We discussed this on our latest episode of CPG Vibes, BIG BIG news from KeHE Distributors on 11/22, a new program dubbed 'AAP' (administrative allowance program). A flat 2 % off-invoice allowance for specific fees including New item intros, extra performance fees, MCBs, new item set up fees, and lumping fees. My quick thoughts: This is a step in the right direction for sure. UNFI implemented SSI which is a similar program to help brands budget for costs and fees associated with doing business with large national distributors. With all that said, these categories are pretty large and encompassing, so for all the other fees associated with Kehe that can chop down a brand's margin, will this program truly cover it? Likely not, but at least it covers some. What are your thoughts?
How much of that 2% actually translates to sales? Increases in revenue? What have been the results of that program? Seems to be missing a lot of information about business impact
Extortion & manipulation
Founder/CEO, Beverage Formulator x Sarilla, Winner of BevNet Packaging + SOFI Awards (DrinkSarilla.com), Speaker, Philanthropist, Importer
3wAre they taking 2% off as a default now though and what are implications for existing suppliers who do not have those new item fees or aren't in a promo period? Should be optional?