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Have you ever wondered how new products make their way into restaurants, universities, and other food service outlets? In this episode of Spilled Salt, Maureen delves into the fascinating world of food service sales with insights from Matt Cotton, founder and CEO of Rooted Food Sales. 

Laying the Groundwork for Rooted Food Sales

Matt Cotton’s career began with selling Vitamix blenders—a high-energy, commission-based gig that lasted six and a half years. After that chapter ended, Matt transitioned into the Consumer Packaged Goods (CPG) world, which eventually led him to find his passion in food service. 

This journey laid the groundwork for him to start his own venture, Rooted Food Sales, just days before the world shut down due to the COVID-19 pandemic.

Launching Rooted Food Sales in March 2020 was a leap of faith. The pandemic posed significant challenges, particularly for the food service sector, which includes restaurants, colleges, universities, and more—many of which were forced to shut down temporarily. Despite the rough start, Matt’s perseverance and adaptability allowed his company to navigate through the crisis and come out stronger.

Exploring the Role of a Food Service Broker

Rooted Food Sales acts as a food service broker—a term that might sound a bit dry, but it’s pivotal in the industry. They are the crucial link between innovative food brands and the food service operators who serve these products. Matt’s team of eight represents 12 brands, focusing on better-for-you, innovative food products that resonate with health-conscious consumers.

Getting a product into food service isn’t just about having a great item; it’s about finding the right path and partners. Matt explains that for most products, working with a distributor is essential. However, gaining distribution is not easy. It requires demonstrating significant demand—what Matt refers to as “operator interest.” In simpler terms, you need to show that there’s enough excitement about your product to justify its place in the distributor’s lineup.

One of the biggest challenges new brands face is the “chicken and egg” problem: should they secure a distributor first, or find the food service outlets (operators) that will sell their products? Matt emphasizes that operator interest should lead the way. Without it, even the most promising product might not gain traction with distributors.

Determining Product Fit for the Food Service Marketplace

For Rooted Food Sales, the ideal product is one that fits into a broad category with a strong market presence. For example, they represent Lundberg Family Farms, known for its high-quality rice—a staple in many food service outlets. Products that require extensive education or are too niche can be a tougher sell. The goal is to find items that are not only exceptional but also have clear, immediate appeal to food service operators.

Success in food service sales is all about hustle and strategy. Matt describes how Rooted Food Sales focuses on specific channels that align with their brands’ products. A targeted approach helps streamline efforts and maximize results.

Navigating the financial side of food service sales can be complex. Matt outlines that working with major distributors like Sysco or US Foods often involves a marketing agreement fee—typically around 5%. Additionally, the markup from distributor to customer can range from 10% to 35%, depending on the account type.

Building Strong Relationships with Shared Values

One of the keys to Rooted Food Sales’ success is their focus on building strong relationships—not just with brands and operators, but within their team. Matt stresses the importance of cultural fit and shared values, which help ensure everyone is aligned and working towards the same goals.

As Rooted Food Sales continues to grow, Matt is excited about expanding their team and bringing on new brands that fit their vision. The future looks bright as they aim to broaden their reach and impact within the food service industry.

For food industry entrepreneurs, Matt Cotton’s story offers valuable lessons on perseverance, strategic planning, and the importance of filling gaps in the market. Whether you’re launching a new product or looking to expand into food service, understanding the landscape and building strong partnerships can pave the way for success.

Transcript

This transcript has been edited from its original form to support readability.

Maureen Ballatori: I’m Maureen Ballatori and this is Spilled Salt, a podcast on the thrills and spills from the food, beverage and agriculture industries. Today’s guest is Matt Cotton. He’s the founder and CEO of Rooted Food Sales. He’s also a keynote speaker and a food service advisor. And the context of our conversation today is primarily focused on the Rooted Food Sales component and Matt’s work in food service as a whole.

So food service just for listeners to get that basis of understanding includes restaurants, colleges and universities, vending, concessions. We talked about C stores quite a bit today, but it’s that segment of outlets. So operators as Matt calls them. So one of the things that I love that we talk about today is the relationship for a brand with operators and distributors. 

I get a lot of questions from clients about that, you know, the way that that works and what comes first. Is it the sales team and the operator or do I need the distributor? Does the distributor sell for me? You know, so we address a lot of those questions in today’s discussions. This is a treasure trove of information for any food company, food or beverage company that is interested in any way in food service. Enjoy the conversation.

Maureen: Hey Matt, how are ya?

Matt Cotton: I’m good. Thank you for having me.

Maureen: Wonderful, glad to have you here. I would love for you to kick us off by talking a little bit about your work history leading up to the work that you’re doing now.

Matt: In a nutshell, I sold Vitamix blenders for six and a half years straight commission gig mic’d up pitch man. I loved it. Truly. It was, it was an amazing run and that really dried up on a dime. So, networked around; got connected.

Bob Burke, who’s a real legend in the industry who lives like 20 minutes from me. And he, we got a cup of coffee. He introduced me to a startup food company in Newburyport, which is where I live. And , I guess I had no industry experience, but I guess she was kind of drawn to hiring someone hungry and passionate, which I was and am, but so , so that was like, I don’t know, nine, 10 years ago, came into the CPG world and quickly shifted to just all food service. Retail just wasn’t my jam. Food service is my, , is my thing and.

I’ve had three jobs in food service before starting Rooted, leading companies, leading brands into food service, growing a brand into food service and started my own thing, Rooted Food Sales, just over four years ago. So March 12th, 2020, days before the world shut down.

Maureen: Was that intentional? Like something happened or it was just, that was your launch date and it just so happened to coincide with the shutdown. man.

Matt: That was not the plan. I just got the courage. I mean, mostly terrified with a little bit of courage leading the way to start my own thing. And COVID was, in my own mind, this not real thing in the news far away and then started Rooted and then it got really, really real and everything shut down. 

Maureen: How did that affect you? Because we have some clients that, you know, you, of course, you don’t want to capitalize on something as awful as the pandemic and what happened, right? But there were some companies that did well, you know, as a result of that happening, like one of our clients was doing meals by mail exploded during the pandemic, right? So was this a COVID hit and it was, shit, it was really, really bad or was it in some ways beneficial to what you were doing?

Matt: It was for food service. It was straight bad, you know for folks in grocery or maybe direct-to-consumer. For certain channels, it was beneficial for business.

For food service, it was bad. The main channels we focused on now, focused on then when it was just me were college, university, restaurants. Places that were just shut down.The only thing I really had going for me was it was always supposed to be lasting just like a few more weeks. I took that into brand exploration, partnership exploration calls. Yeah, it was all about to end.

Maureen: A week before the pandemic hit, we, too, had heard rumblings. This is happening, and it didn’t feel like it was happening to me. 

We made a major change with our largest client the week before the shutdown because it just wasn’t a partnership that was working out. I was thinking we’ve got all of these other irons in the fire, as you do as an entrepreneur, right? You’re thinking 10 steps ahead, thinking I’m going to stick and move here and then I can do this. 

All of those dominoes disappeared when the pandemic hit. And we had a really tough six months from March and beyond. 

And in March of 2022, we had pivoted our focus to a focus on food, beverage and agriculture at that time too. So it was kind of like, how do we get the word out about this? Is this appropriate? Like, what do we do? 

I realize we’re four years out from that, but it was such a pivotal time, especially for you to launch the business at that time and have that coincide and still be here is a remarkable feat.

Matt: It was. I don’t think I’d be able to relive it or run it back. But I’m super grateful. A lot of personal growth during that. I mean, during that first year and a half was brutal.

So a lot of personal growth and just a lot of strength growing rooted through that time. So I wouldn’t run it back but truly grateful for it.

Maureen: To have made it through the experience. Yeah. So tell everyone a little bit more about Rooted Food Sales and what you do.

Matt: We’re a food service broker. I think at some point in time, I’ll think of a prettier name than broker, which I feel like has a bad connotation. But at the end of the day, I mean, that’s really what we do. 

We’re an outsource sales agency. We’re a team of eight. We represent 12 different brands at this moment in the better for you, innovative, Whole Foods -y kind of space. 

We sell their products in the food service, which is many channels, but like I spoke about a little bit, college, university, restaurants, could be vending or travel or premium convenience stores. It’s another channel for us. Corporate like B&I, those are our big channels through distributors like Sysco or US Foods for ingredients and back of house items for Vistar or Core-Mark, sometimes UNFI for front of house packaged items or beverages. So that’s what we do. So not grocery retail foods or home food service.

Maureen: You just started to scratch the surface on one of the questions that I had for you, which is, I think that food service is a bit of a mystery to many people. Do I need a distributor? Can I have my distributor just sell? 

Can you talk a little bit about the journey from product to a food service outlet or some of these kinds of journeys? That a brand has to go through in order to be able to be sold at that final destination.

Matt: So for the most part you do need a distributor. There are different distributors than retail, UNFI, KeHe, even though both do distribute to some food service operators. Yeah, it’s a bigger question. So getting distribution is hard. Yeah, getting into food service is hard.

You really need to make sure there is enough interest, which by-the-book is five cases a week per SKU. Although honestly, more than that is really needed to force distribution. 

So it’s really about finding an operator, finding a couple of channels that you think makes sense for your product with coffee shops, college, university, convenience stores, whatever your product is. And then finding a large enough operator who can quote unquote, force distribution, getting operator interest and then bringing that operator interest to the distributor and rolling up your sleeves and muscling it into distribution because you really do need distribution in food service.

Maureen: That’s a chicken and egg problem that a lot of early brands have. Exactly what you were just talking about, is that it’s a bit of a push -pull. You know, some of the questions that I get from clients are, well, what do I need first? Do I go get a distributor or do I go find, you know, the final, the convenience store that’s going to sell my product? And they kind of have to happen simultaneously, right?

Matt: Yes, with operator interest leading the way, if you can go to a Sysco or Core-Mark, Vistar, it doesn’t matter. Said this line before. It doesn’t matter how shiny, trendy, delicious your product is. Like it’s just not the business model of the distributor to like roll the dice and hope it moves. I wish it was in an ideal world. That’d be great, but it’s just not. 

They kind of need to happen simultaneously, but really it’s an operator focused game. And then finding out who their distributors are and bringing that interest to the distributor.

Maureen: Let’s talk a little bit about what makes a product a good fit for food service. Like are there typical sort of categories that you find that work really well?

Matt: I can share how we get excited or not excited about a product. If it’s too niche or takes too much explaining, it just makes it doesn’t mean there’s not a path. It just means it’s going to be hard. 

For us, I prefer it to be less hard. If there’s education that’s needed, like I just spoke to someone yesterday and he was such a good guy. I was like, hey, let’s hop on a call. Like I want to try to help out.

And I just knew there was just going to be so much education needed. I just know there’s a path, but it’s just going to be a long tricky path where an ideal item for our world is going into a bigger category. And it’s just an awesome item. 

I’ll give a real life example. like we represent Lundberg Family Farms. Rice is a crazy competitive category. And so it’s challenging, but Lundberg is amazing.There’s so many reasons why certain parts of food service should be jazzed up for Lundberg. That’s a really fun sell. And when you get a win, the volume’s great, because it’s not a niche category.

Maureen: We work with Fee Brothers, which is an international bitters, cocktail syrups, cordials brand. They’ve been around for five generations, 160 years old, pretty remarkable. 

We’re the first formal marketing that they’ve ever done in five generations, which is pretty amazing. They have a massive opportunity because they’ve already got this engine of brand advocates and loyal fans behind them. Bartenders love them because they’ve got 22 flavors, which is really different from the number one bitters brand in the world that only has a handful. 

Fee Brothers is number four in the world, so they can really stand out in that way where they have the audience that’s going to pull it through. And so I’m not surprised that you mentioned that when you said you’ve really got to have the demand in order for it to make sense in food service and with a distributor, to have enough product moving that it makes sense for them.

And the other thing too,the explanation component, I get that sometimes from clients as well. 

I met with a guy last week, 87 years old. He said, I want to launch a salsa company. And his whole thing was on, he said, it’s immune boosting when you eat the whole jar. And I said, I think that’s great if you can prove the immune boosting and everything like that. But also you’re talking about shifting human behavior from, How do people typically consume that product to you’re asking them to eat the whole jar?

Matt: Nightmare. Sales, getting someone’s attention is hard enough, right? There’s no proper review schedules and stuff. So getting someone’s attention is hard enough and you only have that brief period of time to capture their attention, get the momentum and then while momentum’s there, get the sale. So too much is whirling and it’s just really hard.

Maureen: Let’s talk about that sales cycle. How does that typically work for you? Let’s say I want to take this salsa idea to market. I don’t have one. I’m not launching one, but hypothetically if I was, what does that typically look like? How do you get a product placed with a customer?

Matt: So if you were launching a salsa and did not have any distribution, how would you, what would the process be? Once we’re with the brand and selling it or once we’ve partnered with the brand selling it? How do we sell and get after it with our brands? 

Maureen: I guess what I’m trying to understand is how do brands best work with Rooted Food Sales? What does a scenario ideally look like for you? 

Matt: Right now is a real ideal time for college and universities. The end of March through late June, as college universities are really making their decisions for the fall semester. 

We’re kind of one foot in that world right now.When we’re bringing on a new brand, or a current brand, we’re really identifying two or three. More than that, I just like to be really focused. 

So two or three channels that really make sense and then just getting after it.There are so many accounts in food service and it’s not like retail where we know the players and here’s a review schedule. 

There’s an infinite amount of players in food service. Whether it’s colleges or universities, they’re great for this salsa for these couple reasons and the better-for-you restaurants or restaurants who care about better for you ingredients. 

Assuming you’re made up, salsa is sustainable and really well made. We’re going to go after the folks who have salsa on their menu and try to set up meetings and send out samples to create the pipeline.

Maureen: So really it’s understanding the product and its customer fit to determine that best fit avenue or channel. 

Matt: Yep. Just getting after it. And we’re not going to be like, is Sysco good? Is US Foods good? It’s going to be high end Mexican restaurants. Without overthinking it, a high end Mexican restaurant or salad bowl places who are using the salsa.

Because you’re making it, in this part of the country, we’re going to focus on some local accounts as well. For just like two, three months, just go, go, go. And then maybe pivot from there on what’s working and not. 

Then when there’s interest, okay, like Purdue University is excited. Okay. Who are, who are their distributors? Okay. These distributors and then try and open up distribution operator interest and I’d also say it’s really important to not just learn about their primary distributor because most larger accounts have multiple distributors and the Sysco rep, US Foods rep, may be open and easy to work with or they might have no interest in forcing a new item but then you find out that they use a specialty distributor, a regional distributor, produce distributor who’s like pumped to pick up like seven cases a week and they’re not a corporate, that corporate of a distributor and easy to turn around so when there’s an operator who is interested. Who’s your primary distributor? Sysco, US Foods, great. Who’s your rep? And then also are there any other distributors you use?

Maureen: That’s great. I think it’s great that you’re being so clear that it needs to be that pulling from the customer first and the distributor is an essential part of the story, but it has to come from that.

Matt: We occasionally buy from this specialty one and this regional one, basically getting their commitment like, hey, if this product was stocked, would you bring it in? What do you think volume may be? We probably do like eight cases a week. Okay, awesome. Well, like, let us take care of distribution. Who’s your Sysco rep? Who are these other reps’ names? And then, and then leave them out of it and start working with the distributor reps and get ready to muscle and be aggressive in a friendly way.

Maureen: Right. Which I also think, yes, I think that’s an important thing to talk about too. 

One of the things I wanted to also ask you about is, so you’re here because I had Kyle Peters on the podcast, season three, episode three, and we were talking about margins. And so we like to educate listeners and use these episodes as a means to not only promote you and the work that you’re doing, but also, educate about your category. 

You just talked about the idea that you’re getting that operator interest first, and then you’re talking to their distributors, right, to determine who’s the best fit for your volume and, you know, your specifics. 

But let’s talk about the percentages and some of the, like, margins that a brand needs to have kind of planned into their matrix in order to make those work. What’s the typical fee that’s paid to outsourced sales, what’s a distributor cut usually take?

Matt: There are a few different things going on here. It’s going to matter whether you’re talking about a package good selling through more convenience distributors like Core-Mark or Vistar. 

That’s going to be more similar to grocery retail versus traditional frying oil, tomato sauce salsa going through Sysco or US Foods. So to go with that example, you should expect with a major broadliner as they’re called, Sysco or US Foods to be in a 5% marketing agreement. 

Which, do you get something from that? Not really, you know, when they share about it, they’ll share what you get, but it’s really just the cost of doing business. So it could be anywhere from three to eight percent. I’ve settled into five percent really being the norm and what do you get for that? Yeah, you get open coded. 

Instead of just being in for Purdue University and no other accounts can see it, it’s open. So if someone’s salsa, they could see your product. You get access to the distributor rep, so their sales team. What the markup will be, I’m sure this is really similar, the same retail grocery. They’re like Whole Foods’ equivalent. They’re like top tier accounts. They’re Sweet Greens, GFS, might pay 5% mark up.

And then Purdue University might pay 15 percent. And then the quote unquote street account, which does make up the majority of their customers, might pay like twenty seven to 30 percent markup. And then there’s really no surprise money in food service, which I know is very different from retail. You’re really not paying a slotting fee to the distributor. There’s no funky surprise charge backs.

The distributor will have a show once or twice a year for a couple thousand, which is good. A few thousand. And then as far as it’s trickier to talk about like the margin for the customer, because it’s so different, right? High end restaurants, casinos or hospitals. So trickier there. Is there a little more clarity I can discuss on that topic?

Maureen: I think that’s great. You’re saying somewhere between 10 to 35% is your sort of margin in mind.

Matt: The markup going from the distributor to the customer.

Maureen: What should people expect to pay for engaging a sales team like you? And I hope that that’s not too broad to ask.

Matt: You’re good. Although it really does depend. You know, our threshold is exploring with brands on a percentage basis that are doing over $2 million in food service sales through distribution. 

In general, it’s a percentage which can vary. 

I think that the early sales and distribution should be done by the brand. If you’re finding an outsource broker agency to do that, you’re just going to be disappointed. Like it’s honestly, it can be really hard and slow and your expectations will probably be too high and too fast. The early learning and real early food service sales trenches should be done by the brand in my opinion.

Maureen: I agree.It makes sense to engage a team like yours when they’re ready to accelerate. They want to throw fuel on the fire.

Matt: Whether it’s us or someone else, bring a resume and that early distribution to a broker. Get that initial momentum. So, you know how hard it is. You understand the selling process more. You’re going to be so much better equipped for a better relationship as well. Get that first Sysco, that first Vistar, by yourself.

Maureen: True. I remember talking to one of the early guys from Vitaminwater and he said every single time I would walk into a coffee shop, I would bring a couple with me. I had a cooler in my car. I’d pack it up every day and then everywhere I would meet clients, I’d bring a couple in and I’d hand them to the barista. Hey, I sell this. Here’s my card. Here’s a couple samples. 

It’s that kind of hustle that I love. And that’s really what you’re talking about, too, is that you’ve got to have some skin in the game to understand what we’re talking about here and the direction it’s going so that your expectations are managed about what this looks like. And then we will be your fuel for the fire. That’s great. 

Give me a high time and a low time from the last four years at Rooted.

Matt: The high time jumps to my brain first at this moment is the last Expo East. It felt like a real celebratory moment. My wife came, which was really special. And it just felt like a real Rooted celebration.

Christie, our VP, who’s a dear friend was there. My wife, Erin was there and it just felt like the brands are current brands and just like our recognition. And then Wyclef John put on a concert there and he came out into the crowd. My wife gestured to him asking, can we put this on your head like a Rooted hat? And he ended up wearing a Rooted hat for the last half of the concert. And that whole event… There was a lot of gratitude and a lot of celebration. 

Maureen: That’s amazing. Before you go off of that, we can’t just take that high point and then move on from it. That’s such a cool thing. And I love those moments where, especially as the founder, right? All of this that you’ve been working toward all comes together in a moment. And you’re like, man, it’s working. It feels so good.

Matt: As much as I try to have gratitude as part of my life, it can be hard. And I find that trade shows are a real time for reflection and just like, you know, out of the normal day to day and just like, like we are like, making progress. This is cool. We got this show, whether it’s Expo or NRA, which is the big restaurant show actually happening next week. What a cool thing to think about now compared to last year.

And then low points. Yeah, honestly, a low point for me is, with respect, with a ton of respect, because we’ve had some hires come in who weren’t a fit, really good people. 

The moment I realize that someone’s not a fit, it’s so painful. I’m not someone to people please and when I realize this person isn’t a fit, that’s a really hard moment for me.

Such a journey, the last four years, and I’m so grateful. Like I said at the beginning, just so grateful for the personal growth, walking in this entrepreneurial fire. So grateful for the current team, who’s just a bunch of bright, amazing humans who are incredible at their job. And we’re in a really good spot as a company with incredible brands, incredible people.

Maureen: So before I ask you my last question, which is what’s next for Rooted Food Sales, I want to just say, I think even just the way that you position that about when someone’s not a fit is something that every business owner struggles with. 

But I think that that’s the right way to think about it, is the fit, right? That there is a better, if this is not the fit for them, there is a better fit for them somewhere else. And that really frees my mind up and I present the discussion in that way when I have to have one of those difficult chats to say this I don’t think is working for these reasons and I want you to find a place that is a better fit for you and your skills. In my mind it softens it a little bit because I want the best for you, I want you to feel great about the work that you’re doing.

Matt: Totally. Having, yes, 100%.

Maureen: What’s next for Rooted Food Sales?

Matt: Thank you for the question. This is fun because as we were talking about before we press record, I’m usually the podcast host. It’s fun to receive questions, take it in and see what comes out.

We’re in a really strong place as a company. So really grateful where we’re at and just like digging in for our current portfolio. Such a strong group of brands. But, expansion with growing our current brands, adding some more high quality brands so we can widen our ship and that adding some, there’s a couple regions I want to fill in and just adding more bright fiery humans to our  Rooted team.

Maureen: When you nurture your culture, which you clearly are, because you’re thinking about fit, I think that makes growth that much more exciting too. Knowing I can add this excitement and energy and share it with another person.

Matt: Someone needs to be a culture fit. They literally need to be. it’s not like there’s an exact kind of rooted person, but like they need to be on the same frequency-ish as our team. It’s the only way it works.

Maureen: I totally agree by the way. And I think that what you mean is they don’t have to work in the same way, but they have to align with the same kind of energy and values, right? 

Matt:  Almost more energy and values. There’s a lot to unpack there. 

Maureen: A lot of layers to that. Well, this is amazing. 

Thank you so much for sharing your education and your knowledge about the industry and your path to where you are now. I’m very excited to continue to watch you grow the company and have an impact on the brands that you work with and the folks that you bring onto the team. So thanks for joining me.

Matt: Thank you very much.