--:-- Ryan Knutson: Welcome to The Journal. I'm Ryan Knutson.
--:-- Ryan Knutson: Today, we're talking about the hidden costs inflating your grocery bill. Our guest is Kyle Kaler, the owner of Wild Way Foods, a granola company that sells its products to over a thousand grocery stores around the country.
--:-- Kyle Kaler: Thanks for having me on the show.
--:-- Ryan Knutson: So, Kyle, you're a health-conscious guy who used to work in finance in New York City. You started making your own granola in your kitchen, and that's how Wild Way Foods was born.
--:-- Kyle Kaler: Yeah, I was trying to live healthier, and I couldn't find a lot of good options on store shelves. So, I started making my own granola and experimenting with different ingredients.
--:-- Ryan Knutson: And that's how you came up with your recipe.
--:-- Kyle Kaler: Yeah, I just threw some dried fruits, nuts, and seeds into a food processor and blended it together. It became a life-changing snack for me.
--:-- Ryan Knutson: And now, your granola is sold in over a thousand grocery stores.
--:-- Kyle Kaler: That's right. We started at farmer's markets, and then we began selling to bigger retailers.
--:-- Ryan Knutson: But, Kyle, you've also talked about the challenges of working with distributors. Can you explain what that's like?
--:-- Kyle Kaler: Yeah, sure. So, when you're a small brand, you don't have your own trucks or logistics team. You rely on distributors to get your product to the stores.
--:-- Ryan Knutson: And that's where the fees come in.
--:-- Kyle Kaler: Exactly. The distributors charge us fees for things like storage, transportation, and administration. And sometimes, they even charge us fees for things that aren't even our fault.
--:-- Ryan Knutson: Like what?
--:-- Kyle Kaler: Well, if we deliver a pallet of goods late, or if it's not everything the grocer asked for, they'll ding us with fees. And it adds up quickly.
--:-- Ryan Knutson: That sounds like a lot of pressure.
--:-- Kyle Kaler: It is. And it's not just the fees themselves, it's the complexity of the system. There are so many different charges and deductions, it's hard to keep track of them all.
--:-- Ryan Knutson: And what about the guaranteed sale clause? Can you explain that to us?
--:-- Kyle Kaler: Yeah, sure. So, the distributor guarantees that they'll sell our product, but if they don't, we have to buy it back or discount it to get rid of it. It's a big risk for us.
--:-- Ryan Knutson: That sounds like a lot of responsibility.
--:-- Kyle Kaler: It is. And it's not just us, it's all the small brands out there. We're all struggling to make ends meet because of these fees and charges.
--:-- Ryan Knutson: I see. Well, Kyle, thanks for sharing your story with us today.
--:-- Kyle Kaler: Thanks for having me.
--:-- Ryan Knutson: Now, let's talk to our colleague, Jesse Newman, who's been investigating the hidden fees in the grocery industry.
--:-- Jesse Newman: Thanks, Ryan. So, I've been looking into the fees that distributors charge to small brands, and it's a complex system. There are all sorts of charges and deductions, and it's hard to keep track of them all.
--:-- Ryan Knutson: And what's the impact on consumers?
--:-- Jesse Newman: Well, the fees are getting passed down to consumers, which is why grocery bills are going up. It's not just the cost of the food itself, it's the fees and charges that are getting added on.
--:-- Ryan Knutson: That makes sense. And what about the distributors? Do they have a response to these allegations?
--:-- Jesse Newman: Yeah, they say that the fees are necessary to cover the costs of doing business. But, Kyle's story suggests that it's not just about the costs, it's about the complexity of the system.
--:-- Ryan Knutson: I see. Well, thanks, Jesse, for shedding some light on this issue.
--:-- Jesse Newman: Thanks, Ryan.
--:-- Ryan Knutson: Now, let's talk to another guest, who's been in the industry for a long time. Can you tell us a bit about your experience with distributors?
--:-- Guest: Yeah, sure. I've been in the industry for over 20 years, and I've seen the fees and charges get worse and worse over time.
--:-- Ryan Knutson: And what do you think is the root cause of this problem?
--:-- Guest: I think it's the consolidation in the industry. There are fewer and fewer distributors, and they're all trying to make a profit.
--:-- Ryan Knutson: That makes sense. And what about the impact on consumers?
--:-- Guest: Well, it's not just the fees and charges, it's the lack of competition in the industry. When there are fewer distributors, they can charge higher fees and still make a profit.
--:-- Ryan Knutson: I see. Well, thanks for sharing your insights with us today.
--:-- Guest: Thanks for having me.
--:-- Ryan Knutson: And finally, let's talk to our guest, Kyle Kaler, again. What do you think is the solution to this problem?
--:-- Kyle Kaler: I think there needs to be more competition in the industry. We need more distributors and more options for small brands.
--:-- Ryan Knutson: And what about the guaranteed sale clause? Do you think that's a good idea?
--:-- Kyle Kaler: No, I don't think it's a good idea. It's a big risk for us, and it's not fair to small brands.
--:-- Ryan Knutson: I see. Well, thanks, Kyle, for sharing your thoughts with us today.
--:-- Kyle Kaler: Thanks for having me.
--:-- Ryan Knutson: And that's all for today's show. Thanks for listening.
--:-- [Outro music plays]
--:-- Ryan Knutson: If you liked this episode, be sure to follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening.
