CHICAGO — Seven startups competed in C.A. Fortune’s Build Tank pitch event on April 24. Prior to pitches, the 10 judges — buyers and supply chain managers from natural and conventional retailers — provided the emerging brands insights on how to best manage the anticipated challenges brought on by the imposition of tariffs and the expected retaliation from affected countries.   

“Shoppers are concerned about the impact of tariffs and are bracing themselves,” said Ryan Niebes, senior insights manage at C.A. Fortune, who kicked off the discussion. “And groceries top the list when it comes to consumer concern. With budgets being stretched thinner, consumer loyalty (to brands and retailers) is likely to be tested.”

He explained that consumer behavior, preferences and attitudes during periods of uncertainty — like now — have the potential to change and evolve. It forces brands to rethink strategies and connect with consumers in new ways. Emerging brands are in a unique position, as they are just starting and don’t need to pivot.

“Consumers are expected to revive COVID-era habits,” Niebes said. “However, despite concern about tariffs, three macro trends are driving growth at retail.”

They are protein consumption, better-for-you foods and snacking. While consumers will be more mindful of their spending and seek ways to save money, they still are willing to spend on products they perceive as being valuable to them. They are willing to trade up to treat themselves in certain categories.

“I know for us, private label is a huge focus,” said Travis Reams, manager-supplier inclusion management, Meijer Inc., Grand Rapids, Mich. “But I think the thing that we have to always remember is that the heart of innovation is in this room. When it comes to moving quickly and coming out with new concepts, new ideas, new products, that’s what you guys can do. And that’s how you can be great partners for us, by constantly working on that innovation pipeline and bringing new and exciting goods to the retailers.”

Niebes explained that research shows today’s shoppers do not necessarily care if a product is made in the United States for the reason of being made in the United States. They are, however, looking for such products because they are more confident they will remain available.

“It’s a good time to really lean in on local and really promote the fact that your products are domestically made,” said Rich Gillmore, vice president-center store, Gelson’s Markets, Compton, Calif.

Reams added, “We are leaning in very heavy with local. A lot of times when national brands have holes on the shelf, that’s the perfect opportunity for us to reach out to our local suppliers and build a connection with them and understand how they can help us not only fill those gaps today, but build their brand with us and their brand presence with our customers.”

All the retailers said they are expecting there to be a lot of upcoming out-of-stock products. They all plan to be aggressive in filling those holes.

Retailers will not hesitate to replace out-of-stock items with a different brand.

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“During COVID, we got really numb for a while because out-of-stocks were so crazy,” said Levi Wingo, senior vice president-product and merchandising innovation, Raley’s Supermarkets, West Sacramento, Calif. “Our willingness to keep an out-of-stock hole on a shelf because of promises it will be filled is a lot shorter than it used to be.

“We may have waited to the last reset cycle and you had a solid six months to figure out supply chain. Today we’re doing a lot more plugs because I don’t want holes on the shelf.”

Scott Romano, vice president-forager, Sprouts Farmers Market, Phoenix, added, “We would echo the same thing for intolerance for out-of-stocks on the shelf. That window is closed and so we’re looking for emerging brands.”

He advised emerging brands to communicate with their distributors. Hold them accountable for unnecessary out-of-stocks. Often brands believe orders are being completely filled, but they are not. It is why brands must also have a relationship with the retailer, even when working through a distributor.

“Knowing that information is critical for emerging brands,” said Kelly Landrieu, director-local and emerging brands, Whole Foods Market, Austin, Texas. “You have to be your own advocate. Otherwise, the assumption (by the retailer) is there’s a problem on your side.”

Gillmore said distributors often will tell retailers that the supplier — brand — shorted them and that’s why orders are not being filled. When the retailer brings this issue up to the supplier, if a relationship has even been established, the response is often that the distributor has not picked up product.

“Communications like that are vital for us to know, so we can call the liars out,” Gillmore said.

Travis Blair, enterprise natural and organics merchandiser, Kroger, Cincinnati, said, “Just because you’re on shelf or you’re accepted for a reset, your game isn’t over. It’s just like you build an automobile. It leaves a lot. You constantly have to put gas in it and you have to take it for tune ups and oil changes. That’s part of owning the business. Making sure that you are shipping in full (orders) is that business.”

At the end of Build Tank, now in its fourth year, the judges awarded Doich!, a better-for-you cookie dough brand, best pitch. Headlock Hot Sauce, a carrot-based hot sauce brand, won the award for most innovative product. Bear Maple Farms, a sparkling ginseng tonic brand, took home the award for best packaging.