CUSTOMER PROFILE:SAM'S CLUB
The rise and rise of Sam's Club, a customer of Damin
Words: Mote Pooley
Damin – a China-based joint venture between Finlays and Damin founder and Jiang’s Group Chairman Mr. Jiang Aiqing – is one of the world’s leading suppliers of tea, coffee and botanicals extracts. Here, Damin’s Mote Pooley discusses the rise and rise of its customer Sam’s Club, part of the Walmart Group.
Cast your mind back to the early 2000s, where big changes were underway in the Chinese supermarket sector. Retailers were pursuing a high-volume business model, with a typical hypermarket often packing as many as 20,000 to 30,000 different products (SKUs) onto its shelves, encouraging brands to compete for visibility and consumer purchases.
However, this model often incurs significant costs for both brand owners and retailer operators, in many instances ultimately resulting in higher prices for consumers. So when the e-commerce giants such as Taobao and JD.com, arrived with their virtually unlimited ‘shelf space’, traditional retail models were disrupted, leading to a wave of store closures among conventional supermarket players.
Against the onslaught of e-commerce, one retailer stood firm. Sam’s Club, part of the Walmart Group, is a membership-based warehouse which defended against online retailers by adhering to three key product selection strategies. Firstly, it offered a wide variety of product categories but limited choices within each category. Secondly, it prioritized membership renewals over product margins. And finally, it carefully selected unique, differentiated products.
Through this approach, Sam's Club successfully carved out an alternative and flourishing retail model. As of the end of 2023, Sam's Club operated 47 stores in China, generating over 80 billion RMB in sales, with membership fees alone contributing more than 1 billion RMB in profit.
Today, Sam’s Club caters to the lifestyle needs of some 70 million middle-class families in China's first and second-tier cities, offering around 4,000 products in total, with only one to three SKUs per category. Of these products, over 700 are Member's Mark private label items, with approximately 30% comprising dry goods.
Established in 1995, Damin International is a global expert in food and beverage service solutions. Damin’s main businesses cover four major fields, including natural plants (such as tea, coffee, and botanicals), marine organisms (such as microalgae, marine plants, and marine microorganisms), natural minerals (such as organic calcium and selenium), as well as genetic engineering.
Damin is able to draw upon an extensive and well-established network of raw material resources, including the global network of its joint-venture partner Finlays, enabling it to offer diverse product solutions across multiple categories for customers such as Sam's Club.
Damin is committed to the philosophy of "enhancing the functionality of health foods and mainstreaming functional foods into everyday life”. Leveraging its extensive R&D capabilities, decades of experience in natural plant extraction, Original Equipment Manufacture and Original Design Manufacture custom manufacturing services, and global raw material supply and logistics expertise, Damin is dedicated to delivering customer-focused and value-centered innovation.
Damin first engaged with Sam's Club's dry goods purchasing and private label teams in May 2021. Over the course of several detailed discussions, brainstorming sessions and sample testing, the Sam's Club team gained a deeper understanding of Damin's corporate values, innovative R&D capabilities, and strong end-to-end supply chain expertise. They found a close alignment in values and product development strategy which paved the way for the two companies to forge a strategic, collaborative partnership.
Established in 1995, Damin International is a global expert in food and beverage service solutions.
The first custom product that Damin developed for Sam's Club's dry goods private label was a Member’s Mark freeze-dried instant coffee powder. This features mini-cups of freeze-dried coffee powder made from beans sourced from three different origins (Colombia, Guatemala and Ethiopia) and processed via a range of extraction techniques to offer a premium, hand-brewed flavor.
Following its launch in April 2022, this product quickly established itself as an enduring, top-selling item, celebrated by Sam’s Club consumers for its exceptional quality and value for money.
Damin and Sam's Club’s partnership so far has focused upon developing a wide range of offerings in the instant beverage category, with over a dozen products launched to date. This includes: A Tea Bag series (comprising innovative concepts such as Cassia Seed Goji Chrysanthemum Oolong Tea, Monkfruit Snow Pear White Tea, Ginseng Burdock Tangerine Peel Tea; and Green Tangerine & Coix Seed White Tea); a Bubble Tea DIY Kit series (a winter season offering, with a new flavour introduced each year); a Freeze-Dried Fruit Tea Block series (featuring exciting flavor combinations such as pineapple, passionfruit and jasmine tea); a Coffee Bean offering and a Drip Bag series (including an innovative fusion concept comprising coffee, longjing tea and osmanthus flower).
Building on this strong and successful collaboration, Damin and Sam’s Club are continuing to explore new product development in additional categories for Sam's Club’s ready-to-drink beverage and health supplement departments, as the two companies look to expand the scope of their partnership to offer consumers an ever greater range of high quality, innovative products.
Mote Pooley
Chairman, Damin Mote.Pooley@Finlays.net
