The Art of the Strategic Concession: How CPG Founders Give to Get
Jeff Church breaks down why strategic concessions in retail negotiations aren't losses, with real stories from Walmart and Costco that changed Suja's trajectory.
I remember when Walmart came back with a counter-proposal that made our production team want to flip the table.
We'd pitched the wellness shots expansion. Four-ounce format, strong velocity data, attractive margins. We wanted broader distribution. We knew it made sense for both sides.
And Walmart said... sure. But first, can you build us an exclusive plant-based smoothie for our region?
Nobody at Suja had ever made a plant-based smoothie. The formula didn't exist. The economics were unattractive. Our production team didn't believe in it. I didn't believe in it either.
We said yes anyway.
In CPG, the biggest mistake I see founders make in retail relationships isn't asking for too much. It's not knowing what to give.
I've watched talented founders walk away from deals that should have happened because they couldn't stomach a concession that, in retrospect, would have cost them far less than the opportunity they missed. They optimize for the battle. They lose the war.
Retail negotiations are not transactions. They're the beginning of a partnership, or they're nothing. Your relationship with a Walmart or Costco buyer isn't a single deal. It's a multi-year, multi-SKU, multi-reset-window relationship. The concession you make today is equity you're depositing into a partnership that will pay dividends for years... if you manage it right.
The founders who get this build retailers into genuine advocates. The ones who can't stomach any flexibility become a vendor the buyer tolerates rather than a brand they champion. There's a real difference between those two categories. Champions get better shelf placement. Champions get a heads-up before the line review. Champions get second chances after a rough quarter.
Vendors get cut.
The Walmart smoothie story has a second chapter worth telling.
We ran the plant-based smoothie. It was a headache. Slow to produce, complex, not our core business. We ran it anyway, at economics we'd never accept for our core line. And here's what we got in exchange: expanded shots distribution at Walmart that became one of our most important retail relationships. Walmart is now one of Suja's largest customers.
You tell me if the concession was worth it.
Around the same time, we had a parallel situation at Costco.
Nicky, our head of sales, had been pitching our wellness shots for months. The Costco buyer loved the velocity data. He came back with a condition: develop a plant-based milk for his region. Nobody at Suja had made plant-based milk. We said yes.
The milk struggled. Pea protein flavor is... let's just say challenging.
But the shots? First year in Costco clubs, we were hitting roughly $2,000 per club per week. Do that math across even a modest Costco footprint and you're looking at a $15 million-plus annual opportunity. We replaced the kombucha we'd been running at a 12% gross margin with shots running at 60%. That swap alone moved our company-wide gross margin from 32% to 40%.
One yes... to something we didn't fully believe in... unlocked all of that.
The lesson wasn't about winning every negotiation. It was about understanding leverage, thinking long-term, and making selective concessions to grow the whole relationship.
So here's the framework I now use before any major retail negotiation.
Three questions before you concede:
1. What does this retailer actually need from me?
In the Walmart case, they wanted to show innovation in plant-based beverages. They wanted something new for their shoppers and couldn't get there fast enough through their own private label process. We had the manufacturing capability. The concession served a real need on their side.
When you understand what the other side actually needs, concessions become strategic tools instead of capitulation.
2. What's the real cost of this concession versus the real value of the relationship?
The plant-based smoothie was a short-term headache. Walmart becoming a major long-term retail partner was transformational. The math doesn't always look good in the moment. It usually looks very good over time.
This is where I see founders get the calculation wrong. They measure the cost of the concession against zero. The right comparison is against the full lifetime value of the retail relationship. When you frame it that way, most strategic concessions look cheap.
3. Can you define a ceiling?
This is where founders get burned. They make a strategic concession and it becomes permanent. The buyer expects it every year. The "exclusive" product runs forever because nobody redrew the line.
Before you agree, define the scope. How long? How many units? Which regions? Have a plan for unwinding it gracefully if it stops serving both sides. Open-ended concessions become structural liabilities.
A few principles I've built around this over 30-plus years:
Never make a concession that permanently impairs your unit economics on your core line. One difficult SKU to win a relationship is a fee you pay. A permanently mispriced core SKU is a slow bleed. Know the difference before you shake hands.
Always document scope and duration. Verbal agreements in retail are assumptions waiting to be disappointed. I don't care how strong the relationship is. Write it down.
Know what you want in return. Don't make open-ended concessions and hope for goodwill. This is commerce, not charity. If you can't name what you're getting, you're not making a strategic concession. You're just giving something away.
And the one that matters most: if you say yes to something, deliver it fully. Half-measures aren't concessions. They're broken promises. And in retail, broken promises don't get second chances.
The thing nobody tells you about strategic concessions is that they compound.
The first time you deliver on something difficult for a retail partner, you earn credibility. The second time, you earn trust. By the third or fourth time... you're the brand they call when they have something valuable to offer before the market knows about it. You're the brand they bring to their category leadership meetings as an example of a real partner.
At that point, the relationship has tipped in your favor. You stop being the one always being asked to accommodate. You start being the one they accommodate.
Getting there requires patience. It requires the willingness to run a mediocre plant-based smoothie for a season to protect a relationship worth millions. It requires thinking in years, not quarters.
Most founders aren't built that way. They want to win the meeting. I understand that impulse. I've felt it plenty.
But the brands that last aren't usually the ones that won the most negotiations. They're the ones that built the most trust. And trust gets built through how you show up when you don't have to...
Not just when the stakes are obvious. Sometimes on a Tuesday, with a smoothie nobody really wanted.
Want to build the retail relationships that turn into long-term competitive advantages? Jeff works with CPG founders inside the CPG Founders MBA, where retail strategy is one of the core disciplines. And if you're working through a specific retail challenge right now, the 90-Day Breakthrough program gets you direct access to Jeff's frameworks applied to your business.
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