Michael Theodor has years of brokerage experience to his name. After starting his first company, Organic Connection, in 1976, Theodor focused on building one of the first organic distribution companies exclusively for British Columbia-grown organic fruits, an unusual goal due to the fact that there were only two organic growers in the southern Okanagan Valley.
“I had previously lived in southern California and was lucky to have experienced the very beginnings of the organic and natural products industry in the U.S. I knew back in the late 1960s that these products would help me to create a healthy personal lifestyle. I also knew back then that millions of others would eventually gravitate to these products to support the health and wellbeing of themselves and their families,” says Theodor.
According to Theodor, the Canadian natural products industry was quite limited in the mid-to-late 1970s. Organic products usually consisted of fruits and vegetables, brown rice and a few other products.
“When I came to Canada I knew that being involved with these products and helping to create an organic and natural products industry was my destiny. This is exactly what happened with the starting of Michael Theodor Brokerage.”
Michael Theodor Brokerage Inc., or MTB, was established in 1980 as the first natural and organic broker in Canada. It successfully launched and represented several top brands in the categories of organic and natural grocery and natural health and beauty. MTB is now owned by the Cyba Stevens Management Group, which purchased the brokerage in April of 2013. The Calgary-based marketing firm focuses on work in the consumer packaged goods industry. It has provided brokerage, distribution and brand activation services nation-wide for over 26 years to customers in club, mass, food, drug and convenience and gas channels.
The industry has changed dramatically over the past 40 years since Theodor’s start in the natural channel, with dramatic growth over the past 10 years in particular. He notes a shift in consumer acceptance leading to increased sales and competition. Theodor’s advice is to adapt to change in a creative way by seeking out new avenues of distribution, promoting products carefully and building new industry relationships.
“Companies that were very strong in the natural sector have bought out other companies with an existing focused business into mass-market retailers and have separated those brands by class of trade,” he says. “Other domestic brands have aggressively and successfully gone into mass-market retailers. Some of those brands have higher price points than competing conventional brands and bring higher gross profit margins to the retailers.”
In terms of changes with regulatory rules and regulations, Theodor believes strict government requirements for natural health products have allowed claims and dosage guidelines, however these requirements have also created issues.
“In some cases, companies have dropped out of Canada due to ingredient disclosures on the public record and other inherent Canadian rules,” says Theodor. “Overall, the regulatory climate is working and its guidelines help companies know exactly what can be said or not said when taking a product to market in Canada.”
Theodor also mentions a shift in what certifications are important to consumers, with a focus on non-GMO, which, according to him, was not a major topic of discussion even 10 years ago.
“Verified Non-GMO certification is now bigger in North America than organic certification due to the widespread media coverage about this key issue,” he says. “Some domestic brands and distributors have been bought out or consolidated with other companies, with American companies leading the way.”
In terms of running a company in the natural health industry, Theodor believes that management style has changed as well. “Many original industry owners had a much more personal style and were rooted in strong organic or health related principals,” he says. “This is changing, with companies bringing in outside managers who have strong business backgrounds, yet not always the same original ideals that the company started with. Company cultures change and may shift into a much stronger business model without the same personal feel of the original owners.”
Online marketing of organic and natural products have grown in prevalence over the past several years, according to Theodor. “In Canada, online sales in general are going up every month. Many sites feature organic and natural products. Prices can vary widely versus traditional retailers and online sellers don’t have the same overheads and costs as a bricks and mortar store does,” he says. “Suppliers need to look at this transition carefully and make sure pricing accommodates retailers so online sellers do not become ongoing price cutters in Canada.”
Theodor’s decades of experience in the industry have provided him with advice to give to the newest generation of brokers.
“Listen carefully to the client’s needs. Work with the allocated clients’ budgets and get creative. Be a guerilla marketer,” he suggests. “I seek out domestic organic companies for offshore opportunities, which in some cases they have never done before. This is brand new business to them and it doesn’t thin out existing domestic business at all. Private label opportunities may be another option. Think out of the box.”
