Sobering and accurate insights into the way the real world works in our industry. And the connection back to the Walmart juggernaut as the 'baseline' that forces all retailers to compete on price was something I have never seen articulated as clearly. For better or worse, small co-packed brands coming to market need to be at 60% gross margins from COGS to price list now, a full 15-20 points above the historical norm, in order to absorb trade costs via secondary distribution. That makes them automatically uncompetitive in major categories and will certainly stall innovative brands that are under-financed or not self-manufacturing. Thanks for continuing to shine light here.
Wow! What an honest a true breakdown of the industry. Congrats Errol on a fantastic article here and showing both sides. You failed to mention when you were on the retail side that you were actually a fair guy that helped small brands. Your perspective having been on both sides is invaluable to all.
A true master class written with class. Love that you tell it like it is.
Fittingly dropped on the same day as Kendrick's Watch the Party Die
Sobering and accurate insights into the way the real world works in our industry. And the connection back to the Walmart juggernaut as the 'baseline' that forces all retailers to compete on price was something I have never seen articulated as clearly. For better or worse, small co-packed brands coming to market need to be at 60% gross margins from COGS to price list now, a full 15-20 points above the historical norm, in order to absorb trade costs via secondary distribution. That makes them automatically uncompetitive in major categories and will certainly stall innovative brands that are under-financed or not self-manufacturing. Thanks for continuing to shine light here.
Wow! What an honest a true breakdown of the industry. Congrats Errol on a fantastic article here and showing both sides. You failed to mention when you were on the retail side that you were actually a fair guy that helped small brands. Your perspective having been on both sides is invaluable to all.
Angelo>Anthony