Catch Steve Cleere on the #PirateBroadcast™
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Introduction: [00:00:00] Welcome to the #PirateBroadcast™, where we interview #interestingpeople doing #interestingthings. Where you can expand your connections, your community, #kindnessiscool and #smilesarefree. Let’s get this party started.
Russ Johns: [00:00:10] And it's a great day for a #PirateBroadcast™. And welcome if you're watching this in the future or an alternative time and we're live seven days a week or no, five days a week, Monday through Friday. 7:00 AM. So let me get that correct, Arizona time. So Steve, good morning. How are you, my friend?
Steve Cleere: [00:00:30] I'm doing well, Russ, doing very well and glad to see that you're up and at 'em this morning. This is a good time to get it started.
Russ Johns: [00:00:37] It's a routine of mine and I wake up with #gratitude and I make sure that I check in every day and share a few things with a few people and bring guests like yourself onto the #PirateBroadcast™ and hopefully inspire and #motivate and tell a few stories and make sure that we entertain and educate as well. And so Steve, you're in an industry that has gone through some massive changes. And for those that don't know you, give us a snapshot of who you are and what you're up to these days.
Steve Cleere: [00:01:09] Little thumbnail. So my, my career background is primarily in the agency business, marketing agency, which I had in San Francisco for 20 plus years and other agencies before that. And mainly even what we call consumer packaged goods, which is stuff that you guys buy in a Walmart or Safeway or whatever. So food in a package or deodorant or over the counter drugs or whatever, but basically packaged food. And so I got into that industry because an agency that I went to work for was specializing in that. And I learned from their experiences and came up with some ideas about how to disrupt the industry a little bit, got together with a couple of other friends, started our cohort and got it gone. But it was related to mainly helping companies, manufacturers, and producers to sell more efficiently through retail. That was really the idea, which is how do we do that? How do we get the processes that were a little bit better, because at that time, which was the early nineties you had agencies with a lot of skills, a lot of data that were able to help you with your advertising, but you had nobody to help you to spend the money you were spending at retail. And you were probably spending 10 X at retail, what you were spending in advertising on any decent brand. So that was our business model and it worked. And then we did that. And then about five years ago, I decided... I was doing some work with smaller companies and decided that I want to get into founder coaching and consulting and little bit more of the educational process. So we started putting together workshops for smaller firms. I started working with groups to put on pitch contests, where you do your five minutes and try to get some funding or whatever shelf placement. And and so that's been a lot of fun and that's where we are now. My business is split between medium-sized companies and smaller companies, but I try to help everybody out if I can.
Russ Johns: [00:03:05] It's nice to be able to give back to the community. And a lot of the same parallel, I got into advertising in 85 and technology and evolved into different media groups. And I know that packaging though, as a unique process, there's so many packaging options these days, and we went through a lot of different packages that are not necessarily as effective as other packaging processes, but have you seen any packaging that really stands out that really makes you take note and say that's a beautiful, amazing idea or something...
Steve Cleere: [00:03:45] Yeah, there's been a reemphasis really for a long time. The cardboard box kind of sufficed and maybe it had a plastic bag inside of it and whatever. But the ecological concerns, number one, were very important. And then a lot of people don't realize how important packaging is in what we call the shelf life of a product. So when you buy something and you pick it up and you look on it and it says best buy July 23rd, whatever else that's a really critical component of how long a product can stay on the shelf, be sold, whatever. And a lot of that has to do with packaging. If you have say an oatmeal, right? If you open up the cardboard and then inside is the little plastic bag inside, the little plastic bag is probably nitrogen fill, not air, nitrogen, because it will make it last longer. That's one of the things that you do, how you seal it is important. And as you move from dry to frozen is actually the next least critical. Next least dry, frozen, and then refrigerated, because there's a lot more refrigerated packaged product than there was 10 years ago. All right. So let's talk about bars. Talk about protein bars and stuff, right? They all used to be dry shelf stable. No problem. Now. They're refrigerated and time's ticking, they're a clinical live product. You also have that with beverage. And so what's going on right now, I think, in the really slick kind of stuff, two things. One is there's a move back to glass. And a couple of reasons obviously ecological, because it can be recycled. It's better for the product than PET or any of the plastic alternatives in terms of, does it, it doesn't leach into the product over time. All of those things that they talk about, but the problem is it's heavy.
Russ Johns: [00:05:29] Yeah.
Steve Cleere: [00:05:30] So shipping costs are killer. And secondly, that trend toward glass is in fact increasing the trend toward recycling glass has decreased dramatically. And so you literally have places where you have stockpiles. Crushed glass waiting to be recycled, but there's no market for it at this point. Hopefully that will balance out. That's what they're looking for. Then on the other side, you have ecologically friendly plastics, which almost sounds like a total misnomer oxymoron. It's not so again, let's go back 10 years, 10 years ago, they first started coming out with this stuff. It was great. Except you couldn't have the sunlight hit it. Cause otherwise it would start to melt and they found out even in the environment, like a store, in a grocery store, if it was too close to the window, it would just went away. So they're coming a long way on that cost is obviously prohibitive, with that. But those costs are going to come down over time. So you'll see designs out there that are I think getting way better, one of the challenges we have Russ is. In this packaged goods business is although we're dealing with food and supplements and other small goods, we're really in the logistics business. That's how the business operates. And that's what I try to work with. People who are getting into the food business to have them understand. I had a conversation yesterday with a guy who was bottling. He wants to do a hot sauce is down in Florida, and he's got this great idea for a bottle, except the problem is it's not going to fit on the shelf space where stores have hot sauces. Yeah. So guess what? He's not going to get distribution because that's not how it works.
Russ Johns: [00:07:06] It goes back to not only shelf space. It goes back to what's the dimensions in a semi what's, the transportation cost per changing the size of the packaging and all of those dimensions. This is what fascinates me about packaging in general and logistics. Like you say it's a logistics exercise because the fact remains is okay. It's like standard sizing for anything, a palette. You have to understand, okay what's the most, the best interval for storing on a pallet of goods and how high can it stack before, having a problem with it. All of these things, these nuances in the business have to be considered in the packaging and it's almost the product is parallel to the exercise. However, it's not necessarily the first thing you have to consider long-term.
Steve Cleere: [00:07:56] No, but people also don't necessarily think about the fact that packaging also remains the main communication point between the producer and the consumer. You can have a healthy advertising budget. You can be on Facebook, you can do all these other wonderful things. 90% of the people who buy your product the first time are going to see it on a shelf in a store. So the packaging has to carry the message. And that is in itself as a challenge because about 65-70% of the space on the packaging is already dictated by regulation. You have to have a nutritional statement. You have to have an ingredient statement. You have to have your corporate headquarters. You have to have directions. You have to have a list of allergens. By the time you get done all that, you basically got time for like your logo and a pretty little picture.
Russ Johns: [00:08:44] Wow.
Steve Cleere: [00:08:45] Yeah.
Russ Johns: [00:08:45] So you have to make it large enough for people to actually read. This triggers an idea for me. And I'm curious to what your thoughts are or your your experience in QR codes, because I remember back in the nineties, when everybody thought QR codes were going to take off, they were going to be the, the bomb diggity and all of a sudden, things were going to change. Cause you could just walk up, scan it and you know exactly what everything is. And they just didn't take off like I anticipated that they would, or some people thought they would.
Steve Cleere: [00:09:14] No, they didn't, but they are making a comeback in the fact that, Generation Z'ers and whatever else are much more attuned to using those mechanisms. We weren't attuned to it. It was a pain I'm trying to hold the camera up. And we weren't attuned to that. They do it without even thinking about it. For stuff that requires a little bit of education, let's say supplements, right? It's not just, gingko biloba. What do I do with this? Anything that requires a further explanation, I think that's still quite viable. And then if you do like over the counter drug companies, right? You have the Tylenol box, right? Like this, you have the foldout panels that go eight panels out to tell you don't do this, don't do this, don't take this. You're trying to get to the directions. How many do I take? There's some solutions to that at the same time that you're trying to do that. You're also trying to reduce packaging for ecology purposes, loss, whatever trying to get around it. And a lot of that is a lot of that was derailed by the pandemic. Some major initiatives, people like Walmart and whatever who went to their vendors and said, hey guys, we need to, first of all, you have a lot of small things that are taking up too much space. That's huge. So you get the cardboard and plastic with the earbuds. And the earbuds are this big and the package is this big. I don't want you walking out of the store with it, but okay, that's really a waste. But that pressure is going to come from consumers to retailers, and then it's going to come back to manufacturers.
Russ Johns: [00:10:41] Yeah. It's amazing to see how it evolves over time. How the packaging evolves over time. But I want to dive in on something you mentioned and take it to the next level is the pandemic has been changing the way that we do business and so many industries. And I have to believe that packaging now is migrating or thinking about, or considering how to, how can I deliver these things? How can I deliver this package safely to the individual at home and move products in a different way? How have you seen that evolve? And what's your experience with having food delivered and packaged, just delivered? Amazon prime is actually expanded and grown up. And it's insane to sit back and watch it from a third party experience. And so somebody in the industry who probably has a new take on it. So share that with us as a street claimant cruising by,
Steve Cleere: [00:11:42] Russ there is no way to overstate the impact of the pandemic on the food and beverage industry. Just, I can't there's no superlatives I can just reach and pick out from the air, okay. But the primary forces, are what you mentioned, which is the personal consumer protection went sky high, all of a sudden, we could not sample or demo products anymore. That just went away, forcing the adoption of a lot of single serve sampling. Which is one little package with one little thing in it for you or your family to taste. Yeah. That's very expensive, very wasteful. Frankly, it costs just as much to make that little package as does the big one. And so there's a force there. The second thing that happened was this movement to e-commerce for food, which was growing pre pandemic, but based on the estimates of what we thought, Amazon. Walmart.com kroger.com would do. We went up 10 years in six months, literally 10 years of volume. So where e-commerce was supposed to be in.
Russ Johns: [00:12:51] So we've accelerated 10 years in advanced projections.
Steve Cleere: [00:12:53] Accelerated 10 years in 6 months. Yeah. Yeah.
Russ Johns: [00:12:57] In the last six months.
Steve Cleere: [00:12:58] Exactly. So you can imagine the impact that put on...no one was ready for that. Amazon wasn't ready for it. Working with Amazon over the summer has just been a nightmare.
Russ Johns: [00:13:07] Think about that. Think about that in relationship to the before and after effect.
Steve Cleere: [00:13:17] Yeah.
Russ Johns: [00:13:18] That's fascinating.
Steve Cleere: [00:13:20] Yeah. So the question that everybody had about August or September was when we thought maybe we're going to come out of this little early, that didn't happen was, our consumers who have now changed their buying habits. And they'd changed them for long enough, whatever you probably had somebody on, that's a habit expert. And they say six weeks or, whatever. We've been through six weeks, six months, we're going to go on a year and a half. That's a habit that you now have. You're not necessarily, you mean, you may go back to, you're going to get, maybe get milk and, whatever at the grocery store, if you were introduced to a product and I have a couple of clients who sell only on e-commerce, they're not in stores. So if you're buying their product and stuff, that's the only place you can get it. But if you weren't on amazon.com and oh, by the way, I need cookies, I need whatever. And it showed up. It's great. Or if you signed up for Walmart, which a lot of people did for Walmart Plus and they just said, for this stuff, that's branded for Cheerios, whatever else I'm just going to go online. And it's really, I do it. I had to try it because I'm in the business, it's really easy. And it's really frightening in the fact that you get back to your computer and it says, oh, by the way, you're going to be running out of milk. Son of a gun. I am.
Russ Johns: [00:14:34] Well, just think about the internet of things, Steve. If I could plug my fridge into the network and know that, okay, here's the milk location. Here's the bread, all of these things that you need and want. And then when it gets low, it can remind you, it's okay, I get a text message.
Steve Cleere: [00:14:51] And then from the promotional side, which has a lot of the stuff I work on and see, I work to have, when you're going to order that milk, I want to make sure you got a little coupon down there for Oreos.
Russ Johns: [00:15:01] Yeah. Yeah.
Steve Cleere: [00:15:03] And you want to fill that basket, because that's one of the challenges of grocery retail is that when you're working from a list, Russ you usually work from a list. And the problem is you don't do that. When you go in the store, when you go into the store, you're just shoving stuff in the basket, down every aisle. So your average purchase price dips considerably when you're doing list shopping or online shopping. So they've got to come up with ways to get you to basically add to your list while you're shopping, what we call impulse buys in the store. We want you to impulse buy online too. And that's tough, right?
Russ Johns: [00:15:39] Absolutely. Because like you said, when you're shopping from a list and you're saying, okay, you look in your fridge and say, okay, I need milk. So you added to your list. And then all of a sudden, you know what, at some point in time you order it, your food either you go pick it up in the parking lot, which is a lot of people are migrating to, or you haven't delivered either way. It doesn't matter. You're not impulse buying because you're walking down an aisle and seeing, oh, wow. That awesome packaging on aisle 14 caught my eye and I wanted to try it out. Cause I've never seen it before. And that's an experience that is really hard to transfer on to the online method.
Steve Cleere: [00:16:17] It's a real challenge because we have what we call shelf adjacencies, which is right. Can I get you to buy the bigger bottle? Can I get you to try the strawberry flavor? Cause it's sitting right next to the blueberry and maybe you pick up both. In Amazon, it comes up and there it is. It's a big picture of the package and all this stuff is on the side here in the video. And then there's the lines with competitor's product and sponsored product, but they're down here not the same environment at all, and much tougher to get you to shell out.
Russ Johns: [00:16:45] Yeah. I have a question for you. You may know the answer. So in a grocery store, if I go there once a month, And I go back a month later, it appears to me that a lot of times they've moved everything around in the store. And it's, they might be remodeling, I don't know, cause I wasn't in the store every day and it just seems like everything moves. I keep thinking to myself, that's ingenious because then you have to look more at the shelves to find out exactly where you're going, in order to look and see your product that you're searching for. And you might see something else along the way to pick it up and impulse buy
Steve Cleere: [00:17:27] In most of your standard store, diagram, right? You probably won't get a change unless there's a remodel too much. And particularly not with freezer and refrigerator space, what you will get is end aisles and side aisles, whatever which will change constantly they'll change every four weeks because they're a promotional item. And what we also usually will find is that the most heavily trafficked items, which is by the way, milk and eggs are always at the back of the store.
Russ Johns: [00:17:54] Yeah. You have to travel through the impulse aisles.
Steve Cleere: [00:17:58] I just want to grab a milk and go. No, it's over in the back corner and you're going to have to go through produce or cereal aisle to get there. Sorry yeah.
Russ Johns: [00:18:06] Deliver it.
Steve Cleere: [00:18:08] Yeah. I had the good fortune to work with some folks from Ready Pack Salads and Kraft cheese, where we got to set up some test stores to do different things in the produce department. And it was basically a build a salad program. Okay. If you want a salad, we all want goodies in our salad, toppings, meat, cheese, whatever, but you've got to go to 10 places in the store to get all those things. What we did is we got the partners together and we created a section where literally there was the bag of lettuce, the cheese, the meat, the croutons, whatever. And it was a phenomenal success from a sales point of view. The problem is it was cross departmental within the store. So the produce manager had to give up his space to the Kraft cheese guys. He was not happy. The beverage guy, he got a cooler in the produce department because you could grab a beverage with it too. And they were like, no, get the hell out of here. I want to apples in there. What's wrong with you? And so it never went anywhere. It just didn't happen.
Russ Johns: [00:19:14] Because of the grocery internal...
Steve Cleere: [00:19:16] Because of the way it's structured. Yeah. And partly logistics. There's a logistics part of it too. Refrigerated space is expensive in produce, not expensive to the Kraft people, what's it going to cost me? I'm selling graded cheese at $3.49. Just tell me what it costs.
Russ Johns: [00:19:32] Yeah. Sign me up. Sign me up.
Steve Cleere: [00:19:34] Yeah. I don't have any... that's a whole nother meeting, a whole nother conversation about pricing and margins and stuff. But trust me, the guys from Kraft will put cheese anywhere in the store at any cost because they'll make the money back.
Russ Johns: [00:19:46] So talking about money in the process, delivery, okay. The grocery stores are reduced inventory, impulse item purchases. There's a person that is required to be paid by the delivery process. So the end user consumer, is it being picked up all by the end user consumer ultimately? Or how is that working from a model perspective in the grocery industry, in the food industry, the packaging industry.
Steve Cleere: [00:20:15] So there's a couple of different explanations when it... let's go back pre pandemic. Most of that was being absorbed. To a certain extent by the retailer , whether it was Amazon and I'll quote Amazon as a retailer. So whether it was Amazon or Walmart or Kroger or whatever, there was a subsidy of that because they knew that it was coming, they were going to have to do it and Amazon was doing it. So they didn't do it. It's one of those things, but let us say that Amazon was not probably making money at that point on that particular delivery. There's no way that I can have something delivered to my house, a box of crackers, tomorrow that is $3.40, right? That comes in a box of its own, by the way. Then anybody's making money on that, that's not,that's out of the gate, but the delivery of groceries and you begin to get a tab of a hundred and stuff. Plus a lot of cases, there were charges for delivery. I feel that the both prime and Walmart, plus they're each a hundred bucks a year. Does that pay for the delivery person who comes by? I still don't... I'm not sure. I'm not sure, Russ, that it makes... I haven't done that deeper dive, but I have a sneaking suspicion and this is a good story because it's true. And that is one day I worked from the house and one day I'm counting trucks in my neighborhood dropping stuff off. Literally a FedEx truck at this, that, and the other. And I say to my wife out of frustration going, this is ridiculous. I go the carbon footprint, what is going on here? What we need is we need a system where basically you just put everything in a transfer center. One truck comes to the house and drops everything off and she goes, honey, it's called the post office. Why doesn't Bezos buy the post office? He could. He could, it's like seriously no, we're coming once a day and we're going to put everything in the transfer center and then and we're coming to the neighborhood and that's it. Yeah, you could come today and save so much money. Russ I don't know where the end, obviously they're rushing to reduce the costs. And, because clearly there's a lot of stuff being delivered that cost is not, is it being covered by the consumer? I don't think so at this point, not all of it. No.
Russ Johns: [00:22:31] Razor thin margins at best.
Steve Cleere: [00:22:34] Yeah. Yeah. So they're counting on you doing more and getting more in the truck at a time. There's drones, which I think are, again, something that's been accelerated probably by the pandemic. We'll see how that works. I just can't imagine in the retail lingo, when something walks out the store by itself, we call it slippage. I can't imagine what the slippage is going to be on drones. Like the drone that lands at your neighbor's house and maybe your neighbor goes, wow, Budweiser, hey.
Russ Johns: [00:23:07] Yeah, we're living in an amazing adventure right now and, understand that it's not all positive at this point in time. However, the outcomes and the education and the experience that we accumulate through this journey is going to be able to really change the world in a lot of ways. And like yourself, I've been a remote worker for 10 years. I work where I want, I can move where I want. I'm pretty flexible in what I'm able to accomplish and as a result of that, I released a lot of things that I thought that I used to need and I don't purchase certain things that I used to purchase. And I don't have a lot of items that some people work hard for and it's just a lifestyle change for me. And I know that pandemic has caused a lot of people to reflect on that same thing and say, wow, do I really need this? Do I really want this. Do I need to have this? Is it important in my life? How much exercise, how much experience and effort do I have to go through to get to that point? And some people are saying, yeah, I don't need that. I don't need it. And however, at the same time, I get excited when I see a Prime truck show up and I got a package in the mail or something, it's just, it's funny how we react as humans. And I'm just excited to watch it unfold and, experience this whole thing. And you're just like the show. You're a podcaster, I'm a podcaster or you live in Idaho. I'm in Arizona. The reality is a few years ago, we wouldn't be able to do what we're doing right now. And we're live streaming to multiple platforms. We're getting groceries delivered and five years ago, you wouldn't even think that would be even be possible, let alone acceptable. And here we are in 2021 and it's almost normal for so many of us and it's just an amazing adventure.
Steve Cleere: [00:25:08] I worked with a couple of companies, Russ, where manufacturing and marketing and branding, wherever are not together. So there's a headquarters and then there's plants around the country and whatever else. And I did a couple of zoom calls this summer when there was a little hiccup in the system, but we were all on the zoom together. Just like that. And the guys in the plant could show us stuff. Not trying to explain to you, Russ what happens in the thing. Here it is. This is what's happening on the line. And do you know, are we going to do a recall, are we going to do, what are all those things? And the legal counsel is on the zoom and, and whatever. So it's all of that stuff is amazing. And then the other part is while we've lost some of that face-to-face stuff, we've also developed. A wider circle of people that we would never have gotten involved with. And the podcast is a perfect example face to face. If I'd had to go and physically interview the people I've had on my program, like you, you couldn't do that. There's been no, they make no sense. So that's just huge. That's given us a whole nother level of communication in interaction and networking. And remember, Russ, the opposite of networking is not working.
Russ Johns: [00:26:26] Absolutely positive.
Steve Cleere: [00:26:27] But what we'll see is we'll see what happens with, there are companies that are, I'm going to call them semi manufacturers, Apple, they're a manufacturer, but they're not Ford. How are they going to deal with collaboration and stuff amongst thousands and thousands of employees without the campus? And there are some companies that are saying, hey, you can stay, you can work till 2022 at home. There are others that are starting to do callbacks, or you're going to see more callbacks in the spring. And then while we're almost spring right now, but later in the spring, you're going to see more in May, June. They're going to start calling some people back that they feel need to be in the plant or not in the plant, in the office, the plants they're already there, the plants themselves.
Russ Johns: [00:27:11] It's amazing. I would love to watch it unfold. I'm going to continue to watch it unfold and it'd be interesting to have you back and the end of the summer and get updates from you, Steve.
Steve Cleere: [00:27:24] What's going down. It's a little crazy.
Russ Johns: [00:27:26] The evolution of packaging in a COVID arena. Thank you so much for being here, Steve, I really appreciate you and sharing this information and updates and I got so many people that I love and appreciate and it's because of the show. It's because of the ability and opportunity to have zoom calls and, live streaming and instant communication. It's also the fact that we're all doing what we're doing and we're evolving. And the people that are doing the best in the world right now are the ones that are resilient and flexible and creative. And so hats off to you and everything to get through. Yeah, absolutely.
Steve Cleere: [00:28:07] And thank you. Appreciate chatting with you this morning and would love to come back anytime.
Russ Johns: [00:28:11] How do you enjoy people connecting with you and reaching out to you.
Steve Cleere: [00:28:14] The easiest way is you can do firstname.lastname@example.org. And it's kitchen, the number two shelf.com or Steve at nexxtlevelmarketing.com with two Xs next level. And it's the next level brands podcast it's available everywhere. Podcasts are available. New episodes, air on Thursdays.
Russ Johns: [00:28:36] Fantastic. As always reach out, connect with Steve's the pirate let's connect with the pirate. It's all about the connection. And also, go subscribe, go like, share. If you found value or you want to share this with somebody that you feel is in need of this information, please share it out. #gratitude for all you're doing. And it's because #kindnessiscool, #smilesarefree and you #enjoyyourday, Steve.
Steve Cleere: [00:29:04] Thank you, Russ. See ya.
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