Regional Nut Distributors Align With Retailers To Build Sales

Originally printed in the July 2020 issue of Produce Business.

Nut distributors scattered across the nation know their products, markets and retail landscape well enough to provide invaluable advice and help build produce department sales.

Merchandising nuts in the produce department can be as much art as science, and the way retailers go about it reflects their overall strategy.

But the fact remains that there is only one right way to merchandise nuts in produce: profitably.

Some stores greet shoppers with elaborate shelves stocked with containers of stacked product. Others emphasize bulk bins for scooping, though COVID-19 has forced many to rethink this approach. Many stores rely on pre-packed bags hanging in racks or lined up under cases of produce.

Whatever the layout, however, nut suppliers have the expertise to provide plenty of valuable guidance for product trends, merchandising and promotions.

Chad Hartman, executive director of sales & marketing for Truly Good Foods, based in Charlotte, NC, points out that he and his colleagues are happy to help retailers build nut sales, but that it is usually unnecessary. “For the most part, stores have a long successful formula for selling in the produce department.” Truly Good boasts a combination of its own in-house merchandising staff in some regions, along with broker representatives in others.

“Our business tends to concentrate near our operating centers and near our sales reps,” says Hartman, whose company maintains sales and distribution offices in Charlotte as well as in Reno, NV, Orlando, FL, Atlanta, GA, Memphis, TN, Washington DC, and Dallas, TX. “The main regions we serve are the Southeast, Mid-Atlantic, California and Texas.”

Truly Good’s core nut items sold in the produce department are almonds, pecans, walnuts and cashews. The company can provide private-label product if requested, but for the most part sells under the Truly Good Foods brand.

Hartman recommends that in the produce department, retailers keep nuts front-and-center. “Except for during the holidays, nuts tend to be more of an impulse item in the produce department.”

MERCHANDISING TEAMS

Torn & Glasser Inc., in Pomona, CA, an importer, processor, and packer of nuts, dried fruits, beans, rice, spices, candies, and grains, maintains its own merchandising team available to assist retailers and work on planograms to fit the department. Roughly 80% of its produce department business is in the West.

According to Greg Glasser, the company’s president, its core nut items in produce are in-shell mixed nuts, in-shell walnuts, and in-shell pecans.

For shelled nuts in the produce department, Glasser says, the core items are roasted salted mixed nuts, almonds, cashews, pistachios, and peanuts. “We also sell a good amount of flavored, chocolate, and yogurt-coated nuts in produce.” Half of sales are private-label products, he adds.

Glasser regularly advises retailers that rack displays for everyday items and shippers for in-and-out displays “are the best way to sell nuts.”

INNOVATIVE SKUS

To support its retailers and help generate greater sales, Commack, NY-based Setton International Foods, Inc.’s management team is continually offering new and innovative products, promotions, and eye-catching displays. Says Joseph Setton, vice president of domestic sales, “Among our innovative SKUs are our new Seasoned Kernels and Pistachio Chewy Bites, which are a great way to get more pistachios into consumers’ carts.”

The company works closely with retailers to ensure that it is offering them the best display methods for the brand’s variety of pistachio items. In addition, Setton points out, “our shipper displays are designed with eye-catching colors and graphics to catch the consumers’ eye, and they come pre-loaded for ease of use.”

Setton Farms’ pistachio products are available nationwide, with a significant percentage of its business sold through regional retailers in the West and Northeast. Says Setton, “You can find our products at over 50,000 locations nationwide and on amazon.com.” The company offers a full range of pistachio products, from inshell to kernels. They include a host of innovative new products, including a variety of seasoned kernels, inshell seasoned pistachios, dark chocolate-covered pistachios, pistachio chewy bites and pistachio blend mixes.

Setton Farms packages products under its own brand, as well as several private-label brands. Private label “is an important part of our business, and retailers return to us year after year thanks to the premium quality of our pistachios.”

The company’s top brass recommends that retailers display pistachios with complementary items such as beer or wine, “which make a good pairing for snacking, and will encourage impulse sales.”

In addition, Setton adds, pistachios are “great for baking, so pairing them with other baking items will also generate stronger sales.” Because pistachios are a healthier option than many traditional snacks, “when the consumers view them as such, they are more likely to grab a bag from a display.”

The bottom line is that nut distributors know the products, markets and retail landscape well enough to provide invaluable advice and assistance to help build produce department sales.

RETAILER’S VIEW

Bronx, NY-based retailer Morton Williams Supermarkets takes the nut category in produce very seriously, and achieves strong results.

Founded in 1952, the family-owned and operated food retailer has 16 stores: 14 in Manhattan, and one each in the Bronx and Jersey City, NJ. All of Morton Williams’ nut offerings sold out of the produce department are private label. The chain features ShopRite products as its private-label brand, supplied by ShopRite’s parent company, Wakefern Food Corporation.

According to Mark Goldman, the company’s director of produce and floral, the retailer works with a trio of regional nut distributors: Totowa, NJ-based Cibo Vita; Oak Foods LLC, based in East Stroudsburg, PA; and Aurora Importing and Distributing in Orange, CT.

Nut business is generally strong, although recent events have put a dent in overall sales. “We do very well in the City,” Goldman reports. “Right now, with the whole pandemic thing, it has kind of affected everything because we lost a lot of our lunch business in stores. Also, a lot of the offices are closed, and that was a lot of the nut business.”

Depending on the store, the nut section could stock anywhere from 80 to 200 SKUs. There are no bulk bins and scoops at this time, as management prefers to go with product packaged in 16-oz. containers.

Nut sales are brisk throughout the year, Goldman notes, with a relatively small rise during the winter months. “Certain items do well for the holidays. Also, during the school year, parents buy them for kids’ snacks.”

Merchandising displays for nuts are innovative, unique to each location, and prominent. Says Goldman, “Being in Manhattan means there is limited space, and every store could be different, basically depending on how much space we have. Normally it is a prominent display in the department because, when you stand it upright, it looks nice and it’s a good volume, good margin item.” Indeed, he adds, the margin for nuts runs at about 50%.

Nuts are divided into conventional and organic varieties. “Sometimes the organic display is almost the same size as the conventional one; usually not, though. I would say organic is probably, on average, about 60% of what we have in the regular section.”

The distributors with which Morton Williams work help the chain by making sure deliveries are both frequent and on time. “Being in Manhattan with limited space, we get direct-store deliveries from our vendors,” Goldman explains. “A store will place an order on Monday, and on Wednesday another truck will pull up with his order. So (a distributor) has to be fairly local for us in order to make sense.”

Goldman says he is satisfied that his three distributor partners are already doing everything for him and his stores that they can, and they have proven themselves over the course of several years. Cibo Vita was the most recent addition. “I’ve been working with them now for a pretty long time, and overall, I really don’t have too many complaints.”

Promotions are held to a bare minimum, largely due, once again, to his stores’ lack of square footage. Even ads are tight. Fortunately, nuts have more or less grown to be a destination item for shoppers. “They kind of sell themselves; people look for them and buy them.”

When it comes to merchandising his many nut SKUs, Goldman handles it “the same way as I do the overall produce department. I like to break up the colors.” For example, he will resist the temptation to place all of the almonds side by side “because it all blends together and it looks boring. I’ll put a mix in between, or something like that because I like to make the colors pop so it catches people’s eye.”