Jeff Scolnick

CPG brands: You are wrong, distributors are not the problem, nor the enemy of your brand. Quite the opposite in fact. Your problem is a lack of preparation in the necessary business understanding for working within the distribution model. Your lack of preparation and understanding of that model does not constitute blaming the distributor for the poor outcome you experienced. I can’t tell you how many brands over the years have asked me for distributor advice, (ONLY because I have a very long history working on the distribution side at multiple distributors, before ever moving to the brand side, not because I know better than any other brand owner..) My message is almost always the same & what I hear back is almost always the same. Me: “Did you adjust your pricing model to account for the fees and requirements for shipping / logistics and chargebacks that are built within the contract you received and signed?” Brand: (in some form or another of the following) “ I did not want to price myself out of my market, or have to change my pricing in my other channels… and nobody told me that all these fees would actually hit, and some of them I was not aware of” The reality is no one blindsided you. You were unprepared, you are upset and you’re looking for someone to blame. Regardless of what type of founder, entrepreneur, business owner or executive at a CPG company that you are, you must absolutely understand the contracts and financial requirements that you are dealing with AHEAD OF TIME. You don’t have to work with the distributor— in fact as we know, tons of brands work fantastic simply D2C, or direct to retail without them. But if you’re going to work with the distributor networks, be prepared to work within the model. If it helps, I’m happy to answer any questions that I might be able to answer when it comes to distributor model.. feel free to hit me up anytime if I can be of service and I’ll do my best to get back to you with information that is appropriate based on my experience. Rant over, and go have a great day! Lets sell some stuff 😎 #distribution #cpg #branding #wholesale #dietarysupplements #vmisports

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July US Retail Sales were the most robust growth of the year, with Core Retail sales (Retail minus Gas, Auto, and Restaurants) up 5.2% over July 2023. Year to date, Core retail is up 3.4% over last year, which is a bit slower growth than the historical average of 3.9%. The bulk of this growth is going to a handful of retailers (Walmart, Amazon, Temu, Shein, and Tik Tok Marketplace), which means lean times for many other retailers.

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💡 9 Surprising Realities of Running an E-commerce Business 💡 Here are some unexpected twists I've encountered in growing Gut Wealth THE LESS FUN 1> Acronyms out the wazoooo… CAC, LTV, AOV, CRO, CPC, CPM, 3PD, CTR, CPV… *and loads more* 2> Almost every person I meet who has never run a DTC brand, has ideas on how I can do better *and doesn’t hold back telling me*  3> As much as I hate to admit it, processes are my friend. When something happens outside of process, it sucks up time. THE GOOD 4> I’ve met people from all walks of life in the founder world… loads of them doing amazing things that are changing the world for the better 5> I’ve learned a scary amount of new skills and I feel good knowing I’m a generalist  6> My problem solving muscles are the ones I’ve trained and stretched most THE GREAT 7> There’s lots of support for early stage businesses IMO (especially in Scotland) 8> Almost all brand & business owners I’ve met, truly want to help each other out - they all know the challenges of start up mode 9> LinkedIn has helped me to connect to advisors, partners, collaborators, customers... and soon-to-be-investors… and it’s been a powerful tool for me when building Been reflecting on this a fair bit over the last week because I had a rough week (which I knew would be temporary)... Running an e-commerce business for the most part is great craic, I’ve got some awesome customers, got some brilliant partners but in lots of ways it’s soooooo different to how I thought it would be What’s been surprising for you in your role as founder? #Ecommerce #Entrepreneurship #BusinessGrowth #CustomerService #Marketing #ProductDevelopment #founders

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AI in Retail: Bridging the Gap Between Ambition & Readiness for Generative AI I recently spoke with Michelle Pacynski, Ulta Beauty & Mike Dupuis, SPARC Group LLC about this topic. Before diving in, I find it helpful to ground the conversation in recent data: 1. According to a recent Forbes estimate, the AI market size is expected to reach $407 billion by 2027. 2. A global Accenture study (July) highlights that: - Companies with strong digital capabilities (data, cloud, security, etc.) are reinventing 2x as many functions with AI & are expected to drive 2x the value creation. - 50% of executives believe they can scale generative AI across their enterprise within 6-12 months, but only 13% are confident they have the right data strategies & digital capabilities to fully leverage GenAI. Why the gap? These insights set the stage for a deeper conversation. Here are some key themes we explored: 1. AI integration frameworks they've adopted: - Assist, Augment, Automate – This framework has helped categorize the 15-20 AI pilots running at any given time. It has especially reduced the pressure to automate everything right away, allowing teams to focus on assistive & augmentative use cases first. 2. Real-world AI implementation examples that required process changes & KPI definition: - Leverage GenAI from your SMS partner to create new audiences & test custom messaging. Process changes included: new workflows for both internal & external teams. KPIs: # of new customers acquired & conversion rates. - Launch a GenAI conversational experience during peak sales to manage case loads, while ensuring real humans are available for more complex queries. Process changes included: customer query routing & escalation procedures, with KPIs focused on # of cases resolved to satisfaction, incremental revenue from case resolutions etc. 3. Keeping up with the evolving world of AI: a) Follow key professors like Ethan Mollick & Stefano Puntoni b) Stay close to the VC community to learn about emerging applications & how people are thinking about the future c) Access to product engineers & innovation through involvement on Boards (e.g., Cordial) d) Attend key tech events like CES and SXSW. 4. How AI can transform retail, from customer experience to back-end operations: - Use weather data to inform inventory buying & planning, ensuring customers get the products they want in the channel they prefer. - The retailer that best uses GenAI applications to develop personalized & on-brand communication with customer segments will create the most value. c) Empower consumers to virtually try on products & learn more about them, both online & in-store. Finally, some questions to consider: - I wish consumers knew AI… - I wish regulations did… - I hope someone develops… There’s no doubt that AI is omnipresent, but achieving meaningful impact requires strong digital strategies, partnerships, and a sharp focus on data governance. #AI #Innovation #Transformation #Leadership

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We are spending 31% less on #RetailMedia to get the exact same sales. How? Both #Target and #BestBuy (and others) have a Retail Media solution where the search bidding is a first price auction vs. second price. #Amazon and #Walmart are second price. What is the difference? In it's simplest form... 🖋 First price auction is where what you bid is what you pay 🖋 Second price auction is you only pay ~$0.01 more than the next "best" bid (Amazon, Walmart, etc.) ("Best" is in air quotes because it's not that simple) Without strong bid strategies, intelligence and frankly a lot of attention to the data, a set it and forget it strategy for non-Amazon/Walmart search spend strategies can lead to overpaying. For the last 4 weeks, we are currently working with a client that by finding the right (lower) bids on their current non-branded targets, with 31% less spend we reaching the same: ➡ Total Ad Sales ➡ Total Reach ➡ Total Engagement (CTR + Absolute Clicks) ➡ Same Share of Voice The hope is that these dollars can now be redeployed to test new strategies and invest in other opportunities from the same retailer. Note - I'm not saying it's just that easy. It's all about understanding the retailer platform and not assuming #WalmartConnect is the same as #AmazonAds, #AmazonAds are not the same as #Roundel, #BestBuyAds, etc. I remain bullish that finding a real expert is important vs. someone's side job. The Bluebird Group has a broad set of experts across all #RetailMedia channels. For those traditional first price auction experts, I'd love to hear what strategies you find to be the most impactful!

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Absolutely brutal, but this shift could be a blessing in disguise for many CPG brands. With less VC money chasing them, founders can focus on building sustainable, profitable businesses without the pressure of a quick exit. This opens doors for alternative funding models or bootstrapping, fostering a more organic and long-term oriented CPG landscape. What are your thoughts on alternative funding models for CPG brands in this new environment?

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8 Tips for Launching a Profitable Private Label Brand on Amazon 🚀 A THREAD #1 - Nail Your Product Differentiation Stand out from competitors by adding unique features or a fresh angle. Don’t just copy—innovate based on customer needs and pain points. #2 - Leverage Your Network for Launch Support Reach out to friends, family, and colleagues to help with initial reviews and feedback. A solid launch depends on reliable support! #3 - Create a Brand Story That Resonates People buy from brands they trust. Share your “why” and connect with customers on a deeper level. #4 - Engage in Industry Meetups & Groups Private label sellers often benefit from peer advice. Join Facebook groups, forums, and industry events to stay up-to-date and get invaluable tips. #5 - Master PPC Ads for Visibility Amazon PPC can be a game-changer if you understand the basics. Optimize bids, test different keywords, and monitor ad performance closely. #6 - Develop Strong Supplier Relationships Treat your suppliers as partners. Solid relationships can lead to better terms, faster production, and even product improvements. #7 - Invest in Top-Notch Branding and Packaging Premium branding can set your product apart and boost perceived value. Design matters when building a long-term brand! #8 - Use Customer Feedback to Refine Your Products Customer feedback is gold. Continuously improve based on reviews and market trends to keep your brand relevant. 🤳 Follow @TonaFBA for daily information on all things ecommerce. 🤝 Join my FREE discord if you want to make wifi money: buff.ly/3QO3Vkj

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Target didn't just miss on revenue and earnings (20%!)- this was standing in the batters box and flailing wildly at a ball 3 feet off the plate. When you permanently lower prices on 10,000 items (including staples like diapers, bread, and milk), increase same store foot traffic by 2.4% YoY, and still have same store declines of 1.9% - all while your biggest rival, WalMart RAISES their quarterly and annual revenue forecast the day before - retailers and brands would be near criminally negligent not to take notice. Even front running the Holiday sale didn't help. Other take aways for brands to consider: ➡ Forecasting - Target now expects fourth-quarter comparable sales to be approximately flat. ➡ Consumer Demand- lingering softness in discretionary categories / deceleration in discretionary demand ➡ Consumer Strategy- Target offered discounts after hearing from shoppers about “the importance of value and affordability" ➡ Category growth: Customers gravitated toward food and everyday essentials during the quarter, along with beauty items (Comparable sales in beauty grew more than 6%). Two other categories, food & beverage and essentials, posted low single-digit gains compared with the year-ago period. Other Key take aways: ➡ Groceries account for about 60% of Walmart’s U.S. business but only about 23% of Target’s. ➡ "The retailer is contending with savvy and selective shoppers who aren’t willing to buy until the price is right....Consumers have become increasingly resourceful and strategic on how they shop” - TGT Chief Commercial Officer For as long as I can remember, if you're an emerging CPG company getting into Target was the holy grail. The collab with ULTA expanded the Heath and Beauty category and the "Target Shopper" embodied who brands catered to. That strategy appears to have holes - and you can bet when your share price drops by 20% while margins reduced across the board, category buyers will be extra diligent, selective and demanding with their assortments. Unit Velocity and high margin items will carry a premium. The other take away - and this is just my opinion - consumer fatigue has set in and demand is tapering off. I've written about Care Free Carrie and Anxious Anne in recent posts, as well as consumer debt being at an all time high. With Target forecasting a flat Holiday season YoY, brands and retailers need to be prepared and not wait too long to discount. This will be a holiday season driven by bargains.... and there is nothing AI can do about it. Where do you see holiday spending trending this year? #cpg #retail #branding #RetailTrends #ConsumerBehavior #RetailStrategy #ConsumerInsights #EmergingCPG #ConsumerDemand #InflationImpact #HolidayShopping #BrandStrategy #CPGTrends #MarketingInsights #SalesAndMarketing #CategoryGrowth

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A timely follow-up to yesterday's post on Dollar General's assortment initiative, today's The Wall Street Journal article confirms more retailers and brands are also reviewing and rationalizing their assortments. Some of this is to curtail inventories, while some of it is simply overdue assortment management. Seasonal and annual assortment strategies should continuously review trends, revenue/margin, and store/channel assortment goals, and plan the the SKU breadth and depth appropriately. Some retailers let the SKU count expand a bit in hopes it will drive revenue, while others lack the appropriate processes and tools. Sometimes less is more. #assortment #planning #inventorymanagement

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When you work with a manufacturer, size matters. Specifically, the size of your business compared to the size of the manufacturer. I find that in CPG manufacturing most “healthy” relationships occur when a brand is between 5% to 15% of the manufacturer’s total capacity. Less than 5% and the brand gets lost. Being lost at the manufacturer rarely leads to good outcomes. Greater than 15% and the manufacturer becomes over leveraged. This can work out well for the brand in the short term due to the greater leverage, but over the long run it tends to create unhealthy operating relationships and outcomes. I recommend that brands and manufacturers really focus on this “size matters” concept if you want to build partnerships that will sustain for decades and beyond. #manufacturing #cpg #beverageindustry

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Private Label update for @QualiTeaSupplements: Listing is now live (for me) on both Amazon & TikTok Shop Next steps: - WFS and DTC listings - A+ Content - Brand Storefront Design - Getting An Affiliate Army on TTS

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Compliance isn't sexy Quality isn't sexy We aren't superheroes But what we do drives so much value and impact in the CPG market Qualitas Executive Group helps protect you from: -demand letters -angry customers -regulatory action -product rejections -angry retail partners -class action nonsense -those gosh darn auditors And that's pretty sexy tbh #quality #compliance #consulting #qualitas #cpgindustry #dietarysupplements #food #foodandbeverage #cosmetics #beautyindustry #qualitymanagement #regulatoryaffairs

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I recently read an interesting article in Inc about the consumer goods space. It is a good, albeit gloomy article, about the state of early stage CPG brands in the USA. “By the end of last year, the total amount of early-stage VC funding for CPG brands was down about 60 percent from its 2021 high, according to PitchBook. And new product launches were down about 70 percent in the same time period, according to consumer-products data provider Spins”. These stats are not different in Canada and could actually be worse here. There are many factors that help to make an early stage CPG business a long term success. Product market fit and a well planned strategy are critical. Many founders skip over the strategy for tactical efforts that don’t build brand, or, they don’t have the ability to stick the strategy out and stay with it because they run out of capital. Just because your family and friends love your product, doesn’t mean the category at large will accommodate the rate of growth needed for venture capital or private equity return expectations. If there is a market opportunity, the road ahead is fraught with innovation, distribution, marketing and brand development decisions, any of which, if you get wrong, can set you back years and your own equity. This is why strategy is key - along with recognizing your strengths and weaknesses and finding partners to help you mitigate risk. We are passionate about supporting early stage CPG businesses and have invested in dozens of them. The overwhelming characteristic of a successful COG entrepreneur is persistence. That, along with a healthy dose of optimism, fortuitous timing, capital and consumers who know and love your brand and product!! It’s not easy but then again, nothing worth doing ever is. I have deep admiration for CPG founders in Canada. We have some amazing founders in this country who are out there every day working hard creating much needed innovation for the market. Keep going. You’ve got this!

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