Created on 3/12/2018 1:47:59 PM
To become a Costco vendor is a dream of many (if not most) manufacturers and service providers. With the potential to place your products in their stores nationwide, with millions of members to view on a monthly basis, who wouldn’t want to partner with this retail giant?
At FCPC’s sold out Trade Talks event, moderator Errol Cerit, FCPC’s SVP Industry Affairs & Member Services asked Costco Wholesale Executives, “What is the ‘secret sauce’ that has made Costco’s model so successful? The speakers all agreed; it’s our culture.
Errol Cerit, FCPC, Pietro Nenci, Charlene Knight and Ken Newby, Costco Wholesale Canada
“People say Costco is a cult, but it’s not, it’s a culture,” said Charlene Knight, AGMM for Eastern Canada Food & Sundries.
95% of the company’s people are promoted from within and after a new hire has been with the company for more than a year, they almost never leave; the turnover rate is only 5%. In addition, almost everyone has worked in the warehouse, including the senior executives on our panel; they say it was an invaluable experience.
Costco places so much importance on their ability to retain employees that they extend these values to their supplier community. When answering what the gold standard supplier looks like, Pietro Nenci, VP & GMM of Eastern Canada Food & Sundries, Corporate Foods, Quality Assurance & Food Safety explained, “Longevity of the people at the desk, we work well with a team that is stable, who are there for at least a decade.”
Ken Newby, GMM of Corporate Foods and Business Center for Canada, adds, “Partnership is key, vendors understand when we ask for a bit more and we respect when vendors need something from us, we are there to help.
Cerit asked the panel, “What are you looking for when launching new products?”
To that, Newby answered, “Our buyers are never looking for a specific item, they are waiting for you (the suppliers), that is where you come in to ‘wow’ them.”
Pietro noted, “Timing is a must; organic, better-for-you food trends and diets. We have to motivate teams to follow media and read specialized press to see where the trends are going.”
Knight agrees, “It’s trends like ethnic foods, even mainstream is eating ethnic. Better-for-you, organic and more wholesome products are where we need to focus.”
The Canadian food, beverage and consumer goods industry faces challenges to innovating new products; it is an expensive country to do business in. When asked his views on innovation in Canada, Pietro responded, “It’s the lowest I have seen in my career.”
“Innovation is coming from acquisitions, it is such a long process to develop a new item and we want to move quicker than the large CPGs can,” said Knight.
“It can take 12-16 months to get a new item in and we understand why, but it is a problem; that is what forces us to the smaller vendors,” added Newby.
The discussion rounded off with a final message for the vendor community, a collaborative approach to working together – it’s that simple.
For more information on upcoming events visit www.fcpc.ca/events