Food startups make a play for face time at Pop Up Grocer

For food or beverage startups, there is nothing more valuable than the moment someone gives their product a chance. Getting that opportunity can require some hustle and a little bit of luck — especially during the pandemic, when so many consumer interactions have been restricted. 

Emily Schildt was very familiar with this issue. As a brand marketing consultant, she had been helping startups prepare for launch. Many were direct-to-consumer only, and lacked a physical platform for their products. This dynamic sparked the idea for Pop Up Grocer, a traveling grocery store that could provide a stage for promising young brands, and the opportunity to make an impression.

“The impetus for creating it was really my observation that there wasn’t a discovery space dedicated to all of these new and exciting, innovative products,” Founder and CEO Schildt said. 

Pop Up Grocer launched in 2019 in New York, offering a limited-time-only, curated selection of about 400 SKUs from around 150 small CPG brands. The first event lasted 10 days, but that time frame has since stretched to 30. Over the past two years, it has visited Austin, Texas; Los Angeles; and most recently, Chicago.   

To participate, brands can fill out an inquiry form at Pop Up Grocer’s site, although the retail concept also gets referrals and does its own scouting. The Pop Up Grocer team judges each brand based on two criteria: It needs to be new in terms of its approach, product format or ingredients, or have a compelling founding story. 

“We have put a lot of emphasis on selecting brands from founders who are under-resourced or under-represented,” Schildt said. 

For food and beverage products, Pop Up Grocer scrutinizes nutrition and looks for responsibly sourced ingredients. Finally, packaging is important — it needs to be visually pleasing to complement the Pop Up Grocer aesthetic. 

A visit by Food Dive to the Chicago site in May revealed this carefully curated shopper experience. The 1,000-square-foot site, located in the hip Wicker Park neighborhood, presented its wares on simple shelving and fixtures, with a black-and-white checkered floor and primary colored walls. 

Sections with names such as sweets and treats, bites and chews, and crunch and puffs included a range of edible grocery pantry items, snacks and confections. Three refrigerated cases — an open-air cooler for perishables, a two-door cooler for packaged beverages and a freezer case for frozen offers — flank the store. Other sections offer breakfast items, beverage mixes and health supplements and beauty items. At the counter, fresh baked goods from a local boutique bakery are available for purchase, although these items tend to sell out quickly each morning, according to store employees.

Employees mill about the store floor to talk about products, offer suggestions and hand out pamphlets containing information about all of the participating brands. Each product is priced separately — there are no shelf tags or price signage in the store.

All about the exposure

Some brands that participate in Pop Up Grocer are relatively well known and already sold at national grocery chains, including allergen-free Partake Foods and better-for-you breakfast brand Kodiak Cakes (which has since been acquired by private-equity firm L Catterton). Some are only available online, such as HumanCo’s frozen snack brand, Snow Days. The majority are small startups with products that tap a mix of current food trends, including clean label, plant based, gluten free, high protein and low sugar, upcycling, and keto and paleo diet friendly. About 20% to 25% of the brands are local.

One of the participants for Chicago was Hooray Foods, a San Francisco-based company that specializes in plant-based bacon. The product, manufactured from coconut oil, rice flour, tapioca starch and seasonings, is packaged just like conventional bacon in plastic sleeves, with the aim to convince flexitarians to make the switch from animal-based meat. The company recently closed a $2 million seed financing round, which it is using to improve its plant-based bacon and develop other products.

At the Chicago site, Hooray’s bacon was merchandised in an open-air cooler along with products such as Tia Lupita grain-free tortillas, Harmless Harvest coconut-based yogurts and Picnik keto-friendly creamers.  

Hooray Foods Founder Sri Artham said his product is already sold at about 300 Whole Foods Markets and some health food stores, but COVID-19 restrictions over the previous year had eliminated one powerful tool to encourage greater product trial: sampling. 

“The pandemic’s been really hard to do that — we can’t really demo our product in grocery stores, for example, or give out samples on the street as easily,” Artham said. Pop Up Grocer has served as a means to physically get Hooray Foods’ bacon into consumers’ hands.

“We’re just excited about the opportunity to have a physical manifestation … where people could learn about it, see it, buy it, try it and get excited,” he said. Within the first week of the Chicago Pop Up Grocer, Hooray Foods had sold out of its initial shipment of product. 

Pan’s Mushroom Jerky has participated in all five of Pop-Up Grocer’s events. The Portland, Oregon-based startup launched its shiitake mushroom-based jerky in 2018, offering a vegan, gluten-free snack that also is said to be a good source of fiber and vitamin D. It received a recent boost after appearing on Shark Tank and launching its product on Amazon Prime. The jerky is also available in about 900 stores nationwide. But Pop Up Grocer has offered its own unique outlet for brand exposure.   

“Our brand definitely doesn’t feel like it gets drowned out or lost in the noise,” said Shannon Lehotsky, head of sales and marketing for Pan’s. “It seems like it’s a very curated experience … We can get in front of a lot of people. I also think that there’s not that many opportunities to really transform grocery shopping and to have a fun experience, and I think it reinvigorates consumers’ enthusiasm and excitement about discovering snacks.” 

Lehotsky was initially leery about participating in a pop-up concept. Sometimes the execution is lacking, and brands are not represented accurately.

“I’ve worked with pop-ups before where they’re like, ‘Yeah we’re going to represent your brand,’ and sometimes they don’t quite nail it,” she said, noting that they sometimes mischaracterize products to the end user. Pop Up Grocer uses brand descriptions from the CPGs themselves in making its event pamphlets. “That’s our language, our voice,” Lehotsky said.  

There are costs, however, associated in working with Pop Up Grocer, she noted, “so there is that barrier to entry that is the risk.” 

Because Pop Up Grocer considers itself more of a marketing vehicle than a grocery store, it charges each brand a showcase fee, which Schildt declined to specify. “The brand makes the overwhelmingly large majority of the share of revenue from the sales of their product in store,” she noted.

Thus far, Pan’s has not only been able to sell jerky but it has also gotten exposure on multiple fronts, including in consumer publications such as Food & Wine.

“We’ve connected with VCs. We get a ton of influencer shoutouts,” Lehotsky said. Pan’s Mushroom Jerky was also included in a snack box curated by Pop Up Grocer for department store chain Nordstrom, which sold it on its e-commerce site.

A need for discovery

Kin Euphorics, a New York-based maker of premium, nonalcoholic functional beverages, has also participated in Pop Up Grocer since its 2019 launch. Its beverages include High Rhode, a nonalcoholic apertif that contains botanics such as hibiscus, gentian and licorice, as well as adaptogens and nootropics as mood boosters. Its Dreamlight is formulated to calm with reishi mushroom, passion flower, melatonin and L-theanine. 

“We kind of look at it as much of a marketing opportunity as it really is a sales opportunity,” said Chief Sales Officer Ryan Giunta, who had spent a decade with Red Bull in brand marketing and at its on-premise division before founding his own agency that focused on early stage food and beverage startups. 

Giunta considers the Pop Up Grocer format in step with the post-pandemic consumer. 

“Throughout COVID, purchasing behavior and even just shopping behavior in general has really shifted,” he said. “Consumers’ need for discovery hasn’t shifted, but people are just getting burned out from being on their phones and swiping through Instagram and getting served up ads. So I think what Pop Up Grocer does is bring a really fresh perspective with lesser-known brands to more prominent brands, but to give a great shopping experience where consumers are finding that excitement again.”

It also offers small brands more control than a traditional grocery store, where “we may have less input or creative involvement,” Giunta said. “And it’s not necessarily shopping in a grocery store. It’s going to a place that has a vibe, and has like-minded people that are around you, and I think that’s what people are going to value more.”

That said, the limited-time nature of Pop Up Grocer can make supply forecasting a bit challenging, and requires some flexibility in terms of logistics.

“You have 30 days in one retail location. If you’re out of stock for five of those days, you kind of missed a big opportunity,” Giunta said. In Chicago, Kin kept extra stock at the home of a Pop Up Grocer employee who lived nearby since it didn’t have a local distributor. 

“The last thing we wanted to do was have this great opportunity with an empty shelf for Kin,” he said, noting the brand was eager to be introduced to consumers in the Chicago market. ”It seemed like our brand was resonating with their curated audience, which was amazing. But that did put the pressure on us to make sure that we had a steady stream of product.”

Schildt said Pop Up Grocer tries to anticipate inventory needs for the duration of each event. “However, we aren’t fortune tellers, so it’s not really exact and so oftentimes things will sell beyond what we’ve anticipated,” she said. “Brands can replenish once or twice, and the beauty of our model is that it’s very easy for that to be done since they ship directly to us, eliminating any of the middlemen that’s typical of grocery.”

Sky’s the limit

Chicago is the only limited-time event for Pop Up Grocer this year, with three new cities to be announced for 2022. 

Pop Up Grocer has extended the reach of its retail events with its Pop Up Grocer Box, which contains six to eight items from the current city “in an effort to bring the discovery experience nationwide,” Schildt said. The service launched in April 2020, and ships all over the U.S. 

And at the end of this year, Pop Up Grocer will make an even bigger statement: Its first permanent location, in its launchpad of New York. “All small brands dream of making it big in New York City because if they make it there, they can make it anywhere,” Schildt said. The site will rotate its inventory to maintain the pop-up essence, but otherwise its selection process and share of local brands will remain the same. 

“I think it’s very important for us to plant a flag and build a brand through a long-standing location, in a way that we are very limited in doing in our pop-ups, and also be a reliable destination for people who want to visit us with more frequency, use us as more of a grocery store, and community space,” Schildt said. Pop Up Grocer plans to offer regular events such as tastings, classes and informational talks at the store “on topics of interest to our community,” she said. 

The timing could perhaps not be better. During the pandemic, Pop Up Grocer served as an event that consumers could put on their calendar and look forward to, Schildt said. And the Chicago pop up, which had high foot traffic and sales, shows the concept has appeal in a post-pandemic world, where consumers have more freedom to shop and explore. Schildt, however, declined to share specific figures.  

“We’ve already seen the level of excitement about getting back out there and getting back to normal,” she said. “So the sky’s the limit as far as the potential moving forward.” 

Source