How To Get Into Food City
Owned by K-VA-T Food Stores, Inc., Food City is an American supermarket chain with stores located in Georgia, Kentucky, Tennessee, and Virginia. Before the Food City name was taken, the owner and founder, Jack Smith opened his first store in 1955. It was a 8,800 square-foot store in Grundy, Virginia.
In 1984, the company had grown and was able to acquire a food retail chain of 19 locations. The acquired chain was Quality Foods. It was operating under the Food City name. The Smiths adopted Food City as the new nameplate, along with its heritage, for all of their stores going forward. In 1989, Food City purchased the 37-store White Stores chain based out of Knoxville, Tennessee, more than doubling the size of the company.
K-VA-T Food Stores ranked 40th on the 2008 Progressive Grocer’s List of America’s 50 Largest Supermarket Chains, 55th on Supermarket News’ Top 74 North American Food Retailers (in 2008 with over 1.6 billion dollars in sales) and 269th on Forbes Magazine’s List of the Largest Privately-Held Companies is 2007.
To ensure that all hands are on deck and to compensate employees, the billion-dollar retail chain is owned primarily by the family. However, about 14% of the chain is owned by the associates – the employees. This is a hallmark of companies who understand and appreciate the impact of their employees and knows that the way they treat their employees would reflect in the customer service the customers would get.
The best reviews are given by customers who shop there often. Thanks to platforms like yelp.com where customers share their experiences, we can have some reviews on this international food market. A customer noted that “I KNEW there had to be a good Mexican grocery somewhere in North Phoenix. With Yelp’s help I checked out 3 carnicerias but they all disappointed. Finally I found Food City!!! This place has really good marinated meats that are ready for the BBQ. It’s also a full-serve supermarket with an in-store bakery, fresh vegetables, etc. The staff is very friendly, and they speak very good English. This will definitely be our go-to place anytime we need more than the usual supermarket’s idea of Mexican ingredients.”
For a distributor, this is an established store that can get your products to move as fast as possible. With the awesome varieties they offer and the established customer base, it can be easily deduced that there are customers already dedicated to what they sell. With a loyal customer base and new customers every day, it is highly profitable to get into business with this kind of store.
On the local sourcing of food products, Food City has been on the forefront of selling locally sourced food products and imported food items. Their wine, spice, and produce selection make them a leader in the retail and grocery business niche. This store has been in the business for years and has its established sourcing angles. Its constant support of local products has helped it cement its brand in the community as people can easily resonate with it.
How to get your product into Food City
- Understand you client: Before you spend a lot of time and money creating a product, you should know if anyone will want to buy it. Learn more about Market Research
- Learn if it’s protectable: Know if you can defend your product against cheap copies if it gets knocked off. Learn more about Copyright and Patent your product
- Test your product: Make sure that there’s a demand for your product and the customer understands what you are selling when it’s on the shelf and nobody is there to explain it. Learn more about Product Testing
- Perfect your pitch: Before you speak to decision makers, know your numbers, know your retailer and know your logistics in and out. Learn more about Pitching Your Product
- Don’t do it alone: If you haven’t been successful in retail before, a secret of success is that you can’t do it alone. Having great sales staff, customer support and marketing partners can take you from zero to success faster than if you tried on your own. Learn more about Retail Partnerships
Contact Food City Buyer
Do not trust any “list” of buyers.
Typically retail buyers change either companies or positions every few years. This strategy helps retailers know that their buyers are not taking “kick-backs” and are selecting the very best product for the very best position each time.
Buyers are typically held to a very rigorous standard of sell-through volume that they must hit and because of this they are risk averse. Your job as a supplier or vendor is to convince them that the buyers going into the stores not only know about what you’re selling but are actively seeking the product in the store currently.
How to Submit a Product to Food City
There are several ways to get a product placed in Food City. However, most entrepreneurs only dream about getting their product distributed to major retailers, few actually do it. We have experienced a significant rise in interest since the show Shark Tank started airing on NBC. Mr. Checkout has had the pleasure of working with a few Shark Tank success stories such as KISStixx and 180 Party Cups which are now currently being distributed around the country to stores like Walmart, Target, Kroger, 7-Eleven and more.
If you envision your product would be a good fit for Food City, we have a few steps to help you get your product on their shelves.
Here are the 6 steps you need to take to have your product placed in Food City.
1. Start with the right questions.) Before you try distributing your product to Food City, you need to ask yourself a few basic questions. Do you need to build demand for your product, or is there already a demand for it? Do you know that Food City would be interested in selling your product? If you can strike a deal with Food City, can you handle the production volume? Do you want to sell directly to Food City, or do you want to license your product to a manufacturer that will handle distribution?
2. Be prepared to profit.) Does your product offer enough of a profit margin for Food City? Can you sell your product at a reasonable enough profit to cover the packaging, shipping, commissions, marketing and wholesale distribution? Check Food City guidelines for other fees that you will have to build into the cost of your product in order for you to be able to turn enough of a profit to make the effort worth your while. If you work with a discount retailer, they will try to strip your profits down to zero in order to keep their prices as low as possible.
The typical breakdown of margins are: If a products costs $1 to produce, that product will retail for $4. That product that retails for $4 will wholesale for $2 to distributors and stores that purchase direct. Big box retailers like Food City may offer to pay $1.25 to the manufacturer if the product costs $1 to produce. That is the typical profit margin.
3. Determine if Food City is the right store for your product.) The relationship between you and Food City starts with you browsing their store for competing products. If Food City already has a similar product, it is going to be very difficult to get your product picked up. Spend some time at your local Food City to see what kind of products they are selling, speak to the manager and see if he thinks your product will sell well in their store. Picture in which zone your product would best fit on the shelf and keep in mind that the most precious asset that these big box stores value are their shelf space. Keep this information in mind when you are preparing your presentation to Food City.
If your company is minority or women owned, check Food City website and see if they offer specific opportunities for those designations.
4. Pitch your product to Food City.) Decide whether it will be you or a representative to present your product to Food City. Your presentation depends heavily on your strengths as a businessperson as they will most likely ask financial questions and logistics questions.
It’s common for companies to hire a broker to pitch their product to Food City, as it will be more likely that your product will make it to the next stage if the individual pitching your product has industry knowledge or a personal relationship with Food City. The percentage of commission verses, however generally a broker will take around 5% to represent your product to Food City.
We at Mr. Checkout have experience dealing with brokers and know that there are several retail brokers that have poor business practices that can potentially damage your brand. If you are seeking a legitimate Food City broker, please give us a call for a recommendation. It could save you a huge headache and a lot of money.
5. Complete the required Food City paperwork.) Often Food City will have you go through an application process. However, before submitting the paperwork required by Food City, you should contact a buyer at Food City and let them know your intentions. Having a contact inside of the company will potentially move your application more smoothly through the process.
6. Anticipate the need for increased volume.) Having Food City agree to stock your product will most likely mean a significant increase in volume. You should be prepared to ramp up your production and informing your manufacturer of this opportunity.
Having production, logistics and distribution to sync is not only difficult, it requires a significant amount of time invested in customer relations. Also, Food City may have stipulations in the contract that may penalize you for delays in shipping and production. Have an attorney explain all contracts to you if you don’t understand the terms.
If you’re looking to sell your product to Food City, be sure to thoroughly assess the marketplace, carefully prepare for production growth, and take full advantage of resources available to help you grow your business.
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