Brokers are one of the most misunderstood aspects of the CPG world. Whether you are just starting to consider hiring one or a seasoned executive looking to get back to basics, this article will provide a quick rundown of the 5 basic services they provide.

Brokers. Rarely has a single word in the English language caused so much confusion. This article is for those still scratching their heads on what a broker does and a refresher for any executive looking to get more out of their current partnership. Below is a rundown of the 5 Services you should fully understand before hiring, negotiating or managing Brokers to successfully build your brand. Even though I was a leader in national brokerage and have few years of experience leading a startups as a Sales lead, I am by no means the world’s greatest expert on the subject. In fact, I’m banking that some of you will add to this list since many of you have incredible experiences and knowledge to share. So, let’s just get into it.

HQ Call Support:

This is the most basic of services and the one you most likely associate with Brokers. They will help set appointments with the retailer and are your key partner to manage the ongoing business once you get in. They can help prepare and guide you through documentation and contracts and provide (the good ones) strategic advice on key events, promotional strategy and even negotiating with your buyer. However, make sure you don’t default to the broker ‘owning’ the relationship with your buyer. That is ultimately your relationship and you should take care to establish that dynamic with your buyer early on.

Regional Call Support:

This refers to when there are multiple ‘banners’ within a super-regional or national chain and, in my opinion, flows down to the onesie-twosies that make up the bulk of the independent natural and specialty stores. In practice, this is similar to HQ call support but requires you to ‘connect the dots’ on the strategic plans you set at the HQ level to the individual regional goals and KPIs and how those flow up to HQ plans. Don’t ever assume this is being done on your behalf by your brokers even though they all ‘rep’ your brand. You must take a very active role in communicating strategy to all levels of the broker organization that touches or impacts your business. Your role here is, at a minimum, to provide the brokers direction, goals, accountability and structure to achieve your brands strategic outcomes. Make sure you understand how the broker expects you to handle this type of communication flow and to work within their processes or agreed upon process. You also want to understand the level of strategic relationships they have at the regional HQs. This can be an untapped resource within the organization that most noobs simply overlook. Yes, this does require you actually pick up the phone and call them, with regularity. Make friends, communicate clearly and often, it’s part of your job.

Data/Analytics:

Data is the new oil boom and extracting, refining and processing it to leverage everyday decisions is a critical aspect that must be mastered for today’s CPG businesses. Most Brokerages should have access to one or a few of the major data houses (IRI, Nielsen, SPINS, Mintel, etc.) and its important you understand exactly what they have and by function, you have access to since those contracts aren’t cheap for them and have restrictions on what and how they can share to the brands accessing them. It’s important to also understand the people they have in place to analyze data and provide relevant strategic insights for your mutual business. Ask for example reporting, case studies performed, cadence of reporting and any customization/ad hoc reporting that can be done. But, don’t think that they will do it all for you and get you fully baked reports that need no further analysis. Brokers should be viewed as providing the basic data and useful pivot tables to display the data. Its on you to take it those few steps further to really dig into your business. From there, you can ask for their resources to refine or assist your pet project but you need to lead that effort. Again, its your data, you should be digging into it regularly. Don’t try to outsource it all and complain you don’t have any insights.

Field Teams

Most brokerages should have some folks in the field. However, this is generally the most expensive part of their business and, as such its changed quite a bit over the years with the explosion of data to help manage audits, etc. Field teams generally perform two broad functions: Audits and Blitzing. Audits are ongoing and involve associates auditing store by store making sure you are placed on the correct shelf, priced right and in optimal selling condition and reporting back. This requires them sending teams of people around the country and as such their ‘frequency rates’ should be explored by you when negotiating or evaluating your business with them. How often are they in stores? How do they prioritize higher volume stores over lower? The other function are blitz teams which are much more common these days since they are flexible, lean and project based. Blitzing is for when you have some specific action that needs to be taken in a window of time (not ongoing) for example- a big off-shelf that you want pictures taken and sent back to post on your social media. Or having IRCs placed at key stores. You get the idea. Make sure you understand these teams, how they are structured and please be respectful and inquire the best way to communicate to these teams early on and stick to it. They are not your personal field marketing team.

Distributor Support

Make sure you understand how they handle different sourcing (direct vs distributor). In some larger national brokerages, if you are through a distributor at a particular customer it will require you to work with an entirely separate team inside their organization. If you have a mix of Direct and Distributor driven business (or expect to over time) its critical you recognize how they view and manage that scenario and what impacts that will have to your strategy for execution and communication. In addition, you will want to understand the resources (human or otherwise) they offer to help manage and interact with the main distributors. Make sure you really sniff around this topic; it will save you a lot of time, effort and headache.
These five buckets capture most of what you need to understand about CPG brokerage. Obviously, this is a broad snapshot and a lot can differ based on your particular needs, what type of product you have, what channels you sell in and how you plan to specifically reach your target consumers and grow your brand.

Some other areas you should research is the context they operate in. In other words, stop thinking only about your business when searching for strategic partnerships. Understanding their industry and their place in it is critical to effectively partnering. Seems like a no-brainer but, I can’t tell you how many times I’ve seen basic research skipped entirely only to have them left wondering what went wrong. Is the broker known for an expertise in a specific channel or region? If so, ask them about it, see how they position themselves to you and where they are trying to head in the next 5-10 years. Corroborate this with your board or other industry contacts. Does this jive with your brands strategic goals and focus? These simple questions and some basic research will help increase your chances to securing the best partner for your business and building a truly mutually beneficial relationship.
And I’ll leave you with one last sentiment- Brokers need to be managed (just like everything else) and it’s your responsibility to lead the communication with them and understand the bigger picture (yours and theirs) to achieve uncommon results.

Hopefully, this content gave you some basic insights to build from. I plan to follow up this article with another couple in “The Broker Series” for Managing Brokers and Negotiating with Brokers. If you have any other ideas for articles on brokerage or other related services in our industry, drop me a line or leave a comment. And be sure to share your experiences and insights for things I (definitely) left on or off the list!

Jake Huber is the SVP of Business Development for The Better Food Group, a value added holding company for early stage growth brands & he is also the Founder of Real Fancy Foods, a stealth-mode brand tentatively set to debut in 2021.