Two Brands, Same Category—One Thrives, One Fails. Here’s Why.

Nick: 00:00:02

There are a million ways to make money in the food service industry. You just have to find one. On the Titans of Food Service podcast.

I interview real life movers and shakers in the food game who cut through all the noise to get to the top. My name is Nick Portillo and welcome to the Titans of Food Service podcast. Let's jump right into it. Same category, similar products.

One skyrockets and the other disappears. Why? Because one knew the secret to food service growth and the others, they just waited. Let's break it down.

Welcome back to the Titans of Food Service podcast. Nick Portillo here, I'm your host. Appreciate you joining me.

Please, if you're enjoying the show, if you're listening on Apple Podcasts, Spotify or anywhere you get your podcast, if you can leave me a five star review, that means a lot. I'm really trying to get content out to as many people as possible and your support is greatly, greatly appreciated.

Hope everyone's having a good week. Thank you for joining me again here. So as I kind of set the stage initially, so imagine two brands, okay, let's call them Brand A and B.

Brand B, they launch into food service at the same time. They're in the same category. So essentially they're competing or competitive products. One is everyone is everywhere within a year.

You know, you've seen those types of brands that, those types of brands that just kind of skyrocket and they continue to grow, they're adding more fuel to the fire. And before you know it, it's like you wake up a few years later, it's like this is like an overnight success, but really it's not.

They've been building the foundation, the framework for many years and now you've just caught on and they've already, they're already really well entrenched into distribution, into restaurant chains, into large leverage operators, into all these types of categories. And they're big and chunky now and they've really built a nice business. Then on the other side, let's call it Brand B, they are the exact opposite.

Maybe they got into distribution initially and you could see that maybe at some different food shows or whatnot, but they really fizzled out or they kind of, it's the same old, same old. It's, they got some business, they maintain that business and that's about it. You're not seeing a lot of growth, growth.

And I see this all the times with, with, with brands. My 10 years I've been a food service broker. This happens, I don't want to say it Happens often.

But I do see it happen where a lot of brands, they feel stuck and they wonder how did, how did brand A, who's similar to me or maybe in a different category, how are they able to have just explosive growth in food service? So I want to break down kind of the two different sides.

Brand A versus brand B, some of the mistakes that they made, some core lessons, and we'll take it from there. Overarching theme is food service success. It's not just about getting your product into distribution. It's about creating demand in it.

As you'll see in the examples of brand A versus Brand B. Brand A, they created demand. Brand B, they waited for it and it never came. So brand A, they, this is the brand that just absolutely took off.

Many times they focused on operators. So hey, I'm gonna put, I'm gonna build a team around, let's call it national chains or around casinos or K12 or whatever it may be.

I'm gonna get my anchor operators, they're gonna buy into the, into what I'm selling into my brand and help me in distribution, create that pull through again, create that demand. Once you get the products into stock, into distribution, it can open it up to the field.

And what I mean by that is getting it open to the mom and pop restaurants, maybe your local hotels, maybe your local colleges, your local, whatever it may be.

But you need those anchors, those large restaurant chains, you need large casinos, large, you know, maybe like I live here in Southern Cal, USC or ucla, someone like that who can really buy into the product and create that demand for you. They even brand A many times they're investing into education of their products as well.

Whether it's, maybe they have a broker staff, maybe they have a direct sales team, maybe they have both. And they're investing time and energy into educating those people to be proficient sellers on their behalf.

I see some manufacturers that say, hey, broker team, I want you to send some people, or maybe it's their direct team. I want to take them back to, you know, where we produce the products. I'm going to get them to buy into my story.

I'm going to show them how we make the products. And essentially I'm going to, I'm going to give them all the tools to be able to go out into their markets and sell my company on my behalf.

Now, it takes cost, it takes time, it takes effort, but it does pay dividends. When you do those types of things, it's reinvesting into your business. Another way to drive awareness is being A part of food shows.

It can be, you know, a lot of times broadliners like Cisco or US Foods or Shamrock here in the west or maybe PFG and others, even your independent distribute distributors, they have food shows, get involved in those, start building that demand. Demand, demand. That's the word of this episode. Early, don't wait for it to come. You have to go out there and create it.

And the brands that do that have that longer term success or what I meant what I kind of said at the beginning of the episode, that overnight success, like how did they get it? Well, it's because they've been building the building blocks this whole time.

Eventually they get to kind of like a critical mass where you have products that are stocked in distribution, you have operators creating that pull through that demand.

And once you start building this critical mass, then distributors start talking to their operators, operators start talking to other operators like them, their friends, you know, chefs in a local area.

Many times they know different chefs and so they talk, they start talking about the product and then you start really getting that word of mouth, it starts getting out there. Even distributors, they say, you know, they're.

Many times they might share an operator for example, and that operator is buying your product from somebody else. But that distributor says, well, that product, if I can bring that in, that operator would be more important to me as the distributor.

Boom, there you go. So you start to create competition between the distributors as well. There's so many different ways to go about it. I mean you can.

I could do a whole episode on gpos which is essentially like contract managed accounts like Sodexo, Food by Compass, Premier, Avendra, so on and so forth.

Like once you get those types of, once you get within those programs, then they're essentially forcing the products into, into the operator's hands, which, which makes distribution fall in line and bring in the products as well. And then it can really fold out nicely. But again, that's a, that's for a whole nother kind conversation.

So kind of laid out some different ideas and different tactics that brands take. And in this case this is brand A's tactics and it's proven to be super successful.

But brand B on the other, on the other hand, what they did, maybe, maybe their, their sellers, their direct team or their broker team has relationships at distributors and based on that relationship, distributor brought in the product and they said, hey, I'll bring in a pallet or whatever the minimum order quantity is. But you have to go out there and drive the demand. You have to go find the opportunities for me, and they don't. And so the product just sits there.

So they brought the product in and after a certain period of time, the distributor calls and says, hey, I need you to come pick these products up. And then you're kind of back to square one.

Or maybe they get a little bit of velocity, but it's not really anything that's moving the needle or that's exciting. The problem that brand B has is they have minimal operator engagement.

They didn't precede the market with, you know, here's my product, here's my brand story, here's all of these types of things.

They're kind of just sitting there and waiting, waiting on that word of mouth, waiting on those distributor reps who are responsible for thousands of items at these distributors to focus on your product line. It just doesn't work. It's. It creates more of a trickle as opposed to a flood of demand.

So those are kind of the different tactics of brand A versus Brand B.

And as you can see, kind of brand A is way more successful in food service because they've got the feet on the street, they're educating their, their sales teams, they're investing back into operators, and they are manufacturing that demand themselves and not waiting for it to come.

Whereas brand B, on the other hand, they kind of took more of a approach of if I could just get it into distribution, which is the hardest part, it's not easy, I must say. It's very hard to do that. But just getting into distribution, that's only a fraction of the overall food service sales equation.

There's so much more you have to do if there's no demand.

No one's going to pull your product off of the shelves there at, at the Broadliner or the independent distributor or their produce distributor, meat purveyor, whoever it may be, they're not going to pull the product if there's no demand. So how to build pull through before you launch? I kind of. I gave some ideas. So the first one I'd say there's, there's kind of four different ideas.

Idea number one is you have to start relationships with key operators early. When I say key operators, think of strategic customers. I call them strategic accounts.

So these are large restaurant chains or these are large college universities or large, we call them LLOs and food service. Large leveraged operators.

These are the, the end user essentially in food service that is going to use your product in their operation, but they're going to do it on a very big scale. We all love our local Italian or Mexican food or Asian food, whatever cuisine down on the corner in our local neighborhood.

We love going there with our family. They do a fantastic job, great people. However, if it's just one unit, maybe they only buy two. They could only buy two cases of your product.

Maybe they can only buy five cases. We need to put some chunky sales on the board. It's important. Two cases a week not going to cut it. How can I find 20 cases a week?

Heck, how can I find 200 cases a week? We all have the same limited resource and that's time.

Put your time towards the big operators, those large leverage operators that can move the sales needle. Secondly, this is point number two that I talked about is training your team. Build out a framework. You can go on YouTube.

There's tons of different sales training and whatnot. Teach your, your team, whether it's your direct team or your broker team, on how to sell your products. Think of how do I sell product?

Or excuse me, product. How do I sell profitability? How do I sell product function?

How do I sell the things that are important to an operator or the things that are important to a distributor, sales rep so that they can sell on my behalf? I can only be in so many places at once. I need to have that multiplier effect.

The third, third topic would be around different events within the industry.

You've got, as I kind of mentioned, you have food shows put on by, you know, your broad line distributors, Cisco, US Foods, pfg, Gordon, Shamrock, so on and so forth. They're even at food shows at independent, more local market distributors. Then there's also large national or regional shows as well.

Think of like the Pizza Expo or the National National Restaurant association show. Or like I, we represent, we're in the beautiful state of Hawaii. They have the Hawaii Restaurant association show. Get involved, be part of those.

There's a cost to it. You have to sign up for the show, you have to create the booth, you have to fly your team there and get hotels. I get it. There is a cost to it.

It's not cheap, but it's a great way to build your brand. It's a great way for operators and distributors or distributor reps, whoever it is, to see your products, to see what you have to offer.

And that's how you build traction. And number four is this. And this is probably one of the most important ones. You have to make it easy to buy your product.

Too many times I see brands that have a minimum order quantity of five pallets or you have to buy four Pallets direct is too high. Make it easy, simplify it. Maybe instead of just start with five pallets, maybe start with hey, I'll give you a half a pallet or a pallet to start.

If you can bring that in, then over time we can build. But it's so new. This is a new venture, let's say into distributor. Like you have to have some leeway to get the product up and built.

It just takes time. So you have to make it super easy.

Another other ways to make it really easy for your operators is, you know, maybe there's some rebates that you can offer.

You sell the case at $50, but because they're going with you and they put in maybe a contract with you for a certain amount of volume that they'll agree to, or maybe it's just a well known operator you want to be a part of or whatever the reason may be, maybe you don't even need a reason. It's just strictly volume. Give them a couple of bucks a case, maybe three, four, five bucks a case. Be a partner with them.

Make it easy for your operators to do business with you. Those types of things go a long way. Again, are you waiting for someone else to sell on your behalf?

Are you waiting for someone else to drive demand for your company? Don't do that. Get out there. Drive demand for yourself, build the business. Eventually you will get to that critical mass, but it takes time.

You have to train your team, you have to position your products, your company correctly, and so many other different things. It's not just a one solution of just getting into distribution and everybody high fiving. Because we won, you know, we won the battle.

There's a bigger war going on that we need to continue to address every day to grow this business here in food service.