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PantryPerks’ referral program makes free groceries possible

PantryPerks

A new online retailer offers natural, organic and specialty name-brand food for a flat delivery fee and no membership charges—and a chance to earn free groceries.

PantryPerks, founded by Rishi Padhi in Sunnyvale, California, gives customers who spend at least $60 per month 7 percent back on those purchases. When a customer’s friends spend at least $60 a month, the original customer earns 6 percent from those purchases, too. And when friends of friends also spend at least $60 per month, the original customer receives 5 percent of that.

Customers can receive their payments via PayPal, bank transfers or PantryPerks credits, Padhi wrote in an email to New Hope. 

“We enable this by not spending on marketing and instead, giving it back to consumers for their word-of-mouth reference,” he wrote. PantryPerks also gives 1 percent of each sale to a nonprofit of the customer’s choice or, if the customer chooses, 6 percent of a sale to the Non-GMO Project, according to the company’s website.

“We use technology, a lean supply chain and social commerce to challenge traditional retail margins structures, and re-distribute the same back to consumers and causes,” Padhi wrote.

The company says it is not a multi-level marketing company, because consumers are not required to purchase and re-sell inventory and no one is compensated for recruiting associates. Instead, PantryPerks uses a “triple-reward loyalty cashback program” or “multi-level social commerce,” Padhi wrote.

Padhi is the sole founder of PantryPerks, which opened in September as a for-profit, online-only business. His experience includes nearly 17 years in consumer packaged goods, consulting and e-commerce (including eBay). He is, he wrote, in discussions with bringing in partners or investors.

Because he is in discussions with potential funders, he would not say how much the average customer is spending or how many unique customers the business has had so far.

IdeaXchange

Build a case study before you build a brand

Elliot Begoun

It’s like the drums in the movie Jumanji. An incessant beat calling you, drawing you in. Don’t fall prey. Don’t play the game. It will carry you away to another dimension. One that is full of threats, traps and wild beasts.

For young brands, it’s the call of growth, the call of potential new retailers and their shiny shelves and doors. Plug your ears, walk away. Don’t heed the beat of the drums. Before you build a brand, before you find your products in disparate retailers across the country, before you find your resources stretched, your burn rate alarming, and your products under the threat of being discontinued, build a case study.  

You need to go slow to grow fast. It’s counterintuitive, I know. But, there are things you must prove and figure out.

You must prove product/market fit. Investors are going to demand this proof. Can you demonstrate that consumers need, want and, most importantly, are willing to buy your product? In the absence of that evidence, it’s hard to justify the investment and its accompanying risk.

You must also prove the economics. When you give birth to a product, you make assumptions. One of those is what the market will pay. You need to validate that early before you expand reach and distribution. Too many brands find out too late. Forced to lower their retail price point they find their margins depressed beyond the point of sustainability.

Additionally, there are a few things you need to figure out first before you attempt to become a household name. The first is how best to communicate with your ideal consumer. You’ll want to learn with whom and how they engage in social media. You’ll then want to understand how to leverage that in a way that allows you to build a relationship.

You’ll also want to test your trade plan. What promotional vehicles and at what price point do you realize the biggest volume lift? Just as important is understanding the frequency of promotion. How often do you need to be on promotion to see your base velocity grow? Keep in mind, if you were to graph promotional volume, you don’t want to see a graph that looks like hills and valleys. Rather, you want to see something that resembles stairs. The goal of the promotional activity is not the volume you sell during the event, but the increase in base velocity you realize by bringing new buyers to the brand.

The needed evidence and learning can’t be accomplished effectively by following the drums of growth. When you are spread far-a-field, you can’t administer the necessary experiments that deliver the data which will enable you to adjust and perfect your go-to-market strategy.

That is best done by building a case study and you can best accomplish that by going narrow and deep. Pick a geography, a channel, a single retailer or cluster of independents. Lean in and learn. If you can find a model that allows you to build velocity, gain traction and make money, you’re on to something. Even if that’s in 50 or 100 stores, it doesn’t matter. What you’ve uncovered is something scalable.

Only once you are confident that you have a scalable model is it then time to follow the drums of growth. You’ve mitigated risk, you have a playbook, and likely, you’ll have interested and willing investors. So, go slow to grow fast and build a case study before you build a brand.

Elliot Begoun is the Principal of The Intertwine Group, a practice focused on helping emerging food and beverage brands grow.

A New Year’s resolution for brands? Work on improving that Amazon presence

Thinkstock grocery shopping online

June 16 was, for many in the natural products industry, the most notable day of 2017. The news that Amazon would buy Whole Foods Market has been followed by six months of speculation about what the merger means and how companies should proceed. Will it squeeze out small, local brands or instead create new opportunities for them to reach new customers?

“So far we don’t know exactly what it means,” said Rob Principe, vice president of strategic partnerships at Wishing U Well, a consultancy focused on Amazon strategy. “But I’ll tell you it’s not going to hurt for you to get better reviews, or to spend on marketing on Amazon, or to increase your sales velocity and add SKUs. All the stuff you were doing before on Amazon—or you should have been doing before on Amazon—it’s not going to hurt you.”

Out of all online grocers, Amazon has captured the most significant share of sales thus far. A recent report from RBC Capital Markets found that three-fourths of people who regularly shop online for groceries most often shop through Amazon. And according to Nutrition Business Journal data, internet is the fastest-growing channel for supplement sales, with 9 percent of sales occurring online and Amazon leading the way.

As the e-commerce juggernaut captures more industry sales, experts say it becomes imperative that brands are represented on the platform the right way. So how do they do that? We talked to three Amazon consultants for their advice.

Be ready to devote adequate resources. Amazon is a dynamic marketplace, and companies who use it need to be committed to giving it the necessary attention and resources. “It’s really important to make people aware that Amazon is always and has always been changing, with or without this acquisition,” said Johanna Cooper, an Amazon consultant who recently joined the team at Cascadia Managing Brands. “You have to make sure that brands are completely flexible as Amazon changes.”

One mistake a lot of brands make is getting everything set up on Amazon and then thinking that the hard work is over, said John Willkom, director of CPG at NetRush. He suggested that sellers use the analytics that Amazon provides to keep an eye on who is buying and who is clicking, in order to better concentrate their marketing efforts to drive the right targeted traffic to listings, and make changes to a listing if it’s underperforming.

“Often you can make just subtle changes to various parts of an Amazon page, even just the title, and you can see different results,” he explained.

The best approach to managing these e-commerce efforts is to build a cross-departmental Amazon team that includes salespeople, creatives (designers, copywriters, photographers), marketing experts and supply chain managers, Willkom said.

Understand that Amazon isn’t just for buying. More than half of U.S. adults under 50 say they check customer reviews online before buying something for the first time, according to a 2016 Pew Research Center study. That makes it all the more important for Amazon listings to do a complete and accurate job of telling a brand’s story.

“Amazon should essentially be an extension of your own direct-to-consumer website,” Willkom said. In other words, if brands can translate their best salesperson’s explanation of the product’s features and benefits via images and text, they will be in a good position.

It’s also a great source of customer feedback. Willkom suggested using customer feedback and questions being asked on Amazon to seed content for blogs and social media posts.

Encourage actions that will boost your listing. The more “weight” a listing has, the more likely it is to appear in a shopper’s search. No one knows exactly how the Amazon algorithm works, but Principe shared these basic ideas: positive reviews add weight, sales velocity adds weight, and additional things you might not even think of—like how many images are on a listing—add weight. “If your bullet points and title and product description are keyword enriched, that adds weight,” he explained. “If you have video—that adds weight. Questions and answers add weight.”

All of the experts stressed the importance of positive reviews. “Amazon has strict rules on incentivizing reviews, so you do have to be careful about that, but there are ways to navigate that,” Cooper said. For example, many brands send follow-up e-mails to customers who buy products to encourage them to leave a review.

Another pro tip from Principe: Under each review is a line that says, “Was this review helpful to you?” along with a yes and no button. “The more people give a review a thumbs up—whether it’s a positive or negative review—the more weight that review gets,” he said.

Rethink packaging. Most brands design their packaging to be attractive on the shelf. But on Amazon, customers don’t see that packaging until they open the box. “You can present the product digitally in so many different ways, but you don’t necessarily need super fancy, large, boxy packaging, because nobody sees it,” Willkom said. He challenges the brands he works with to rethink how they innovate in packaging for online first, instead of just taking what they currently sell in brick and mortar and trying to put it on Amazon.

“Packaging is absolutely part of the conversation,” Cooper reiterated, noting that the sustainability element is increasingly part of that conversation, too. “We’re seeing more companies go the recyclable and biodegradable route, with a lot less plastics.”

Eataly fosters symbiosis of restaurants and retail

Eataly store

Eataly—the Italian supermarket, food hall and restaurant complex—offers visitors a wide variety of premium imports; specialized services such as a vegetable “butcher,” who cleans and chops produce to customer specifications; and meal options ranging from pasta and sandwiches to multi-course feasts.

Raffaele Piarulli is vice president of operations for Eataly USA, which operates two locations in New York City and single outlets in Chicago, Los Angeles and Boston. Eataly also has 13 locations in Italy, as well as outposts in Brazil, Monaco, Turkey, Dubai, South Korea and Japan.

Piarulli discussed the symbiotic nature of operating retail and foodservice under one roof.

How do the restaurants at Eataly benefit from being attached to a supermarket?

Raffaele Piarulli: There are many ways our restaurants and retail department benefit from each other. Some are quite practical, like having the possibility of featuring a broader variety of products on restaurant menus. Most restaurants will purchase a set number of cheeses, for example, to feature on specific dishes. That’s mostly due to storage limitations and waste concerns. At Eataly, our restaurants can source internally and “shop” our whole cheese counter, [which has] several hundred Italian and domestic ones, without having the burden of committing to purchasing a certain quantity, and without having to worry about where to store the product, since it’s already there.

Restaurants may also benefit the retail market by being a constant marketing window for products. Where else can you dine at a table, enjoy a monocultivar extra virgin olive oil from Italy, and have your server point you to the shelf where you can purchase it to take home with you?

Some other ways restaurants and retail departments collaborate are more philosophical, such as the vibe one environment creates for the other. Walking around a produce market will always trigger a craving for your favorite salad; looking at a beautiful steak cut will make you think about the last time you had a nice New York Strip, eventually. You’re just more and more wowed at every step.

Are most restaurant customers also shoppers at the market? 


RP: We see it all. Many of our guests come in regularly to dine and shop; many prefer one over the other. We try to balance our offers and the overall experience in the store in order to cater to different targets in different areas based on the behavior we observe every day. 

Exceptions exist, like in every restaurant and retail business. A tourist from Europe can’t bring back fresh retail products on the plane but can eat at the restaurants. And workers, most of the time, are more willing to have a quick lunch at our quick-service restaurant during their break and eat at the [full-service] restaurants after work.

Angelo Trani

Restaurants are typically more profitable than retail markets. Is that also true at Eataly? 


RP: It truly depends on the department or restaurant you want to consider, and sometimes even on the season. In many instances, it’s also not that simple to define a clear boundary. Our pasta restaurant doesn’t spend anything in labor to make tagliatelle, because those come from the fresh pasta retail counter. Does that make the fresh pasta counter not profitable? Accounting for some of those blurred costs is definitely an interesting process. You have to remember to look at Eataly as one operation.

Do you take advantage of cross-promotional opportunities, such as highlighting hard-to-find or well-priced retail items on the restaurants’ menus? 


RP: Absolutely. This happens almost every day. We get to carry really rare [meat] cuts in our butchery, for example, because we know we’ll be able to cook them in one of our restaurants and run them as specials if the inventory doesn’t move quickly enough. We also highlight them with call-outs on our menus where we tell the story of the producer and the product so our customers are aware where it is from.

This is a great strength for us, but it is quite difficult to manage. A lot of these cross-utilization efforts rely on how well our managers get along and how easy we make it for them to work together with the right mix of team spirit and competition.

What other synergies are there between the restaurants and the market?


RP: My personal favorite: You get to have twice as many people as a standard restaurant or market would who are passionate and knowledgeable about the products they cook and sell. Our cheesemongers, our butchers, our grocery managers are constantly trying out new menu items. Our chefs are always checking what new products come in when retail deliveries arrive. Knowledge demands quality, so the more experts you can fill the store with, the more you know you’ll have high-quality products. We work with people who have chosen food as a career, a lifestyle. They’re not going to let you compromise.

The perfect example is the Manzo’s guest chef series “From New York to New York” [in the city’s Flatiron location], which combine ingredients from local farms that we sell at our butcher counter cooked by a different local chef every month. And a portion of the proceeds go to a local charity of the guest chef’s choice.

This piece originally appeared on Nation's Restaurant News, a New Hope Network sister website. Visit the site for more restaurant trends and insights.

Eataly fosters symbiosis of restaurants and retail

Eataly—the Italian supermarket, food hall and restaurant complex—offers visitors a wide variety of premium imports; specialized services such as a vegetable “butcher,” who cleans and chops produce to customer specifications; and meal options ranging from pasta and sandwiches to multi-course feasts.

Raffaele Piarulli is vice president of operations for Eataly USA, which operates two locations in New York City and single outlets in Chicago, Los Angeles and Boston. Eataly also has 13 locations in Italy, as well as outposts in Brazil, Monaco, Turkey, Dubai, South Korea and Japan.

Piarulli discussed the symbiotic nature of operating retail and foodservice under one roof.

How do the restaurants at Eataly benefit from being attached to a supermarket?

Raffaele Piarulli: There are many ways our restaurants and retail department benefit from each other. Some are quite practical, like having the possibility of featuring a broader variety of products on restaurant menus. Most restaurants will purchase a set number of cheeses, for example, to feature on specific dishes. That’s mostly due to storage limitations and waste concerns. At Eataly, our restaurants can source internally and “shop” our whole cheese counter, [which has] several hundred Italian and domestic ones, without having the burden of committing to purchasing a certain quantity, and without having to worry about where to store the product, since it’s already there.

Restaurants may also benefit the retail market by being a constant marketing window for products. Where else can you dine at a table, enjoy a monocultivar extra virgin olive oil from Italy, and have your server point you to the shelf where you can purchase it to take home with you?

Some other ways restaurants and retail departments collaborate are more philosophical, such as the vibe one environment creates for the other. Walking around a produce market will always trigger a craving for your favorite salad; looking at a beautiful steak cut will make you think about the last time you had a nice New York Strip, eventually. You’re just more and more wowed at every step.

Are most restaurant customers also shoppers at the market? 


RP: We see it all. Many of our guests come in regularly to dine and shop; many prefer one over the other. We try to balance our offers and the overall experience in the store in order to cater to different targets in different areas based on the behavior we observe every day. 

Exceptions exist, like in every restaurant and retail business. A tourist from Europe can’t bring back fresh retail products on the plane but can eat at the restaurants. And workers, most of the time, are more willing to have a quick lunch at our quick-service restaurant during their break and eat at the [full-service] restaurants after work.

Angelo Trani

Restaurants are typically more profitable than retail markets. Is that also true at Eataly? 


RP: It truly depends on the department or restaurant you want to consider, and sometimes even on the season. In many instances, it’s also not that simple to define a clear boundary. Our pasta restaurant doesn’t spend anything in labor to make tagliatelle, because those come from the fresh pasta retail counter. Does that make the fresh pasta counter not profitable? Accounting for some of those blurred costs is definitely an interesting process. You have to remember to look at Eataly as one operation.

Do you take advantage of cross-promotional opportunities, such as highlighting hard-to-find or well-priced retail items on the restaurants’ menus? 


RP: Absolutely. This happens almost every day. We get to carry really rare [meat] cuts in our butchery, for example, because we know we’ll be able to cook them in one of our restaurants and run them as specials if the inventory doesn’t move quickly enough. We also highlight them with call-outs on our menus where we tell the story of the producer and the product so our customers are aware where it is from.

This is a great strength for us, but it is quite difficult to manage. A lot of these cross-utilization efforts rely on how well our managers get along and how easy we make it for them to work together with the right mix of team spirit and competition.

What other synergies are there between the restaurants and the market?


RP: My personal favorite: You get to have twice as many people as a standard restaurant or market would who are passionate and knowledgeable about the products they cook and sell. Our cheesemongers, our butchers, our grocery managers are constantly trying out new menu items. Our chefs are always checking what new products come in when retail deliveries arrive. Knowledge demands quality, so the more experts you can fill the store with, the more you know you’ll have high-quality products. We work with people who have chosen food as a career, a lifestyle. They’re not going to let you compromise.

The perfect example is the Manzo’s guest chef series “From New York to New York” [in the city’s Flatiron location], which combine ingredients from local farms that we sell at our butcher counter cooked by a different local chef every month. And a portion of the proceeds go to a local charity of the guest chef’s choice.

This piece originally appeared on Nation's Restaurant News, a New Hope Network sister website. Visit the site for more restaurant trends and insights.