KeHE Distributors is a major player in the distribution of natural and specialty food products. Understanding KeHE’s operational standards, fee structures, and promotional opportunities is crucial for brands looking to leverage KeHE’s extensive network to expand their market reach.
Product Requirements: KeHE favors products that are organic, non-GMO, ethically sourced, and have a clear health and wellness benefit. All products must comply with FDA regulations and meet KeHE’s quality standards.
Vendor Onboarding: Prospective vendors must go through a rigorous onboarding process, including product evaluations, financial assessments, and compliance checks.
2. Fees and Cost Structure
Slotting Fees
Purpose: Slotting fees at KeHE are charged to cover the costs associated with onboarding new products into their distribution system. This includes the allocation of warehouse space, inventory management, and the initial administrative work required to list new products.
Details: The amount of these fees can vary based on the product category, market demand, and the potential sales volume. These fees are generally negotiable and might be waived or reduced based on the strategic value of the product to KeHE's portfolio.
Promotion Participation Fees
Purpose: These fees are for vendors who wish to participate in KeHE's promotional programs, which can include special pricing events, featured product placements in newsletters, and other marketing initiatives.
Details: The fees help fund the promotional activities and offset the cost of advertising and reduced product prices during the promotion period. They are calculated based on the level of participation and the expected reach and impact of the promotion.
Marketing Contributions
Purpose: Marketing contributions are fees paid by vendors for inclusion in KeHE's broader marketing efforts, such as trade shows, catalog features, and digital marketing campaigns.
Details: These contributions are used to enhance the overall visibility of the products within KeHE’s network and to attract retailer and consumer interest. Participation in these activities often leads to increased sales opportunities.
Purpose: Charged to new vendors as a one-time fee to cover the costs associated with integrating new products into KeHE’s supply chain and IT systems.
Details: This fee includes the setup in KeHE’s inventory management system, initial data entry, and the integration of order processing and logistics handling.
Monthly Storage Fees
Purpose: These fees are for the storage of products in KeHE’s warehouses and are based on the amount of space used by the vendor’s products.
Details: The storage fees compensate KeHE for the cost of warehousing the products, including utilities, security, and maintenance of the storage facilities.
Participation Fees for Trade Shows
Purpose: KeHE charges fees for vendors participating in their trade shows, which are vital marketing and networking events that connect vendors with potential buyers.
Details: These fees cover the cost of booth space, event marketing, and logistical support during the trade shows. Participation is often crucial for new product launches and expanding market reach.
3. Policies and Procedures
Minimum Order Quantities: KeHE may require minimum order quantities to maintain efficient logistics and inventory management.
Return Policy: KeHE has a detailed return policy for unsold and expired goods, which usually involves shared responsibility depending on the reason for the return.
Co-op Advertising: KeHE offers cooperative advertising opportunities that allow brands to share the cost of advertising and promotions, enhancing product visibility.
Category Reviews: KeHE conducts periodic category reviews where they assess the performance of products and decide on their continued distribution.
5. Trade Promotion Management
Discounts and Allowances: Vendors are encouraged to offer periodic discounts and promotional allowances to stimulate sales. These promotions must be approved in advance by KeHE’s category management team.
Performance Tracking: KeHE provides vendors with detailed sales reports, allowing them to track the effectiveness of promotions and adjust strategies as needed.
Delivery Requirements: Vendors must comply with KeHE’s delivery schedules and packaging specifications to ensure efficient handling and distribution.
EDI Systems: Compliance with Electronic Data Interchange (EDI) standards is required for all transactions to ensure accuracy and timeliness of orders and invoicing.
7. Sustainability Initiatives
Environmental Commitments: KeHE is committed to reducing its environmental impact and looks for partners who share this commitment. This includes sustainable packaging, waste reduction, and energy-efficient practices.
Delayed Payment Terms: KeHE’s payment terms can be longer than industry average, which might affect smaller brands’ cash flow.
Promotional Commitment: The effectiveness of promotional activities can vary, and not all promotions lead to increased sales. Brands need to strategically choose promotions that align with their target demographic.
Navigating a partnership with KeHE involves understanding their specific requirements for product types, logistical capabilities, and promotional engagements. Brands that align with KeHE’s focus on health and wellness products and manage the distribution nuances effectively can greatly benefit from this relationship.
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