Vol. 127 - NO. 39

Blog Startup CPG

SINCE 2019

Startup CPG’s Database of
channels to sell or donate expiring product

Many food manufacturers currently have excess inventory because of the restaurant slowdown and delays in retail category resets. Startup CPG gathered a list of all the people & places that can help you either sell your expiring / closeout inventory or donate (foodbanks)

Getting excess food to people who need it

There is a big problem right now in the food system: Extra food is wasting away in warehouses. It was intended for restaurants or to be sold in grocery stores, but cannot be due to the Coronavirus slowdown. Sadly, if this product does not find a home, not only will it be wasted, but the brands will actually have to pay to destroy it.
Startup CPG has sourced a list of many closeout retailers, resellers, and foodbanks as we can find. See the bottom of the article for instructions to access.

Closeout Retailers to Pass Along Savings

Grocery Outlet, DollarTree, and TJ Maxx have great prices for a good reason: they often buy discounted products from manufacturers who have excess inventory. While the price a manufacturer gets from them is a fraction of list price, it is often the best price you can get for this inventory, as there is no go-between. They pass savings along to consumers, and you have a good understanding of where your product is ending up. They would typically only accept products that are packaged for retail. For those who aren’t familiar, Grocery Outlet is “an extreme-value grocery retailer” with over 350 locations. In normal circumstances, their team sources name brand, high quality products as a result of “packaging changes, product overruns, and other varied inventory circumstances,” notes Steve Wilson, SVP Purchasing.

Dana Peck from Render Food is working directly with closeout retailers. She explained, “The Lucky’s and Earth Fare bankruptcies, coupled with the impact of COVID on restocks and promotions, has left us with excess inventory that now has short code dates. We’ve had to react quickly and target multiple direct retail channels in the Startup CPG database to get our product out to consumers so we can continue to feed people in this evolving retail landscape.”

Donating to Foodbanks

Foodbanks are another ideal outlet to get food to the people who have the greatest need – and you’ll typically get a tax writeoff. They are a bit less responsive because of their complex operations, but because they often both distribute and cook food, can often take both foodservice and retail products. They also can frequently arrange to pick up inventory from your warehouse if it’s near their distribution center. The deduction should be equivalent to the cost of goods + half of your typical profit margin (better explained by TotalFoodService here).

What about resellers?

Resellers also play an important role – they are well connected to many places that can use your products in addition to the above channels, like prisons. They have broad networks and while they do take a commission, they move fast and save you a lot of time. Adam Gibson from Lewisco has a massive network – working with over 700 CPG clients, he continually places inventory into secondary markets nationwide. He notes, “The stores I work with can handle very large quantities of goods with short shelf life. My experience and knowledge of the price points customers need help me act quickly on any inventory available.”

What do you need to do?

When you contact these sources, proactively include key information like location, quantities, expiry dates, reason for the excess inventory, and pallet configuration (all the size/unit dimensions, perhaps a spec sheet). They will often ask for a target price or you can ask for a bid. You can discuss whether you will get them the inventory or ask them to include pickup in the cost (note that if they do so, they will need your warehouse location).

How to access the database?

The list is available for free, along with Startup CPG’s other resource lists:

Access the database here

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