Grocery Update#20: Retail and Wholesale Fees and Upcharges 101.

The Pay To Play Economy.

Discontents: Retail and Wholesale Fees and Upcharges 101. 1. Smash and Grab. 2. Dialing For Dollars. 3. Wholesale. 4. Status Quo. 5. Postscript. 6. Tunes.

Retail and Wholesale Fees and Upcharges 101.

1. Smash and Grab.

Have you ever been mugged? Victim of a smash and grab? I grew up in the Bronx, I have fought off my share of muggings. Not fun. Crimes of the poor get everyone's attention; parents, media, police, etc. Unlike wage theft, for instance. Who actually goes to jail for that shit, despite wage theft out-thieving the muggings, shoplifting and all other property theft by a factor of 10? Unless its Bernie Madoff or Bankman-Fried stuff, defrauding investors, that’s a big no-no. These are besides the point. Big business muggings, well, that is another story. So fork it over, bub.

The modern grocery industry is built on such extractive practices. That shouldn’t be a surprise. A lot of what seems normal and accepted in the industry is probably a big mystery to most consumers, and even journalists, scholars and regulators.

Market concentration enables gatekeepers to set participation tolls and fees as they please, siphoning value from consumers, workers, suppliers and growers to enrich executives and shareholders.

This discussion starts with an understanding of the economics of a new 6% EDLC (everyday low cost) scan that Sprouts is asking suppliers to pony up. It also revolves around wholesale revenue streams, and then, zooming out, how the “Walmart Effect” impacts the entire grocery business. There is a lot to tease out here. Bear with us.

2. Dialing For Dollars.

We will start the discussion by looking at Sprouts. The popular and fast growing middle market grocer has transformed into a destination for new food trends and emerging brands, a market position once owned by Whole Foods. Sprouts has implemented a new 6% EDLC (or everyday low cost scan) for its suppliers. The discount gets billed back to suppliers once an item is rung up at checkout and does not reduce cost of inventory. The EDLC will also be “internal” and not reflected at shelf to lower the retail price for consumers, but rather “an investment in Sprouts and their future growth”.

And according to a document sent out by Sprouts, “As a trusted partner, we are asking for your commitment to an EDLC. A 6% EDLC for 2025 ensures we grow responsibly and consistently for our business. At the end of the day, this growth is benefitting both of us.”

All brands are being asked to participate, and “those who don’t won’t be looked upon favorably”, as one anonymous sales document put it. It will also be 100% incremental to the promotional plans that brands have already negotiated with Sprouts buyers. In the past, in more analogue times, this would have been called “dialing for dollars”: a retailer or wholesaler calling suppliers for incremental spend to pad margins at the end of a sales quarter. C&S in particular was well known for this.

The scan is meant to help Sprouts achieve their growth goals. That is reasonable on the surface. As a publicly traded company that competes with all manner of other grocers, from Whole Foods to Kroger, to Aldi, to Trader Joe’s and even Walmart, Sprouts has to keep demonstrating strong margins and strong comparative store sales to their investors. But this means that a supplier that already has an annual 20% promotional trade spend rate (defined below, don’t worry) at Sprouts, another 6% will mean a 30% increase in spending. And because it is “internal”, or not meant to reduce the shelf price proportionately, it will have no real ROI (return on investment) or quid pro quo other than not getting on the Sprouts shit list. Fear is currency.

The EDLC scan will be billed through KeHe, their wholesaler, also their “collections” muscle. This is a common practice for retailers using third party wholesalers. UNFI does it for Whole Foods too, it is efficient. Instead of collecting such monies themselves, retailers contract with their wholesalers to just deduct the cost of such discounts off of incoming supplier invoices. According to Fred Schroeder, a sales consultant, who posted a long series of explanations about the scans on his LinkedIn, once the 6% goes through the 8% KeHe markup to Sprouts, the scan ends up being a 6.5-7.1% discount off the brand’s list price. Another way to look at it, is for a brand doing 40% of their business at KeHe, this adds up to an incremental 3% of their gross revenue, according to Schroeder.

Supplier responses to the scan plan have been mixed, with many assuming that the 6% is not mandatory and it just means they will have to pony up something extra to keep the Sprouts team happy. Brands, even if they are best sellers, don’t want grocery chains to discontinue them or move them to the bottom shelf. They know such cash grabs are not optional but many will push back or negotiate it down.

This move comes on the heels of a 2.5% supplier services and data fee recently implemented by a financially troubled UNFI. And it follows a recent Whole Foods policy requiring suppliers to fund employee discounts on promotions, on top of a 3% in-store execution fee to cover outsourced labor for merchandising services (Note: sources tell me that Whole Foods makes a 50% margin on this fee, but has only been able to collect @50% of the fees from its supplier community.). Sprouts, who competes fiercely with UNFI/Whole Foods in many markets, has been cut out of this 5.5%. Someone at their Phoenix headquarters was thinking that if suppliers could afford this at their competitors, they could pony up as much, or more, for them.

The truth is, there is nothing “optional” about these fees and they siphon trade spend away from end consumers into retailer profits. Trade spend means that brands typically spend 15-20% of their outbound sales with retailers, and usually another 10-15% at the wholesalers, in order to promote their products through on-shelf specials, like two-fers, BOGOs, endcaps, anything with a yellow sale tag, etc. If a brand has $10 million in outbound gross revenue, more than $3 million is going right back into this spend, above and beyond ingredient costs, manufacturing, salaries/wages, etc.

So when a customer buys something on sale, that discount was mostly paid by the supplier. Trade spend implemented in this way drives unit volumes, lowers prices and spikes consumer demand so that the brand, the retailer and the wholesaler sell more product, increase foot traffic, increase basket sizes, build loyalty and good will, all while customers save money and can stock up on products they love. Such discounts are investments in both the immediate and long term success of all parties.

Trade spend adds up to over $250 billion a year in revenue annually. It is responsible for most of the growth and success of many grocery retailers, with the very significant exceptions of everyday low price (EDLP) retailers like Walmart, Aldi, Lidl and Trader Joe’s that require suppliers to give them dead-net pricing with all of the trade spend sunk into cost of goods.

Suppliers that commit a portion of their trade spend to both retailers and wholesalers are also paying for placement and administrative fees, such as slotting fees, promotional event fees, or flyer placement fees. These are “pay to play” and are pocketed by the retailers and wholesalers, sometimes at an additional markup to the supplier if the fees are billed through wholesaler as an MCB (manufacturer chargeback, we will get to that in a moment). These fees mean they must pay for the privilege of running these sale events at grocers, for $10,000, $20,000 or even $100,000 per event, an event being a group of items put on sale for a given 2-3 week timeframe. Brands usually promote 12-20 weeks of the year in this way. In some cases, like with retail service cooperatives such as NCG or INFRA, these fees are more meaningful and actually support the overhead and operations of these service agencies. For most retailers though, fees are line items in their budgets and profit centers above and beyond their general and administrative expenses.

And once these fees start happening, the finance and accounting folks will be very hesitant to let them go, especially when their growth can be tracked from year to year. So if Sprouts is collecting and accumulating this capital, one should assume it is here to stay, unless they have a drastic change to their business model, which is unlikely. Sprouts is doing well and their future is bright. There is nothing stopping them.

Or look at this way. Sprouts’ sales were about $7.2 billion in 2023. A 6% EDLC scan for all center store suppliers could mean around $100 million in incremental revenue on an annual basis, straight to the bottom line. Assume they can collect on 50% of it, that is at least a $50 million cushion to their P&L. This will make Wall Street very happy and juice the stock; expect plenty of buybacks and dividends to come, Robin Hood in Reverse, funded by the collective spend of suppliers instead of paying growers or workers more, or lowering prices to consumers. This may also be an example of the “price to profit spiral”, where investors reward such behavior with higher stock prices.

But small producers that have to cover another 6% in fees, with no ROI and no direct consumer benefit, means they will fund this out of their gross margins… assuming they have the bandwidth to do so. Gross margins for many emerging food brands doing under $50 million a year in sales are already stretched thin at 40-50%, so another 6% could wipe out their EBIDTAs, force layoffs or changes to the business model such as reducing quality or skimping in food safety testing. The implication here is that brands will have no choice but to raise prices to consumers at some point to cover this spread just to stay profitable, no matter the threats or admonitions of the retailers not wanting to pass more costs onto consumers. In a for-profit system based on private ownership, with high borrower’s interest rates, staying profitable is the only way to stay afloat.

So customers lose in two ways, they don’t get the benefit of the trade spend in the form of promotional markdowns and frequent sale pricing, and they will eventually have to pay higher prices or more small food brands will end up in Chapter 11. The decision by Sprouts (or previously like Whole Foods or UNFI) to implement such fees indicates their executives have never run a small business trying to break into the industry. They instead see themselves as the hammer, and everyone else as nails, to paraphrase Brecht.

Such a huge reduction in gross margin will handicap many small businesses, even if they are not put under. They will be that much less likely to compete with deep-pocketed incumbent packaged food conglomerates who have plenty of “buckets” of trade or marketing spend to pull from. The result is that such fees and tolls are further cementing market concentration across dozens of categories by a handful of companies. We have covered this before, here and here.

Customers lose out by paying higher costs or getting fewer sale markdowns, having less access to innovation and less visibility to small and emerging food brands whose energy, inspiration and creativity drives the food industry forward; Mars and Nestle definitely ain’t doing that LOL. Retailers churn through new items every year in their category review schedules. Whole Foods launches 1500-2000 new products a year, but less than half stay on shelf for more than a couple years. Gotta make room for the next wave, those shelves ain’t getting any bigger. High volume, high turn consumable categories like snacks and beverages have 2-3 year attrition rates well above 75%. The chances of some cool, unique, creative food brand making it to a $10 million a year run rate are very slim, well under 5%.

Higher fees reduce opportunities to make the industry more diverse, sustainable and trend forward. This ironic since many retailers have programs to onboard and support local brands. Fees also take advantage of the seemingly endless hordes of needlessly optimistic, naïve and energetic startup founders and whatever cash they have raised from friends, families, their trust funds, or high stakes early stage investors. They just make the rich richer, starting with the shareholders and executives of the biggest players, the retail centers of gravity with the weight and pull to mandate such expenses without fear of repercussion or running out of suppliers to take advantage of. The markets they control, for consumers looking for healthier, better for you, trendy and more sustainable options, are too valuable for brands to miss out on.

3. Buying and Selling Wholesale.

Wholesalers in this context are major gatekeepers and bottlenecks, and command significant market access to the retailers. They work hand in glove with grocers on a daily basis. Or another way to look at it, wholesalers are the vital middle ground between producers, manufacturers and retailers. They handle millions of cases of product per day, the 6, 12, 18, 24 boxes of the single bottles, boxes, cans, bags that you buy at the store. They have very thin margins. They are large, complex, fast-paced work environments with high turnover. Plenty of truck to shelf, Just In Time inventory management, high volume, fragile and beholden to the weather, pandemics or anything else that could disrupt their inventory forecasts and required regularity. Working in wholesale warehouses, driving forklifts and automatic pallet jacks, stacking boxes square and flush, shrink wrapping stacked and loaded pallets -this is all skilled labor, which is why many wholesale employees have been unionized for better pay, safety conditions, benefits, pensions. But I digress.

Our food system heavily depends on wholesalers. Taking them out of the equation would be catastrophic in the short term. Many wholesalers have built up the organic, natural and specialty products channels of trade, aggregating products from thousands of suppliers, supplied by millions of farmers, enabling customer to have alternatives to mainstream, conventional and mass market products. But there is little that is alternative or unconventional about wholesaler business models.

Wholesalers include $23 billion C&S (involved in the $26 billion Kroger/Albertsons merger and divestiture drama) and $50 billion McLane (a major supplier to Walmart and convenience stores like Wawa, and wholly owned by Berkshire Hathaway). Or Spartan Nash, 14% owned by Amazon, or $30 billion a year UNFI and smaller rival KeHe, who act as primary distributors for retail customers like Whole Foods and Sprouts, respectively. These are mutual relationships. The retailer dictates what the wholesaler sells to them, based on their contractual obligations, their category management strategies, new product launches, private label programs and overall assortment blend by store, region and enterprise, specific to each distribution center that the wholesaler runs. The wholesaler in turn controls much of the market access for thousands of brands and suppliers approved by retail buyers to sell into their stores. Bottleneck, gatekeeper. There are smaller wholesalers involved too, but being a primary means having the lion’s share of business.

When retailers approve placement of a brand into some or all of their stores, brands see it as a victory, a success, a triumph, that they got into this chain. But this is really just the beginning of their journey. They must now keep the grocer happy, fulfill their promotional and inventory commitments and achieve sales and velocity hurdles to stay on shelf. They must also go through the wholesaler, who is a profit center and has their own margin model, marketing programs, fees and assorted expenses that suppliers must cover. Wholesalers’ business models are dependent on a range of business practices that are obscured to consumers, and probably not even familiar to most business school graduates, unless they have studied the sector. There are whole textbooks written about wholesale math. These business practices include one sided, early or truly draconian payment terms, free fills, slotting fees, MCBs (manufacturer charge backs), Off Invoice discounts (OIs), forward buys, bridge buys, deductions, upcharges, billbacks and even outsourced labor fees for moving products around or between warehouses that suppliers must pay for (!), called lumper fees. These are all a major revenue stream for the wholesalers. In fact they keep them in business. This is because the core function of wholesalers, to distribute product into retailers, does not pay the bills.

The markups wholesalers charge retailers are typically well below their cost of doing business. UNFI’s gross margin is in the 13-14% range. Their contractual markup to their largest customer, Whole Foods, is in the 6-7% range and even lower for Whole Foods store brand products. This means UNFI is losing money on every box of cookies, bottle of kombucha, every chocolate bar, every bag of lentil tortilla popcorn chips they sell to Whole Foods. The cash burn accelerates as Whole Foods grows. Likewise for Whole Foods/Key Foods or, most relevant to this discussion, Sprouts/KeHe.

UNFI must cover this spread in one of two ways. One way, which we will not cover in depth this week, is by charging disproportionately higher markups to independent and non-corporate retailers who are not part of an advantageous cost plus contract or buyer’s service cooperative that would bring their markup below 10%. Such one-off independents sometimes pay 20-30% markups on the same items that a cost-plus or cooperative services retailer with larger scale pays 6-8% for. Or the other way, which is more important for this discussion, is the ways the wholesaler will nickel and dime every supplier and manufacturer that must use their facilities to gain access to their coveted retail outlets.

The MCB (manufacturer charge back) revenue stream is a good example, and one of the industry’s open secrets. MCBs are a discount structure taken off the inbound cost of the product once it hits the wholesaler’s dock. Unlike Off Invoice (OI) discounts, which transparently flow from supplier to wholesaler and on to the retailer, the MCB is billed back to the supplier at an additional retail markup, called the “full wholesale price”. This inflates the outbound cost of the supplier’s product, thereby also inflating the value of the discount that the wholesaler can grab and the supplier must pay. A supplier taking 20% off their list cost then ends up being billed back for 35-40% of the cost of their product. This is MCB math. UNFI MCBs are a major part of their gross margins, sometime 3-4% a quarter, making them a materially important strategy to their health as a business, given their 13-14% gross margins.

Many retailers have become wise to this and have required wholesalers to give them a cut of this “full wholesale” markup. But they have not urged the end of the practice. It is too lucrative a discount model. Most items on sale at grocers that pull from UNFI or KeHe are in part funded by MCB monies. Oddly, many suppliers actually prefer the MCB because OI discounts can be worse. OIs can mean that wholesalers can forward buy large amounts of product on discount just as the sale pricing period is ending, allowing them to sell much of it at a regular price at much higher margins. Or the wholesaler can bridge buy, loading up on enough inventory at the end of one sale period to carry through until the next sales period a few months down the line, so they never have to buy products at regular cost, and all the while selling it at a higher margin and not reflecting their discounted inventory to their retail customers or end consumers in the form of sale prices. And suppliers will see no return on investment (ROI) on these trade dollars, unless they count not running afoul of their wholesalers as a good use of funds. In late stage capitalism, fear is currency.

On shelf at a store, when an item is on sale, say $1.00 off a $5.00 item, that $1.00 can be an MCB, an OI or even a scan back (billed back based on units sold thorough the register). It depends what the supplier offered or what the grocer or wholesaler asked for.

According to a range of suppliers I have heard from, here are other wholesaler practices they deal with regularly:

• Being charged the same fees twice and waiting a long time for refunds.

• Lack of transparency to what stores are pulling what products, because wholesalers use their ability to “open up” retailer accounts to leverage trade spend and additional program fees from suppliers.

• Being paid late and receiving early payment deductions in spite of this.

• Systematically being withheld payment.

• Paying warehouse activation fees or listing fees/discounts that are not contractually required, with no guarantee the supplier will see an ROI on the spend.

• Getting billed for monthly specials and flyer programs they did not agree to pay for.

• Erroneous deductions with no backups to review, sometimes for $1000’s of dollars at a time.

• Vague and confusing deduction and billback documentation for shrink or damages, making it hard to dispute such fees.

• Being billed for out of temp product the wholesaler sent to a retailer, sometimes more than once at a time, especially when the retailers refuse product and send it back to the wholesaler.

• Being billed for free fills and slotting even when retailers have waived such fees.

• Retail buyers telling suppliers they “have to watch these guys like a hawk and really don’t believe a word they say”.

• Having demanding documentation and chase wholesaler reps for refunds and disputed charges and .

• Paying for a highly essential cottage industry of forensic accountants who specialize in billback and deduction audits, dispute resolution and chasing refunds.

By controlling market access to select retailers, wholesalers make the rules and they can charge brands whatever a constricted market will bear.

They are the kingpins. It is a one sided discussion. There are exceptions of course. Family owned Chex foods. Startup Pod Foods. Co-op Partners and other retailer owned wholesalers, a scattered archipelago of scrappy independent operators, mostly on the coasts.

One obvious solution would be to force a change to these business models. Maybe wholesalers should not be allowed charge retailers markups lower than their cost of doing business? Such markups typically get lower every year as their business with the retailer grows. These are called escalator/de-escalators, as volume goes up, markup goes down. This puts more pressure on the brands to support the overhead and operations of the wholesalers, and it is a problem that compounds annually.

While it is easy to blame “the messengers”, like wholesalers’ customer service staff or other purchasing and accounting managers that are implementing and enforcing these ridiculous practices, just doing what their jobs demand of them to varying degrees of enthusiasm, grocery retailers are ultimately responsible for how the wholesale sector is behaving. If grocers push back, it is against their own interests. There are few wholesaler alternatives that can distribute the broad range of goods at the low costs retailers are demanding to stay price competitive. And even when grocers self-distribute, like Kroger, HEB or Whole Foods they typically do so for a select range of high volume or high margin items, like best-selling packaged goods or fresh meat and produce. Or like Ahold-Delhaize, they contract out to wholesalers like C&S to run their distribution facilities for them.

4. Status Quo.

The upshot here is that these practices have become status quo because every year wholesalers and retailers must grow sales and increase profits while competing downstream with mass merchants. This is just capitalism in the real world, not in some textbook or Friedman/Hayek/Mises fantasy. It would be one thing if there was competition solely on service and quality and experience. But in a country with rising home costs, skyrocketing food insecurity, income stagnant relative to expenses, retailers have to compete on price. They cannot escape this fact.

Scale and market concentration in such ways do not mean efficiency. Scale just enables greater revenue extraction and concentration of power. He who has the gold makes the rules.

In that sense, the center of gravity, the black hole at the center of the food system is always Walmart.

Everyone is looking over their shoulder at Walmart, even indirectly. Kroger competes with Sprouts in many markets. But Kroger is losing market share every year to Walmart. So that impacts Sprouts as Kroger sharpens their game, like in Atlanta. Deep discounters like Aldi and Lidl, as well as Natural Grocers and Trader Joes all compete with Sprouts in many markets. They also compete with Walmart. Grocers all have significant product overlap, even if their assortments are much more slimmed down and basic. Retail channels are a creation of syndicated data service providers to monetize data sets. They don’t really exist anymore. Everyone is competing on price, and in an inflationary period built up after years of price hikes, greater scale means you can pick and choose what prices you want to lower en mass. That is why Walmart is having such a great 2024. They are kicking everyone’s ass. We will dig into this topic soon.

And the grocers with the most leverage in their supply chains, with the strictest payment and fill rate terms for vendors, the ones that secure the most inventory, at the best quality and date codes, at the lowest cost, most consistently for their customers, the ones that can leverage their market share dominance at the expense of literally everyone else in the marketplace, e.g., other grocers, workers, suppliers, growers… the biggest will be the winners. This gravitational pull affects all of the long term business models, the earnings forecasts, the daily business practices, the partnership decisions, down to employee morale, the customer communications and relationship management. Or the fee structures. Even if employees do not know it or acknowledge it, they cannot resist that pull.

That is the nearly elemental force driving the grocery industry right now. The race to the bottom. It is the opposite of sustainable. It is the mindset of a cancer cell, the business model of a strip-mine. No matter how much organic or regenerative goodies they sell. It is extraction, a one way street, with a handful of winners, and most of us hanging on, treading water, trying to make it happen day to day. And many casualties, whether they are expendable employees, underpaid farmworkers at the bottom of supply chains, consultants and service providers who never get paid, flash in the pan startups and cash starved small brands that get churned out by the dozens every year, or the ingredient/raw material growers that can’t make their margins with the low pay prices they receive via their wholesale and retail accounts.

Companies can make more ethical decisions, they have a choice to do so. But in a race to the bottom, they must abide by the consequences of those choices. They will have lower revenue because that revenue in the form of fees or discounts will flow to their competitors up the street. They may have higher prices, they may have higher overhead or higher costs, they may have a more limited appeal that must be targeted to a very specific niche customer demographic. It is possible to run a business despite all of this, but there is little guarantee of long-term success or building a multigenerational enterprise. The promise, remember is the pursuit of happiness, not happiness. Or on the dollar bill it says “out of many, one”. My former CEO at Whole Foods liked to tell suppliers, not ironically, that not everyone gets to be mayor. Lol.

This is not accidental, it is the evolutionary end product of a concentrated industry that has lost sight of its reasons for existing: to feed people good food, to ensure abundant and high quality products and to do so fairly, ethically and efficiently. It will take tremendous collective effort, including large scale policy and ownership changes, but also daily individual efforts, to change it.

5. Postscript.

I am not a neutral observer here. I have made a living on both sides of this dynamic. For 10 years I was in purchasing leadership at Whole Foods, including a stint as an all-star regional grocery director in the NY/NJ region and then 7 years leading the national grocery team during their most profitable pre-Amazon years. I was then a board director, consultant and even fractional CEO of a handful of small brands over the last 8 years since I left Whole Foods.

In my Whole Foods roles, my P&L (profit and loss) directly benefitted from UNFI’s business model, and vice versa. I negotiated 3 contracts with KeHe and worked closely with the WFM distribution team that negotiated concurrent UNFI contracts. Our UNFI markup got lower every year as we grew sales. We charged ad fees on every promotional event, harvesting millions of dollars a year so suppliers could have the privilege of funding a discount in our stores. We required a case per sku per brand of free fill for new items, our version of slotting fees. These were all billed back to suppliers as MCBs. We know that UNFI bridge-bought and forward-bought on OIs we negotiated with suppliers.

We also hosted semi-annual supplier feedback conferences where we had to manage the anger and frustration of suppliers as they dealt with UNFI’s confusing and opaque billing policies, as well as Whole Food’s inability to follow through on commitments. We tried to prioritize startups and emerging brands, companies pioneering new food trends like keto or paleo or plant-based, or sustainability paradigms like organic and regenerative or Non GMO or fair trade. We ran hundreds of millions of dollars annually in vendor-funded sales promotions, more every year, prioritizing high attribute, exclusive and truly innovative products. We were a springboard for new brands to test the waters before venturing into Kroger or Target. We launched thousands of new items over the years, waiving their free fills and ad fees and giving hundreds of companies a shot at success through broad store placement, even when it hurt our team’s revenue stream. I would always hear from the accounting teams when ad fee revenue dropped, which was intentional. I would ask brands to spend more on discounts, not fees. Call me strange. But my team never missed sales or margin targets. When I was let go, I left the bean counters with $5 billion in sales on top of a 350 basis point margin cushion. Not sorry.

A number of our brand partners broke through to the mainstream and prime time visibility. A few of them got acquired and their founders got very, very rich. Lucky.

In my 8 years on the other side of the desk, working with brands, I saw firsthand how wholesalers could put companies on shaky financial footing. One of my brands did a national retail launch and had enough cash in the bank to last through the 60 day guaranteed inventory and non-payment window that de-risks new product launches for wholesalers. What they did not expect were the massive opening purchase orders for nearly 9 months of inventory, a truly epic forward buy that meant they barely got any more invoices for the next 6 months and then when a *not* insignificant portion of the initial inventory went out of code, they were billed back for the shrink. How do you get billed for spoils on product you sent for free? It almost killed the brand in infancy and hurt cash flow, employee salaries and turnover, promotional trade spend and long term company valuation and growth prospects. But it is just the norm.

So I understand how the game is played. I am uniquely suited to discuss these topics. I would not be here discussing this if I did not have these experiences. But my work has led me to the very obvious conclusions that for the sake of the $1 trillion grocery industry and the many, many of us who depend upon it- for sustenance, for jobs, for purchase orders and for customer access- we need to make some really big changes.

No one said it will be easy. But it will surely be worthwhile and ultimately, necessary.

In the meantime, bub, pay up.

6. Tunes

In a parallel universe, the Red Hot Chili Peppers are an obscure bar band and Fishbone rules the airwaves.

peace.