Selling Food To Club Stores; Costco, Sam’s Club, BJ’s…

We have a new startup client whose main focus is to sell their gourmet food product to club stores (primarily Costco, Sam’s Club, etc). They have two things going for them: 1. Their product is a comfort food, which tends to sell better during economic hardships, and 2. During economic hardships, consumers tend to buy in bulk when possible to cut costs on (pretty much all of) their purchases.

Since we primarily don’t work with club stores, I decided to tap into my network of industry connections (thanks, LinkedIn) and call up an acquaintance, Rick Hirsch.  Rick is a food industry veteran with some very impressive credentials and experience including the “pioneering” of several now-well-known gourmet brands. Currently, Rick is a consultant to gourmet/specialty food companies (similar to what we do) and specializes in brokering products into stores like Costco.

We had a conference call on Friday to discuss the possibility of collaborating with Rick on the project, and were truly impressed with Rick, his capabilities, and professionalism. In addition to possibly forging a potentially-strong alliance, I learned a lot about the business of club stores. For example, I learned that Costco typically doesn’t like to sell to a business whose sales with Costco represent more than 20% of their overall business. The reason: Costco doesn’t want to be the “bad guy” if they drop a Costco-dependant line that could sink without their business from Costco. Just goes to show that all the corporate giants aren’t so cut-throat after-all (which is common when dealing with the larger food retailers and distributors).

If you have a club store-worthy product, I’d strongly suggest giving Rick a call. I don’t think he has a website, but if you’d like, contact me directly and I will put you in touch.

Happy New Year!