Dive Brief:
- Food distributor KeHe announced a new program to help emerging brands maximize growth and reach more grocery shelves across the country, according to a company release.
- The program, Kehe Elevate, will utilize the company's category management team to advise companies. The program is limited to no more than 200 suppliers at a time, and Kehe is currently accepting applications through its RangeMe site.
- “We look for brands that are purpose-driven, have high-quality ingredients, are innovative in their category, represent a future trend, have a unique taste profile, and will appeal to consumers at the shelf,” said Rachelle Radcliffe, director of brand development at KeHE, in a statement.
Dive Insight:
The biggest struggles for startup brands wanting to get national retail distribution include funding, navigating operations and marketing. According to Harvard Business School, 95% of new products fail each year.
But emerging brands are often at the bleeding edge of consumer demand, and as a specialty distributor Kehe wants to make sure it identifies promising ideas before they get snapped up by competitors or fizzle out due to operational difficulties.
Kehe is positioning itself as a modern specialty food expert to retailers. According to a recent press update, it's taking a more data-focused approach to category management and trend analysis, and now offers technology to help brands navigate pricing and order placement.
Smaller brands continue to put pressure on the larger CPG brands. In response to consumer demand, retailers are looking to add more challenger brands to their shelves and help them differentiate from competitors.
Kroger formed Pearlrock Partners last year to scope out promising new products. In December, The Fresh Market partnered with an early-stage incubator to help it identify trends for 2020. Target offers a seasonal program that brings startups to its Minneapolis headquarters for several weeks of mentorship and development.
Large manufacturers like Kraft Heinz, Chobani and General Mills have launched their own development and mentorship programs to shepherd early-stage companies.
Food and beverage companies aren't the only ones enrolling in these programs. A recent Target mentorship cohort included a technology company that uses AI to optimize the fresh food supply chain for retailers and wholesalers, and a sustainable packaging startup.
