Brian Folmer Shares Distribution Strategies for Success

Brian Folmer is the founder of FirstLook VC, a  subscription box of emerging consumer brands that is sent to investors every month. Working closely with emerging brands, Brian's developed insider knowledge on the ways independent distributors work and the complexities of distributor-brand relationships.

We caught up with Brian to discuss the state of independent distribution and what makes a dynamic partnership. 

What is the state of independent distribution?

Most independent distributors are small, local businesses with significant leverage over brands. Because of this, they’re often slow to innovate, forcing brands to adapt to their unique systems—like how they handle orders, promo calendars, discounts, and chargebacks.

Every distributor operates differently, which creates complexity for brands and how they manage each relationship. 

What are some of the biggest challenges distributors face working with new brands?

One of the biggest challenges for distributors is the reliability of brands. Are emerging brands stable enough to justify bringing them on as a supplier? Can a brand allocate sufficient resources to the distributor’s market to drive sales and ensure mutual success?

Remember, size and scope of distributors vary greatly—some carry 10 brands, while others manage in the hundreds. Distributors' priorities depend on their market size, the types of stores they service, and whether the brands they carry align with what’s moving in those stores.

How can a brand get in front of a distributor?

Breaking into the world of independent distributors is tough. It's a bit of a "black box"—figuring out who they are and identifying the right decision-makers can be messy. Titles vary widely, and finding the person responsible for onboarding new brands is often a challenge.

Most distributors are focused on running their businesses, moving products, and managing warehouses. They don’t spend nearly as much time scouting for new brands as a VC would for example. 

All that said, going to trade shows, working with brokers, hiring a sales person, and classic cold emailing are the primary options at the moment. 

If distributors aren’t actively scouting for new brands, what motivates them to take on new brands? 

Distributors are motivated by brands with strong velocities—products that sell well. As consumer tastes and preferences evolve, having popular, in-demand beverages means more revenue for the distributor.

Another motivator can be a "breakup clause" in distribution contracts. When a brand is acquired by a larger company, like Pepsi, its distribution shifts to Pepsi’s network. They now have to break their contract with the independent distributor. This triggers the breakup clause, where the distributor receives a payout which is typically the 2x-4x forward months sales based on recent historic. While this payout is a win, it also leaves a gap in the distributor's portfolio.

For instance, if a tea brand gets acquired, the distributor needs to find a new brand to fill that void and recover the lost revenue. This creates an opportunity for new brands to step in and meet the distributor’s needs. 

What advice do you have for brands to improve collaboration with distributors? 

Email is the primary communication channel, but things can easily be missed through email, especially if you don’t have a person on the team dedicated to managing the relationship. Founders could also tap into systems or APIs that can manage the relationship via email and extract all the important information in that email. Essentially what Pantry AI is doing! 

Brands also need to take the time to understand what makes a good partner for that distributor. 

Distributors want to work with brands that contribute to their success and provide support to move sales in the market. Brands that just send products without any support aren't building the foundations for a good relationship. 

What does being a good partner look like? 

Being a good partner sets both you and the distributor up for success. 

This means allocating manpower and capital to these markets. 

For example, if a brand is working with a new distributor to enter the Central Massachusetts market, what is the brand doing to get people to go into stores and buy product? 

• Are they running geo fenced ads on social media? 
• Are they offering promotions that incentivize trial and repeat purchases?
• Are they redirecting their sales team or hiring new sales rep for that territory? 
• Are they hosting branded events and activations? 
• Are they doing in-store sampling? 

These efforts demonstrate what it means to be a good partner. At the end of the day, it all comes down to driving velocity.