Gum maker woos mega gro­cery chain

Loblaws deal could be a game changer, as long as the prod­uct sells

Toronto Star - - BUSINESS - BARB GORM­LEY SPE­CIAL TO THE STAR

Jay Klein is in a po­si­tion that many small busi­ness own­ers would envy. Af­ter just three years of sell­ing to mostly small, in­de­pen­dent health food stores, the founder and CEO of Toronto-based PÜR Gum has his foot in the door of food gi­ant Loblaw, which has re­cently com­mit­ted to sell­ing his prod­uct.

But while many en­trepreneur­s re­gard crack­ing the big-re­tailer chan­nel as a ticket to riches, Klein is more cau­tious.

The year-long Loblaw sup­plier-ap­proval process taught him that the de­mands of big league clients can be for­mi­da­ble, even be­fore the deal is sealed.

Klein is thrilled to have suc­cess­fully cleared the first hur­dle of in­tro­duc­ing his niche prod­uct — a chew­ing gum that is su­gar-, as­par­tame-, gluten-, nut- and dairy-free, as well as ve­gan- and di­a­betic-friendly — to a broader mar­ket.

But he sees a sec­ond more-daunt­ing hur­dle com­ing fast: Once on the shelves, PÜR Gum needs to quickly grab the at­ten­tion of Loblaw shop­pers and in­duce them to buy.

The food re­tail mon­sters — such as Loblaw, Sobeys, Metro and Lon­gos — are all scram­bling to grow their share of the bur­geon­ing $3-bil­lion-plus Cana­dian nat­u­ral health prod­ucts sec­tor.

How­ever, ven­dors who don’t meet per­for­mance bench­marks in th­ese highly com­pet­i­tive mar­kets are swiftly delisted with­out cer­e­mony, with the vac­uum quickly filled by the next ea­ger brand.

“You have to cap­ture the at­ten­tion of the con­sumer, or they’ll walk right by,” says Klein. “Stores want your prod­uct to turn and to im­me­di­ately cre­ate rev­enues.”

When Klein launched PÜR in 2010, his first goal, he says, was to sim­ply sell one pack­age of gum to a stranger. He sold that first pack for $1.39 and since then has sold more than 10 mil­lion pack­ages of gum.

Rev­enues have been ex­plo­sive since year one, at least tripling each year as the com­pany has ag­gres­sively pushed its way into about 10,000 in­de­pen­dent health food stores, cafés and gourmet shops in Canada, the U.S. and 18 other coun­tries. Typ­i­cal

“This new phase of busi­ness has a steep learn­ing curve. We’ve been given the chance to per­form. If we don’t, we know there’s another per­son with a dream wait­ing for the op­por­tu­nity.” JAY KLEIN CEO OF PÜR GUM

cus­tomers are health con­scious con­sumers, preg­nant women, ve­g­ans and peo­ple with di­a­betes. Ac­cord­ing to Klein, the health food store sec­tor has em­braced the PÜR brand thanks to its strong value propo­si­tion (PÜR Gum is the “healthier chew­ing gum op­tion” that “kicks as­par­tame,” says the PÜR web­site) and its mar­ket­ing strat­egy that fo­cuses on so­cial me­dia (PÜR has 3369 Face­book fans and 5232 Twit­ter fol­low­ers), in-store prod­uct sam­pling, spe­cial promotiona­l prices and, most im­por­tantly, ed­u­ca­tion of front-line em­ploy­ees. His three-per­son sales team takes con­sid­er­able time and a per­son­al­ized ap­proach to ed­u­cat­ing and mo­ti­vat­ing store em­ploy­ees. “If you speak to a staff per­son at The Big Car­rot or Noah’s Nat­u­ral Foods in Toronto, for ex­am­ple, you’ll get some level of ed­u­ca­tion about our prod­uct, be­cause we’ve been de­vel­op­ing re­la­tion­ships with th­ese em­ploy­ees for years,” says Klein, who keeps his own sales skills sharp by con­duct­ing in­for­mal mar­ket re­search on air­planes while dis­tribut­ing packs of PÜR. Though Klein re­al­izes it will be im­pos­si­ble to present ed­u­ca­tion ses­sions to ev­ery sin­gle em­ployee of the gro­cery chain — which has hun­dreds of stores across the coun­try, thou­sands of em­ploy­ees and mul­ti­ple work shifts per day — the plan is to con­tinue with the cur­rent mar­ket­ing ap­proach that has proven so suc­cess- ful in the health food sec­tor.

Klein hasn’t con­sid­ered hir­ing a sales de­vel­op­ment con­sul­tant — he would rather con­tinue to in­vest in his team’s own ideas than put all his eggs in one bas­ket, he says — and the com­pany doesn’t have the bud­get for an all-out bill­board, tele­vi­sion and mag­a­zine ad­ver­tis­ing ap­proach.

Eric Ma­tu­siak is the re­tail in­dus­try lead at Toronto’s Sa­tov Con­sul­tants. He notes that while mar­ket­ing is typ­i­cally the re­spon­si­bil­ity of the ven­dor, some gro­cers in­clude mar­ket­ing sup­port as part of their agree­ments, and this can help kick start sales.

“Ven­dors pay up­front monies to get set up in the gro­cer’s pur­chas­ing and sup­ply chain sys­tems, and they of­ten also pay a mar­ket­ing fee that cov­ers all forms of ad­ver­tis­ing, in­clud­ing fly­ers, print, tele­vi­sion, ra­dio and in­ter­net,” he says.

“But th­ese costs can range into the thou­sands of dol­lars, so a small com­pany needs to do its home­work to en­sure its prof­its are not ad­versely im­pacted.”

Think­ing ahead, Klein al­ready has his eye on other gro­cery chains where he might pitch PÜR. But in the mean­time, his goal is to make a suc­cess­ful first leap into the gro­cery world, ad­vanc­ing PÜR one step closer to be­com­ing a dom­i­nant player in the global chew­ing gum in­dus­try.

“This new phase of busi­ness has a steep learn­ing curve,” ad­mits Klein. “We’ve been given the chance to per­form. If we don’t, we know there’s another per­son with a dream wait­ing for the op­por­tu­nity.”

NICK KOZAK FOR THE TORONTO STAR

Jay Klein knows he has to con­vince busy shop­pers to buy his gum, or Loblaws will find an­other prod­uct to sell.

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