By Beth Robertson Martin, Founder of SHINE Sourcing
Collaborations between start-ups and CPG companies are growing in importance as companies of all sizes are working to rapidly respond to changes in the food marketplace. Start-ups can benefit from corporate funding, resources, and customer access while corporations need to innovate to stay ahead of competitors. But as a small to mid-sized food or ingredient start up in an increasingly crowded field looking to work with a large CPG company, you are most likely navigating how to stand out from the pack and secure those partnerships.
Today collaboration between food startups and CPG companies has become a strategic imperative for both companies. But it wasn’t always this way. When General Mills bought Annie’s 8 years ago, there was no one at the company specifically focused on organic sourcing and I was tasked with building a team to support organic businesses.
From there things exploded. We created General Mills’ first identity-preserved regenerative mac and cheese, conducted a life cycle assessment of a ranch we were working with that showed it was sequestering more carbon than it was emitting, and secured a commitment from General Mills to convert a million acres of farmland that support its supply chain to regenerative.
After 10 years of working on supply chains at General Mills, I founded Shine in August of this year to provide small and mid-sized food brands, ingredient companies, restaurants, and school lunch programs with insight driven sourcing and supply chain strategies. In this post I’ll share a few strategies that I have seen give rise to successful partnerships with CPGs over the course of my career.
Think about how you fit into the larger company narrative
Start by imagining the internal narrative that the CEO is trying to communicate to their board. The past five years of stock prices for many large food companies have been ok, but they are seeing their toplines stagnate. They know they must reinvent themselves to keep up with the pace of change of consumer trends. They are looking to grow their top line and their bottom line, and they need to win in the non-meat protein category. To put it simply, they are trying to figure out how to grow and cut expenses while saving the world. As a partner or supplier, think about how you can support that larger narrative the company is trying to construct. Consider what is going on with the greater economy and consumer space, the company dynamics and what the company is focusing on. How can you help?
Make life easier for the buyer
When you partner with a big CPG company, the buyer or sourcing team is going to be managing that relationship. The problem is that buyers change, and they have a million and one responsibilities. They’re working on supply risk, innovation, and sustainability all while targeting holistic margin management which means everything should cost less than it did last year—a near impossible task. Many times, the buyer must continue growing sustainability metrics while paying less for products. The point is, your main contact at the company has their plate overflowing.
If you can make things easier for the buyer by supporting their objectives, they will call you first to offer you business. Find their priorities that match your capabilities. You can also make life easier for yourself if you get to know the director or manager of the categories as they are usually around longer.
Understand where you fit in the supplier segmentation
Most companies have the same breakdown when it comes to segmentation. The category where a supplier resides determines their level of SRM engagement. Suppliers that fall in the categories of critical and strategic are typically the most qualified for a comprehensive SRM program. Most smaller specialty companies will fit into the strategic space and many companies will have one strategic supplier.
The more you contribute to your customer’s success, the greater opportunity for you to be considered a strategic supplier. Measuring and communicating your contribution to the company is key to standing out as a strategic partner.
R&D is your friend
CPG companies have business units that focus on categories such as snacks, yogurt, cereal, or pet food, but buyers will span ingredient categories. For example, you will have a buyer focused on corn who will operate across snacks and cereal. But within those businesses there are R&D teams with a much narrower scope. When you have an opportunity to meet with someone from R&D, make them your friend because they are not responsible for savings or negotiations. They’re tasked with making a really great product. If you develop a good relationship with the product development side of the business and become valuable to them, you will have an advocate within the company. When it comes time for product innovation, R&D will pull you in if they know you will make the process easy.
Creating strong partnerships with big CPG companies comes down to understanding the needs of the company as well as the individuals and teams you’re working with. If you prove yourself to be invaluable, you will be top of mind for CPG companies looking to innovate and grow their product offerings.
Founder and President
Beth Robertson-Martin started Shine so she could maintain a particular focus on developing deep industry relationships to create new alliances and break down barriers. Basically she wants to change the food system to save the world.
She has extensive experience building strong relationships with suppliers, manufacturers and farmers. Her commitment to creating a more sustainable food system stems from her early years of growing up on an organic farm in Southeastern Missouri. Prior to joining GMI in 2012, Beth led sustainable sourcing groups in the furniture and apparel industry. Before moving into procurement, Beth developed risk management strategies and portfolio management techniques in the financial industry.