How to Get Salsa and Other Food Products into Costco | FTE Episode 060

green salsaToday’s guest is Marc Jordan Paxton. Marc helped launch and operate a food startup called Kicking Lizard Salsa for 3 years where at the companies peak their product was sold in four Costco’s in Northern Utah, two in the Seattle area. When the salsa was available in these stores it was the top selling salsa product, but the margins demanded by Costco made it difficult to break-even. In this interview, Marc shares how his father was able to convince a Costco to give their product a chance and the challenges of working with a large distributor, what the process is like getting salsa into a major retailer, and his latest venture the Food Marketing Podcast.

The Background 

In one way or another, Marc Jordan Paxton has been in connected to the business of food pretty much his entire life. Marc’s father was even employed by FritoLay, Pepsi and Pizza Hut across various corporate roles across throughout companies. This led to Marc’s first ever entry-level job reviewing insurance claims for Pizza Hut where he would evaluate a variety of slip-and-fall and burn claims. Understandably, this experience made Marc want to stay far away from working within the restaurant business.

After a variety of short-term jobs Marc eventually joined into a new salsa start-up business that his father was getting involved with. Marc’s father had joined forces with an individual that had a unique tomatillo salsa recipe. Distinct features of salsa is that it was colored green, not pre-cooked like a lot of other salsas, and included no tomatoes.

Quotes from the Interview

The thing with Costco is they’re always trying to get the best deal for the consumer and so they try and hammer down the price as much as possible. – Marc Jordan Paxton on having a food product in Costco. 

Originally when we made the deal with Costco, we were just so excited to be in Costco that we probably agreed to a price that we should not have. – Marc Jordan Paxton on his agreement with the distributor.

Kicking Lizard

The Kicking Lizard Team: Today’s Guest Marc Paxton is on the left.

Stuff You’ll Learn

  • How the company created samples of salsa to send out test runs and
  • How the company transitioned from creating salsa in someones kitchen to working with a private label manufacturer.
  • Why they hired a consulting team to come up with labeling and packaging for the salsa.
  • Why Marc sent salsa samples to a lab for a three-month time period to calculate official nutritional information for the product in addition to determining the estimated shelf life.
  •  The different ways the business was funded through personal savings, bank loans, friends, family and other investors.
  • Why you probably won’t be rich just because your product is in Costco.
  • How a booked flight and prior relationship got Marc’s father in front of a key decision maker at Costco to help fast track the process.
  • The importance of factoring in the price of shipping into your overall cost for food products.
  • How the business was able to turn a profit by selling to smaller grocers like Good Foods.
  • The importance of market testing before you get a full-scale run on a food product
  • Creative ways that Marc contacted local food bloggers to generate interest and press for the salsa
  • Learn about Marc’s latest venture called the Food Marketing Podcast

Mentioned in The Podcast

Food Marketing Podcast – Want to hear more of today’s featured guest? You’re in luck because Marc has a regularly published podcast where he interviews a variety of movers and shakers in the food industry. Check out one of his podcasts below featuring Karen Post, AKA The Branding Diva, to get a taste of the awesome content being served up.

The Sweetery NYC – This is an experiential marketing company highly-involved in the food truck industry that was previously interviewed by Marc and mentioned during the show.

Costco Vendor Inquiries Page  – Interested in getting your food product into Costco? Here’s the official contact information so you can contact the appropriate division of the company for your specific product.

Want to Sell Your Products Through Costco? – Article published by U-T San Diego that examines how working with Costco has panned out for a few San Diego-based companies.

Are food boats the next food truck?  – NPR says they are not.

Seniors Sharing in the Food Truck Craze – Learn how the non-profit Dreams for Change is helping serve seniors with a food truck in the San Diego area.