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Cultivate fruitful relationship with distributors

April 24, 2008

7 Min Read
Cultivate fruitful relationship with distributors

As a natural foods retailer, you may be rightfully focused on making sure you have a good relationship with your customers, but don't overlook the importance of developing a strong rapport with your distributors.

A good relationship can be not only mutually satisfying, but can also translate into better quality and selection for your customers. Best of all, developing a robust retailer-distributor relationship doesn't require a heavy capital investment or technology upgrade—it just depends on human attributes and skills like communication, courtesy, understanding and honesty.

"The [retailer] relationships that are most successful are the ones where my customers are honest with me about what they want, what is not working for them and what products they are getting locally," says Karen Salinger, sales manager and co-owner of Veritable Vegetable, a San Francisco-based private company that has been distributing certified organic produce since 1974.

Salinger knows that in California's grower-rich environment, many retailers will be supplied through direct grower relationships during certain parts of the year. "If a retailer who has been buying 10 to 15 cases of lettuce a week tells us that she doesn't need us for six weeks because she will be getting supply from a local grower, then we can cut back our orders to keep our quality high. It's very helpful for them to let us know about anticipated local supply and we do have customers who communicate with us at that level."

One of those customers is Andru Moshe, buyer for Oakland-based Market Hall Produce. Though Moshe joined Market Hall just last year, she has been working with Veritable Vegetable for about 10 years, building on a relationship that started when she was produce manager at the Sacramento Natural Foods Co-op. Why has the relationship endured so long and what are its benefits for Moshe? "I think there has always been a willingness to have a dialogue and to share information at a high level," says Moshe. "If I have questions about certain regions or growers, they are willing to get me the answers. That is super valuable for me. They are a trusted resource for information—it's like getting a second opinion."

Beyond the informational benefits, Moshe says her relationship with Veritable Vegetable also helps her think up new promotions for Market Hall shoppers. This sharing of creativity helps her to be more innovative, she says. And if she happens to be in a pinch—for example running low on a popular item before a holiday—her distributor will scramble to get what she needs, going so far as to bring the items to her via special delivery.

That kind of relationship can't be built overnight. Mark Mulcahy worked for 20 years as a produce manager. Today he runs Organic Options, an organic consulting and education company based in Glen Ellen, Calif. Mulcahy laments the tendency of some retailers to view distributors as interchangeable and distributor relationships as disposable. "In today's world, people grow tired of a delivery schedule that's not working and they just jump to another distributor. That doesn't solve anything," he says.

Instead, Mulcahy urges retailers to communicate with their distributors to overcome any incompatibilities and form the strong relationship that can benefit the retailers' businesses in a pinch. "The reality is that even if you have the greatest locally grown program … you'll still need to get some of your produce from elsewhere. Very few places can grow everything they need," he notes. "If you can work well with your distributor in good times, then you have an open line of communication when problems arise. If supply was tight on a certain product [when I was a produce manager] and only four boxes reached my distributor, they would save one of the boxes for me, even though I was not one of their biggest accounts." Ultimately, Mulcahy's relationship worked to his customers' advantage, allowing them access to produce that other stores might not be able to obtain in lean times.

What specific steps can retailers, especially smaller stores, take to build a good distributor relationship? Mulcahy says that if a retailer cannot sell as much product as a distributor offers, the retailer can help the distributor (and himself) by trying to team up with other local small stores. "If you can't sell a whole case of X-product, see if another local store will agree to buy half the case. Don't expect the distributor to do all the legwork," he advises.

When it comes to prices, Mulcahy recommends against nickel-and-diming distributors. Though some retailers will switch distributors just to save $1 or $2 per case, Mulcahy says the savings won't make much of a difference in a retailer's margin. In the long run, Mulcahy argues, it's more important to have high levels of service and good product quality standards from your distribution partner.

Both Mulcahy and Salinger suggest retailers visit their distributor if at all possible. Salinger says the experience can be eye-opening for many retailers when they get a sense of the scale at which distributors operate. You'll also get a chance to meet your distributors face-to-face, see their trucks and find out how they handle product and keep it orderly. Veritable Vegetable has six different refrigerated spaces at different temperatures and humidity levels to keep items stored in their ideal environments. You couldn't learn that, at least not in a visceral way, through an e-mail exchange.

While frequent visits to the distribution center may not be possible, or even necessary, Mulcahy does tell retailers to at least pick up the phone rather than just faxing in an order. During the conversation, you might learn that rain in California will push broccoli prices from $4.99/box to $20/box over the next week. Then maybe you can get some stock at the lower price if you place an advance order, or you can warn your customers of the coming price hike so that they can prepare and adjust their menu planning. You'll never know how many benefits the distributor relationship could bring you and your customers until you start building a strong one.

Aaron Dalton is a New York-based freelance writer.

Natural Foods Merchandiser volume XXVII/number 3/p. 102-103

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