[00:00:05] Melissa Traverse: Hello, and thank you for joining. I am Melissa Traverse, Director of Community here at BevNET CPG Media, and I'm excited to welcome you to the Nonbase Podcast, a podcast built to help CPG owners and operators navigate growth challenges and build more profitable businesses. Be sure to check out nonbase.com, BevNET's platform for the CPG community, where you'll find tactical content like this and so much more. CVS has a bit of a reputation. Brands hear stories about slotting fees running into the hundreds of thousands of dollars and drug tends to get less attention than grocery and club when folks are talking about where to grow their brands. Today, we are going to clear some of that up. Our guest spent two and a half years as a buyer and category manager inside CVS and now manages the CVS relationship across consumables, baby and beverage at Kahee. We are going to cover what the actual submission process looks like, the specific programs built for emerging brands, what CVS requires that other retailers don't, and what's actually true about cost versus what's just a rumor. So if CVS has felt like a little bit of a mystery, this episode should help to clear that up. I am so thrilled to welcome Ashley Czerwien, Account Manager of CVS at Kehi, Ashley, thank you so much for joining. This is going to be a great conversation. And you're just the perfect person to have it with. You are at KEHI now. You were at CVS. Can you share a little bit of your background in CPG? I know it's quite extensive.
[00:01:45] Ashley Czerwien: Sure. I like to say I kind of was born in on the beverage side in the alcohol industry. I worked as a sales root rep, brand manager, and kind of worked my way up from there, starting off in all sorts of different positions across the Northeast. From there, I decided I really wanted to stick to the brand side. So as you discussed, I spent about two and a half years at CVS in their corporate office. I managed categories such as fragrance, hand and body lotion, hair care, natural beauty, and that was a really great experience. And now I've been at Kahee Distributors for the little over two years now. During my time, I've stayed solely managing the CVS account with our team here, and it's been a lot of fun and a really great time.
[00:02:33] Melissa Traverse: Could you give us your CVS 101? If you're talking to a food or a beverage brand for the first time, what's the lay of the land that you share with them?
[00:02:44] Ashley Czerwien: Sure. I start off basically by explaining some of the basics. CVS does have around 9,000 stores across the US, including Hawaii. They have many different distribution points. They have many different types of stores. And that depending on their segment and category, there are a lot of different opportunities available to them. And then I try to stop there and ask them, What is their brand insight? What is their journey looking like? Because then that can frame what parts of the CVS process we can go into.
[00:03:19] Melissa Traverse: So you mentioned that there are about 9,000 stores. There are different kinds of stores. What kinds of stores are there?
[00:03:27] Ashley Czerwien: Sure, so there are some stores that are called, I believe it's Health Hub, where they're very focused on pharmacy, first aid, diabetes, medical grade appliances, things of that nature. Those will have less of a CPG focus and more towards the pharmaceutical side. There are stores that have different types of planograms. One that we manage is the Healthy Consumables Planogram, where there is a whole permanent fixture and section just put aside for emerging healthy and natural brands. And then there's other stores that are more beauty focused and have larger prestige brands within them. So depending on what your goal is, there's a bunch of different opportunities.
[00:04:12] Melissa Traverse: And if you're an emerging food or beverage brand, and emerging can mean a few different things, but let's just say you are, you know, a huge mega brand with tons of cash to burn. Are you able to choose the kinds of stores that you get into if you get in? And are you able to choose the number of stores that you roll out into if you're accepted into CVS?
[00:04:40] Ashley Czerwien: I think it's a conversation that definitely I've seen a lot of brands have with the CVS category managers. The category managers at CVS, they want you to succeed. And I think that's been a large misconception in the past is that You know, there wasn't a lot of empathy towards brands or compassion, but it's just not true. These brands need, they need you to succeed. They need you to do well because in turn that affects their entire planogram. So there's a lot of conversations that go on between what can you handle? Is the direct to market route right? Or should you be working with a distributor or consolidator? Where can you grow your business the best? You know, what type of demographic do you have? Where are you doing business now that you're successful? And those are all things that you talk about leading to. Is there a more regional approach that worked? Is there a more ethnic approach here that works? Or is there just a certain segment of stores that you would excel in?
[00:05:37] Melissa Traverse: You just mentioned that direct to market versus a distributor, a consolidator is one of the considerations. Could you explain that?
[00:05:45] Ashley Czerwien: Sure. There are some categories within CVS that the buyer will have a strong opinion of where they feel you are most successful, especially with brands just starting out, kind of getting their foot wet in the CVS system. Maybe they're not in a ton of stores. Maybe they're only in 500 to 1,000. Then at that point to hit your minimums to CVS, maybe it's actually more profitable for you to go through a consolidator or distributor to not have to worry about date coding, not being able to ship on time, not having enough production. And then there's other larger brands where maybe they don't have distributor relationships yet, or they've just been working DSD with an established partner or on their own. If you can show CVS that you can handle this on your own and don't have to work it, then that's an opportunity for you as well. So you're not locked into one situation.
[00:06:40] Melissa Traverse: And what are the distribution options with CVS?
[00:06:45] Ashley Czerwien: Sure. So there are some stores where there's DSD options. where you just go in, you take care of all the merchandising yourself, you're in charge of setup, any new planograms. There is the distributor method where you partner with a distributor like Kahee and they handle all of your transportation, your orders, billbacks, anything like that. And then there is the direct to store where you work directly with CVS, their supply chain, taking your own orders and ship to their DCs.
[00:07:17] Melissa Traverse: That sounds very complicated.
[00:07:19] Ashley Czerwien: I don't think it seems a lot more complicated than it is. I think depending on where you are in your journey, most brands know exactly where they want to be. I find is that I'll speak to a lot of brands and they'll be like, I'm in Target. I'm in Walmart. I do just fine shipping directly to these stores. We work better this way, knowing where our shipments are going, that they're exactly on time. They feel comfortable working with this. They feel comfortable with that control, with that pressure. And that's great. You know, you want to be able to do something that feels good to you. I speak to a lot of other brands where they're like, we want to get into CVS, but we're not as familiar with shipping to a warehouse program. We're not familiar with working with multiple DCs and how to manage these orders. That's when a distributor or a great broker partner would be helpful. And if you're looking at a really small store base, like even the Long's Drug Stores in Hawaii, which are under the CVS flag, they work mainly on a DSD. They're specialized to that Hawaiian population. They're going into just a small handful of stores, and they like that specialized care and attention that they bring.
[00:08:31] Melissa Traverse: So I know we talked a little bit about what people think about CVS and the reality of CVS. How would a food or a beverage brand know that they are actually ready to launch at CVS? You know, they know they're ready to submit and if they're accepted, they have a good chance at success. What should be true about their business before they even start thinking about this channel?
[00:08:54] Ashley Czerwien: Sure. I think there's a few things that would really give them a good indication or at least let them know if they're on the right path. How is your current production and where is it located? Are you producing a lot of your materials overseas and then importing where you have very long timelines? Are your supply chain routes quickly established and you know how to get there? Do you have the inventory necessary to work with a large retailer? I always say, think about. You know, a high scenario, if you were to get 4,000, 5,000 doors and in six months you needed to get to every single one of those stores, at least a case of product, would you start feeling nervous or would you think that is no problem? That would be your first indication. And then do you have a marketing plan established already? Would you be able to describe to the consumer, whether it be social media, some kind of advertising, who you are so that when they walk into a CVS, there is some recognition of your brand? Or are you still in the stages where you are so brand new that you're still kind of teaching people what your brand is? Then you may be worth waiting a year and then going into CVS with that power behind you.
[00:10:14] Melissa Traverse: So you talked a little bit about lead times and timing. If you're importing a lot of the ingredients and you have long lead times, that could be an issue. Is there a way to explain what lead times would make sense for a brand to know that they were actually ready?
[00:10:32] Ashley Czerwien: So I think looking at lead times holistically from the beginning of the end of the cycle is the best way to think about this. For a great example would be right now, it's June of 2026. CVS has already begun planning for a lot of their consumable and beverage planograms for 2027. A lot of suppliers and manufacturers look at that and they say, oh, that's so much time, that's too long, I don't have to worry about this. When in fact, it's really not a long timeline. So if you look at, this would be the time I'd be presenting to CVS, giving them an idea, I would start to think, okay, could I possibly be ready to ship in eight months from now? Would I be ready to land in their GC in about eight months if they awarded me a program? So I would then look at your pipeline, look and say, if this came to fruition and I had to activate on this tomorrow, what would be my drop dead date? And I think then you work from there. If you have, I don't need to really start activating this for another six months, or I have plenty of time, I'm already in production, I could just add to production, that's great. Or if you start to think about this and say, gosh, I have some longer lead times, or I'm still building my infrastructure, and I would actually need an answer on my store count, my distribution status. in the next month or two, I would say you're probably not ready yet from a distribution standpoint.
[00:11:59] Melissa Traverse: You also talked a little bit about brand recognition. So if you're not in a lot of other stores where, you know, customers have already identified the brand, identified the product, it may be a little bit trickier. What's the risk if you're an emerging brand and a naturally positioned emerging brand? Let's say you're not in any Whole Foods markets or any Sprouts yet. What is that risk? What would you counsel a brand who's in that situation if they're asking you about CVS?
[00:12:31] Ashley Czerwien: Sure. I would be asking them what their marketing and social media plan looks like. How are you launching to the world right now? Do you have a D2C? Are you on Amazon? Who else are you pitching to? One of the benefits of having a long time to plan with CVS is that Maybe in six months, you're launching with another large retailer. Maybe in four months, you'll be in a lot of small grocery chains. There's a lot that can happen there. So what's your schedule look like? Who are you talking to? Not something I would necessarily pass along, but just so I can try to identify Is the consumer actually going to know who you are? What are you putting on social media? What's your promotional spend? How are you going to grab that customer, especially in a store like CVS where they're just surrounded by not only choices, but some large brands that have been with them since childhood?
[00:13:26] Melissa Traverse: And how much cash do you need to launch? And I know that this would depend on how many stores, the kinds of stores, what the brand is, but how do you help brands figure out if they have enough capital?
[00:13:41] Ashley Czerwien: I would say, think about always the worst case scenario and look back from there. Slotting fees vary across your category. I would say, you know, take a look at something like three to four units per store. Could you afford that, first of all? If already right there, you're getting nervous, you probably don't have enough capital yet. Are you willing to be able to spend dollars on CVS specific promotions throughout the year? They are extremely important, not only to CVS, but to the success of the brands. So if you're looking at anywhere from four to six promotions throughout the year, and you're just not sure you can swing that, it's definitely not a good idea to be ready for CVS. And I would look at it also from your raw materials. There's a lot of volatility in the economy right now. Do you foresee with the economic forecast that your raw materials are going to have an exponential price increase? It's very difficult, especially when you're starting out to pass along that price increase to a customer that just now wants to carry your product. So if you foresee some economic problems, you may want to hold back and wait a year until things are more stable.
[00:14:50] Melissa Traverse: And what does a typical promotion strategy look like for a food or a beverage brand at CVS?
[00:14:57] Ashley Czerwien: Sure, so CVS runs their promotions in two-week blocks. So you would be signing up from those blocks. They run throughout the year. Depending when you go on shelf, you would work with a specialized promotional assistant at CVS that can help you manage that. And they could also help guide you with what two similar type items do well. What I've seen is that, you know, a 2-4 works great. So 2 for $5, 2 for $6, kind of wherever you line up. It generates that second purchase. It increases the basket ring. Not only that, but it gets the consumer to either double down on really establishing which skew or flavor they like or experimenting with others. Buy one, get one 50% off, almost as the same exact thing. And I would say having one or two big times throughout the year where that is your season, that is your time to play. You know the consumers out there looking for your type of product. I always tell brands, if you can, go big. If you have to drop one other promotion throughout the year to really go big with, maybe it's a buy one, get one free. Maybe it's a really steep multiple purchase allowance. Definitely do it and take advantage.
[00:16:09] Melissa Traverse: You know, oftentimes seasonality is a great way for brands to experiment with new SKUs, sometimes with retailers. Are seasonal in and outs an option for brands who want to test out this retailer or can you really only promote a seasonal item if you are on the shelf year round?
[00:16:29] Ashley Czerwien: No, it's absolutely an opportunity. I see brands pretty frequently that they resonate really well from a seasonal impact, but maybe they don't have the established everyday market built up, that they go into CVS for certain seasons, depending how they perform. When the next review session comes around, now they have some great data at the CVS stores that they can use, not only for them to make their decision of, am I really ready? But is CVS ready for them too? I mean they go through holidays such as Valentine's Day, Easter, summer is a huge season for them, fall, holidays, any one of those that you have the opportunity to meet with the buyer category manager, pitch what is great about your item and really tell your story about how it fits so it's a great opportunity for testing.
[00:17:21] Melissa Traverse: Are there any categories or products that we may not immediately think of that work seasonally at CVS? Like, you know, obviously for Valentine's Day and Easter, you think about candy, but are there any categories or products for certain times of year or certain holidays that tend to actually do pretty well that we wouldn't immediately associate with a win?
[00:17:46] Ashley Czerwien: Even some things I always think about for around the holiday time is The food dynamic just in the US has changed so much and people want to experiment. People want to try things at home. People want different tastes and flavors. If you have a special hot sauce, honey, oil and vinegar set, something that you would think, wouldn't I buy that at a specialty food store or something like that? Those tend to do very well at a CVS. Under that 1999 price point, exceptionally well. I've seen, you know, little minis of hot sauce that you could actually hang on a Christmas tree, blow out of the store. And you necessarily wouldn't go into CVS looking for that, but it's a great opportunity, a little coffee, you know, ornaments and little displays that you can give as secret Santa gifts. I think food is becoming a lot more prevalent in every day and playing around with fun flavors, especially in the younger generation, is what's really getting them excited right now.
[00:18:50] Melissa Traverse: So, you know, that, that makes me think about who the CVS shopper is. Certainly we think about people who are looking for convenience. Certainly we're thinking about people who duck in because maybe they need something for, like you say, like a quick gift, something like that. Who, who is the, who are the CVS customers and what are they looking for?
[00:19:11] Ashley Czerwien: Sure. Generally, the core CVS customer is still female, still in her 30s and up, who has a family and is taking care of her everyday family needs and needs a one-stop shop to get that. They're managing the prescriptions for the family, the medical care. They more than likely have children that they need to get school supplies for. That is their core customer. What you are noticing though, is that it started to expand a little bit more with the growth of, you know, the millennial and generation Z and alpha generation coming up. They're the ones that are really going in on food trends. They're the ones really taking the market on hold right now with wanting to try cultural flavors, wanting to pay better attention to their health, wanting to focus on inner beauty versus outer beauty. So we're going to see a large dynamic switch where instead of just focusing on that older aging customer and just the drop in and grab what you need, you're going to start seeing items and set built out for, we don't want to just be your convenience. We want you to come here when you want to try something new, where you want to try something fun, where you want to make good health decisions, but also enjoy these things.
[00:20:29] Melissa Traverse: Are there any categories that, you know, you maybe have some white space that you think really do present a great opportunity for food or beverage brands and then other categories that are incredibly competitive? Like I would think that vitamins and, you know, nutritional supplements would be a good opportunity. But then what about nutrition bars? I mean, I would think that that those would be fast movers, but are those sets so saturated that you really do need to think carefully? How do you think about that?
[00:20:56] Ashley Czerwien: Yeah, I think it's a great question because there's a lot going on right now, not only at CBS but within the industry. Actually, when you look at categories like vitamin supplements, you have a lot of legacy brands there. Brands that have been around for 50 years, they're tried and true, they sell well. So I think if you're in that category as a manufacturer, you need to really differentiate yourself. What do I have that I can bring to the table that CVS needs right now? And that's how you need to lead your story. Do I have, for instance, creatine and fiber? Those are big topics right now about people utilizing creatine more, people starting to get more fiber, even protein. So if you're a company and you have protein shakes and fiber supplements, you go into any CVS today and there are a multitude of options. So really go into the stores and take a look and say, what do I have that they don't? Is it a super fun flavor that's hot right now that would bring a younger generation in? Is it a different format that they just don't have that makes it easier for them to take? I would say some of the largest opportunity right now would be, you know, better for you food, snacks, and candies. I think CVS has always been typically seen as a conventional place to go. You go, you pick up your soda, your candy bar, you get your script, you're out, you're on a road trip, you're thirsty, you run in and out and just grab some chips or a snack. And now they're really establishing themselves as a destination for healthier choices. And they have options for everyone. So if you're a brand and you're like, well, I'm gluten free and I'm vegan and I'm dairy free, like, talk to someone at CVS. They are always looking for the next thing that tastes good and better for you.
[00:22:47] Melissa Traverse: All right, let's address the reputation directly. You know, CVS does get called a black hole when it comes to things like slotting fees, that kind of thing. What are your biggest warnings about CVS and maybe even drug in general when it comes to margin structure, slotting fees? What do brands really need to be careful of? And then, you know, what's the truth and what's the fallacy of that?
[00:23:16] Ashley Czerwien: The number one thing I like to tell suppliers is that think about what the velocity expectations are at a CVS and just what inherently the velocity is versus a Target, a Walmart, an Albertsons, a Kroger. You are not going to turn as quickly on shelf for many categories. For some, you absolutely will. But for many categories, it's not the same type of spend. So your velocities could be much lower. You could be looking at a quarter of a unit per store per week, and that's average and normal. Can you make a profit and be happy with that business turning at that velocity? Some people feel great about that. Some people don't. I think that's the number one thing is that you never want to get caught in a trap where you pay the slot and you sign up for promotions. You get with a distributor, you're paying all these different people hoping for success. And then you're like, wait a minute, I'm not moving three units per store per week. I don't know how I'm going to do this. So that's always the starting point. I would say the biggest misconception overall is that you just have to pay CVS millions of dollars to even get your foot in the door, and then they kind of just walk away from you. And I can't tell you how many times I've gotten on the phone with suppliers who have talked to the category managers, worked out their arrangements, and they're like, this was not nearly as expensive as I thought it was going to be. It's actually shocking to a lot of people.
[00:24:46] Melissa Traverse: So interesting. And so which categories turn pretty well? And then which ones are you maybe looking at a quarter of a unit a week?
[00:24:57] Ashley Czerwien: Sure. I would say beverages, great turn category. Everybody's always looking for the next energy drink, the next functional beverages. They're really hot right now, especially as you get into the warmer months or warmer parts of the US. Hydration is a huge factor right now. So people are always going to stop in. grab a beverage, grab one on the way out, anything like that, I think you can expect some decent velocity. I think once you get into certain sections, like maybe a grocery item, I think, you know, just taking for instance, first thing that pops in mind, and I don't know why, but pasta. You have pasta, and you're in CVS. It's not a destination for dinner more than at that point, it's a convenient stop for, I came here to get my script. Oh no, I have sauce at home, but I don't have the pasta. I'm not making another stop. Let me grab it at CVS. And that consumer may or may not come back because if you're a pasta brand, more than likely you're in their local supermarket. So I would expect that those would be your less turned items, your lower velocity, and really your watch out, can I handle this sort of situation?
[00:26:06] Melissa Traverse: That makes perfect sense. You know, sometimes I'll be in a CVS and they have flour and sugar and things like that. And I always think who's getting their flour and their sugar here, but it's when, you know, whatever it is, you're on vacation, you're picking up your prescription, you realize you need it. But yeah, that makes perfect sense.
[00:26:22] Ashley Czerwien: Also too, I will say in markets, especially, you know, there's a lot of talk about food deserts in the U.S. and where do people shop and where can people get their goods conveniently? CVS, dollar stores, things like that are essential to that whole population. That's where people can do a majority of their shopping. So naturally in those stores, you will see items like that turning much faster. So that's always something to consider as well, is that, yes, in the majority of the United States, are you going to turn lower if, like you said, you're a flour or, you know, baking soda? Absolutely you will. But there is a whole segment of the population that needs you as well.
[00:27:02] Melissa Traverse: Yeah, that's a great point. What about the markups? I also typically think that CVS is going to charge more for some of those grocery items than you might find at a grocery store. Can you dig into that a little bit?
[00:27:15] Ashley Czerwien: Yeah, I would say Without specifically talking to your category manager as different categories are going to have different requirements. If you're just starting out, plan anywhere from 40 to 50% just to be safe. Could you handle that as your markup? Can you still make a profit? I always tell people you need to make a profit first. I understand if you want the visibility. I understand if you just want to be in CVS and you're willing to do everything. That's a dangerous feeling to have in a dangerous game to play. It's great to have the visibility. It's great to be in a retailer like CVS, but the last thing you want to do is look back two years later and say, yeah, I sold well, I turned well, but I never made a profit.
[00:27:59] Melissa Traverse: Yeah, for sure. Could you walk us through the, what the actual submission process is? You know, where does a brand find the paperwork? Is there a supplier portal? How does that all work?
[00:28:11] Ashley Czerwien: Yeah, so CVS does have a supplier portal that you can get access to. Starting from, you know, how do I get into some of these category reviews or how do I even get noticed? There's a couple of different platforms. RangeMe offers opportunities for brands to connect with CVS, especially from a seasonal or regional demographic ethnicity perspective. You'll see things as I believe currently there's A Hispanic ECRM going on right now. There was just recently an Easter ECRM going on right now. So I think that's always a good opportunity. Working with a broker. I always say it's very important if you have not anything else, if you don't think you need a distributor, a big network, get a broker who has experience with CVS. They know their systems. They know how they operate. They have relationships with the buyers. They know the schedule of every single category view. They know who to pick up and call there. Interview brokers and go for one that has experience with CVS. They can get you a whole calendar for the year, so you'll know how to submit. And then once you link up with someone, whether it's the distributor, the broker, you find a friend who has this schedule, you start calling around, however it is. you can be invited to present to them and show why your brand should go into a CVS, what they think. Many brands after that will host an eCRM for that category and invite you to come or invite you to virtually present more in depth what your plan is, what your specific marketing drive is for CVS, how you could be successful. Then from there, they take their time and due diligence. These buyers have, like I said, close to 9,000 stores to plan for. They have a lot of hard decisions to make. So it does take a couple of months where I say to people, nobody's ignoring you. It's going to sound like it's radio silent. You're going to wonder where everybody is. It's okay. Don't get nervous. Stay the course. You're dealing with so many versioning techniques and everything like that. And the last thing you want to do is count yourself out before you're even there. Then you'll get some sort of letter from either your broker partner, your distributor, or directly from CVS. working through some final details of your contractual agreement with them or any specific fees. There might be some extra marketing that they can offer you if you want to take it. There might be some promotional activities. Everything like that will be fully discussed with you, offered to you, and what you can and cannot do will be given at that time. Then you'll be given your award letter letting you know what items have been selected, what the date is that it's due into CVS, what any more information they need from you, do they need you to complete a setup, do they need you to set up promotions, what your store count is, anything like that. And that's when you'll start working closely with either your broker, your distributor, or your internal production teams to start building out your timeline to meet their NDC date regulations.
[00:31:16] Melissa Traverse: So let's say you're accepted into CVS. How much time do they typically give you to get the product in? And do you typically recommend that brands use merchandising teams to make sure that the product is on shelf? Is that not as much of an issue as it might be at a grocery store? How does that work?
[00:31:36] Ashley Czerwien: I would say you don't necessarily need a merchandising team, especially if you have a larger store count. The employees at each store are responsible for setting their planograms and they all want their store to look good. You know, they're all incentivized and they're all, you know, basing their careers on how their store looks as store managers. They have all the materials, they're given schematics, they're given exactly where this has to go, and each store is allocated a certain amount of hours in their schedule to set up your items. So I would say, trust the process. Unless you're in a very small store count, maybe, like I said, it's just in Hawaii, or maybe it's just 100 doors in Northern California, then maybe it might be more worth it to stand out, but trust the process. Usually you'll get your information about five months before, so you can really start planning depending on what route you're going to ship to, where I need to be at from a material standpoint, where I need to be for my production deadlines. And you can also call to the fact, if you believe that your timing may be off, that's the time to discuss it with your CVS buyer.
[00:32:46] Melissa Traverse: So you just mentioned, you know, maybe you're in a hundred stores in Northern California. Is that a viable option for a brand? You know, you were talking about how gifting is a big thing and how people are looking at food gifts, maybe more than they were before. So I can imagine maybe you're, I don't know, a local honey brand and you have whatever it is, but you're maybe more of a regional brand. Does it make sense to launch in a very small number of regional stores with CVS, taking into consideration the cost of setup and all of the costs associated with it?
[00:33:21] Ashley Czerwien: I would usually say I have seen some brands come from a hundred store launch and they are so successful that immediately the next year they're in 4,000 stores. That is rare. It's going to sound like an urban legend. People are going to talk about how it's the greatest thing. It's happened. It's possible. I've seen one brand successfully do it and they're doing fantastic. And they had a lot of marketing behind them, a lot of dollars to spend on promotion. And they were really up and coming in both conventional and natural. What I would say is if you find yourself that your brand is so specialized to a market, like you have a Texas hot sauce, something like that, that's a big enough territory where I would say, go in with Texas and Southwest markets. See if you can start there. You have that consumer ready to go. That Midwest consumer may not be the one ready for your product yet. So see what opportunities are available in your category that year for those regional approaches. Some categories love nothing more than to do that. I know just recently for the beverage team, we've been talking a lot about regionally what works best in certain markets. For instance, a sweet iced tea, going to do great in the South. up here in New England, I'm not so sure it's going to have the same resonation. So really think about what your core customer is and then ask openly what the opportunity is for regional apply.
[00:34:46] Melissa Traverse: Certainly that's an option for more emerging brands who need to be careful about how they launch. CVS has developed a couple of programs that emerging brands may want to consider. One of them is the Air Cooler program and then the second one is the Healthy Consumables Beacon. Could you explain those two programs and what opportunities they offer?
[00:35:09] Ashley Czerwien: Sure. So the Healthy Consumables Planogram is really your start. If you have a health claim of any type, whether it's low-fat, low-sugar, plant-based, gluten-free, Whole Foods, anything like that, CVS has opened up this opportunity for you to enter a more conventional environment that there should be healthier foods in. They've devoted a whole section and a couple thousand stores for you to really shine and stand out and grow your presence in this market. This is a great opportunity for brands just starting out. Maybe they have established a little bit in natural channel, but they haven't quite broken a lot into conventional yet. Maybe they're dipping their toes in, but they brought great sales data. They have a lot of trending ingredients. They really are capturing that customer in other places, but they're not quite ready to full scale. That's the place you need to be in. That opportunity gives you the opportunity to have a smaller scale into CVS, so you're not worried about having too many store counts. You still have the opportunity for promotions. And also, you're in a great spot towards the front of the store with other like-minded brands. So that customer who wants to try your product has a destination to go to, and you have fantastic visibility. The option is there after a couple years of performance on this set to possibly go into the mainline planograms. So you could go into the snacks section, the grocery section, the candy section, just based on this sort of test that you've gone through. It's growing every single year. It's gaining more stores each year. There are some great options out there. I would say go into your store if you've seen one of these now. They just set their 2026 planogram and there are a lot of exciting options on it. Take a look and really get excited about the brands. From a beverage perspective, they've developed this program where they know they need new products. There's been a lot of talk over the past couple of years, especially about functional items, different sources of energy, adaptogens, nootropics, things of that nature. And where do they fit in with that CVS customer? You can't necessarily put them right next to the conventional energy brands or conventional sodas in the cooler. They're going to get lost and really there's no space. So they do have this open air cooler concept. in about a thousand doors where that's where these trending, new functionality, really popular brands are sitting. You have things there that are, you know, they're protein sodas that everyone's crazy about right now. They have, you know, the hydration drinks that do it in a different format, cleaner energy beverages, the mushroom type beverages you're seeing right now with the adaptogens and the nootropics. They're all successfully living there and they're all growing. And you'll see some larger names in there too, who are trying out, you know, their stance in a new place in the market. And you'll see some that are newer that maybe you've seen a couple of times, but are building their brand. So again, it's not an intimidating door cow. It's not anything you have to be nervous about, but it does give you the opportunity to stand out a bit more.
[00:38:20] Melissa Traverse: And with these programs, are there any cost breaks when it comes to slotting or any of the other fees that are associated?
[00:38:28] Ashley Czerwien: I would say naturally your slotting fee is going to be lower because you're at a fixed store level. For instance, with the open air cooler, I believe the exact store count this past year was 989 stores. You know what to expect when you're pitching for this. That is going to be the maximum store count. So, you know, it's going to be a lot easier on the wallet than going into possibly 2,500, 3,000 stores. So it's a lot easier to manage. It's a lot easier to manage scan backs from promotions, kind of just the same way due to the size of the stores and the count that you get, there is going to be a limit. Obviously that promotion is not going to go to all 9,000 stores. So they have the opportunity for it. So it does allow a little bit more control for you to gauge what kind of business you can do, what kind of promotions you have the opportunity for, and make it a lot more cost effective.
[00:39:21] Melissa Traverse: How about data? What data does CVS make available to brands? Is there a cost to access it? How should brands think about the kind of data that they'll get from CVS to help them understand whether or not they are successful?
[00:39:35] Ashley Czerwien: Sure. So there is data available. It's all custom built packages, uh, tailored to whatever your specific needs are. And the costs vary on how much, how little, what kind of data you need. There is a team you could talk to, to help build this out and price it for you. I would say, starting out, look internally. Do you have any Spin, Cercana, Nielsen data that you subscribe to yourself? Do you have a broker that can gain access to you? Or do you have a distributor that has access? And then sit down and say, this is what I really, at the end of the day, need to see to be successful. And go back to CVS with that and have them price out that package for you. Initially, you might think, well, I just want everything. But after looking at the tools you have inherently around you, you might realize, oh, there's only about five other pieces I really need to see. And that's going to save you a ton of money.
[00:40:28] Melissa Traverse: All right, I got another one for you. This is something that you mentioned when we were getting ready for this call, and that is shelf life requirements. You mentioned that this is something that catches people off guard. How does CVS compare to grocery here?
[00:40:42] Ashley Czerwien: So CVS does have some much stricter shelf life requirements. And a lot of it has to do with turn and velocity and just recognizing the state of the account that you're in. A lot of grocery accounts, you'll tell from your distributor, especially, that even if you're, for instance, a popcorn brand, as long as you have 30, 40, 50, 60 days remaining, more than enough time, you'll sell through it. No big deal. They're only going four back on the shelf. You're great. CVS has a requirement based on their categories. And one example is just snacks in general, where you need to enter their DCs with at least 90 days of shelf life remaining on your product, or it's not accepted. from a distributor perspective, they would have to back that up a little bit to ensure by the time they receive it from the supplier that they have time to ship it at that requirement. So you could be looking at around 100 days of shelf life still needed for your product to even be accepted into a CVS. I think where I see a lot of people feeling some of these fees that everybody talks about is the spoilage is that they're just cutting it close. They're just getting through the door. You know, they hit the CVS warehouse at 92 days. Awesome. Great. And then it goes to the store and you have 30 days left before they outdate you and scan you off. And then you're paying for that. So I would really look at. Are there changes you can make to extend your shelf life? Are there things that you can do to help expedite the sales here? But I think it's extremely shocking to some people, especially when they come from groceries. Oh gosh, I don't even have that much shelf life available on my product just naturally.
[00:42:26] Speaker 1: Then unfortunately you're not going to be successful at CVS.
[00:42:34] Melissa Traverse: All right, Ashley, well, all of this sounds great. And it does sound like there are opportunities for brands in the natural and emerging space that are a little bit less daunting than 9,000 doors. When a brand does pitch in a category review, what are those buyers and decision makers listening and looking for? What's the information that brands should be armed with when they're pitching and they want to get in?
[00:43:01] Ashley Czerwien: Yeah, absolutely. I think this is so important, is that when you finally, you know, get that opportunity to sit in front of the buyer, you have a limited amount of time. And what I would really suggest is what makes you special? What stands out? And it's beyond the, oh, we're sugar-free, we have extra fiber, we have extra protein. You know, the harsh reality is everybody's doing that right now. So especially when you go into saturated categories like a protein or nutrition bar or a chip or a popcorn, the buyer is looking at hundreds of these on a daily basis and deciding what's best for their store. What do you bring to the table that's exciting and new and different? Are you working with a different ingredient that makes the item taste better, but includes a nutrition fact that exceeds expectation? Are you working with different flavors that are exciting and new and are really promoting out there? Are you reaching out to certain ethnicities and global partners to make your food interesting? Even if it's only one or two small tidbits, what makes you different? What is going to make the buyer stop and say, oh, this is not just another bar, or this is just not another soda? What is really going to make them pause and remember you at the end of the day? I think that's so critical because it's so easy to go into the CVS and the buyer be like, we do this many sales, we do this amount of turns, and all that is wonderful information. But you'd never realize that across that desk is someone who's probably been sitting in three weeks of meetings on the same type of item that you have. And their head is just filled with, I know you taste good. I know you have protein. I know you have fiber. I know you're doing well in grocery. And it just all starts to glue together at that point. So what can you say to them where they are thinking, oh, that's so different. That's so unique. And we don't have anything like that. Really identify that white space on your own and bring that to them before they even discover it.
[00:45:07] Melissa Traverse: All right, so on that note, you see so many products and brands who are entering CVS. What are some interesting trends that you're seeing? And it could be ingredients. It could be the brands themselves. Like, are there any brands that have landed on CVS shelves recently that you think are really interesting? What are some of the things that are landing these days that we may be surprised or interested in?
[00:45:30] Ashley Czerwien: They are actually carving out an amazing coffee and tea category within their grocery set. It's been slow changing over the past couple of years, but that buyer has been phenomenal on carving out this little barista set where you'll find flavored syrups, different types of coffees, different types of teas, like this one-stop shop to get everything you need to make your coffee at home. And it's fascinating because you never think of CVS as being this go-to place to make a good coffee. And I still walk to this section every time I'm in CVS, which has to be at least four times a week, even for my own personal stuff. But just to like walk the stores, I still stop and look at all these products. I can get tapioca boba to make my own boba tea. I can get, you know, Tehrani flavored syrups. So I don't have to go to Dunkin Donuts. I can get specialized tea flavors that help with my gut. I can get fun coffee brands that I never would have thought of, not even just the Starbucks of the world, although they do have Starbucks in there, but brands like La Cologne, like Illy Coffee, some really great upscale brands that you would never think to look for in a CVS. I think that's been one of the most surprising and growing areas that I've seen lately. I will also say, you know, nostalgia, especially when you're getting into candy and fun snacks. There's a lot of throwbacks to fun, playful flavors. You know, this whole revival on Shirley Temple. If you had told me, you know, three years ago, everything was going to be Shirley Temple flavored, I'd be like, why? Why? Why would we do that? And I am now contributing to that. I buy everything. I see that Shirley Temple. And just these collaborations, you know, you'll see collaborations with Kool-Aid and, you know, all different candy brands from a long time ago. As an adult, I'm immediately drawn to it. It's just fun. It reminds you of a better time. But you just don't think of CVS sometimes outside of your Halloween candy, your Christmas candy, as maybe being a place of discovery for some of these new flavors and ideas.
[00:47:52] Melissa Traverse: Ashley Czerwien, thank you so much for joining. I love that no matter what question I ask you, you have the answer. You really are such a great resource for all things CVS and C-Store. So thank you so much for joining the Non-Based Podcast. Ashley Czerwien, Account Manager of CVS at Kahee. It's been such a pleasure to host you here. So thank you for joining and for everybody else out there, thank you for listening to the Non-Based Podcast and we will see you next time. That concludes another episode of the Nambase podcast. If you enjoyed the show, please leave us a review and follow us on your listening platform of choice. You can also watch and listen to past episodes on nambase.com. And don't forget to join our Nambase Slack at slack.BevNET.com for company updates, industry networking, and community discussions. See you next time.
