Want to Sell Your Food Product in Stores? Read This First

On most days, owning and operating a small condiment brand can feel like tossing piles of money into an abyss. Operating without investors and instead funding the business with the money earned from my day job means a slow and steady path for growth. With a fair amount of press and a sheen of success for my Poi Dog products, I frequently get tapped for advice by newer entrepreneurs. 

“Everyone will want a piece of the pie,” I tell sauce makers first starting out. I advise them to price their products as though 50% is going to go towards a retailer (even if they don’t have any retailers yet), 15% of the wholesale price is going to a distributor (even if they don’t have a distributor yet), more chunks are going to go towards marketing (even if they haven’t hired a marketer – you catch my drift). I tell them to set their price while thinking about the price of boxes, shipping, compensating for products that are broken in shipment, or samples to retailers and members of the press. 

On a bottle that a customer pays $16 for and costs me $4 to produce, there hopefully will be a few dollars left of that $12 difference for me to take and then produce another batch. This is not always the case, and it’s common to lose money on each bottle sold.

I let these aspiring producers know that as they start to scale, their cost of goods goes down and they can negotiate better rates with all their vendors. Prices can also go up, as have the costs of the chiles, spices, and vinegars that go into my Chili Peppah Water and BBQ sauces, as well as the bottles that contain them, and the labels that broadcast to the world what they are.

You might have noticed that in the math I described above, I’ve said nothing about trademarking or the intellectual and cultural ownership of a brand or condiment. And yet a few months ago when I wrote a story called Who Owns a Condiment – a Company or a Culture?, that’s all that everyone in the CPG (Consumer Packaged Goods) industry and beyond, could talk about. The notion that David Chang and his Momofuku empire could attempt to lay claim — via trademarking — to “chile crunch” and “chili crunch” got everyone up in arms. How dare he?

Everyone from the small producers who make chile crunch or crisp to the people who consume chile crunch or crisp, had a bone to pick with the chef and businessman who was perceived as the Goliath in this story. (Chang explained live onstage at the Food & Wine Classic in Aspen that the reality on his side was wildly different.)

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In the months since, I’ve heard from dozens of small condiment makers about their struggles. We’ve also seen a similar battle over cultural appropriation in the CPG world go viral after actor Simu Liu objected to Bobba’s erasure of bubble tea’s Taiwanese identity on Dragons’ Den, the Canadian version of the show Shark Tank. 

Twrl Milk Tea founder Olivia Chen’s response to the Bobba controversy got 131.2K views on TikTok and increased her business by 259%. She finds that success is often rooted in hyper-competitiveness. “Shows like Dragons’ Den and Shark Tank can be life-changing to a small business like ours,” she says. But it comes at a price.

“I feel like we are all being scammed,” says Kristen Kapoor, the co-founder of Flouwer Co., which makes products using edible flowers. “The industry overall has pushed this narrative of shark, hyper-competitiveness between emerging brands so we agree to the status quo in terms of traditional, archaic distribution models with free samples, slotting fees, aggressive new brand promos, and net 60 payment terms.” 

Every single other entrepreneur I spoke with lamented the same challenges presented by Kapoor, but trademarking is a very small slice of the struggle pie. If you’re going to defend small producers making condiments from their own cultures, it’s unfair to all the rest of the Goliaths we battle to fixate on trademarking alone. 

The game has changed, but it’s unclear who is winning

In many ways, over the past five years, the real life game of grocery has been exciting. Pandemic lockdowns drove many small producers into commercial kitchens, switching careers and starting projects that were meaningful to the food of their upbringings. The parallel rise of the highly curated and aesthetically driven “shoppy shop” made the paths of some small producers to grocery shelves swifter than ever before. Consumers, cooking more at home, became hungrier for higher quality ingredients and more interesting condiments that would allow them to travel around the globe via bottle and jar. Larger grocers stepped up to compete with specialty markets.

When I closed my own restaurant and started bottling Chili Peppah Water, the ubiquitous Hawaiian condiment of my youth, as well as the barbecue sauces I had developed for the restaurant (Poi Dog Huli and Guava Katsu), I started off carting a case at a time to specialty grocers around Philadelphia, where I live. Four years later, my business has grown slowly but steadily, and the bottles are in about 70 Whole Foods stores and are served in multiple university cafeterias. I am not making money.

Interviewing my fellow small producers — none of whom I see as competitors despite our businesses being similar in scale and size, and likely sharing the same customers — I noticed overlapping challenges that precede trademarking in urgency to us.

We’re still stuck in the “ethnic” aisle

“Our biggest challenge getting into grocery stores has been the trend towards quick-prep Asian food,” say the married co-founders of Moji Masala, J.D. Walsh and Shireen Qadri. “We get allocated to the ethnic aisle, which is full of products that are either Indian-inspired or oversimplified British-Indian restaurant dishes.” Walsh and Qadri are trying to steer customers away from ultra-processed foods, while their retailers are trying to sell those same customers on the same flavors through hyper-convenience. 

Yao Zhao, the founder of Sichuan peppercorn-based 50Hertz Tingly Foods, says, “Our biggest challenge is that we’re not part of a ‘hot’ or widely recognized category like chili crisp or soup dumplings. The concept of tingly Sichuan pepper is still relatively unknown and many buyers are unfamiliar with the unique tingly sensation it provides.” 

All of the founders I spoke with struggle with educating both consumers and retail buyers. With limited resources and having to meet buyers individually, the path to growth is very slow.

Limited distribution and the increasing difficulty of going it alone

“When you factor in brokers, distributors, and everyone else shaving the al pastor off my trompo, I have to say no to a lot of big retailers at the moment,” says Marcos Espinoza, the founder of Side Project Jerky. “Grocery is where you scale, but you need to be very careful with free fill and slotting fees, which can be daunting when you’re considering a 500-plus store chain.” Free fills are the practice of a producer giving a retailer a free case to sell in order to get on their shelves. The store gets a certain amount of free product for a set amount of time, but the producer does not get any portion of sales.

Hyunjoo Abrecht, the owner and kimchi maker at Sinto Gourmet explains to me that trade shows and social networks used to be inexpensive ways to promote your brand and communicate with customers, but they have become very expensive. “Distributors and retailers have been charging more fees and taking bigger margins. You’ll see the prices of products on the shelf stay the same or get higher, but producers end up making less money.” 

Free fills, chargebacks, and the scourge of delayed payment

“Larger companies have the advantage of moving higher volumes, incorporating filler ingredients to reduce costs, and leveraging significantly larger marketing and PR budgets,” says Palita Sriratana, the founder of Pink Salt Kitchens, who makes her Nam Prik Pao herself, in small batches. 

Her worst experiences have been with free fills. “In my opinion, it’s the most predatory ask,” Sriratana says. “Our margins are already slim, and they’re asking for free products they’ll sell and profit from.” The request can be for hundreds of stores. “Free fills force the brand to expand without cash flow, take on unnecessary risks, and devalue the product’s worth. Smaller brands end up shouldering this burden.”

Then, there is the matter of chargebacks, which Sriratana says are another serious challenge that can make or break a small business. “If I wholesale Nam Prik Pao to a retailer at $6 and it doesn’t sell, the distributor is charged back the full retail price of $12. The brand is left absorbing the loss. There’s a high risk of losing more money than you make when working with certain retailers. The retailer will never lose.” 

This all has a cascading effect on cash flow, which Espinoza considers as his biggest challenge, since he has only ever bootstrapped his brand of jerky. And Zhao finds that the payment terms required by many retailers — often allowing the business to take 60 or more days to pay an invoice — can create additional strain.

There’s both blessing and curse in sameness 

Andrea Hernández’s Snaxshot, the Instagram-famous “product oracle,” recently lampooned a wave of design trends in a post captioned, “What will they yassify next?” under a carousel of ordinary pantry goods with current de rigeur imagery on the packages.

“As for grocery shelves, I’ve noticed some degree of sameness creeping in, not only in the trendy categories, but also the branding and label designs becoming way too poppy,” Zhao says. “It’s great to see more diverse flavors and products getting recognition, but there’s also a risk of grocery stores becoming overly curated around a narrow band of what’s currently hot.” 

This visual similarity can make it more difficult for smaller brands to get in front of consumers, but if you want to continue getting upset about America’s practice of trademarking, here is where we stand. “Trademarking has not been a major concern or challenge so far, and it’s lower than other priorities,” says Albrecht, who goes on to qualify that statement saying, “I’m aware it’s a very important issue and can create big headaches and conflicts.”

Sriratana explains that she attempted to trademark Nam Prik Pao not as a means of enforcement, but as a way to safeguard its cultural identity. “My intention was never to monopolize the name, but ensure it wouldn’t fall into the hands of people disconnected from Thai heritage.”

Beware the crab mentality

Each producer I mentioned (and many more I spoke with) have struggled to balance their own growth without elbowing out fellow producers. “Competitors” is not the right word here; I want there to be more Chili Peppah Water in this world. Sriratana wants there to be more Nam Prik Pao. Zhao wants more Sichuan pepper products. Our path to ensuring that this happens means making it ourselves.  

“Balancing innovation and growth with respect for cultural roots is an ongoing challenge without an easy solution,” says Sriratana. “It reflects a broader conflict many of us face: the desire to protect cultural creations while navigating a system that commodifies everything.”

The problem is we’re not selling Chili Peppah Water, Sichuan peppers, or Nam Prik Pao to ourselves, but to an unfamiliar audience in a system that is stacked so high against us. Sriratana saw the Momofuku chile crunch controversy as rooted in “crab mentality — a desire to monopolize a segment of the market rather than celebrate or share its cultural significance. Is this an example of minority groups fighting over scraps in a system designed to limit access?”

But almost in defiance, she chooses to “operate in abundance.” So do I. But that doesn’t remove the fear or disquietude I feel that my brand Poi Dog, my little collection of sauces, could just cease to exist, drowned out by fees, unfair margins, and waiting for my ship to come in.