So you want to get into Whole Foods, huh?
If you read my first blog post you'll understand a bit more about me and how I was determined to land my product into Whole Foods. But like I've heard so many times from many other vendors getting into WFM is the easy part. There's so much more involved than just landing the Flag Ship store that all food vendors want their products in. And in my experience getting approved by the Local Forager was definitely the easiest part of this voyage. Shortly after I was approved by Harv Whole Foods Market had a near complete restructuring of it's corporate operations. The Local Forager program was terminated and many of it's norma day to day procedures were changed. I cannot give any advice on how to now proceed as I did but I will briefly describe what I did to navigate and hopefully it will help you out too.
Harv, the Local Forager, was known as "the man" in the food world in Northern California. Any time I would see him at food events there was always a line to speak with him. And I mean always. Most people wanted to tell him about their great food idea and I often over heard people just bragging about themselves and their business. Since I didn't have anything to show except my little bar in essentially a zip lock bag I became discouraged because it seemed impossible to get his attention. Many of the people talking to him always seemed to cut off each other in a seemingly aggressive fashion. Since I didn't have much confidence in my product idea just yet I wasn't sure if people would even like it. I found myself walking away with my head down not knowing what to do next, but I did know getting Harv's attention was my surest way to getting into Whole Foods. Over the next year I kept refining my recipes and I kept in my mind that eventually I would reach my goal. It was a physiological war of attrition. I had to refocus my efforts on building up my brand and packaging. I often visited a local food coop on the Berkeley campus, The Berkeley Student Food Collective, a student run food coop. I thought it would be a good idea to first get my bars (which were still very experimental at this point) onto the shelves at this location to get me a little credibility and since I was a student at Cal they were very open to the idea. This is where I found out about a law that had just passed in California called the Homemade Food Act Law. Essentially this law legalized the manufacture and sale of certain homemade food products. Introduced as bill AB1616, the California Homemade Food Act was signed by Governor Jerry Brown and became law effective January 1, 2013. There were two parts of this law. A Class A license gives permission to produce in your home kitchen and to sell to customers. The Class B license, which I received allowed me to produce in my college dorm kitchen and to sell commercially. I was the first business in Berkeley to be given the class B license. With this license I knew I had to start getting some traction now that I was a bit more legitimate as I was now able to sell to retail locations. Now that I landed my first store my focus was realigned with Whole Foods Market.
The Whole Foods process is clearly a daunting one, but after years of research and essentailly obsessing with other local companies I had it pretty much figured out. I could either go the corporate route and try to get my product regional. If I decided to go this route my products would go into most of the Whole Foods stores in Northern California by going through the corporate office. This route, however, would have been too costly for me. In addition to the initial costs of ordering raw ingredients, labor, and packaging costs to supply over 40 retail locations there is something called "free fills" which almost all new stores will require. This is a system where vendors give a free case of product of each flavor, also known as SKUs, to the store for allowing you to test out your product and costs thousands of dollars to fulfill. Luckily Local Forager program was still in place and I realized this was my only real opportunity and getting into the stores since you go from a store to store basis. I had to get Harv in a room with his focus on only me. But how?
I started searching for local networking events and organizations. Since Berkeley is well known for coops and coworking spaces I stared researching the best places in the area that might be a good fit for me. Right down the street from the UC Berkeley campus is one such space called Impact Hub. It consists of a random group of socially minded entrepreneurs and ranges anywhere from architects, bloggers, journalists, a soccer ball designer, and even a few food curators like myself. Hub occasionally puts together events that engaged buyers from Whole Foods and other retail spaces but I kept pushing them to put together more. After many requests they finally put one together an event in San Francisco where buyers from Whole Foods, Birite, and other markets, food vendors, in addition to packaging experts and brokers. It was totally awesome and a dream come true. And the best part was that we got to select a few of the visitors that we wanted to spend one-on-one time with for 15 minutes. And who do you think I picked? Harv! Finally I get to lock the one guy that could make or break my future into a room and force him to try my bar. I was terrified but I knew I was as ready as I could be given my situation and my determination.
So here I was, nervous as all hell, about to meet my destiny face-to-face. All my recent sacrifices were about to be substantiated or left in wind by a simple yes or no response. I kept reminding myself that I could accomplish anything I set my mind to. I took several deep breaths and walked in. After briefly sharing my story of being a student at Cal Harv got straight to business browsing my packaging, reading the ingredients and analyzing the bar without saying a word. He tears open the bag, lifts the bar to his nose and takes a brief inhale then moves on to take a bite as he looks away from me. With every chew I can feel my heart beat in my throat pounding harder. After three or four seconds, which felt like an eternity, he says, "This is good. This is really good." He continues, "We'll start you in the Berkeley location. but you have A LOT of work to do." I want to say I couldn't believe it but I always believed I could accomplish this. But was he was ever so right --I did have a lot of work. Way more than I had ever thought I could pull off by myself. If you plan on getting into the food industry you better be prepared for massive ups and downs with non-stop inspections, deadlines, paperwork and lots of obstacles. Harv recommended getting certified organic, finding a distributor, and a copacker, the latter costing somewhere in the ball park of $50,000 for that alone. With starting a business there's a lot you have to learn. From obtaining you business license, a state tax ID, and resale certificate, and the list goes on. Do you plan on going with a C-Corporation? An S-Corp? Or how about just filing as a sole-proprietor. Do I need a tax guy? These are minuscule things to ponder compared to the plethora of requirements that come with owning a food business. So here I was approved for Whole Foods Market but that's essentially the only thing I was certain of. I had to quickly learn the ropes. I needed packaging, corrugated boxes, nutrition fact tests, shelf life testing, a distributor, a website, a graphic designer, etc. I also needed to get my organic and gluten free certifications. Getting certified organic was one of the longest most grueling things I had to embark on with this whole endeavor. Just to get things going I had to have a total of five inspections: CCOF organic certifiers, GFCO gluten free certifiers, Whole Foods Market third party inspectors and the CADPH health department came twice. Not coming from a food background I had no idea I was going to have to do so much leg work just for one aspect of my business. All said and done it took me 23 months from Harv giving me the thumbs up to actually landing on the shelves. Yup, that's two years folks. And that was me working on things everyday. I won't even go into how I figured out what packaging I needed and how to come up with my graphic design. The best advice I can give here is to look at competitors and like products and find a good graphic design person.
Unfortunately, since the end of the Local Forager program I wouldn't be able to give any points on how to enter Whole Foods as a small local producer. Within the past year Whole Foods has done a lot of corporate restructuring. They put a lot buying on hold in many regions and got rid of local and regional Buyers. Even one of the co-CEO's, Walter Robb, has resigned. They are restructuring and funneling most of their operations from store and regions to their Global Headquarters in Austin, Texas. It's a bit scary to have most of your eggs in one basket, especially when some drastic changes are being made. This is it's so important to have a unique company offering something novel and not to think that one store will support your brand. What if Whole Foods decides to remove your products from it's shelves? Then you're essentially done. There are many more stores competing in this space now such as Sprouts, Costco, etc. If you are going to venture into the natural food world I'd highly suggest creating something really unique. It's crazy to see how many people are dumping everything they have into a new kombucha company. Like, really? It's one of the most saturated categories and you're competing with people with tons of money. Of course when I tell people what I make I'm sure they roll their eyes. Another bar company?! But I don't make just another bar. Sprouted Minds offers the only cold-brew tea infused fruit based superfood bar. I've tried to touch every trend word you can think of: sprouted, ancient grains, superfoods, ayurvedic, raw, organic, gluten free, adaptogenic, dairy free, soy free, nut free, refrigerated. But with novelty comes customer education. It's imperative to get in front of your customers to and as they say, "demo, demo, demo!" When I created Sprouted Minds I knew the only way i could compete and do well was to really impress with ingredients, taste, texture and branding. The way I saw it was that all the other bars were arguing with each other with their ingredients, flavor, texture, similar founder stories (or lack there of), and branding efforts. I realized I wouldn't have to argue if I started a new conversation. Getting in front of your customers is key and letting them know in a subtle way that you are founder of the company always impresses them and they almost cannot resist buying from you. For example, in some stores in a three or four hour demo I can sell between 50 and 60 bars at $3.99 each. Although that's a great number It's not so much the sales that you should be solely concerned with. It's a positive if your sales at the demo allow you to break even for the days costs of free product, travel time and/or the cost of an employee. The main objective of a successful demo is that you've hopefully gained many more customers. A few really solid customers can support you in each location by purchasing daily and spreading the word to others. As of recent I've been selling at Whole Foods for just over a year and I've invested close to $100,000 into the company. I've sacrificed a lot to follow this dream and if you're a small local company with little funds you'll likely have to sacrifice a lot as well. So, are you ready? The appropriate answer would be no, because you'll never be ready and that's the point. Like our friends at Nike say, just do it.