How To Get Into Hugo’s
Founded in 1939, Hugo’s is a family-owned chain of supermarket grocery stores located in the U.S. states of North Dakota and Minnesota. It was founded by Hugo and Dorothy Magnuson in 1939. Hugo’s is headquartered in the city of Grand Forks, North Dakota. The chain’s stores have been supplied by the Nash Finch Company since 1939. Nash Finch was once headquartered in Grand Forks, but moved to Minneapolis, Minnesota in 1919.
At the moment, the chain operates ten stores exclusively under the “Hugo’s” name. The store’s mascot is a cartoon of a smiling blonde boy named Seemore for Seemore Savings and the slogan is “More low prices, more great stuff, when you go to Hugo’s“. This is part of the promotional strategies that the company has put in place.
The supermarket business in the United States is one that tries to connect with the individual customer. This means, the supermarkets try to address the needs and interests of individual customers. This is by offering local, international, and metropolitan products. You can get spices, meat, wine, food, and so many other food products from this type of store.
Getting your products into this kind of store would require you taking notes of some certain things. As much as this is more of a prevalent factor, it is still essential to point out. Pricing is an essential factor. Even for food, people look at prices at which they are being offered for sale. Ensure that the prices are normal. Retailers won’t stock products from which they won’t make profit. At the same time, they won’t stock products which won’t sell, no matter how high the profit might be. Thus, as a distributor, you need to balance the factors.
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. However, this is a big retailer and there is a high standard for the products they take and thus, it may not be that easy to push your products in there. This is why networking can be very useful.
On the local sourcing of food products, Hugo’s 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 Hugo’s
- 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 Hugo’s 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 Hugo’s
There are several ways to get a product placed in Hugo’s. 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 Hugo’s, 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 Hugo’s.
1. Start with the right questions.) Before you try distributing your product to Hugo’s, 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 Hugo’s would be interested in selling your product? If you can strike a deal with Hugo’s, can you handle the production volume? Do you want to sell directly to Hugo’s, 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 Hugo’s? Can you sell your product at a reasonable enough profit to cover the packaging, shipping, commissions, marketing and wholesale distribution? Check Hugo’s 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 Hugo’s 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 Hugo’s is the right store for your product.) The relationship between you and Hugo’s starts with you browsing their store for competing products. If Hugo’s already has a similar product, it is going to be very difficult to get your product picked up. Spend some time at your local Hugo’s 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 Hugo’s.
If your company is minority or women owned, check Hugo’s website and see if they offer specific opportunities for those designations.
4. Pitch your product to Hugo’s.) Decide whether it will be you or a representative to present your product to Hugo’s. 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 Hugo’s, 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 Hugo’s. The percentage of commission verses, however generally a broker will take around 5% to represent your product to Hugo’s.
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 Hugo’s 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 Hugo’s paperwork.) Often Hugo’s will have you go through an application process. However, before submitting the paperwork required by Hugo’s, you should contact a buyer at Hugo’s 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 Hugo’s 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, Hugo’s 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 Hugo’s, 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.
Submit Your Product Now
(est. time 3 minutes)