And then you send out that offer to all of your member stores and they can choose whether or not to accept them. Now, do all of them participate in core sets? Within that, they can decide if that product they want to have in core set or is it just like binary? I either do core sets or not.

It's not 100% of members that are part of the core sets program. So they sign an agreement with us and say, yes, we're going to be part of this. We're excited. And, you know, we're going to execute all of these various aspects of it. And to be part of that core set gives them the benefits of the core set program as well. So NCG is doing that work. We're creating the planograms that they get access to. There's reset support. That's part of that, that the stores have access to if they want it. So, then they see the list of everything that the category managers are saying. You know, this is what we're recommending. We typically do three set sizes. It's like salts, small stores, medium stores, large stores. And based on where we think their store is, based on the number of SKUs that they're carrying already, they're saying, OK, of this list that's within my set size, I want these items and no on these items. OK,

so that makes sense. And then what about the distribution side of that? Do they already have to be in a certain number of distributors that, you know, your stores work with or do you ever help them get into some of those distributors?

They have to be in UNFI. So the Core Sets program runs through UNFI. And our Co-op Deals program as well runs through UNFI. They don't necessarily need to be in UNFI, but it is a lot easier if you already have started the relationship. You're not a new vendor to UNFI. Maybe you're in a couple of warehouses. But what we do need is significant number opt-ins to be able to open additional UNFI warehouses. So the more UNFI warehouses you're in already, the easier the lift that it is. And we may, it's a lot easier, especially in shelf stable and frozen. It's really hard because turns that you need to be doing in frozen to maintain your slotting, which means the forecasting we have to give to UNFI to get something slotted in a warehouse is much higher than shelf stable. We say to UNFI, okay, we have a significant amount of members, maybe in Chesterfield that opted into this item. You don't have it slotted there. You don't have it activated, but we have enough to meet your forecasts. So please open the warehouse. And so that is the pathway for brands to open up UNFI distribution through the Core Sets program. But a lot of the times NCG members aren't enough on their own. It can be the pathway in, but you can't just like let it go, assume everything's good. You have to go out and sell more into those warehouses.

What is the minimum that they would typically want to see for UNFI? Do they like in terms of forecast? Do you have a number where you're like, yeah, I know it needs to be over this amount for them to bring it in? I'm

trying to remember my past life because the rules are a little bit different for NCG than they are generally for brands outside of the core set program. And I think it's five cases per warehouse per week to maintain slotting and shelf stable. And that refrigerated and frozen, I believe, is 10 cases per warehouse per week. It's a little bit lower in the NCG core sets program because UODIFI is a really good partner and understands what we're trying to do with our category review process. Okay,

that's good to know. That sounds consistent, I think, with what I've heard from people before. And it makes sense, I've never heard that number being higher for frozen refrigerated. That's really interesting to know. OK, so to summarize, basically, when they're applying to you, you'll look at, OK, what distribution do you have already? You're going to make a decision about whether or not they go in the core sets and you're going to offer it out to the members and you're going to see how many of them pick it up. And then you're going to use that response to decide, are there places we need to anchor this to bring it in if we have sufficient demand? And if not, you just may not be able to offer it in the core sets in the end to stores in that area. Yeah.

So obviously we want good things to happen, everyone to get what they want, plenty of member opt-ins. But there are cases where, you know, I might think an item is great and members might be like, what is this? No, put the brakes on. We don't want this. And in that case, we either cancel item if it's across the whole brand, we might cancel the launch with the whole brand. And if we do cancel the launch, we're canceling the program fees as well. So I think there's less risk for some brands that, you know, NCG is not here just to take your money. That money is meant to go towards something. And, you know, if it doesn't work out with members, we're not just going to take your money for the fun of it.

Okay. I did not know that that was an option that it could be canceled afterwards if the brand, if the stores were like, nah, I don't really want it. So I'm almost glad I didn't know that would have given me a lot of heart anxiety even after we were accepted. So sometimes it's good to just not know everything. But, you know, that's it's a really interesting point. And I actually think about this a lot where, you know, you have those case minimums. And I remember when I was launching my beverage company, we were like, hey, should we do a 12 count or 24 count in a case? I'm like, I don't know. Like, I didn't really understand the difference. But when I hear numbers like that, I really understand how beneficial it is if you go with a smaller case, because as far as I can tell, people don't really look into, oh, like, yeah, it's a five case per month minimum, but, oh, they have like a 24 count. So we'll give them a break on that. Like, it seems like they really just care how many cases it is. That's the thing that they look at because it's easiest. And so, hey, maybe have some smaller cases out there for hands as well as you probably save a little bit on slotting. Not

only does having a smaller case size benefit you at the distributor, but it also benefits you in retail at the shelf because especially small stores and some of our members are quite small. If you're a six, it's easy to get that slotted on the shelf. If you're a 12, not only need two facings, maybe three facings. If you're 24, that could be half a shelf. And it's hard for members that are very small to commit to that amount of space for one case, one product.

Okay. And then just coming back to that Laoban example. So right out of the gate, you just knew because you had seen the data probably on dumplings or you had an intuition about it. And what was it? You liked the branding or you just really liked the product? You liked the founders? What was it for a brand that early got you to a yes on them? I

had a need. I

had a need

for a actual dumpling. And I think Alban, in the natural channel at least, was really early to that trend and wanted to partner and demonstrated wanting to partner. Beyond that also, it really helped that they were backed by and the recipes were from Jack Ma. So there's an authenticity there. It's not just like, oh, I am noticing that a bunch of people are buying dumplings. So me being completely unconnected to dumplings, I'm just going to start making dumplings. So it was, you know, even the founder had spent time in China for a long time in China and is bringing back his experiences with that. So it was the story. It was the founders, the backing, the recipes is a good product, good ingredients, right time, absolute right time.

And so you said I had a need. How did you know that you had that need? And, you know, just more broadly speaking, how do you generally know? Like you're looking at its data or its requests coming from the stores or their particular trends that you're looking at?

It's data trends. It's when I'm going into a category review, I'm not going in saying, okay, I need soda and I have 100 SKUs. I'm just going to pick the top 100 SKUs and go with it. You know, I'm looking at, okay, I need now in the soda category being dynamic as it is right now, I need prebiotic soda and I need a diet soda and I need some juice-based sodas and I need some sugar-based sodas. Trying to get a broad assortment to meet consumer needs. At the time for allow ban, I had pizza snacks, so many pizza snacks. Everyone had pizza snacks. I didn't need pizza snacks. I needed dumplings. I didn't have a dumpling. Okay.

Well, so that makes sense, Jeanette, like learning that you really come at it from a need-based perspective, you know, basically what you're hearing from consumers and seeing out there in the markets. I remember when I worked with you, so I was trying to launch an energy drink with you and I'm like sending you samples like, hey, don't you love it? You're like, actually, I don't drink caffeine, but, you know, other people on the team will try it as well. So, you know, it makes sense that you're really like solving for needs. And that's why you were interested in the product, even though you personally weren't probably going to drink it.

Yeah, I think there's a lot of thought out there, a lot of different perspectives and how people run their categories. But my personal way that I run my category is like, what is the data saying? What are consumers saying through the data? That is a trend, that is a need. And it doesn't have to be my personal taste. I will not eat nutrition bars because to me, it's kind of like a bummer. That's a meal that could have been a meal. And so like, but I know that so many people love nutrition bars and are excited by them. And so it's not my category now. It was my category in the past. I didn't just like give up on the nutrition bar category because I didn't eat it. It's just I don't think that you should make choices based on your personal flavor preferences. That's

great. Definitely like to hear that. So Heidi, coming back to you a little bit, I know you play a really visible role with NCG out there in the industry. A lot of brands know who you are and you must get outreach from a lot of brands just looking to make a good impression with you and get connected in with NCG. And then some of them end up getting up, getting on shelf eventually. What would you say are the best ways that you're getting approached by brands in a way that makes you think like, yeah, this might actually be a good fit for us and I'm going to see if I can help connect them into the right teams? Yeah.

So brands that come well prepared, their pitch deck is buttoned up. It's got everything in there that the category manager might need to help them kind of suss out this product, you know, so you've got a visual representation, you've got your spec information, you've got your ingredients, you've got any certs, right? So sometimes I'll see pitch decks come through and there's pages and pages of a lot of stuff that's unnecessary, right? And if you think about a buyer like Jeanette, category managers, they need quick, they need quick hits, like show me very quickly, what is in this for me, what is new that you're bringing to the table. Also, you know, a well thought out placement and promotions plan, and then show us that you have the backing and the staffing, as I was mentioning earlier, to manage that throughout the year. So it's really too, like, it's so important. And this is very cliche, but I think it's one of the hardest things for brands to get is how do you stand out? There's so much me too now, right? Like, what is the true new innovation that you're bringing to the table? And I'll just give a little advice here. Like, how do you find out about that? It's a really great idea to go in store, get in front of your category. Look at everything at that shelf set. Look at the other packages. Pick those packages up. What are the ingredients? What are the common certs you're seeing on the packages? What's the pricing? Where do you fit in? What's the placement like? And what does that say about the consumer that's shopping at the store? Knowing, like being well-versed in retail and being able to talk that way, know how your product fits in. That is something where, you know, I might see a brand and be like, ah, I go over to Jeanette and I'm like, wow, you know, look at these people. I think they're ready to work with us. How would you like to engage with them? Do

you notice anything about the kind of founders who end up getting that right? Like, are they repeat founders who kind of know the business or is it just really diligent founders or just, you know, people you think have a little bit of a sharper eye for, you know, doing their homework? Anything that any trends that you notice?

Well, what's coming up for me intuitively is like passion. People that are driven by a lot of passion and have a clear idea about what they're doing. Those, I think, are the people that really shine through. And

how much do you care if they're in any co-ops already and have the data from those co-ops, like your members? Because I know, I think that was a really important thing for me is, hey, we got into a couple of your stores. Here's what's going on in those stores. Here's how we're sitting on shelf, what they say about it, how, you know, and here's what we're doing to support it.

Yeah. So for me, to bring information to the category manager, it's helpful to have sales at the co-op and not just any sales, but positive sales. You know, there will be situations where brands come to me. I look up the data and they're in some co-ops, not performing so great. Then the category manager is like, well, there's not really the consumer interest out there. So I'm not really interested in moving forward with these people. Unless of course the founder tells us something like we had a major supply chain disruption. If there's a reason for that, that dip in sales, then, you know, that's a little different, but if it's just straight up sales and there's a dip, not so interesting to us. So if you do have sales and spins, want to make sure you're going that right direction, doing everything you can with the local co-ops. That's your promotions. That's your engagement with the local co-op, with the staff. If you have that opportunity to help educate the staff about your products. Remember co-ops are a little different because percentage of our shoppers, and this varies by every co-op, but a percentage of our shoppers own the store. So they're in talking to staff. Staff can be your brand ambassadors, helping folks learn about your products. I mean, I don't know if you have walked into a local co-op, I'm sure. But if you go up to a staff person and you ask them about something, they can give you information about the products. They'll walk you over. It's a different kind of engagement.

Yeah, absolutely. And that's something I always notice is just how engaged the employees are in the co-ops with the products and you can really win them over and it can be incredibly valuable for your brand. So Jeanette, coming back to you and just the idea of some of these trends and things that you're looking for, what are some of the things that you're looking for now? Probably everybody wants to know. So in all of the categories that you cover, are there any specific opportunities like, hey, I need one of these. If you're out there, maybe hit us up. I

was all prepped to talk to you about trends, but I hadn't thought about what am I really missing? And I think that's maybe part of it is like category manager. I'm trying to use data to predict the future. And that's a little bit limiting versus brands that are like, you know what, I've got an idea and I'm going to make it into reality. So I think some trends that are kind of going to impact some of my decisions in the coming year, kind of different way to attack the question is, you know, like, okay, I'm probably going to go bigger in dumplings, probably. And that's because that initial bet on dumplings is paying off. We're also working with the pierogi brand, Jaju, for the past couple of years. Probably they're doing well. So it's showing an overall trend in dumplings. We're starting to see soup dumplings rise. MoMAs are doing really well. So I think there's opportunity certainly in dumplings. Plant-based meat is actually leveling off, which is maybe a surprise topic for those out there. So had a really big rise and then a really deep fall. But I think we're starting to see it level off. Plant-based is still relevant in entrees and meal solutions, dairy. So I don't think it's as dire as people think. Mushrooms everywhere, products with mushrooms in them that are relevant. Don't just put mushrooms in it because I said mushrooms should be relevant to your product. And then right now I'm doing a category review that includes mocktails. And, you know, certainly I'll be looking to partner there with some brand and or brands. However, yeah, I'm a little bit cautious too, because what I see in the mocktail space is exactly what we saw in the plant-based meat space. There's a limited pie of products and there were a few brands that were in it and crushing it. And now there's a rush of brands getting into mocktails that not all of them are going to be successful. So category managers are basically going to be placing bets on which brands they think are going to make it out of this.

So for mocktails, how are you going to figure that out? Is it based off like, hey, I actually am just looking for who makes the best N.A. Margarita or you just like, yeah, I'm trying to look at brands that have had some initial success. Or are you, Jeanette, just making your best decision about which you think is the strongest brand, you know, just is going to have the best presentation and the best addition to the set to offer to the stores?

I'm looking for a couple of things. One, I'm trying to divine whether I think a brand is relevant to the consumer. That can happen through a couple of ways. One, like what does their social media engagement actually look like? Is it, you know, authentic or, you know, is it does not look like it's authentic? And then probably it's more than just the standard mocktail. Like, and it has taste good too, you know, like that's so important that I think brands sometimes forget, especially in that plant-based meat set, which is part of the decline was brands weren't making sure their products tasted good before launch. And then they have to want to partner. Like it's everyone has said this. It's not about getting on the shelf. It's about getting off the shelf. And it's absolutely true. You know, the brands are going to have to really genuinely want to partner to grow their sales, given especially how competitive the set is.

That's a great answer. And just one follow up on the plant based meat. Is it just anything, you know, featuring itself or anything promoting itself as plant based is hitting a peak or is it just like the things that promote themselves as substitutes? Like, hey, this is the plant based burger. This is the plant based steak, whatever. While maybe just things that are just veggie forward are still doing okay? Or do you see any differences there? So

not all the plant-based categories got hit the same as some others. But in my categories and frozen, plant-based meat and plant-based ice cream saw some declines. And what it largely was, you had some really established brands that were doing well, and some of them were doing mock meat kind of alternatives, and some of them were doing veggie forward. But the other products, they were very much in the mock meat sort of space. And the plant-based ice cream, it was a lot of very different milks that maybe didn't really resonate with the consumer, and not all of them tasted good. That's just the honest truth of it. Can't tell you how many plant-based ice creams I tried that were not going to satisfy a dairy consumer, let alone a non-dairy consumer. So as those brands have exited the market, now we're seeing a level off. And those brands that were making good products that tasted right in the first place are seeing their sales come back.

Okay. So speaking of performance in the stores, what's good performance? What's bad performance?