Fix & Fogg is ramping up its US presence where its distribution is now close to 3,000 stores and has just secured a range extension with Whole Foods Market.
Co-founder and chief executive Roman Jewell told the Ticker the company is on track to be selling eight million jars a year in the next 24 months – up from the current one million – after building on its flagship Whole Foods Market deal to go into 500 stores in July last year.
“We are now in 3,000 stores across the US but it is all relatively new,” Jewell said.
“What Whole Foods did was lead to a cascade of new distribution. We’ve been in some of those stores only 2-3 months and some of them have said we’re taking you and putting it on the shelf next month so we’re building out the brand across the US.”
The Wellington company will “just continue to ramp”, Jewell added, with a range extension with Whole Foods helping to drive growth. From May, the 25-employee nut butter company will see its current deal with the leading US retailer’s 500 stores extended from three to seven SKUs.
“The range extension has come about because of what we brought to the category. That was, sure, good quality products, but also innovative – we brought interesting flavours to a category that was a little bit stagnant,” Jewell said.
“Shoppers have their weekly favourites, but they still want to be dazzled, they still want to find cool things. It is important for Whole Foods and other natural and specialty grocery stores that they deliver that, I think we have helped solve a problem.”
For a relatively small company, Fix & Fogg was also deeply invested in what is one of the world’s largest nut butter markets.
It has a Houston-based team led by US general manager Blake Lupton and ploughed US$500,000 into a joint venture with a Colorado manufacturer to secure its own line, which completed in September.
All of this was a “massive financial commitment for the business,” said Jewell, who co-owned the company with his wife Andrea, but it has been a bet that is paying off.
“We always wanted to go down the path of being present in that market, not just present with our product but physically present with our brand, our values, our people because it shows a level of seriousness,” he said.
“America is a market where everybody turns up with the next best thing or the latest trend, but it can have a lot of gloss and veneer without substance.
“We have a really good quality product first and foremost, and a team that could deliver it.”
Jewell added that it was a different approach from a typical export strategy, “which is to put lots of things in containers and send them off around the world and attend trade shows once a year”.
“We are really trying to show that this is both a New Zealand and American based business. The model we applied is very hungry for capital, but it has proven itself.”
While it had run the rule over other markets within reach of its US manufacturing hub – such as Canada and Europe – the focus remained on the US for now, in nataural and speciality grocery stores.
“We have a rule of thumb here that it always takes at least two years to actually prove and make a product or the brand work in a market,” Jewell said.
“People have to get to know it, you have huge start-up costs in terms of slotting fees, setting up distribution and marketing so it is always good to take a long term play.
“Markets like the US can just chew money up. You have to go in knowing what you are getting yourself into, and if you go in undercooked you could just come unstuck and end up retrenching back to where you were. You need enough gas in the tank to get through a couple of years.”
There was plenty more to play for in the US, and Fix & Fogg had the ability to build another line or another facility there should it need to.
“There are 380 million people in America versus 5 million here in New Zealand and thousands of grocery stores. It is the largest nut butter category in the world so it is neat to be playing in there and it is neat to be in the best stores in that market.”
Source: https://www.foodticker.co.nz/
