Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.
The third annual Open Call for U.S. suppliers was a roller coaster ride for many of the small businesses, entrepreneurs and inventors pitching their wares to Walmart and Sam’s Club buyers on Tuesday (June 28) in Bentonville.
Michelle Gloeckler, executive vice president and lead of U.S. Manufacturing, told Talk Business & Politics during the reception on Tuesday that the big deal around this year’s event was everyone got an invitation to sell online. She said Wal-Mart had people onsite to help suppliers get signed up.
“Buyers were told to rank the companies pitching in one of three categories, ‘yes’ ‘no’ or ‘maybe.’ When I left the office, the meetings were still going on. But we will get a tally of the decisions tomorrow (Wednesday) and let you know,” Gloeckler said.
However, on Wednesday Walmart spokesman Scott Markley told Talk Business & Politics that the retailer is not yet releasing the numbers. He said several hundred suppliers did get signed up on Walmart.com during yesterday’s event.
From canvassing Talk Business & Politics did of the Tuesday meetings there were far more “maybe” decisions than yes or no. Common issues raised by buyers during the presentations were no available shelf space in certain categories, packaging issues or no sales history.
When asked about why so many were included in the Open Call but then told there was no shelf space in the category they were pitching, (mac and cheese, salsa and cocktail drink mixers) Gloeckler said products have to achieve a certain number of sales per store, per day and without sales records it’s difficult for products to make it on the shelf. New innovative products typically have no sales records and that’s always been the case, but this year Wal-Mart buyers were perhaps guarding their purses more tightly than in prior years given the company’s mission to reduce inventory costs.
NO ‘TACO PLATE’ DEALS
This year’s event was also more subdued than the prior two years, when large commitments were handed out to at least a few companies who literally jumped up and down celebrating in the hallway. In year one, Hugh Jarratt of Fayetteville received immediate approval for an order for 1 million taco plates which are made in Prairie Grove. In year two, Bill and Julie Swaim of Maine were called out by Walmart U.S. CEO Greg Foran for their Dog Not Gone safety vests. Foran said then he was eager to see the products sold at Walmart.
Julie Swaim told Talk Business & Politics on Wednesday that getting on the shelf was much harder than she originally thought, given the CEO publicly touted the product and called for it to hit the shelves as soon as possible. She said it was a learning process but she found help with Wal-Mart’s supplier administration team. She said in February they shipped their test orders to 189 stores in the west and southern part of the U.S., and sales will be evaluated by the buyer later this summer. Swaim said she went directly to the stores located in Maine and throughout New England to get the products in those locations and that is working well.
Retail analysts approve of Wal-Mart’s efforts to expand its product selection with the Open Call, but with so much focus on decreasing inventory levels in the past year it’s no surprise there were fewer absolute yes decisions handed out to prospective suppliers. The consolation prize of allowing everyone with shelf-stable products to get listed on Walmart.com allowed the retail giant to be less decisive in the meetings, especially with the media watching.
“Wal-Mart used today to try and beef up its online assortment. There seemed to be genuine buyer interest but they weren’t pulling the trigger at the rate from recent years,” said Jami Dennis, a supplier consultant.
Regina Koroi spent six days traveling to Bentonville from her home in the South Pacific island nation of Fiji for a 30-minute sit down with a Wal-Mart buyer. Koroi was accompanied by business partners Dr. Ted Anders of Flagler Beach, Fla., and Dr. Scott Carrol of Atlanta, all of which have poured years and substantial savings into developing a natural serum designed to aide in respiratory issues. The product, Respigard was among some 800 products Wal-Mart and Sam’s Club buyers evaluated on Tuesday.
Anders said the meeting with the buyer went well, but they did not get a purchase order and were told to get the package messaging down to more simple terms so a third-grade child could read and understand what the product does.
“They want to see us back in January and told us to take this time to revamp the package messaging and gather feedback from customers who use the product. We are going to take it back to our advertising agency and have them take a hard look at the package wording and get it down to its simplest terms. The one problem we have is that we must adhere to FDA labeling guidelines and I’m not sure how few words we can get by with legally,” Anders told Talk Business & Politics.
He said the product is selling well online and they are happy to launch on Walmart.com because it can go into China now as labeled. Anders said during the next few months the plan is to try and get the product sold internationally with Walmart.com and come January they plan to have a more simplified package to present to the Walmart buyer.
Koroi, who takes care of sourcing the main ingredient, red mangrove herb, will be back in January to try again. She also works to lift more families out of poverty in Fiji by hiring women in the villages to harvest the herb used in Respigard.
David Williamson of Fayetteville only had to drive up Interstate 49 for his Tuesday meeting. He pitched his corner shelves to Wal-Mart buyers – an idea he came up with while working at the Veterans Administration. Williamson’s Corner Mate shelves are made in a plastics facility in Tulsa. He said for the past several weeks he’s been trying to get the packaging right on a shoestring budget.
“I don’t have deep pockets and I have spent a lot of time and plenty of money to get ready for today. I am an inventor, not a promoter so I need Wal-Mart to help me with that part of the process,” Williamson told Talk Business & Politics ahead of his meeting.
When asked about Walmart.com and being given an automatic yes for that distribution channel, Williamson said he figured it was a good place to start but he had no idea how to proceed.
Walmart did make it easy for suppliers to get registered to sell on Walmart.com at yesterday’s event. Gloeckler said more than 200 of the suppliers had already signed up online when she left the office around 4 p.m. Tuesday.
Williamson said the buyer he met with walked him over to the Walmart.com signup station to get registered. He said there was no mention of a purchase order in the buyer meeting which he was counting on to help him secure funding to build inventory.
“I guess these items will sell online. Wal-Mart seems to think so. We will do whatever it takes within our limited budget to prove our product will sell,” Williamson said.
Curt Sheard traveled to Walmart from Atlanta to try and get his four barbecue sauces — Big Bois BBQ – in the stores. Sheard said he almost struck out in the meeting but then a buyer agreed to put the product in five stores in Atlanta.
“I am happy to at least get into five stores. So many only got online distribution,” Sheard said.
NO SHELF SPACE
Cady Products out of Seagoville, Texas, had two meetings with Wal-Mart buyers on Tuesday. They were told in both instances there was no shelf space available in salsa or cocktail drink mixers and it would be a year before they reset the modulars in those categories. While they did get clearance for Walmart.com, they were not thrilled with the outcome as their products are not typically what customers shop for online.
Peggy Knight, the broker representing Cady Products, said it was disheartening that they had no chance to get in-stores but were given a meeting with buyers only to have a full year before actual consideration.
“They loved the taste of drink mixer and said they would put it on the shelf today, if there was room. The buyer did tell us to talk with store managers in the Dallas market about putting these products in their stores via the store of community program. That would be a test of sorts to see if the consumers like the products,” she said.
Knight said HEB has already expressed interest in the salsa and that will likely be the company’s next stop. She plans to pitch the cocktail drink mixer to Sam’s Club in the coming weeks.
Todd Whited, president of Magna Superior Tools, was recruited to the meeting by the category buyer whom he met at a hardware show earlier this year. Whited said they were also told it would be about a year before the modular reset, but Wal-Mart was interested in a couple of their products. Whited and his team traveled to Bentonville from Cleveland, Ohio, only to be told it would be another year.
Talk Business & Politics sat in on a supplier presentation Tuesday. Quality Pasta out of Charleroi, Penn., pitched a product called Muscle Mac which is macaroni and cheese infused with 20 grams of protein per serving.
Paul DeStafano, a partner in Quality Pizza, said the group also met with Walmart’s mac and cheese buyer Ryan Isabell in the retailer’s new culinary center where they prepared the food and had Walmart buyers taste it. He said Walmart executives Greg Foran and Cindi Marsiglio also stepped into the tasting room briefly.
“Ryan Isabell has asked us to come back this fall and he will try to find room for the product. We know there are some next steps to take, we have not gotten the business yet. Our hope is to get product into a few stores by next May,” he said.
Muscle Mac has already been sold into Publix, HEB, Safeway, Jewel Osco and GNC. DeStefano said only one retailer has turned the product down while Wal-Mart has said maybe.