learning the industry from a tiny tiny store to a big high volume store and now I'm back in the middle. So it's a fun path and I think just the education, I couldn't look back like once you learn something about natural foods and how they benefit you personally as well as the environment and, you know, people around you, is a hard subject to drop.

Sari 2:07
Yeah, and you started in Whole Body, is that where you started? I know Whole Foods, you were in Whole Body.

Tania 3:28
Yeah, I think well, working in tiny store you work everywhere but I got, you know, I was doing buying for dairy and buying for supplements all at once in a tiny store as well as, you know, cashiering and whatnot. But you know, when I moved to Colorado, I was with my supplements knowledge I just ended up as an assistant in a supplement department and then running a supplement department for 15 years. So yeah, I opened Whole Foods as the Whole Body Team Leader there and then so, that's my that's my home base, for sure. I still have a passion for supplements and my husband is a, you know, sales rep for a supplement company so the education continues in our house like I can't stay away from the supplements and body care category.

Sari 4:15
Well, so you're coming from your office at Lucky's Market. And you would describe Lucky's as like, what would you describe as far as like size? Is it uh, I mean, it used to be regional, it was super local then regional. How do you describe it to people?

Tania 4:33
When I describe to people, I say it's a weird corner market like we have two stores. So it allows us the freedom to be weird and embrace the fun part about grocery sale. We get to build our own set. We get the build our own planograms. We get to talk to local vendors all the time and decide one on one what's best for our customers on this corner market. We're pretty niche so I think a lot of stores in town, the bigger store gets typically the more streamlined their operations are. And so for us to find our way, we found that we carry the odds and ends of what other stores don't carry, that keep people coming into our store. But we still carry all the basics as well in those categories. So people can do a full stop at our store. But I think we're missized, you know, we're not at tiny, we're not as small as a coop, we're not as big as Whole Foods. So we're right there in the middle.

Sari 4:38
So you're coming from your store office, which I love. It's just got all the clipboards and things and quote.

Tania 5:41
This is my office manager's office.

Sari 5:45
But I just, I want to ask the question, like, how are you? Like, how have you gotten through this? I mean, you have such an ability to remain calm under pressure, you have such a, you were always such a good example, when I worked with you, I've just like, maintaining composure, but how are you doing? We are in March of 2022, after two years of this?

Tania 6:11
I'm feeling great. You know, it's been such a wonky three years for Lucky to be opened three years ago, we turned three on March 6, so we're newly three, we're toddling now. And we opened up and before our one year anniversary, our company went through bankruptcy. So we went from 39 stores to 2 stores. And I feel, you know, so fortunate to work and be one of those two stores. And I got a lot of new skills. You know, I've never navigated leading a team through bankruptcy. So that was new and exciting. We emerge from bankruptcy a year later, right as COVID hit. So then it was a fun time, and you just had to have a good sense of humor. It's like, do we not have toilet paper on the shelf because of we didn't pay a bill somewhere? Or do we not have toilet paper on the shelf because it's a pandemic? I'm not sure. So again, walking through another new situation just created a new set of skills. And I don't know how to answer the question about, you know, how do you stay strong, I have a general tendency to wake up every morning and be like, alright, what does this day have for me, and watch each day unfold, and really embrace the dynamic art of the grocery retail business. You wouldn't do it for 30 years if you didn't have a good sense of humor about what's coming at you every day. And if you have a expectation of how your day is going to go, you'll probably be really dissatisfied in the role. So you just got to embrace the roller coaster piece of it. And the last few years has offered plenty of roller coasters. So I'm doing great. It's just been a really dynamic and crazy three years, and it's helped me grow as a leader as well.

Sari 7:55
Yeah. What is the Buddhist saying, right, like suffering is in the chasm of the valley of like, the reality of it, and then what you hoped would be right, your expectations, so you must do a good job.

Tania 8:09
Right, just like, I think it's good to look forward. But you also have to just, you know, I try not to hold any grudges or, you know, if there's a call out, or there's an obstacle, or there's an out of stock, or it's not like, oh, this happened because of this business. It's like, that's all great to do the post mortem on something and not have it happened twice. But ultimately, in a day, it's like, don't be angry or upset, like, what are we going to do today? And how are we gonna go past that obstacle? And that's been just part of my constitution. And so I think it's helped me navigate my career as well.

Sari 8:43
Yeah. So we ran into each other at Lucky's a couple months ago. And it was so fun, you had some time to catch up. And so I asked you if you would be willing to come on the podcast, I think because, well, I think you're just such a great model of leadership and of such an amazing experience in the grocery industry. But, you know, Lucky's market is a great example of a sort of local midsize grocery retailer that is very open to taking on local products. And so I thought it'd be so helpful, you know, people listen from all over the country, even the world to this podcast. But you know, as an example, just to help guide people as they're starting on a journey going into wholesale, maybe give them some behind the scenes, your perspective from things but so maybe talk with us about kind of Lucky's market view on local and how you guys see that as important to your strategy.

Tania 9:51
I mean, local is a huge component of our strategy because we have such a small company, you know, and suppliers and new business owners get to talk to the buyers here at our store and talk to me one on one, instead of having to go through the hoops of talking to an anonymous, you know, Category Manager or something from a bigger company, they just come in and say, this is what I'm making, this is what I'm doing. And we can talk to him about how it would fit in our set. There's always a challenge within a store that it's a finite amount of space. So for every product that comes in, usually something gets kicked out. So it's a dynamic environment that some people I think who haven't worked in it don't understand that piece of it. You know, one thing I've noticed with some small companies is they tend to, if they've been selling at a farmers market, they're making what they need to make on the product, but then they want to sell it to a store that, and we have to make money on a product as well. So it's understanding the difference between wholesale and retail, and how that market works is sometimes an obstacle for a new business owner, that we can help walk them through. But, you know, I understand they need to make a profit. And I don't think they understand that they can't sell it to us for the same price, you know, at that they sell it to their customer direct for because otherwise, if we make the margin on it, to accommodate paying our rent and paying our team members, then we won't be able to sell it at a too high of a price. So that's an obstacle that I think some businesses haven't thought about yet fully.

Sari 11:37
So, so good to hear you say that because it's something I talk about over and over and over again. And you can just send people to me when they ask that question because we talk about that first thing, like let's look at our cost of goods sold, we need price parity, you can't charge, you know, the wholesaler the same that you charge at the farmers market. And how do we value engineer and get your price down? And we do that through efficiencies, and buying power, and labor, and all these things. But anyway, yeah.

Tania 12:08
That's great. You have helped so many companies, I'm so proud of you, Sari, of what, all the companies that you've escorted into retail, and it's a huge feather in your cap, you're doing a fantastic job navigating these conversations. And when people come to us who have gone through you, they're many times fully informed and ready to launch. So that's awesome. Kudos to you!

Sari 12:28
I love that. Yeah, I do have a number of clients in Fort Collins or in Colorado, and I'm like, go, like I prepped them to go into your store. That's good to hear that they're prepared. So that's awesome. So I agree, I think people need to understand that this is like real estate, right? And like, the shelves are full, hopefully, right? They already have product assigned to them. And so we need to make a pitch to the retailer about why our product should be on the shelf and there needs to be a return on investment. This isn't just free space. But what are some of the do's and don'ts? I know you talked to buyer or to vendors, makers, but you also have a team of grocery folks who talk with them too. But when somebody is ready to pitch to somebody like Lucky's, what are some do's and don'ts?

Tania 13:22
I think I have more do's and don'ts. Mostly it's reach out, you know, call us or find out who the buyer is, try to get their email, contact them electronically. And stopping in unannounced sometimes will get you the shortest visit because our teams are busy. We have load, we have order deadlines, there's all kinds of things that each of our department managers are trying to stay on top of. So sending an email is usually the best way with an introduction about yourself and your product. Following up with if they haven't gotten back to you, say I'm going to send sample in your way and go ahead and send a product to them with a Sell Sheet and your information, your business card. And then just to keep following up on that. You know whether at that point, you can do a phone call but getting product into the buyers hands so that they can feel it and taste it as well as just that electronic contact versus the pop in are some just quick do's and don'ts and to know the market you know if you haven't visited the store, looked at the store. We understand not everybody can stop in at least to understand, you know, go into your local natural foods market. Look at the category, make sure that your product, you know what you're up against so that you can make that pitch and answer those questions and not be caught off guard.

Sari 14:50
Yeah, you really need to know your numbers, all your product information. Have a barcode, I mean, your level of store need to have a correct, just one barcode. We need to Sell Sheet. All things that we do inside Food Business Success. But you need to be prepared like understanding your margins, understanding how you can differentiate yourself, right? I'm thinking of one client I know just came in recently and, you know, they're beet burger. It's like how do they position themselves as a different product among all of the other plant based burgers out there, right? Especially because they're gonna have a higher price point as a local producer, there's just to some extent, there's no way around it. So you got to convince you first, and then you have to be able to convince customers as well.

Tania 15:46
Right, and we're not there to walk us through everything. I mean, we have team members on the floor all the time, but that product has to be able to jump off the shelf to the customers and we help with local signage, we help with local vendor profiles to make local items stand out as the better option or you know, people can identify local in our store without having to ask a team or like which ones are these are local, but it's not the number one buying trait for a lot of consumers, it could be a tiebreaker, but most shoppers are coming in and they want tasty food, they want food that they get a good value for. So it might not be the, doesn't have to be the cheapest thing on the shelf. But it it needs to be competitive. Because if it's local and delicious, but twice as much as the products in the category, it won't sell or it will only sell to the, you know, the friends of the people who are excited to see it out in their, you know, on a retail shelf. But then it usually sells once and not twice. And you know, the name of retail is turn, he's got to keep turning this merchandise. We don't want to have a food museum, we want to have a dynamic. We want to fill selves and not be dusting products. So that's not our favorite job.

Sari 17:05
Oh my gosh, I'm going to pull that quote. We are not here to have food museums. Awesome.

Tania 17:11
Yeah, with all this awesome food that no one wants to buy twice! You're like, it's tasty, I swear. But yeah, Sari, we've curated this great selection for you to look at...That's not our business.

Sari 17:23
Yeah, and I think that's where, you need not to understand what makes you differentially unique. What's gonna stand out, how you can be as competitive as possible. But if you can't compete on price, how can you compete elsewhere? And I think your packaging has to do so much more lifting for you. I always say like, you're not at a farmers market where you can kind of talk to the consumer and tell them all the great things like your packaging really has to do that for you.

Tania 17:51
Yeah, I think there's, you know, when we talk about the do's and don'ts, again, you know, people who have only sold through the farmer's market, again I'd encourage them to go into a grocery store and see how the grocery store or natural food stores packaging looks so that they know the different approach for retail. It's great to have a farmers market side of your line and then still have a retail side of the line where maybe let's go back to the beet burger, maybe the burgers a little bit smaller, but it will help it stay in line price wise. And the ones that you saw in farmer's market have a different package. It's more like right straight from your home kitchen to your consumers kitchen. But for the retail step in between, it really has to stand up. Literally, the packaging has to stand up. As well as, like you said, it needs to be able to speak to the customer because you're not there hand selling it, and even a great demo. Usually the after effects of a demo, you know, you'll get great sales in the moment but you need to get people to buy it twice. And without either talking to them about it when they come to buy the second time and they start to look at the category, and your product sitting in the category, it has to still stand out and be a good value.

Sari 19:12
Right. And I'll just know that our label also needs to be compliant and you as a grocery store, while you're not there to enforce it, you are sort of assuming that their label is FDA compliant, and they have all the components of that.

Tania 19:27
You bet, I know we get phone calls sometimes about like, how do I get into your store? And it's like well, you know, they'll have like a personal gmail and they don't have UPC and they don't have insurance. They haven't yet had a company, they just had this, yeah, my friends love my salsa and I want to make it and sell it. They tell me I should get in there and you carry local things. It's like yeah, well first let's break yourself out of your kitchen and open a business and you know, get a separate checkbook for that. Let's get you started on the right foot because we don't want to sell cottage products in the cottage way, we want to sell, you know, beautiful cottage-like products in a compliant way. You're exactly right.

Sari 20:10
Again, that's where you need to just join Food Business Success, we'll do all those things.

Tania 20:15
Exactly. I mean, you have talked to so many people and walk them through that process. I imagine the phone calls you get are even more interesting than some of the ones that I get. But, you know, what do I do I have this. Yeah, I have this great thing that I give to my neighbors. How do I get on your shelf and you're like, okay, there's gonna be a couple of different things. And even just the obstacle of getting insurance, to get a million dollar liability insurance is an expense. So people have to decide if they're in or they're out, because it's something that you as a, making the jump from a cottage market to becoming retail ready, really takes an investment, and I'm trusting the process, and you have to know that it is, you have to put some money on that front side to become compliant. And that you have to have the commitment personally, that you're going to stick through and see if you can have, you know, how many swords you can get in or what your sales will be, and it's going to be worth that expense. And, I know, you Sari, you help people with that math and make sure like, if you don't think you can sell enough units, or you don't think you want to quit your day job, or you're not at that point to put enough that many hours into your side hustle, it might not be worth it.

Sari 21:29
Yeah, yeah. So good. So they get on the shelf, which people are like stuff that's so hard. I finally got on the shelf and then, yeah, they have like, you know, I'll give him a day like yay, celebrate! And then now we have the hard work, even harder work of getting off the shelf. So I love to use Rachel Walker as an example.

Tania 21:52
Oh my gosh, what a rockstar!

Sari 21:56
Former whole foods, colleague, employee that we both worked with, and then she started her own kombucha company. So from your perspective, how is Rachel doing a great job really helping the store and being a great partner and helping her product move?

Tania 22:16
I mean, Rachel is doing a lot of things right. And she's also putting in the sweat equity, if you will. She hand delivers, she checks the status of her product, she touches her product when she's here, she doesn't just drop off at the back door and then walk out. She goes to the shelf, she looks at her product, she makes sure it's rotated. So she offers that extra helping hands that the departments need, and makes sure her products looks great. She interacts with social so every time she makes a delivery or many times if not every time she makes sure the whole set not just her product, but the forfeit section and then looks great to sit on social so that the store looks good, her product looks good. She, you know, shows endless enthusiasm for her product and each and every store she's in. So if you look at her social media, you know when you work at Lucky's you feel like she loves Lucky's best, but you look and she loves Vitamin Cottage, and she loves Beavers Market, and she loves the Taproom Season. And so her love and making each retailer feel special is something that she's also doing. I know that she also, you know, she'll throw a tshirt to the team member and having people show their local pride. And so some of that swag too is just some little, it has nothing to do with the product. But it has to do with building an affinity for the person, for the brand. She'll give away, you know, six kombuchas when she's here to random people. And the next time she's here, she'll give away three kombuchas with other people. So, you know, it's that intermittent reinforcement. So, you know, not every biggest a free kombucha every visit, but someone gets a free kombucha usually and different flavors get a chance out there. So all those things aren't just helping her product jump off the shelf. It's a combination of those things that really creates the culture where people then if you have customers in front of that can do just that. And we can say, I'll check out all these local kombuchas. I had this one yesterday, it was delicious. You know, so team members can actually speak about it.

Sari 24:30
Team member love, that is a really underrated area that people overlook.

Tania 24:37
It is, people take care of your line when they take care of, like when they feel cared for, they care for you back and just, you know, it's somewhat all those relationships are really important. If you're a jerk in the world and you're making product and that jerkiness shows up in your product somehow and I don't know how to describe it as much as it's like biodynamic farming, you know, you can't cry and harvest roses, it's not gonna, it's gonna make sad rose oil. And we don't want to do that. So we want happy people working with happy products. And Rachel embodies that. She celebrates her staff and her team, she celebrates the team she works with. She always gives love to, and she's worked in retail. So I think, again, her experience in retail, has really helped guide her success as an entrepreneur.

Sari 25:31
Yeah, so fun. It's fun to give her a shout out on this. And use her is a great example. I wish people could just like, go like, go follow her, see what she's doing on social, but also follow what we're just talking about here as much as possible. I realize not everybody's doing, you know, we may not live in the place or as you grow, you can't always do that. But that's also what the next level of growth with brokers or salespeople as far as well, to help you continue that touch point, even as you get larger. Yeah, so good. So what happens when a product doesn't move? Like, I think that there's a bad, you know, we just talked about what Rachel does, the opposite of that is great, I got into the store, set it and forget it, like, it's just gonna sell magically. So what happens? How do you guys, what do you do at that point, when you're, you know, you bring in a product, and nothing really happens.

Tania 26:31
Oh it's usually a natural, it's like a bad relationship, right? It's another hopefully a natural parting of ways. You know, it's sad but it's a reality that not every small business will make it. And so COVID is, of course, put extra challenges on some of our small favorites, I think we had a local pickle brand that, you know, can't keep up the price of jars has gone through the roof. So their raw materials have gotten to a point where it's not, you know, they couldn't maintain their business and had to pull out. So you know, there's some natural progressions like that, but there's some times where the person still thinks they have the best product, but it's not selling. So again, we can have a conversation about doing demos, seeing if they can come in and talk about their product. And there's ways to try to jumpstart the life back into that product. You know, giving coupons while they're here, or putting coupons on the product, trying to give customers an extra incentive to choose that product. And then sometimes it's just like I said, a mutual parting of ways. Like if the product's not selling, if it goes out of date, you know, it's out of date, like we won't reorder it, if we can't sell, you know, a case of something before it's out of date. So there's a lot of different ways products die on the shelf, but that's Food Museum, if we have to dust it and date check it, it's out of here. And if the, you know, vendor hasn't looked at it, if that, you know, person who has so much passion to get it on the shelf hasn't taken the time or doesn't have the energy or love, or resources to set the status of it in the stores where they are just to ask the buyer to check the status of it. Then we figure it's, it's not, it's not really their pride and joy. So it's usually mutual.

Sari 28:28
Yeah. And so, you just don't reorder. And then until that's kind of how that ends. I mean, you guys don't have a formal, the nice thing is you don't have as formal of a process as some other stores with category reviews. And then they bring you in for a period of time. And then they're checking your velocity. I mean, you guys just, you can bring things in easily, but

Tania 28:50
We want to sell it.

Sari 28:53
It's there to be sold. And you as the vendor need to do everything to be a great partner. I always say like, especially those first, you know, 10 accounts, like go deep with them, like give them all the love. Rachel is a great example. But I think that there's a tendency to be like, let me just get as many as possible and it's all just about getting on the shelf but it's a go deep with your initial stores, give really good partner.

Tania 29:19
Yeah, it's like if you can get into a variety of different markets. And to go back to Rachel as an example, you know, she has her product on tap so she can hit a tap room or restaurant, she has her product in bottles so she can hit, you know, small store, big store, a Fort Collins store, and a Boulder store and see where her products getting set, how it's moving, and we'd set and then you start to, you know, like you said if you go deep on the relationship side and checking in and touching the product and looking at it in natural habitat in the store, you start to see what really works for your items or what's not working for your items. And then as you start to add to your catalogue, you can know, if there's flavors that aren't moving, if there's brands that do better than yours, if it's placement, what's creating better success for you. And then as you approach other stores, you have that in your tool belt. But when you try to get in a lot of places at once, and you're not in good placement, or you don't have the best flavor profiles, or you aren't as competitive, you fail at all these stores at once instead of having this, like, you know, compartmentalized bubble, these two stores are successes. And this one's a failure. And this is why I think it's a failure. So I'm going to take that knowledge and apply it to my fourth store, my fifth store, or my sixth store. So I agree with you, I think it's better to go deep and go slow than to go big and wide all at once. I've seen some companies go big and wide really fast. And it's super fun and high energy. But I've also seen a lot of those people crash because once a plug gets pulled, it gets pulled really, you know, and they've, you know, they have 20 grand or something and in these stores or in this region, and then all of a sudden, boom, they have no income. So I think it's better to grow slow and deliberately.

Sari 31:14
So good. That is great advice, great wisdom, because you do, you need that data story to keep growing. And so why not spend the extra time and energy really bolstering your sales. And like I know, we know, a lot of times when you're a brand new product, depending on where it is on the shelf, like you might be on the very bottom shelf. And so it's gonna be harder to move it. I know, Rachel, in the very early days, you know, had a couple of flavors on bottom shelf, and she kept, you know, you saw the value in it. It's like, okay, yeah, more flavors, put you on the top shelf, like you're taking care of your product. So that's another reason, not only helps your sales continue to grow.

Tania 31:54
Yeah. I think it's hard again for people who don't speak retail language, you don't have a retail background. You have to learn that language to be able to talk wisely with your buyers and to have conversations and to understand the lingo that they're using, or what they're asking of you or what questions they have. And if you don't speak the language, there's that communication barrier. So sometimes it's just takes those first few stores and those first detour to, you know, to learn the language in the new country that you're in, which is this grocery store world versus the farmers market, one on one world, which I get to tell everybody one on one how great my stuff is. And it's different when you're on a grocery store level.

Sari 32:38
Yeah, I actually just talked with Rob Allen, you remember him from regional?

Tania 32:44
Yeah, from culinary.

Sari 32:46
Yeah. And we just had a podcast actually comes out today, on the day we're interviewing, but he was talking about, you know, I feel like this industry has more acronyms, or as many as the government, right? You really do need to know that. So funny.

Tania 33:05
I mean, I still find myself like having to Google some acronyms sometimes that I'll see. It could even be from a USDA report or something, you know, I'll be like, oh my gosh, what is this? Like if you're not curious, it's easy to just over like speed read over acronyms or like, let someone talk to you. And you nod your head and then all of a sudden you get out to your car, like what did they just say to me? So I can imagine how does newbies feel when they come into the industry. Or like, they see you know, smile and nod and they're like, oh my gosh, I'm so excited. And they get to their car and decompress and take a breath and be like, I have no idea what just happened.

Sari 33:44
I literally have a whole video that just like here's all the acronyms like here's all the words you're gonna hear and explain, try to give people a crash course because it's like, what's a TPR? What's an OI? What's this?

Tania 34:00
Right, what are they asking? Oh my god.

Sari 34:05
Yeah, I love it. There's a whole language for sure in the retail industry, especially grocery.

Tania 34:11
Well, and each company has a unique acronym thing whether even you know when you talked about our introduction is like what do you call it Lucky's like, what's your position called? You know, if you ask for a specialist at one store, you get a whole different person than if you ask for a specialist at another store. So every company has their own unique set of titles and acronyms as well, which you have to just learn the language of each place. So if you go deep and a few then you're ready.

Sari 34:36
Yeah, yeah, exactly. So where do you see like, I mean, I know you can only speak to your position and your store, but what do you kind of seen as like trends for local and just in the grocery industry as a whole? I mean, we're now two years into the pandemic. We're sort of the endemic as many people are calling it, right. It's around. It's here to stay. So what are some of your insights? Or where do you see it going? Especially from a local producer's perspective?

Tania 35:10
Yeah, I mean, I think the local trends haven't. I think they're still on point. There's room in every category for local. I can't imagine to tell anyone to shy away from a certain category. There's room for growth in every category. That's competitive. Of course, functional foods. They're always sometimes what foods those are changed, but functional foods people, eating for purpose is always a category that is fun to make a splash in because those consumers who are, who care about what they're putting in their body are, you know, like the extra information on the label, they'll pay a higher price. So functional foods are great. And that shows up in beverage categories. It shows up in, you know, bars and granolas, it shows up in,

Sari 36:07
Ice cream

Tania 36:08
Pet food, and frozen food, ice cream. Yeah, you name it. CBD is so hot. I don't see CBD going away anytime soon. And that's another functional food category. Ethnic foods, we always have such great whether it's local, you know, family recipes, sauces like Sisters Kitchens, or hot sauce category is one that people just love to kick around. And like it is already a huge category. So you have to have good product but salsas and hot sauce is always a place that we see lots of people entering the market. And then there's, you know, a lot of people think about produce but produces are such an awesome entrance. If you're a farmer, and you have a local product. It's a great, you know, Lucky's has been an awesome place to have a local product on the shelf for homegrown whether it's seed, starch, actual farm raised product, but you know, I see a lot more packaged goods. We talked a little more packaged goods providers, and we do farmers, but the farmers that we work with are awesome. Love them.

Sari 37:23
Yeah. Yeah. And how are you seeing? Especially small producers, but I guess, producer, I mean, all brands are having to deal with supply chain issues. You mentioned the pickle company with, you know, the increase in their packaging costs, like, how are you guys managing? What do you suggest to people as they're trying to negotiate, manage these price increases? Which we're all, we're seeing them across the board. But how, what advice do you have?

Tania 37:54
I think we're, in humanity it is right now in a crunchy place with pricing, whether it's the cost of housing, cost of your groceries. Costs are through the roof right now for a lot of things that we haven't seen in a long time. You know, cans and jars and bottles, everything from, if we go back to the beet burger, like the packaging for that beet burger. You know, it could be $1 extra to get the right packaging on that product. And so it's something to consider. I think that right now, prices are very volatile, and they're up and down, when mostly up, depending on the day. So I think, again, advice for a new business operator would be know your terms. I know, you know, Lucky's and, I know Whole Foods when I was there, where you require a 30 or a 60 day notification of price increases, that you're going to be sitting on your old costs for a month or two months, even though you have a raw ingredient increase. So just you know, sometimes, again, just know what your inventory level is. So that you know when you need to make those calls. And hopefully you have enough backstock to hold you through a price increase on your cost of goods so that if your jars or bottles go up, you can make it through that 30 or 60 day window. But it is, it's just knowing what your notification should be. And then, you know, we're all in a business where it's the reality is, you're going to get that phone call that says hey, or that email says our prices are going to go up. And here's, you know, 30 days from today, here's the information, here's our new costs. And it's hard not to be apologetic about it especially to the consumers but it's industry wide and in every category. I mean, meat prices are crazy. Dairy prices are crazy. Yeah. And then when you look at packaging prices, packaging is three higher than I've ever seen.

Sari 40:04
Yeah, that's always one thing that people are shocked by when we actually do their cost of goods sold correctly. And they're like, my packaging is like, sometimes as much as the ingredients. I'm like, yeah, that's, welcome to packaged food.

Tania 40:20
Yeah, it's in a container. And that container is going to cost as much. So you gotta watch it. And it's something to consider. And that's again, oh, what your expertise is, is walking people through all those steps of consideration because the enthusiasm for making food and is, it takes a strength of character to take that enthusiasm and retail that food versus just creating it and sharing it because selling is different than creating and sharing.

Sari 40:53
Yeah, being the entrepreneur, being the business owner versus being the maker. Yeah, there was an article that just came out today from Specialty Food Association, talking about price increases and like, specially like they did a survey of all of their members. And people are definitely starting to look at that second, or even third round of price increases. But I think it's important that you do have a strategy, and you're not just like, Willy Nilly, like, maybe the price goes up now, right? Like you need to, you need to be looking at your, their whole forecast and doing your cash flow and putting on the business hat. And not just, you know, there's one price increase, like, how long can you absorb that before, it's absolutely necessary, because it is going to affect potentially your product selling on the shelf, right? And, I mean, we, as the producer, the brands still need to make money, but also the grocery stores still needs to make money like, and unfortunately, the consumer is the ones who are bearing the brunt of it. But we're all in that position, because we all eat.

Tania 41:55
Totally, one I know, a strategy that companies big and small adopt is like, okay, well, I won't increase my price but I'm going to go from, you know, a 25 ounce dish soap to a 19 ounces dish soap. I can even probably use the same jar just gonna have a little bit, bigger gap on top. So there's different ways to approach this price increases as well. Sometimes they don't have to be retail increases, they might just be packaged size changes. We've seen it like I said, with dish soap, it's coffee, it's granola, it's a lot of different size changes. Or they'll change a case size. So instead of being maybe 12 per case, you get 6 per case. So that there's less commitment from the store to buy a bigger amount to see if it's going to be okay. Which is less about cost, but more about like unit movement and like how do I, you know, is my package too big or too small?

Sari 42:57
Yeah, it gives you more flexibility. You mentioned that earlier and I was going to mention that, kind of reiterate that. But like, I'm a big fan of smaller case pack sizes, right six or eight, something like that, because especially if it's a product that's going to go out of date, but grocery stores don't like to carry a lot of back stock, if any, they want it to all go on the shelf. I always tell people like literally take your packaging and go see if how it fits on the shelf and how many you can get on there. I don't know if you remember I've used this example before. But when I was at Whole Foods, I think I showed it to you, there was a woman that came in with these giant, they're beautiful, like glass jars of like household cleaners. And she was like wanting to get on Whole Food shelves. And somehow I ended up talking to her and I was like, they're beautiful but like they don't literally fit on the shelf in the category that they need to go. Unless it's on the very top shelf. And then it's glass. So we don't want glass on top shelf.

Tania 44:02
Like me trying to reach a glass bottle full of heavy liquid on the top shelf like no, I don't fly.

Sari 44:08
So sometimes are, yeah. I still have them actually. They were beautiful. I was like, oh, these are great. But yeah, no, they're not good. We got to rethink our packaging. Sometimes our innovative packaging is not always gonna work. Like you said it needs to stand up on a shelf to be displayed.

Tania 44:26
I know, I've seen some gorgeous cracker packages, like you said that are, you know, it's like a when you take a sheet of crackers and you know, it's a big, big chunk of crackers on a tall, tall, beautiful window bag, but you're like, okay, where are you going to put it that it doesn't get beat to shreds? I mean, again, if you're carrying it from your car to your table, you can be really cautious that if you're getting into a grocery store, man, it's down and dirty in here. We're swinging things around. We try to treat things with care but,

Sari 44:59
I mean, unless you are the brand and you are like carefully delivering it and putting it on the shelf, it's not. That's the only way it's gonna work and even then, your customers going to get them at home, and what's their experience as well.

Tania 45:13
Like what shelf is that big old cracker bag gonna end up on?

Sari 45:19
Oh, my gosh, um, oh, the question I always get, and I have my answer to it. But I'm curious where you would put the range of what are the margins that grocery stores, like a grocery store of your size need to have when they bring in a product? So I always tell people, let's see if you agree with me, minimum of 35% up to 50. That's where the range is.

Tania 45:45
Yeah, I'd say you're about right. And for most grocery stores is by category. So I'd say you know, on body care is usually a different range than, you know, dairy. And so it's like, depends on what the item is. And so trying to find out that range about the kind of product if you have a, you know, body lotion versus, you know, a kombucha, they're going to be different margins for those categories. And also what some, you know, again, small business might not be thinking about is, there's a certain amount of shrink that a grocery store expects as well through breakage, through things that go out of date, through customers dropping one on the floor, team member dropping one on the floor,

Sari 46:28
And giving them away sometimes, right like that. Like, it's on us.

Tania 46:35
We try to build shrink into a margin as well. I know, companies like Whole Foods do granular shrink. And so it's tracked on a separate line and a lot smaller grocery stores, a lot of times we'll just have it built into a margin target.

Sari 46:53
Hmm. So good. And if you don't know what shrink is, I have a module on, it's your way.

Tania 47:00
Oh, good. Do really?

Sari 47:02
Well, I've liked all the terms you need to know, right? Shrink. What is that? I mean, it makes sense. Right? It's the waste, but

Tania 47:11
I love it. Yeah. What is purge? You know, you gotta consider like, what is purge if you got a fresh product, so you got it. That's awesome.

Sari 47:20
I love it. Oh, my gosh, so good. I feel like I could just talk about stuff with you all day. But I would love to hear. As I mentioned, I know these are all out. Thank you so much. Because they're such great answers and wisdom and insight for people. I feel like I sometimes beat a dead horse. But when they hear it from other people's mouths in like yourself, somehow, believe me more.

Tania 47:44
Yeah, and we didn't plan this. So that's awesome. You were on the same page.

Sari 47:47
We did not. But I would love to just actually shift gears a little bit and talk about you, some of your leadership qualities that you like, what has gotten you to this level? As I mentioned earlier, I really do look at you as just a shining, amazing example. I'm going to get a little emotional about like, you were such a mentor to me at Whole Foods and that time, and I learned so much from you and so many lessons that I take with me today. You gave me some hard feedback and hard truths, but they made me a better person. And I just think you have like this amazing calm under fire and ability to be flexible. You embrace the term that like, it is what it is, now let's just start solving problems. So how did you get this way? What do you, because we need this as entrepreneurs? So teach us how do you.

Tania 48:46
I'm not sure. I'm not sure how I ended up this way. But I think, you know, I've always been a person who values honesty and transparency. Elitism is my nemesis so when I see people who think that because of their role or because of their, you know, title or whatever that they they should have more entitlements has less to do so I think just doing work with people really makes you have compassion for the job and the people doing it. Also, just again, starting each day fresh, I know here, you know, at Lucky's one thing that's really important to me is that we understand that we're all working for the same thing. So if you think someone did something because they're trying to make your day worse, you got to step back and be like, wait, none of us have time to try to make each other have harder lives. So just step back from a point of positivity and understand that we're all working for the same thing, and that we want to make each other, push each other to be the best that we can be. So honesty and transparency I think is the best avenue for that. And talking to people directly, I think it's conversation can go a long way versus an email sometimes can, you can't read that person's body, you can't see into their eyes, and see the human on the other side of that. And so, you know, talk to the people that you work with, talk to people you have problems with, or talk to people who you see who could be better. And also talk people who are doing great job and tell them. So let's celebrate each day and let me say, each day is gonna unfold naturally. And just make sure the people around you have a sense of humor, because, again, if you're bringing anger to the workplace, you just leave awake. And I think I've seen and worked with people who leave a big wake behind them, and they just don't understand what it feels like to be caught up in that wake where your, your boat gets rocked, because the big yacht went by, and that's not the person I know, I wanted to be. So when I saw that happening, I just made sure that I tried to be conscientious. We all leave awake, but what's happening behind you and you're awake. And what are the people? Are you leaving agendas awake? Are you bringing people with you? Are you rocking people's boats and then walk it off? I don't even know how it gets to be that way.

Sari 51:17
I think you were such a great example of like, you got in there like you're not like you do the work. I mean, when I go into Lucky's, you're unloading pallets, you're stocking shelves, like you're helping customers, and you still have your duties as a leader. And as a, as a store director. I mean, you have a lot on your plate, but you're not just hanging out in the office. And just like, you know, good luck everyone.

Tania 51:44
Yeah. Thank you. I'm glad you noticed. I think team members noticed that too. I think that I have a reputation from all the stores I've worked at, of being someone who isn't afraid to do the work. And again, go back to that entitlement piece. Like, if you don't know how to do the jobs in your building, then I understand that you shouldn't be the one doing them every day. But you should still understand how the, you know all the jobs work and not think you're better than or that you shouldn't be doing those things. I think it's a blast to be able to go from one department to another and see what needs to happen and help get them ahead. And then, you know, split off to the next department. I have a hummingbird style. So I tend to dip and dive throughout the store throughout the day.

Sari 52:34
Yeah, so good. Well, thank you, Tania, I really appreciate your time. I know you're in the middle of your workday. And this is been a really, really amazing conversation, and it's gonna be so helpful for people. So thank you for your time today.

Tania 52:50
Well, thanks for the invitation. And again, Sari, I'm so proud of what you have turned your career into. You've done an awesome job since we worked together at Whole Foods and great, you're just such a great resource for upcoming new products. And I'm proud of you. So thanks again for including me in your podcast. I feel really blessed.

Sari 53:12
That is so nice of you to say and it has been my absolute pleasure to have you here. I know people are getting so much out of this. And if you guys want to check out Lucky's market. They're on all the social media. They're based in Boulder, Colorado, and they have a store in Fort Collins. But this insight into what it takes to get on the grocery store shelves and stay there has just been phenomenal. So helpful for everyone listening. And I couldn't have said it better myself about the services and how I tried to help people than what Tania said, so I'm just gonna leave it there. Until next time, have an amazing week!

Sari 54:01
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