The following polices are in place for Sprouts Non-Perishables Departments: Grocery, Dairy, Bulk, Frozen Foods, Vitamins, Health and Body Care, Mercantile and General Merchandise. Signature on the New Item Form or New Vendor Form indicates acceptance of the policies below for the Non-Perishable Departments.
New Item Free Fill
Free Fill: A program in which the vendor agrees to provide Sprouts with free product to put on the shelf and/or billing deduction in order to offset the expense associated with placing a new product in our stores. The amount of product and/or deduction the vendor is expected to supply varies based on the department and will be negotiated with the Category Manager.
For all instances of new item placement, a “free fill” of each SKU is required for each new point of distribution.
|Grocery, Dairy, Frozen or Bulk Items
|The negotiated number of SKUs for each instance of new point of distribution (as defined above).
|Vitamins & Body Care
|Up to six (6) individual selling SKUs; to be defined during the Sprouts, Vendor Partnership agreement,
for each instance of new point of distribution (as defined above).
- Replenishment orders will be placed by stores to comply with par level inventory requirements.
- Any deviation from the requirements above must be mutually agreed to between vendor and category manager
2. A new point of distribution is defined as:
- Placement in some or all store locations where the SKU(s) is/are new to Sprouts. Free fill applies to each store in which the SKU(s) is/are added.
- Placement for the SKU(s) in NEW Sprouts locations where the item is already currently authorized on the Sprouts Approved Product List (APL).
- Placement for the SKU(s) in Sprouts locations that have not sold the SKU(s) in the prior six months. (Reset, remodel, schematic alignment, product void).
- SKUs subject to “Free Fill” will have guaranteed placement for a minimum of six months post implementation, or may be entitled to a prorated refund.
3. Item Free Fills will be handles as follows:
- Grocery, Dairy, Bulk and Frozen Foods:
- Products distributed through KeHE or UNFI will receive a deduction on behalf of Sprouts for the wholesale value of the free fill for each instance of placement.
- Items delivered via DSD will receive a deduction from open billing statements (payables) for the wholesale value of the free fill for each instance of placement.
- A direct billing from Sprouts to the vendor will occur when neither (i.) or (ii.) above is a viable means of collection for the value of the free fills.
- Vitamins, Body Care and General Merchandise:
- For SKUs distributed through KeHE or UNFI, KeHE/UNFI will deliver the initial free fill distribution to the stores at 100% MCB.
- Items delivered via DSD will receive a deduction from open billing statements (payables) for the value of the free fill for each instance of placement.
- A direct billing from Sprouts to the Vendor will occur when neither (i.) or (ii.) above is a viable means of collection for the value of the free fills.
Third Party Merchandising – Fair Share
Fair Share: A program that charges back the Grocery, Frozen, Dairy, Bulk, Vitamin & HBA manufacturers for their share of merchandising, or costs associated with merchandising, the Non-Perishable departments. This fee covers the Category Resets, New Stores, Remodels, Refreshes, Sales Initiatives, Hardware & Merchandising Support Staff. The fee is calculated based on space and sales and will be negotiated with the Category Manager.
- All vendors will participate in merchandising activities related to placement of their products via payment of a ‘fair share’ fee assessment to cover the expense of merchandising said products.
- Fair share assessments will occur when:
- The category in which the SKU(s) resides is reviewed and new planograms are instituted at store level on an annual or semi-annual basis.
- A new store is opened and the vendor’s brands are not supported with Broker or Sales Representation.
- An existing store is remodeled or reset and the vendor’s brands are not Supported with Broker or Sales Representation.
- Fair share assessments are based on:
- The SKU(s) percentage of sales relative to the category total.
- The SKU(s) percentage of linear shelf space relative to the category total.
- Items new to Sprouts have sales estimates based on existing items within the category.
- Based on the above criteria, the total cost of the merchandising project is allocated to all vendors participants.
- Vendors paying fair share merchandising fees would have guaranteed shelf placement for the SKU(s) used in the fair share calculation for a period of six months post implementation, or be entitled to prorated refund of 3rd party merchandising fees.
- All billing activity for Free Fills, Advertising Fees, Scan Rebates, Miscellaneous Rebates, Store Coupon redemptions or other agreed upon fees/rebates will be collected via:
- Statement deductions handled on behalf of Sprouts from UNFI or KeHE.
- Statement deductions (account payables) from Sprouts AP.
- Direct Billing where neither (1.) or (2.) apply.
- Billing occurs monthly through Sprouts BILLBACK MANAGER system. Back up and invoices for deductions or billings are available upon request.
Sprouts requires 90 days notice on ALL cost changes.
Incomplete / Inaccurate Paperwork
It is imperative that all vendor paperwork be submitted to Sprouts accurately. Due to the excessive time, resources and potential financial impact, incomplete and/or inaccurate paperwork will be subject to a “per offense” fine.
Upon acceptance of an item into Sprouts, it is required that you get the image set up in IX-ONE before the product enters the stores. If you are not setup with IX-ONE, please follow the link (http://www.ix-one.net/sproutssignup/) to get started on your company profile. An IX-ONE sales representative will reach out to you after this is complete.
Direct Vendors – Sprouts will not pay shipping fees for any direct shipment and no minimum shipping requirements will be approved for store orders.