#138 Buyer Spotlight: Rich Gillmore, Gelson's

In this episode of the Startup CPG Podcast, Daniel Scharff is joined by Rich Gillmore, the VP of Center Store at Gelson's. Together, they delve into the dynamic world of indie retail in Southern California and explore how Gelson's stands out as a trendsetter by curating innovative brands that embody the quintessential Californian lifestyle.

Rich shares valuable insights on prioritizing high-quality products, navigating the influx of brand invitations, and the delicate balance between data-driven analytics and instinctive choices for successful product launches. Learn about the importance of brand visibility and collaboration, and how platforms like LinkedIn play a crucial role in fostering connections and promoting innovation.

Whether you're an emerging brand looking to partner with Gelson's or a retail enthusiast keen on understanding the intricacies of the industry, this podcast offers a wealth of knowledge and actionable insights.

Tune in now!

Listen in as Rich shares about:

• Trends Noticed at Expo West
• Strategies for Brands to Attract Retailers' Attention at Expos
• Keys to Rising Through the Ranks in the Grocery Industry
• Description of Gelson's Stores and Market Positioning
• Decision-Making for Product Assortment
• Challenges with Limited Shelf Space
• Brand Outreach and the Role of Sampling in Sales
• Consumer Buying Behavior
• Local Brands and California Lifestyle
• Decision-Making and Gut Instinct
• Involvement in Industry Organizations
• Influence on Tastes and Preferences
• Gelson's Future Plans

Episode Links:

Gelson’s Website

Rich’s LinkedIn

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Show Links:

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• Questions or comments about the episode? Email Daniel at [e-mail]
• Episode music by Super Fantastics

Creators & Guests

Host

Daniel Scharff

Founder/CEO, Startup CPG

What is The Startup CPG Podcast?

The top CPG podcast in the world, highlighting stories from founders, buyer spotlights, highly practical industry insights - all to give you a better chance at success.

Rich Gilmore
Gelson's is entirely located in southern California. You know, Santa Barbara, out of San Diego. Been here, part of the Southern California culture for many years. So that's really important to us, is making sure that we have a really good representation of local items. We hold that annual local discoveries event where we're looking for brands that are considered local to us, which is within 50 miles of any of our stores. We like to tell those local stories, but part of the reason why we just decided to give them a try is cause they were right here and on the west side based and really resonated with the Southern California culture. So brands like that are really important.

00:47
Rich Gilmore
I think it's important for brands that are locally based like that to focus on a retailer like us, where they know the community, where people can connect with them, and where they're able to get around to the stores and. And be able to really tell their story and connect with the local customer base. What's up, CPG ers?

01:08
Daniel Scharff
We've got another epic episode for you today with Rich Gilmore, the VP of center store for Gelson's. I know you're gonna love this one just as much as I did. We covered so much cool stuff, from. Debriefing Expo west to Rich's career coming up through the ranks in the grocery business to talking through Gelson's format and how do they work with emerging brands? Gelson's is such an awesome tastemaker retailer in Southern California. It was such a privilege to get some time from Rich to learn all about it. I hope you enjoy as much as I did. All right, welcome to the startup CPG podcast. Today, we are joined by Rich Gilmore. The VP of center store at Gelson's, which is a tastemaker indie retailer in Southern California. With 27 stores, Gelson's is a trendsetter.

01:54
Daniel Scharff
They've got a proven track record of discovering unique and innovative brands and promoting the California lifestyle. Gelson's has often been first to market on products that are now nationwide staples. Rich leads a dedicated team of category managers and support staff, and he's a legend in the CPG industry. With his extensive background spanning all facets of the food industry from center store to fresh and food service, rich brings tons of experience to the table. So, Rich, thank you so much for joining us. I'm so excited that we got you on the podcast.

02:24
Rich Gilmore
Thank you, Daniel. This is pretty exciting for me as well. And, you know, I really love getting to interact with the community out there, especially the startup CPG brands that are out there and especially to the organization that you are working with. And, you know, it's been a great partnership so far and looking forward to telling everybody else a little bit more about what we do here.

02:43
Daniel Scharff
All right, awesome. So, well, just to kick off, because we're just all kind of coming back up for air after Expo west, I'm just wondering, what was your expo west like? You probably get that a lot, but I think everybody would like to hear no.

02:57
Rich Gilmore
Yeah, it was. I think when you come out of it at first, you're really, truthfully, a little bit in a daze, and you have your first inclinations after the first day or so, but then when you look back at it afterwards, I think you have a little bit better perspective on it. What we like to do here is after we get to the weekend, after the show, and most of the week afterwards, I asked the team to kind of collaborate and get together and go over what they found was interesting. And we actually put together a deck to share with the senior executives, kind show any items that we think were most interesting for us and maybe talk about trends we saw. And I think it's good to give yourself a bit of a gap there afterwards to kind of think about it.

03:38
Rich Gilmore
And, you know, the thing that struck me this year was, and I think it's a good thing, is a little bit of a trend back to just more plain good food, not necessarily about gluten free or plant based or the keto diet or a specific attribute like that. I think what have I. Most memorable parts of the show was actually on that first Wednesday when they opened up that north hall to walk through. Just the buyers could go through it. It was nice to be able to plow through there. And I came around a corner and there was a nice looking booth with a pizza brand I hadn't seen before. And I'm very skeptical when I approach pizza brands, especially at expo, and walked up and said to them, my usual spiel, you know, tell me what your story is.

04:19
Rich Gilmore
And they just said, we just make good pizza. And they handed me a sample of it, and it was good old fashioned, just gluten full, oily pepperoni, real cheese pizza. And it was really freaking good, you know, and I had a question, you know, is this gluten free? Is this plant based? What's the catch here? And their catch was, there was no catch. It's just good food.

04:40
Daniel Scharff
It's glutinous gluten.

04:42
Rich Gilmore
Yes. Lovely.

04:43
Daniel Scharff
That sounds delicious. Yeah.

04:45
Rich Gilmore
I think there were several booths like that I kind of encountered where it was just good to just have good old, plain old fashioned food that was good, high quality, you know, was unique, but wasn't necessarily pigeonholing itself into some dietary restriction. So there's obviously a lot of that out there still, which is great and there's definitely a place for it and I hope it does continue to evolve so it gets better. But I just like the fact that there was just some played old fashioned good food there this year, which I think is a refreshing thing to see.

05:16
Daniel Scharff
That's great to hear. And I'm just wondering, was there any brand that did a good job of getting you to go to their booth? Like they did a nice job of just sending you an email ahead of time or they figured out how to like text you or how to just grab you on the floor and get your attention. But how did they do it? What's a great brands to try to do that?

05:35
Rich Gilmore
Yeah, and that's a hard one, truthfully, with natural products expo, just because it's so huge, in my opinion, it's too big. I think they actually need to do something about it to scale it back in some way, make it easier for the buyer. And because of that, when brands email me ahead of time, hey, stop buying my booth number, 3500 or whatever, that's all great and everything, but you have to realize that I get 200 of those emails, I don't read them. I mean, just to be honest, there's just too many of them.

06:01
Daniel Scharff
Thank you for your honesty.

06:02
Rich Gilmore
Yeah, and this show is just so big that we know that, you know, I actually tell my team, don't make an appointment to meet up with someone because inevitably you're going to be up on the third floor on the startup CPG aisle checking something out and somebody, you have an appointment to meet someone in the north hall ten minutes later and it's just not going to happen. It really disrupts the process. So in my opinion, from the retailer side, the show's there for us to go out there and find the things. And yes, everybody wants us to stop by, everybody invites us to stop by and we try our best, but we're on a quest. It is truthfully all out quest for my team to just get in there and find something new and different. And that's what we're really focused on.

06:45
Rich Gilmore
So, so what it really comes down to, it isn't necessarily, in my opinion, the footwork ahead of time or trying to set things up. It's the getting our attention as we walk by and that has to do with a well set up booth that has to do with your team being interactive active. I think a lot of people would be shocked at how many booths you walk up to. And I have a 32nd rule. If I stand there for 30 seconds and nobody says something to me, I'm moving on. Having a team that's outgoing and reaching out and trying to start the conversation and selling the product, and that's really important, but it really has to catch the eye in something in a show this large. It has to give you a reason to stop in the first place, really.

07:23
Daniel Scharff
So I like that rule. And let's say it's a booth that's getting a lot of attention. There are a lot of people there.

07:28
Rich Gilmore
Yeah.

07:28
Daniel Scharff
I mean, I'd like to think me, if I'm working that booth, I've got my eyes out. I'm looking for the bad.

07:32
Rich Gilmore
Yes.

07:32
Daniel Scharff
I'm looking for you. I'm going to recognize you and be like, oh, clear the wind, you know? But what? So, like, probably your rule applies, I guess, like, once you get to the front and you're waiting for them to address.

07:41
Rich Gilmore
Yeah. Obviously, if there's a crowd and there's a lot of interest, then there must be something going on, some reason why we shouldn't be interested as well. So you will definitely, you know, fight to get to the front to really see what's going on. It just amazes me at how many people are standing there on their cell phones, and I know they're trying to run a business also, and I'm sure they've got a logistics issue in Iowa that they're trying to deal with at the moment. But, you know, it truthfully can cost them the opportunity to get. To get into retail if they're not paid attention there. So I. Trust me, I'm well aware of the struggles of a small operation and how the founder is also in charge of sales and also in charge of logistics. But just be aware of that when.

08:25
Daniel Scharff
You do the show. Yes, yes. Have to make good use of everybody's time there. It's a intense couple days, and then I think maybe my favorite part of the show was the panel that I got to do, you guys. So we put together this panel called Tastemakers, the SoCal retailers, and we had a couple retailers on who were really influential in southern California. At the beginning of the panel, I thought this was pretty interesting. I asked the audience, there were about 300 people there who in here is from out of town, and maybe it was 80%, 90%, whatever.

08:52
Rich Gilmore
Yeah.

08:53
Daniel Scharff
And then we asked who here visited a grocery store on the way to expo and probably 50, 60% of people raised their hands were like, why? It's because like the retailers here are so influential. The new products that come from SoCal and California in general, and you guys and just the retailers that are really setting the trends. And so it was a super fun panel and then as you know, we got about 60 brands up on stage to do 15 2nd quick pitches and you were a really good sport about that. And wasn't it fun? Because, you know, for all those brands, if they're at the panel, it's probably because they don't have a booth, which means they're very early on brands. And actually, I think for probably two thirds of them, it was their first time ever getting to pitch it.

09:33
Daniel Scharff
Thank you for being. Cause I mean, they're there just to try to get some attention from you specifically. So thank you for doing that.

09:39
Rich Gilmore
And that's really part of the reason why I like to do things like that. But it's really the reason why we're there. You know, I can tell you that you have to go into Expo west with a strategy, and no offense to Chobani and General Mills, but we. The main floor is not our priority. Right. It's. We're not there to find the brands we're missing that targets carrying. We're there to find the brands that nobody's carrying or that it's just at a couple of moment pause. And so having those small startups like you were offering there that day are really the key. And that's. Those are the items that we love here at Gelson's.

10:17
Daniel Scharff
I love to hear that. That's amazing. So. Well, yeah, I mean, I think let's just get into it a little bit more. Especially who is the man, the myth legend, Rich Gilmore. Can you just tell us a little bit more about your background? And, you know, I know you worked at Vons also before your 16 year career at Gelson's. How did you get into the grocery industry in general?

10:38
Rich Gilmore
Yeah, I think my story is identical to quite a large number of people out there. My father worked for Vons for over 35 years. He worked for Charles Vondre back in 1949 and worked with them for 25 years before he decided that he wanted to be a farmer and brought me and my mom and him to Colorado to be pig farmers, where I got to kind of learn about where our food comes from. And then unfortunately basically went bankrupt doing that and came crawling back to Vons to get his old job back. And so therefore, when I turned 16, years old, he pulled up in front of vons and said, get out and get yourself a job.

11:15
Rich Gilmore
And obviously wasn't, I shouldn't say obviously, is the story that I think so many people will tell is that wasn't what my plan was when I was twelve years old. I didn't want to grow up to be a grocer. So you get into that, you start learning the business, you start progressing up. Gets to the point where, you know, I was graduating from college up in Santa Barbara and was getting married two weeks later. And I was making a pretty good living at the time as a full time closing manager at grocery store. And any other place that I was sending my resumes out to wasn't going to pay me close to what I was getting paid then. And I had a, was getting married, so I had some responsibilities. So I looked around some other places, but it just, nothing was working out.

12:00
Rich Gilmore
But I kept moving up it in the grocery store. So, you know, I worked my way up through the store, like I said, as you know, starting as a bagging groceries and working up through being a clerk and a checker and a liquor clerk and working in the bakery and the kitchen. And then during my college years, was a closing supervisor to the store, closing the store down at night, working night crew and all that, and then worked my way through being a department manager and assistant store manager and all that at Bonds and really, truly enjoyed it. I mean, you know, Vons was kind of a family for us. My family had worked for them for so long, and I really, you know, had a lot of pride in working for that company, you know.

12:41
Rich Gilmore
But as things go along, over time, I had made some other connections, and the opportunity came up to make a move from being a store manager to being a category manager. And I thought that sounded really cool. What better job out there in the world than to get to try new and exciting stuff? And so I was able to make that move over to Gelson's at the time. But, you know, I've always really enjoyed in the store looking at the cool new items as new items would come out. You know, I kind of can check them out and read some of the industry periodicals about what's trending and just thought it was interesting, you know, the new and evolution of products. So that's why being a category manager, I think, was my ultimate goal.

13:18
Rich Gilmore
And that's something I, you know, I did it for that for almost ten years and enjoyed a lot while doing that here at Gelsen's as a category manager.

13:26
Daniel Scharff
Yeah, I love to hear that story about getting promoted from within. And I've met lots of buyers, places like Walmart, like everywhere, who started out in the stores and from bagging groceries all the way up to just a really influential position of the company. But of course, there are a lot of people who don't make that leap. What do you think the key is to rising through the ranks that way from, let's say, entry level at the store all the way to central office buying decisions, corporate side?

13:52
Rich Gilmore
I think it's really, it's about the passion. It's about the interest in the items, you know, learning more about it and being innovative, finding new ways to merchandise things, finding new ways to push things, to drive sales and. And really, you know, reaching out and interacting with people in the office. If you're in the stores, you know, reaching out to the office to ask questions about items, to make suggestions can be intimidating. But the truth of the matter is that most of the people in the office came from the same position as the store people. And, you know, I'll tell you, I've been through a lot of industry events over the past 35 years, and grocery people are.

14:31
Daniel Scharff
They're fairly.

14:31
Rich Gilmore
Most of them are pretty nice. Just reaching out and getting your. That connection. Interacting with people in the office, I think, is really important. Just to show that you have the interest, to show you have the passion. That's really where, what it all comes down to in my mind, it's about. It's about that passion. You need to have passion about. About it. It's not just a job. It's not just punching the clock and doing some paperwork. Paperwork. It's about really having interest in what it is that you're doing.

14:58
Daniel Scharff
I love it. I was just reflecting on that. I think you're totally right. And just, like, our passion and, like, are your wheels churning? Trying to figure out how to make an impact, right?

15:07
Rich Gilmore
Yeah.

15:08
Daniel Scharff
Improve the experience for the shoppers or improve things for the team in some way. Like, you can tell who are the people who really care and are curious and driven to think about that stuff. Like, I think that's the passion that you're talking about and who's there to, like, kind of punch in and punch out.

15:22
Rich Gilmore
Exactly. And, you know, I think it's. Some people misinterpret that as saying you need to work the extra hours or you need to be going doing things that you're not really paid to do or things like that. And that's not what it means. It means that you really care about what you do day in and day out, and it's, I can't imagine doing something that I didn't care about, because if you don't care about it, you're not going to necessarily do a very good job of it. I don't think so. I think that's really important for people to find things that they're really interested in and really do care about.

15:53
Daniel Scharff
I think that's right. And the things that you do care about, you're not maybe even on the clock when you do it, but your brain is just always coming up with ideas and thinking of things that it's going to orient itself to the things that you care the most about. So if you're really passionate about your job, even when you're out of there in the time that you're walking down a hallway at night, if your brain is just, you know, running its gears on the stuff that you're passionate about at work, it's going to be coming up with ideas.

16:16
Rich Gilmore
And even when you're out on vacation, I mean, my wife drives. I drive my wife crazy when, you know, we're driving across Canada last summer and I have to stop at some grocery store, we just zoomed by because it looked interesting from the outside, and it's not because I'm looking, you know, doing competitive checks. It's just I want to see what's. I think it's going to be cool, and I would enjoy doing that.

16:36
Daniel Scharff
Absolutely. Me too. Grocery store tourism. I'm very into that. So, speaking of grocery stores, can you tell everybody who hasn't had the pleasure of checking out a gal since what's it all about? You know, what is the, if you're walking in for the first time, what does it feel like? What's the store like? You know, what are the shoppers like? All of the good stuff, definitely.

16:56
Rich Gilmore
You know, I think, first of all, there may be people that visited Gelson's 1520 years ago and have an image of Gelson's and then what Gelson's is today also. So, yeah, we operate 27 stores here in southern California. We go as far north as Santa Barbara, down to San Diego, and out to the desert in Rancho Mirage. You know, we started just as a few family owned operations here in the valley, started in Burbank back in the fifties, and really grew as a company organically over the years, just opening stores up here and there. But we've discovered that it really takes a certain type of location for Gelson's to succeed. I mean, we'll all admit that Gelson's has opened stores and closed them over the years just because they didn't end up being a right fit, which I think any retailer finds.

17:43
Rich Gilmore
But it needs to be a location that does have a clientele that's interested in unique and possibly high end items, high quality items, isn't necessarily afraid to pay a little bit more to get those high quality items and really focused on service. You know, and I think 20 years ago it was really kind of an old fashioned store, kind of antiquated in my opinion, focused on, you know, the cream of wheat and the everything that elderly clientele might like. And on specialty, you know, really more specialty, high and unique items like that, where you can find a really cool aioli or something along that lines.

18:26
Rich Gilmore
But truthfully, about 15 years ago, when Whole Foods is really going through their big growth phase there and the natural product world is really exploding, Gelson we kind of took a bit of a pivot and really tried to refocus in on the more natural side of the business. And I think that we fulfill a very unique position in the marketplace, especially in Southern California. Some people say that you cant be everything to everyone, which is true, you cant be. And its usually best to be. I remember my von stays, a certain CEO over there used to say that you had to choose whether you were going to be the best at being the low price operator or you could be the best at the high end operator, but its really difficult to operate right in the middle.

19:14
Rich Gilmore
And thats something that I think that weve found some good success in, that you can come to a Gelsons and you can buy your flamin hot Cheetos and you can also get that unique probiotic soda that nobody else in town carries, you know, and when we think about what the strategic advantages, you know, that Gelson's has, it's kind of based around that in that customer that isn't the entirely organic and refuses to eat anything else and wants a retailer to tell them what they can eat. And that it's also not a conventional retailer that just carries everything you can think of. It's a lot more curated and a lot more focused on making sure that you've got both.

19:56
Rich Gilmore
You know, you can come in and you can buy your twelve pack of coke and you can buy that cool kombucha, or you get that, you know, handmade kale salad over in the deli, or you can get the certified Angus beef prime ribeye, you know, in the meat department, you can't get all three of those things at one location anywhere else in town. So that's where we've really been able to position ourselves. And our customers have really grown loyal to it. And we've had to evolve with that customer base as the customer base has evolved over the years with being a little more focused on natural.

20:28
Rich Gilmore
But the key thing in the past five years that our team has really been focusing on is being that first to market on new, innovative, cool items, especially in the natural side, trying to beat the conventional retailers to market with lots of those items.

20:43
Daniel Scharff
That's awesome to hear. That really resonates with me. And it reminds me, actually, when I did a podcast with Jonathan Lawrence from fresh time, he mentioned that they had actually gone pretty far in on exclusively natural products before and then had actually rotated a bit back. And, you know, the example were talking about is, I was like, yeah, I mean, for me, I would maybe wanna prioritize organic produce, for example, but when I walked the deodorant aisle, I'm still pretty basic. I'm buying degree or something because, I don't know, I still haven't found a really high end organic one that I feel like makes me not smell bad. So I would still want the kind of like staples that I'm used to. I also want some upscale options that I love. And so that speaks to me.

21:26
Daniel Scharff
And I think, you know, what he was saying is, like, we don't want a consumer to have to then go to like, cv's or do another shop to then fill up the basket. Like, you can come here and get all the stuff for that kind of consumer. So, you know, that speaks to me. Me as I also have, you know, kind of basic taste buds in a lot of instances. So, like, I do want stuff that they're not only going to be selling at Whole Foods or, you know, Arowana or whatever. And that also, that makes sense to me because, so I used to run a beverage company in the energy drink category.

21:54
Daniel Scharff
And so when I was touring your stores, yeah, I would see the newer, you know, high end, kind of new to market type stuff, but then I would also see Red Bull and monster on there. And so that makes a lot of sense to me. Like, you know, given what you're saying about why that is and why you have those in the assortment. And I think, you know, you wouldn't necessarily feature those ones with, like, the most prominent, like, you know, as many facings as you might see it, like a safeway or something, but they're there and people can get them and we know, like, I have friends who are doing the sea moss gel and all that other stuff also, they go out at night and have like a Red Bull and vodka, and they want to be able to have that.

22:26
Daniel Scharff
So how do you make the decisions then about, like, what are the staples we want to make sure that we have on shelf and, like, how much space you're going to allocate to them versus the stuff that's newer to market and more like natural products?

22:40
Rich Gilmore
That's hard. I mean, truthfully, that's probably one of the hardest things. You know, when I can think of, back when we got a new category manager, I don't know, five, six years ago, and we're walking the deli section, the lunch meat section, and they're like, why in the world do you have Oscar Mayer deli thin turkey slices? We've got all this great selection of Applegate and organics and be still and all these high end, high quality products. And then I pull up the category movement and show the number one selling item is that Oscar Mayer Turkey, but the next four are the Applegate. Right.

23:18
Rich Gilmore
So it's a really, you have to look at the numbers and you have to realize where that balance is, you know, but at times we do have to take a leap of faith where you've had that item that is, it's not a top seller anymore. It's really trailed off. But you just think about, you know, well, misses Smith at the Tarzana store has bought it from our store for 50 years, and she's not going to be happy if we get rid of it. But you have to really use analytics and really look at it to see what that item is really doing for you to make that decision.

23:50
Rich Gilmore
I can admit we've gone overboard sometimes, you know, where we've over skewed in a category, you know, plant based was a great example of that several years ago where were all in on plant based and expanding the sections and adding, you know, discontinuing 20 skus of yogurt to put in 20 new skus of plant based yogurt and didn't, went too far. So you have to reverse course, but you have to be agile enough to do it fairly quickly also. And I think that's one good thing, that with our store count and the way our operation is that we're able to make those adjustments without having to wait for the next cycle of something next year or something like that, we can reverse course pretty quickly.

24:30
Daniel Scharff
Oh, and one thing I wanted to ask you, since you mentioned Oscar Mayer and also the pig farmer family background. A lot of people mentioned about expo west in the debriefs out there, the hot dog trend that they saw this year, and I got to check out the impossible hot dog, which I actually thought was really good. Did you try any of the hot dogs out there? And what do you think about as a frontier plant based?

24:51
Rich Gilmore
Yeah, you know, I've had my share of plant based hot dogs, and I'm sure they're probably a lot better than they used to be. But, yeah, I didn't necessarily try them. But with that said, I mean, we sell a ton of hot dogs, so, you know, there's definitely a space for it. It's never going to be 50% of the market or anything like that. But, you know, and that's what really category manager comes down. Category management really comes down to right, is looking at that customer decision tree and deciding what gap each item fills. If the item is just a me too, its not going to do any good. But is it filling some gaps that you have in your assortment and really looking at it closely in that way? Jeff.

25:33
Daniel Scharff
So speaking of making decisions for the category managers and the assortments, so given that you carry some products that are from big cpgs, Cheetos, and you got Pepsi and Coca Cola, Mars Unilever, you carry brands from those. So what does that look like for your category managers? How much of their time is spent meeting with the reps from those kind of companies versus looking for more of the new and emerging stuff? Like, is it less of their time that they have to dedicate to that stuff? Because it's kind of, you know, like you're just kind of swapping out some, taking on some new innovation from them, but, you know, largely just keeping the staples and they spend more time with the new brands, or how does that balance work?

26:11
Rich Gilmore
Yeah, I really, it does work out a lot that way. That's truthfully what a majority of the time the category manager spends is meeting with brands. They're doing two or three meetings every single day with different brands, sometimes five or six, depending on the day. And a lot of those are just brand new brands that are doing the first pitch to them. When it comes to maintaining an existing assortment or promotional planning, things like that, a lot of that can be done a little more automated through emails and things around that sort. But like you said, Frito, it's kind of on. And, you know, we did meet with them a couple times a year and really come up with the plans and then we just execute those plans. But they truly do spend a majority of their time looking for new items.

26:54
Rich Gilmore
That's what we really hang our hat on. So every category manager is authorizing probably it probably averages around 100 skus every month of just plain new items that.

27:04
Daniel Scharff
They found out there.

27:06
Rich Gilmore
And so it adds up pretty quick and it takes a lot of time, but that's really the best way to grow a category, in my opinion, is getting new items.

27:13
Daniel Scharff
So each category manager, you said, is adding 100 new items a month.

27:16
Rich Gilmore
Probably. It's, it's, you know, it varies from month to month, obviously, depending on what's going on. If you do a yogurt review, there's probably going to be a ton, but, one month compared to the next. But it, they see a lot of products and we're, this team we have right now especially is really great at finding cool new items and getting them set up through a distributor and on our shelves pretty quickly compared to what we used to do.

27:41
Daniel Scharff
That's very helpful information to remind us why we don't always hear back immediately.

27:46
Rich Gilmore
When we send an email.

27:47
Daniel Scharff
So that makes a lot of sense.

27:48
Rich Gilmore
They are very busy. It's going to take a couple tries. Tell everybody that.

27:52
Daniel Scharff
So speaking of tries and trying to get on people's radar, I had a pretty good experience when I pitched to Gelson's. So right when I moved to LA, I think a year and a half ago, actually, you had partnered with, naturally, a kind of first pitch type opportunity for member brands. And I was, I had just joined the chapter and I was lucky enough to get one of those meetings. Came out to the Gelson's hq, which was cool.

28:16
Daniel Scharff
And I think that was the first time I actually got to meet you in person and ended up pitching to one of your team members, got through the next round to talk to the buyer, didn't make it in that first round, but then were on the radar and kind of in contact and then managed to get in the next review cycle or the one after that. So, you know, pretty cool process. Is that typical kind of story or how are you seeing brands get through the 200 email clutter and get on your radar or your category managers radars?

28:43
Rich Gilmore
Yeah, that's obviously the hardest part, you know, and obviously, you know, that was a great opportunity when we did that naturally local discoveries program that you were in. That's one way that we do that. We only do those maybe once a year just because it takes a lot of planning to set those up. But it's the following up with the brands and maybe category managers would kill me to say this, but if you getting samples to them somehow. I'm not saying send samples without any information. That's especially for dairy or frozen because you have very limited storage space. That becomes annoying. Also, you just have to keep trying. And your message in your first communication needs to be explaining why yours is different than everybody else. You know, there's a lot of people out there that think they make the best hummus.

29:30
Rich Gilmore
Okay, well, that's great. I'm sure your hummus is really good. There's a lot of hummus out there, though, right? There's probably 30 different brands that have, I've spoken to in the past year that want to be in Galison's. And we've got space for three brands. There's only so much you can do. And no, we're not going to discontinue Sabra. It's the market leader and it sells. No, we're not going to discontinue Gelsen's brand hummus. It's Gelson's brand hummus for a reason. Right. So not a lot of space there. So it's, don't come in and say, I make really good hummus. What's different about your hummus is the question, right? Why is yours better than everybody else? And it can't be, oh, it's my grandma's recipe or, oh, we use all natural ingredients. There needs to be something there that's saying why it's different.

30:16
Rich Gilmore
What gap in the customer decision is it filling? So don't just come out, you know, no offense to all those hummus brands out there, but don't just come out with a really good hummus. Make sure your hummus is different than everybody else.

30:27
Daniel Scharff
So, okay, in that instance where there are only three slots, man, that's going to be competitive because you're right, there are a lot of hummus brands out there. So let's say they go with the approach of trying to convince you to expand because it's incremental opportunity. And, hey, like, hummus is growing overall as opposed to some of the other alternatives that are sitting next to it in your shell. Like, have you seen people do that pretty effectively? Like, I feel like I've tried to tell that story with sandata and it didn't really land. And then I've had other times where they were like, yeah, nodding along, like, yeah, that's what I believe, that we're going to create more space for you.

30:57
Rich Gilmore
Well, you have to realize how difficult that is we have planograms. All of our stores are planogrammed. We have a three foot, maybe a six foot section of hummus and dips in all of our stores. And yes, I would love to add three more feet onto every store, but I'm going to have to take 3ft off of something else. And that if you look at our cases where you've already got the smallest section of most retailers out there, if you compare us to a Vaughn's or Ralph's, it's like half the number of doors. So what's the solution? And even if there is a solution, how do we get the time to go around and reset all those stores? There's only so many people we have that are able to go around and do that.

31:37
Rich Gilmore
It's not like we can just send an email to the store and say, hey, flip this off and it'll all change overnight. It's not that simple. So that's what makes it so difficult. So it really. You have to really sell the fact that you are the best and we're looking for something different. Right? Like I said, and we understand that we only have that much space and maybe that means we do have to discontinue something that still sells well, but we just need to make it more exciting. We've got some categories where if you're selling two units a week per store, then you're great. We have other categories that if you're not selling ten units a week per store, then probably going to get discontinued. So it just really depends on the space. And we're always remodeling stores and always adjusting space that way.

32:21
Rich Gilmore
But it's a long process, takes a long time to transform.

32:25
Daniel Scharff
What are some of those highest velocity expectation categories? Like, I imagine some of it's like grab and go, like, you know, RTD. Like chilled RTD companies or.

32:34
Rich Gilmore
Yeah, especially in today's world. I mean, that's one thing I said in my LinkedIn post, is that I think I tasted 200,000 functional beverages expo. If you're thinking of starting a new business, don't start a functional beverage business. It's saturated. But that's where the movement is, right? All of these companies out there, the innovation, it's always something new, whether it's the functional side of it or it the euphorics or the mushroom based or all these different possible things that they're coming up, it's always evolving. But that core category overall, that's where there's a lot of volume because you're competing for the same space as Coke and Celsius and all these other, you know, really fast moving products that have a lot of money behind them. They're advertising all over television, and they're supporting the Lakers and the Dodgers. Right.

33:22
Rich Gilmore
So it's a lot of competition out there. So within the beverage categories like that especially, that's probably the top, highest volume. And then chips and snacks, salty snacks, that whole area, it's just so much innovation, too. But the core items sell it crazy.

33:37
Daniel Scharff
That's pretty interesting to hear your perspective on it, and I think it's true. So when I was selling the energy drink brand into retail, it was really falling on the Celsius craze. And so all of a sudden, there was so much competition in the market. People had seen how well they had done. Also, they had just done the deal with Pepsi, and so they were commanding a lot of shelf space because of it. And so made it difficult, like, were battling to try to get authorization. So was everybody else. And it was, yeah, it's a very hot space. It was growing a lot according to data, but, yeah, that's why there are a lot of people in it. And then we launched a new product line that was Yerev mate.

34:11
Daniel Scharff
And I was actually really surprised and excited to see a lot of the buyers were just saying, oh, yeah, I have space for that because that was a much newer, emerging, growing segment of the category. And so I kind of see what you're saying of like, yeah, maybe don't just lob something into the overall set that's growing, that has all that competition, but at least maybe find a segment of it that isn't quite as over fished yet. Yeah, right.

34:34
Rich Gilmore
Yeah.

34:34
Daniel Scharff
I also just going back to your comment about finding a way to get buyer samples. I love it when people hustle and figure something out. Like, I think even with you guys specifically, when I did get the chance to send the buyer's samples, I'm not putting it in the mail. I'm like, oh, great, I'm actually going to be in the neighborhood. I'll just come by and make the drive over to Encino and just make sure I'm there to at least drop it with a note if they're out to lunch or something. Yeah, just even the chance to get to say hello or something like always make, you know, it makes a big difference. Even though I'm sure you want everybody.

35:03
Rich Gilmore
Dropping by your office. Yeah. Right. Well, and these days, too, I mean, obviously the workplace has evolved, and truth of the matter is that our category managers actually work from home some days, so you might show up and theyre not going to be here. So frankly, if you show up, youre probably not going to get let in the door these days anyways. But that is kind of a big pet peeve of a lot of category managers are just having stuff shoved down their throat. But I fully understand the perspective from the salesperson side as well. Its like what are they supposed to do? Because there is so much out there and so many emails that you can just get so lost in there.

35:37
Daniel Scharff
Yep. Makes sense. That's the game. So let's say they do successfully get on the radar then and they're having a dialogue with buyer and get to the point of actually doing a submission. Like how do you like to partner with brands? What's going to be the kind of home run in a submission? And I know, for example, that you guys really favor the sampler box that you do with consumers where they get a chance to try stuff that's new.

36:00
Rich Gilmore
Yeah, yeah.

36:01
Daniel Scharff
What's the stuff that really makes it a no brainer for your category manager once they're interested in the product?

36:06
Rich Gilmore
Right. You know, I always tell everybody it doesnt matter how good your product is, you have to sell it. And theres so many brands out there that they go to, they get a tent at the farmers market and they stand there and theyre hand selling to thousands of customers walking by all day long. And the customers love it because the products great. But you cant be standing there hand selling to every single customer in 27 different grocery stores 24 hours a day. So you have to come up with a plan thats going to sell your product without you being there. And that's where I think a lot of brands, especially small ones, kind of lose that because they're so set on the fact their product is so high quality it sells itself.

36:46
Rich Gilmore
You know, how many times have I heard the words it sells itself? Nothing sells itself because it's just another can sitting on the shelf. There's too many other options out there and everybody defaults to what they're comfortable with. You can stand there in front of 200 different varieties of energy drinks and it gets overwhelming. And what, 90% of the time that customer is just going to buy the same thing that they always buy? You know, it's kind of like when I go to cheesecake factory, I look at the menu and say I'm going to try something new this time, but I never do. Just because people like to default to what they're used to and what they like, you know, of course.

37:21
Daniel Scharff
And fun fact, rich goes to cheesecake factory. Let's go. Sometime in. I live next to the one in Marina del Rey.

37:27
Rich Gilmore
Great.

37:27
Daniel Scharff
It actually has the most beautiful view because it's right over mother's beach. I went there twice during expo west for our team dinner. Just. No, easy.

37:39
Rich Gilmore
So, yeah, think about that. The case. The shelf at the grocery store is kind of like the cheesecake factory menu. It's just got a. It's got too many, you know, choices. Right. So, yeah, you have to do something to get the person's attention. That's the only way to do it.

37:53
Daniel Scharff
I love it. And one question I had for you was around how much do you prioritize California brands? You know, California lifestyle? I remember actually, in that first pitch I got to do with you guys, I think there was a priority, at least for that initiative around. You know, we're looking for brands that are headquartered around here or produced around here, or at least resonate with consumers who are in Socagal. It's going to feel like a fit for them. Right.

38:17
Rich Gilmore
So Yeltsin's is entirely located in southern California. You know, Santa Barbara to San Diego. There's not many retailers that can say that of our size, especially. And we grew up here. Right. That's. We were founded in Burbank. Our second store was the store right here in Encino. Been here, part of the southern California culture for many years. So that's really important to us is making sure that we have a really good representation of local items. We hold that annual local discoveries event where we're looking for brands that are considered local to us, which is within 50 miles of any of our stores. So it could be central coast to the Mexico border, out to the desert. That's, you know, we're flagging that as local in our store. We're promoting it as local.

39:00
Rich Gilmore
We like to tell those local stories, and we've had some home runs from those local events. But even if we're not having a local event, if there's a local producer that comes and tries to get in the door, there's been many over the years. We think about brands like healthaid when they were just selling from the back of their truck at farmers markets. And then they came into us to meet with me one day 15 years ago, and we decided to give them a try. But part of the reason why we just give them, decided to give the tries because they were right here and on the west side based and really resonated. With the Southern California culture. So brands like that are really important.

39:40
Rich Gilmore
And I think it's important for brands that are locally based like that to focus on a retailer like us where they know the community, where people can connect with them and where they're able to get around to the stores and be able to really tell their story and connect with the local customer base.

39:59
Daniel Scharff
Yeah, okay. Makes sense. So speaking of health aid, like, you know, early days probably that the data would not have told you to lean in on something like that. Are there any other examples where wasn't necessarily the data that drove a decision, but it was more gut instinct about something that was really going to be innovative or coming on trend that ended up performing really well.

40:20
Rich Gilmore
And I think that's part of an important kind of non quantitative part of being a category manager that I think a person to be successful as a category manager, they need to have that instinct be to be able to look at something and say, hey, that just looks interesting. This is connecting somehow with me. And it's not even, like you said, you're not able to apply any data to it. It's not because of a specific thing. You know, you're looking for. It just kind of, it just clicks in your head that this is something interesting. You know, there's been many brands like that with that I can think of.

40:52
Rich Gilmore
They personally have found over the years, but lots of people in our team that have just stumbled across things, you know, more I can think of a few years ago when Truff hot sauce came in and nobody else was carrying it around and it's got truffle in it. It's the hot sauce for, with truffle in it. That's what more Gelson's could there be, right? Things like that just kind of clicks with you? And then the alternate is sometimes it just, it isn't clicking because none of us are perfect. I think back to GT Kombucha presented to me like four times in a row, and I told them, this stuff's disgusting. Nobody's ever going to drink it. But then all of a sudden, they showed me the data that it was the number one selling item at Whole Foods.

41:31
Rich Gilmore
And I'm like, all right, I guess we'll try it. Six months later, it's the number one selling brand in the entire dairy department. So can't say that we're always able to see into that crystal ball, but so data is important. Obviously, when you are being successful somewhere, I would always say, come to us to show us the data show us the movement you're doing. Show us. And hopefully we're seeing it in spins or something like that. But at the same time, it just, it has to, you have to look at it and just be able to say, that's cool. And when I'm walking up and down the aisles at Expo west, there's several times when I'm walking down the aisle and just literally out of the corner of my eye, I just see something.

42:07
Rich Gilmore
I was about to plow through it, but just I see the package and something clicks and you have to stop. And you go back to stop and talk about it just because of that.

42:15
Daniel Scharff
I don't know why, but that reminds me of, you know, when were going through sensory for product development, I felt like I had a pretty good knack for knowing what I like and knowing why I like it and what I wanted to change and what I didn't like about it. And being able to communicate that to the product developers and that, you know, it's a really useful thing to be able to do, to have, I would say, you know, a strong palette and be able to do it. I would say the next level that I didn't really get to is okay, but I know what I like and what I don't like, but I am not that good at tasting things for other people.

42:43
Daniel Scharff
Like, say that this product is for a different kind of consumer, and I think the kombucha is a great example because, I mean, like, here's the Daniel tell all. Like, I don't really like kombucha in general. I don't know why. For me, it's, like, sour. I'm not sure. I know it's supposed to be really, like, you know, gut healthy and stuff, but, like, I'm not drinking it, so, like, it would be very hard. I can tell you which of the kombuchas I find most palatable of what's out there, but I wouldn't be able to tell you what one of these very evolved socal healthy eaters and drinkers, which one they're gonna like. So I think that's hard, right, for category managers to know, like, yeah, kombucha is on trend.

43:17
Daniel Scharff
And here, even if they're not somebody who drinks kombucha, here's the one that I think is going to be interesting to kombucha turns, or people who are open to that.

43:24
Rich Gilmore
Yes. And it goes across the board, too. You know, a lot of people would say, oh, well, Gelson's customers don't like spicy things. You know, because for some reason, years ago, I mean, when we sell salsa, the mild one sells best. I mean, that doesn't surprise me. You know, I don't think that would surprise anyone. But some people started to say, well, the gulflin's customers don't like spicy things. Okay, so then why do we sell so many flaming hot cheetos? Right? I mean, it's a bad example, but it's the truth, right? We need to. We always need to make the decisions based off of our customer, because if we only carried what we liked, it would be a very limited palate and we would probably be missing out a lot.

44:04
Daniel Scharff
It's interesting. I think things are changing. I don't have the data on this, but, you know, when you look at chili oil, like fly by Jing, and a lot of people use eat that, who I wouldn't expect traditionally were people who loved hot things, and then maybe that expands their openness to stuff that's not so mild in other categories as well. So, so interesting to think about how a product could influence people's tastes in other categories as well. So, rich, one question I'm really dying to ask you about is you're a board member for the Western association of Food Chains. Now, this is an organization that I had not heard about before moving to California, and it's really interesting to me because this is a very influential organization.

44:45
Daniel Scharff
There are a couple out here like that and California Grocers association, and you wouldn't hear about this a lot on LinkedIn or in the trade magazines or even at a conference talking to people. But actually, these are hugely influential organizations that are just stacked with buyers and people who are really important in the retail industry that some people should know a lot more about. So I just wanted to ask if you could tell us a little bit about what that is and what led you to be involved in.

45:17
Rich Gilmore
So, yeah, the WAFC is the western association of food chains. It's actually an organization entirely focused on education. So I went to the USC food industry management program back in 19, 99, 25 years ago when I was two, and a 16 week program where you're actually on campus at USC going to class every single day with people from. I was at Vaughn's at the time, but I was in class with people from Albertsons and people from Ralph's and people from bashes and people from King Supers and people from Gelson's, which is part of the reason why I work at Gelson's now is because one of my classmates was the vice president here. You get to learn a lot about the industry. But the WFC funds that program through the fundraising that they do.

46:02
Rich Gilmore
And then they also do lots of other educational initiatives around the food industry, through community colleges and organizations like that. And they do that all through their fundraising, through their conventions. So every year, the first week of May, they have their annual convention, which for any brand, is a great way to connect with the executives at these companies. Like, you can literally end up sitting at a table presenting your product to the senior vice president of purchasing of that company, or even the president of that company. It's all of the companies, all of the main grocery chains in southern California. You'll see everybody from Vaughn's there, everybody from Ralph's, everybody from Gelson, stater brothers, smart and final. And we all work together on this board.

46:49
Rich Gilmore
You know, I'm on the board with Greg McNiff, you know, from stator brothers, and Matt Reid from Smart and final. And Adam Caldecott was also my teammate back at Femme, and we're on the board together now. And he's, you know, the CEO of Bristol Farms. And I don't think anywhere else in the country would you find grocery retailers that are competitors like that sitting in the same room trying to find up ways to educate our employees. And it works also with CPG side, right through the illuminators and through those types of organizations that work with the WASC. And you come to these conventions so that you can hang out at the bar with these executives. You can have the way to grow those connections. And that's a huge thing for a lot of brands.

47:35
Rich Gilmore
I know some real small startups wouldn't be able to afford the expense that might come along with that. But when you are able to, I think it is really a vital part that along with the CGA events that you see all the time, the illuminator events, those are all great organizations that really. Southern California is pretty unique in having so much of this interaction between CPG brands and all of the retailers that are involved.

48:00
Daniel Scharff
Yeah, I really appreciate you sharing that, because that is one of the organizations. I think it's kind of like under the radar for early brands, and they should know about it, because, like, if you find somebody who's really in the know, they'll know that as kind of like a trade secret of like, oh, no, there's like, they're very good opportunity if you can try to get involved in those kind of organizations. I remember my friend Jess Rodland was the first person who told me about the Olive Crest event. You know, that's a charity that a lot of the retailers in SoCal support. And I was like, oh, what is this?

48:29
Rich Gilmore
Okay, cool.

48:29
Daniel Scharff
Yeah, like, we'll go support charity and.

48:31
Rich Gilmore
Do a booth there.

48:32
Daniel Scharff
And, man, it was just us and a bunch of buyers from socal retailers, like, across the board. I was like, what is this? This is amazing. This is very different from some of the other trade shows out there. And then, yeah, I've gotten to know some other people, and I know that Sabrina from Illuminators facility did a pitch competition with WAFC last year, and I had applied for that because I was like, oh, I know what this is and how good of an opportunity it is. And I narrowly missed, apparently, getting selected for it.

49:00
Daniel Scharff
But I saw my friend Clara from Unite Foods got into it, and one of my friends from business school also, who has a brand called Mocktail club got into it, and I messaged both of them, like, well, congrats, because I don't know if everyone out there knows how big of a deal that is, but I do, and I just really want to congratulate both of you on it. And they went, and they were like, yeah, it was what you think it is. It was incredible. So good. Thank you for helping me illuminate everybody out there.

49:23
Rich Gilmore
That's great.

49:24
Daniel Scharff
These organizations. So rich, man. Thank you. This was incredibly interesting for me to go through a lot of this, the background on your career and Gelson's, and I think just a ton of really cool tips for people. Cause, I mean, I think pretty much any brand that I know would be dying to get into Gelson's. I remember back when I worked at just egg, I was asking around, like, hey, what's the data story that we should tell for this retailer we're pitching? And everyone was like, look at Gelson's. Because I think we had gotten a secondary display there, and velocity was nuts. It was just like something we had never seen before. And so, you know, I just was always so interested to learn more about Gelson and how you partner with brands. So thank you for sharing all of that.

50:06
Daniel Scharff
And is there a good way for brands to kind of follow along with, like, you or Gelison's in general, like, you know, can people reach it, like, you know, try to follow you on LinkedIn, or, you know, what's a good way for people to follow the journey?

50:17
Rich Gilmore
Yeah, LinkedIn is a great way. We've got a lot of innovation coming up in the future. We're opening some convenience stores and things like that. So LinkedIn is a great way to learn about that. I'm actually a huge supporter of LinkedIn. I think it's important for employees just to be trying to promote their companies through LinkedIn, especially in an industry like ours where I want brands to know what we're doing, and I want brands to want to be in our stores. So it's good to get the word out there about what we are doing to those brands, especially.

50:48
Daniel Scharff
All right. I cannot wait to check out those convenience stores. That sounds incredible.

50:52
Rich Gilmore
Yeah, it's gonna be fun.

50:53
Daniel Scharff
All right, Rich, thank you again so much. On behalf of me and the whole community, we really appreciate all of the stuff you do to make yourself accessible to emerging brands. So thank you.

51:04
Rich Gilmore
Thank you, Daniel. I really appreciate it. This is a lot of fun.

51:06
Daniel Scharff
Likewise. All right, bye, everyone.

51:08
Rich Gilmore
Thanks.

51:09
Outro
All right, everybody, thank you so much for listening. If you enjoyed the podcast today, it would really help us out if you can leave a five star review on Apple Podcasts or Spotify. I am Daniel Scharff. I'm the host and founder of Startup. Please feel free to reach out or add me on LinkedIn. If you're a potential sponsor that would like to appear on the podcast, please email partnershipstartupcpg.com and reminder to all of you out there, we would love to have you join the community. You can sign up at our website, startupcpg.com to learn about our webinars, events and Slack channel. If you enjoyed today's music, you can check out my band. It's the super fantastic on Spotify music. On behalf of the entire startup CPG team, thank you so much for listening and your support. See you next time.