Category: Insights

Why did you create Rgand? What was the inspiration behind the business? How did you come up with the idea?

I have been working in the food supply industry for more than 25 years. During my long career, I had the opportunity to work in different sectors of the foodservice industry. I started in big wholesale. We were purchasing the products from distributors of french brands and selling to smaller wholesalers. Then, our buyers were selling to even smaller wholesalers. Restaurants and groceries were buying from the smallest wholesalers only after the products had changed hands of up to ten intermediaries. It was crazy!

The supply chain’s inefficiency was staggering, and I always wondered if a better approach was possible without all these additional costs and processes.

So I always wondered if a better approach was possible, getting out the middle men like me, and removing all these additional costs and processes.

Could it ever be possible for a restaurant to buy products directly from the producers?

That idea always stayed with me as I worked in different food supply businesses over the years. I was a food producer, buyer for hotels, distributor, and logistics manager. In all these roles, I encountered challenges that prevented direct trade. I saw the obstacles at each step for every player in the supply chain.

With every obstacle I encountered, I took notice. With every next job, I learned another piece of the puzzle. I knew at some point all these dots, these ideas will connect, and that I will have the answer to the billion-dollar question and a better solution.

In 2017, after getting to know the IT industry, I started acquiring IP/ software solutions to optimize the supply chain processes. That was the point when all the dots came together and resulted in one integrated solution. After many tests and trials, an automated one-click intermediary free direct trading platform for producers and restaurants was born. In other words, I created a platform that allows restaurants to buy directly from producers with just one click and all the fulfilment is taken care of. No more products being traded 10 times and finally getting to the restaurants – its direct, from the producer to the market. So then in 2020, we formed the general architecture of Rgand.com, and the development began.

For a year we’ve been working tirelessly on our ‘middleman-free’ platform that will empower farmers and food producers and put restaurants and food businesses firmly in control of their purchase system, saving thousands of dollars.

Now we are just days away from the official launch of Rgand which will mean that potentially any food producer can sell to any restaurant or food store in America, and eventually worldwide. The impact of this for the entire food supply industry is game changing.

Why do you think your technology is the answer that food suppliers and restaurants are looking for?

Today, U.S. e-commerce wholesale trade sales are worth $2.64 trillion dollars, it is 32.3 percent of total global wholesale. B2B has overtaken B2C by reaching a worldwide market value of $7.7 trillion, as opposed to the $2.3 trillion of B2С [1].

It is 4 times larger!

We already knew this trend would continue to grow with more and more businesses adopting the direct-to-end buyer technology. However, with COVID, the importance of purchasing online and aggressive savings increased more than ever. We are confident that the Rgand solution will let producers and restaurants grow faster: both sides will find it more convenient and will keep more profits.

What problem are you solving for food producers?

The restaurants and food establishments are the two sides of the food and supplies trade. Yet, you would be shocked to learn that the producers and the restaurant owners earn the least.

There is a large army of resellers, wholesalers, and middlemen between the buyer and the manufacturer.

Direct access and trade between Producers and Restaurants will enable both to make more money, keep more profits, grow faster, and create jobs. Access to more equitable direct producer prices can make restaurant prices more affordable, keep everyone from closing the doors, and contribute to the national economy.

Ask a Producer the question of what it means to sell more. Every time the only answer will be to find more distributors and wholesalers. A producer cannot build infrastructure to sell, even the largest ones. To be able to sell directly, it is necessary to have these four elements of success:

• direct access to buyers,
• direct promotion,
• grow brand visibility, and
• quick same-day fulfillment.

Historically, due to the inconvenience of long-distance shipping and the inefficiency of dealing with many small buyers, food manufacturers have become dependent on distributors or wholesalers. Intermediaries would find the buyers and make the sale. It was before the Internet, before fulfillment centers automation, supply chain integration, and shipping commoditization.

Until recently, producers needed distributors. However, middlemen grew to be the most powerful players in the foodservice industry, paid for by both sides: buyers and sellers while dictating the rules to both.

The marketing cost for producers averages 17% of total revenue, raising food manufacturer’s breakeven price. It also pushes up prices for food buyers. It’s a waste: each year, over $50 billion on trade promotions never reach the end buyers while inflating food prices. This amount can be spent on ending world hunger.

Producers could never compete with distributors due to the lack of logistics, market reach, and marketing know-how. Now, they can become the best sellers of their products: they have a platform, reliable fulfillment services, and a marketplace built to fit their unique needs.

Producers can now shift the power away from distributors back into their own hands.

Please tell us how you will launch the Rgand.com platform?

Producers and restaurants can’t trade while relying on traditional marketing activities such as conferences, exhibitions, and trade shows. These events attract mostly distributors, not end buyers. Buyers have no time or reason to go. They don’t want to meet more distributors and can not buy containers of every needed food item for each location.

We are providing touchpoints where producers and restaurants come together.

The 1st touchpoint is our ‘What’s in the Box’ webinar series, where producers and restaurants join to discuss their needs, problems, and hopes for improvements.

We also have a fun and reliable way to promote this concept of bringing food producers and restaurants together. The 2nd touchpoint is Rgand Sample Box Marathon, the first and most unique sampling event ever. It is designed for producers to directly promote their samples. We will send each sample box to a different restaurant until the total number of restaurants reaches 26,385.

The Marathon will let restaurants try new brands that can be purchased directly in small quantities at direct-from-producer prices. Producers will generate new business leads to secure orders at scale. Add to it a healthy competition to bring out the best in everyone — and both sides win.

We design these touchpoints to inform the market of the new direct trade opportunities and enable actual trading.

How will you scale Rgand.com?
How will you recruit food producers and restaurants?

We will showcase Rgand capabilities with our launch campaign to recruit food producers and restaurants. We call it the Sample Box Marathon.

Rgand will demonstrate its capabilities by delivering free samples to the restaurant doors. Think for a moment that a producer’s product samples are distributed to 26,385 restaurants in a short amount of time, allowing the buyer to try and decide if the product and price are right.

Buyers can purchase these and other products available through the Rgand marketplace. On Rgand.com, they can buy more and spend less than they pay distributors. Restaurants will have freedom of choice: no need to buy the inventory that distributors are pushing down at high prices.

Restaurants will finally choose what they want to buy and have the opportunity to try at no cost. It’s only a matter of time before every restaurant would want to buy through Rgand.com.

This Marathon’s main purpose is to demonstrate how Rgand’s one-click direct-to-buyer food supply platform enables direct sales, distribution, and deliveries.

Sample Box Marathon will be organized regularly with multiple sprints, to be announced.

We already attracted a few top-100 producers from the regions of North America, Europe, Middle East. We are also actively reaching out to small famers and small independent brands. Rgand gives them all an opportunity to put products in front of buyers. In fact, Rgand.com helps small brands compete with international powerhouses.

What will be sold on Rgand.com?

Rgand is a technology and infrastructure solution enabling direct trade for the foodservice industry. The marketplace covers everything a restaurant or food establishment may need to purchase for their business. The categories include Food and Beverages, Equipment and Supplies, Disposables, Janitorial Supplies, Furnitures, Tabletops, Commercial Kitchen Supplies, etc.

Will you turn Rgand.com into a global business?

Rgand solution is needed in every country where there is at least one commercial food establishment. After launching in the U.S., we have plans to scale business to Canada, the E.U., the Middle East, etc…

We already received requests from producers who found Rgand in their countries and asked us to launch there. It makes us believe that Rgand will ultimately be a global marketplace.

What do you see as your biggest challenges in scaling?

Before COVID, we thought technology adoption by Rgand users would be the biggest challenge. Our goal is to break down the outdated supply chain order and rules.

Step by step, we will take apart the old infrastructure and replace it with new sophisticated technologies. We have accelerated this process by eliminating unnecessary costs, reducing dependence on intermediaries, and saving everyone time and money.

Our efficiency simplifies the procurement process and offers the best prices and growth guarantees to all participants.

COVID showed us all that during challenging times, adoption and performance can quickly accelerate. We believe that food producers and struggling restaurants are ready to adopt new solutions.

How has the pandemic changed your business?
With fewer people eating out, is that a risk to Rgand?

COVID put 3 out of 4 restaurants in the U.S. on the brink of closing: they now need to save money anywhere they can, they need any help they can get to survive.

Direct-from-producer prices help spend less on the restaurants’ biggest expense – wholesale food. Even though the COVID caused delays in our launch, it also increased the importance of Rgand solutions and the importance of getting high-quality products with direct-from-producer prices into the hands of restaurant chefs all across the U.S. Direct trade is now more important than ever for every business in the foodservice industry.

How are you funding this business? Who are your investors? 

My path to Rgand.com started more than 25 years ago when I launched my foodservice supply chain career. Building businesses in the food and real estate projects formed the starting capital I used to develop Rgand. 

To my delight, many producers that joined Rgand expressed great interest in our growth and expansion. Thanks to capital support from these food manufacturers, we will develop and expand Rgand Fulfillment Centers with intensive marketing in other countries besides the U.S.

In the future, the interested Rgand members and participants will be considered for becoming co-investors. 

After many years of hard work and major investments, we completed the final trials of the technology. I am pleased to report that the whole experience was seamless – it was wonderful to see the realization of our vision. 

We expect to be fully operational in April 2021 and kick off with a Sample Box Marathon, a free-to-try and free-to-ship marketplace introduction on the U.S. market to 26,385 restaurants. 

After successfully launching in the U.S., we will be introducing our expansion plan thanks to the valuable partners and Rgand community of producers and restaurants.          

Where do you see Rgand.com in 3 years? Is there an exit strategy?

Rgand will allow food producers to reach many more markets than they would have done in the past, and as we grow, that will ultimately mean a global audience.

We are planning to extend the business to Canada and the E.U. in the upcoming years, after successfully launching Rgand in the U.S.

Which other tech platforms have inspired you most in the creation of Rgand and why?

I had the idea of the Rgand solution for a long time but didn’t have the infrastructure for implementation. Marketplaces such as Amazon and Faire have changed the way we buy so after seeing the possibility of automation with technology, I started to understand that the implementation of Rgand practices can be possible.

What inspires you?

To be honest, my inspiration comes from the hard work of everyday people. Working in the industry for a long time, I was able to see all the challenges that all hardworking people are facing. I thought that If I had the opportunity to create the smallest difference in those people’s lives, I had to go for it.

The people to whom I provide Rgand solutions are my inspiration.

What else are you passionate about in life? How do you relax in downtime?

If I am not working on my business, you can find me reading. Another habit of mine is to wake up very early every day and go for a run. I regularly participate in Marathons.

To be honest, the Sample Box Marathon idea came to me during running. It’s a fact that exercise helps improve brain activity and overall health.

Music is another nutrition for the brain, another one of my passions, when there is no one around, you may find me playing the piano.

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[1] https://www.statista.com/topics/4884/b2b-e-commerce-in-the-united-states/

Why Is the Program of Distributing Samples to the Restaurants Called a “Box Marathon”?

In the past, producers had to run after distributors at trade shows in an expensive and sometimes humiliating race for a chance to present products to the restaurants.

Rgand.com completely changes the dynamics of the food supply to restaurants. Presenting products to the restaurants becomes effortless. 

Sample Box Marathon gives the producer community a taste of the future trade – simple, affordable, effective.

Sample Box Marathon is a symbol of the future where the boxes do all the running directly to restaurants.

It’s just like the real marathon, except these are sample boxes that do all the running.

One restaurant – one mile.

Food manufacturers can send samples to run to a preferred number of restaurants between 1 and 26,385.

Automated sample delivery replaces chasing after distributors the food manufacturers had to do to grow their business.

What Are the Key Dates and Terms of the Program?

Rgand Sample Box Marathon starts with 26,385 restaurants. After it’s’ completed, sample delivery access for producers will continue, and producers can continue sending samples directly to restaurants through the Rgand platform. The food producers can start direct sales with free samples that increase visibility and allow producers to be recognized and valued by the U.S. chefs.

The World’s First Fully Automated Sample Box Marathon will start on April 1, 2021.

What Is Rgand, and What Does it Offer to the Foodservice Industry?

Rgand’s mission is to supply technology and infrastructure solutions to food producers worldwide. We help open a direct trade channel and communication with buyers at restaurants, cafes, and hotels while still shipping large quantities to Rgand Prime Fulfillment centers.

Rgand Sample Box Marathon is a vital step in Rgand journey of introducing the marketplace platform designed to enable direct sales from food producers to commercial buyers on the U.S. market.

This campaign’s primary purpose is to demonstrate how food producers can grow direct sales, distribution, and deliveries with Rgand’s direct-to-buyer access platform.

“Try Free Samples Through Rgand Prime Fulfillment” will be a standard service on the Rgand platform, designed to help sellers increase awareness among the buyers. It will be easy and quick (with one-click) to send and receive samples using Rgand services on the direct-to-buyer platform, free from the middlemen.​

Is Rgand Just Another Distributor? 

No. Rgand doesn’t sell goods and doesn’t purchase goods. Rgand.com is a platform provider where manufacturers of food and other restaurant supplies can find restaurant chefs and trade freely without anyone in-between. Rgand supports its members with fulfillment, sampling, product review, and other services built into the platform.

Rgand Delivers Freedom to Producers

Food manufacturers are now entirely dependent on distributors or wholesalers to find buyers and make sales. 

Historically, they needed distributors due to the inconvenience of long-distance shipping and the inefficiency of manually dealing with many small buyers. 

It was before the Internet, before fulfillment centers automation, supply chain integration, and shipping commoditization.

Until recently, producers needed distributors. However, middlemen grew to be the most powerful players in the foodservice industry, paid for by both sides: buyers and sellers while dictating their rules to both.

If producers wanted to see their products in stores or commercial kitchens, they had to use the middlemen. In exchange, distributors would constantly demand discounts, price reductions, marketing sponsorships. 

What is the True Cost of Food Distribution?

On top of the costs to manufacture the products, food producers spent an average of 17% of total revenue on marketing, raising the manufacturer’s breakeven prices. All promotions push up prices for food buyers. It is a waste: each year, over $50 billion on trade promotions never reach the end buyers while inflating food prices. Both sides lose, and consumers of restaurant food end up footing the bill padded with 40%-60% of avoidable costs. 

The Future of Restaurant Supplies Sampling and Trade Is Now

Not even in their dreams did the producers imagine that one day they could introduce and then distribute their products to thousands of restaurants directly. Suddenly, what used to be expensive and largely impossible, is not only possible but has become fully automated. 

Producers could never compete with distributors due to the lack of logistics, market reach, and marketing know-how. Now, they have a platform, reliable fulfillment services, and a marketplace — all built to fit their unique needs. Producers can now become the best sellers of their products.

Producers can now shift the power away from distributors back
into their own hands.

The producers will be able to send the samples to thousands of restaurants while sitting at his office, without having to travel. Thousands of kitchen cooks will try his products first, and then, some of them will become paying customers. 

Rgand will demonstrate this capability by delivering samples to the restaurant doors. Think for a moment that a producer’s product samples are distributed to 26,385 restaurants in a short amount of time, allowing the chefs to try and decide if the product and price are right. 

The buyers will then be able to purchase more for less than what they pay through distributors, without distributors pushing down their inventory or high prices.

Effectiveness of Sending Product Samples

Research shows that delivering free samples converts about 30% of sample recipients into customers. Sampling is the most effective marketing channel, and now it has automated for food manufacturers and suppliers. The Rgand platform is open to all food producers ready to send food samples with one click, leading to direct sales!

Freedom of Choice, More Choices, Direct-from-Producer Prices for Restaurants

Sample distribution is also vital to the restaurants. Buyers can test the best products and new brands for free. It means restaurants can choose what they buy freely, without any pressure or power wrestling from the distributors. 

An additional benefit of Rgand to the buyers is that they are getting direct access to local producers and thousands of new producers and brands nationally and worldwide, resulting in the supply of the best products at the best prices.

Most restaurants are now struggling due to COVID lockdowns, limitations, and an overall crisis.

Every opportunity to save money and get more for less can make a difference between closing the doors or staying in business.

Restaurants, cafeterias, hotels, and catering services can now save because the Rgand platform cuts out the middlemen from the supply chain. Chefs can find lower prices on everything food establishments need to operate. 

How Does Rgand Sample Box Marathon Work?

Food producers from the U.S. and beyond will apply to participate in the project to have their samples placed in Rgand Sample Boxes. Together, food manufacturers form a powerful community armed with the most advanced online trading marketplace, fulfillment capabilities, and marketing services. All these capabilities give food producers the power to enter and expand on the U.S. market with their brands.

The restaurants can apply to receive their sample Rgand Prime Fulfillment delivery for free. The campaign will launch in three regional markets: Miami, New York, and Boston.

The campaign will last until Rgand delivers its 1,000,000th Rgand Sample Box.

In the first sprint of the Marathon, 26,385 U.S. restaurants will receive Rgand Sample Boxes, distributed between the three initial regional markets.

Restaurant suppliers must spend on advertising and promotions to make buyers aware of their products. Manufacturing high-quality food and products is not enough to ensure business growth and higher profits.

Imagine: there are two businesses. One of them makes a great product but does not advertise. The other company sells average-quality products while investing significantly in advertising.

The second manufacturer will sell more due to buyers’ awareness.

Do you know what promotional methods are available today to food manufacturers?

In this article, we cover them in more detail.

What are the Benefits of Product Promotion?

Product promotion is a traditional growth lever regulating the economy and all its marketplaces. Food manufacturers that implement it correctly can successfully sell products and sell them fast.

Additional benefits of promotion include:

Food manufacturers who realize these benefits can significantly expand production and increase the volume of goods sold.

Why Is Product Promotion Needed?

The company’s brand and products should be known to the broad spectrum of buyers and influencers, not just to a few experts who have access to private catalogs and confidentially shared data.

The main promotional tasks for a brand include informing, persuading, and reminding potential buyers about products, services, images, ideas, and social activities.

Every food manufacturer needs access to the market and uses multiple ways of promoting the brand and the products: through stores, distributors, mass media, or online.

What Are the Goals of Product Promotion?

The Product Promotion strategy aims at stimulating buyers to purchase a product or service from a particular manufacturer and remain a customer, repeating purchases when needed.

Food manufacturers engage in the promotion of their brand and goods to achieve these important goals:

• Form buyers’ opinions and perceptions of the brand
• Inform a broad audience about the benefits of their products
• Demonstrate distinctive features of the goods
• Position business and products as prestigious
• Compare products to competitors to highlight own advantages
• Project innovative image
• Justify the higher prices
• Provide information about the place where to purchase products
  

What Is a Promotional Plan?

To implement promotions, especially at scale, the food manufacturer develops a promotional plan. The plan includes essential decisions such as pricing and planned investments into the product, distribution, and sales promotions.

To develop a quality plan for marketing a product or service, an enterprise must consider the volume and unique attributes of its target market, the products’ properties, and the amount it can allocate to the product’s promotion.

What Are the Necessary Parts of the Food Promotional Plan?

It is critical to determine the goals of promotion, identify the target audience, and develop the right messaging. A roadmap, a deployment schedule, and a retrospective analysis are also required to evaluate plan implementation results.

What Product Promotion Channels Are Available to Food Manufacturers?

A promotional strategy is a set of marketing and advertising activities designed to indirectly stimulate sales through 3rd parties or directly with the end buyer.

Producers can inform buyers about products and differentiators using various promotional tools, starting with the brand name and product packaging.

Traditionally, the methods of food promotion with the target audience included:

• Trade shows,
• Store flyer advertising,
• Window advertising,
• Personalized sales,
• In-store sampling,
• Direct email marketing,
• Coupons,
• Online media,
• Outdoor advertising,
• TV and radio,
• Sponsorships, and so on
  

Mature food manufacturers with significant promotional budgets use multiple channels to amplify their message.

Timing of Food Product Promotion

Customers need to be informed about new products and their properties before forming their attitude towards these products. In promoting already known products, the main goal is to transform any pre-existing knowledge into a positive attitude.

Thanks to the marketing promotion, the manufacturer can influence the position of its brand and products on the market relative to competitors. Based on the Product Promotion strategy, food producers can set priority goals and objectives, choose the ways and tools necessary to achieve the goals, and overcome the obstacles. 

Promotion strategies available in B2B sales are of two main types:

1. Pull strategy
2. Push strategy

Pull Strategy DTC (Direct-to-Consumer)

This strategy revolves around the end buyer. The manufacturer drives high demand from the end buyers to purchase goods sold by the manufacturer through the stores or retail. In this case, an active advertising campaign targets the end buyers through the Direct-to-Consumer media.

The buyer receives incentives in the form of a discount, coupon, gift card, text message, social media special offer, etc., and inquires at the store if they have the product. Owners of retail outlets see the demand from consumers for a particular product and order it.

Proactive Inventory Pre-Order

The demand can also be stimulated in the reverse order. As soon as the manufacturer generates the awareness, the retail outlets’ owners order the products from the distributor. Then, the distributor places an order with the manufacturer. Therefore, by the time the products enter the market, the buyer is fully ready to purchase the product.

Push Strategy

The second type of strategy targets the reseller, who must independently promote the product through own channels to the end buyer. Manufacturers who follow the “push” strategy influence consumers through advertising and promotion while targeting intermediaries with promotional programs. 

In this case, the intermediary is the recipient of special deals, discounts, preferential prices, special offers, etc. This push stimulates the distributor to purchase the product and then push it onto the end buyer.

This strategy helps the distribution chain participants share the common goal and frequently results in mutually beneficial relations between the food manufacturer and the distributor. 

Simultaneously, the product is “pushed” into the marketplace and needs an aggressive promotion to the final buyer.

The strategy is narrowly focused and financially costly. It takes resellers a significant amount of work, resulting in increased advertising costs to stimulate distributors and the need for bigger promotional budgets to promote the products to end buyers. 

In this model, the manufacturer does not spend as much on direct-to-consumer advertising. However, the overall cost of product distribution is much greater.

What are Steps in Developing Marketing Strategies?

When forming the company’s marketing strategies, food manufacturer would follow these steps:

1. Analyze the industry
2. Assess market potential
3. Analyze competitors
4. Estimate market opportunities
5. Analyze own strengths and weaknesses
6. Study clients and partners ecosystems
7. Model the effects of external factors on sales
8. Conduct retrospective review of previous marketing activities
9. Analyze internal capabilities
10. Identify product modifications
11. Design and develop new products
12. Compile a marketing plan
13. Monitor and control implementation of all planned activities

The marketing strategy is chosen considering the product’s specifics, the reseller’s image, location, and other parameters.

How to Drop Food Product Promotion Expenses

And now, let us mention that all the above-referenced marketing costs and business processes have been put in place only to promote your product and reach the consumer. Most importantly, they were the only way to put products in front of the end buyers and get them to try your products.

Sample Box Marathon can replace this costly and hard-to-manage promotional machine. It gives food manufacturers direct access to the end buyer without expensive and complicated marketing processes!

Choose as many samples to send as you’d like to have in the number of customers. Want more buyers? Send in more samples!

There is no need to look for stores or distributors if you want to put your product into potential buyers’ hands. Choose as many points of sale as you want new buyers. 500? 10,000? Send them samples through Rgand.com and start growing your sales!

What Is the Key Innovation of Sample Box Marathon?

Why do we recommend adding Sample Box Marathon to the portfolio of the food producer’s marketing strategies? We recommend reducing most of your current spending on trade shows, distributor discounts, and other media with unclear ROI.

Why can we recommend it? Because with Sample Box Marathon, you will no longer need expensive marketing tools or resources to grow your sales.

Sample Box Marathon is the most effective way to promote food products directly to the end buyers. Food producers can bypass all expensive, time-consuming, and resource-intensive marketing channels previously available to food producers.

Placing samples into the hands of the end buyers using an automated delivery channel is the fastest, most efficient, and effective way to directly reach restaurant chefs, saving on expensive trade shows and intermediaries.  

Sample Box Marathon lets you test the way to the guaranteed sales that come directly from the end buyers.

Would you like to try our revolutionary channel of reaching out to the restaurants?