Just today I saw an article in the news referring to food price inflation at 3%.
Have you been able to keep your selling price in line with any increases in your cost of production?
Obviously some producers and processors are because retailers are increasing the cost of food to consumers. Cost of producing a lot of products has increased since the onset of COVID-19. Some of the inflation is a result of the Canadian dollar but most of it is a result of higher costs for inputs such as labour, packaging and ingredients.
Securing a price increase is one of the biggest challenges for a food producer or processor. The fact is you operate in a business environment where the retailers believe they are paying too much, and suppliers believe they aren’t getting enough.
You need a process to get a price increase, just the same as you need one to produce your products. The best price increase is the one your customer knows they have to accept and also trust it is fair. Follow our SKUFood 8 steps to a price increase to give yourself the best chance of getting the price you require for your products.
SKUFood 8 steps to a price increase
1. Work in advance: Working in advance creates an environment where your customer understands your need for a price increase.
2. Your value to your customer: Demonstrating value to your customers will position you to have your products priced right.
3. Your value to the consumer: Proof that your product sells and is in demand with consumers separates you from a lot of products.
4. Use the facts to negotiate: Armed with the facts you will negotiate with greater confidence, be more effective and have the ammunition to justify the right price.
5. Develop the relationship with your customer: Relationships with customers are everything when negotiating price and a critical prerequisite to achieving the right price. This is an ongoing process and you cannot just turn on the charm one time to get the price you need.
6. Be realistic: Realistic price increase asks have the best chance for success. Assess the impact of a price increase to decide on a realistic price and time to ask.
7. Keep a level playing field: Every customer is unique and has different priorities. You should develop individual strategies to keep them satisfied, ensuring that there is a level playing field.
8. Develop a great presentation: Use the tools, information and confidence to deliver a great presentation to justify your price increase. Preparation and practice makes perfect.
Join us for our SKUFood Recipe for Success, presented by FCC Wednesday August 26 where I will take you through our process to help you get a price increase.
Your response to the changes in the market
August Recipes for Success, presented by FCC
August 26- Every business has experienced changes to cost of goods. Labour efficiencies are lower due to physical distancing in production and there are many extra costs for hygiene and personal protective equipment. Some input costs have increased as well as your suppliers react to their own reality. Your selling price needs to reflect the changes you are experiencing. We will give you a process to follow to help you get the price increase you require with your customers. No one likes to see prices go up but they have to when your cost of goods are changing. Peter will share his experience working with a retailer to give you insights and the questions you need to answer to get the right price for your product. Peter has over 19 years working in retail and understands what your customers need to hear for you to be successful.
Selling in a new environment
September Recipes for Success, presented by FCC
Sept 2- In stock position is more important than ever as retailers are focused on keeping their stores well stocked and selling as much as possible to consumers who do go in. Suppliers are expected to have the inventory required. We will talk about how retailers look at service level and how you should be tracking it in your business. Once you know how you are doing it is a great opportunity to communicate this to your customers.
Sept 9- The retail environment has changed and this impacts retailers and suppliers. Consumers are shopping the store differently. They want to get in and get out, more people are shopping with a list and they are buying more when they are in the store. Your strategy needs to evolve to this new environment and some of the tactics you might have used in the past will be less effective.
Sept 16- In store demos were a tactic employed by many food businesses. The satisfaction of talking to consumers about products and getting them to commit to a purchase was very popular. Most retailers have eliminated these from stores so we need to find alternatives.
Sept 23- Developing relationships with existing and potential customers have moved to online meetings and trade shows. Your objectives are still the same, but the tactics you need to employ have changed. There are advantages to the new world we are all operating in and we will help you find them. Virtual meetings can be very effective and now you have the opportunity to attend trade shows anywhere in the world.
Sept 30- Online shopping has increased dramatically since March. It has had a big impact on retailer’s operations but it also impacts producers and processors. Consumers shop differently when they order online. All of the investments made in store are worthless for the 10-15% of consumers who are now shopping online. We will discuss how you can communicate with them in advance and get on their list. The execution is different with each retailer and it will continue to evolve.
At SKUFood we understand it is important to give back. We have the ability to share insights and information you can use in your food business right away. If we were able to get in the same room for an event you would hear me say, “Success in the food industry is not just about making great products to sell; it is about selling the great products you make.” Communicating with your customers in these challenging times is an examples of this.
If you want to talk about how to get a price increase or need some advice just send me an email at Peter@SKUFood.com or give me a call at (902) 489-2900.