Success in the food industry requires you to support two masters: customers and consumers. My observation would be producers and processors focus more on consumers than customers. I appreciate why they do this; consumers are usually easier to work with and it is more rewarding to share your products with people who are appreciative. It is always a negotiation with a retailer or distributor which makes it more challenging.
It is more challenging and it is something you have to do if you want to be successful in this channel. You do have options to sell direct: with your own physical store or e-commerce. These can be viable for some food producers and processors but 90-95% of the food and beverage in Canada still flows through the retail and food service channels.
If you want to sell into this 90-95% you need to focus on both customers and consumers.
When we look at the C.A.R.T. process we ask the question; how can you support your customer more?
To support your customers, consider their priorities and what is important to them. Last week we shared some insights into how you can understand them better. You also cannot do everything so our suggestion is to focus on 5 areas to support your customer. You should know them better than we do but here are some suggestions:
1. In stock position
This continues to be a priority for retailers. Many producers and processors are challenged with labour, restrictions due to the pandemic, supply of inputs and raw materials. Make this a priority within your business and share your efforts with your customers. This can include checking PO’s to make sure they make sense and sharing forecasts with customers to ensure you are on the same page. It is not always within your own business where you need to focus efforts.
Tell them what you are doing and report on your results. They will focus on the problems and might not even realize in challenging times you are delivering over 95% or product ordered on time and in full.
2. Adapt to a new sales process
The staff for most retailers are working remotely. This brings opportunities foe suppliers. My experience has been they are easier to reach and more willing to set up a 15 minute call. Don’t abuse this but if it will help build your relationship take advantage of it. More frequent and less formal seems to be a theme for many.
They are also not able to visit stores as often. If you are out and in stores let them know what you see. This can be very valuable if you or someone in your organization is in a different market. They want to know what is happening so support them with some photos and screen shots of ads.
3. E-commerce is an area where you can support your customer
We know e-commerce has been a priority for many retailers. They have experienced significant growth in this part of their business. How often are you on the website to check your products and make sure they include the right photo, price or appear at all. If your items are not there consumers cannot buy them. You and your customer could be missing out on 10-15% of sales.
One area to focus is themes and ads. My experience has been items do not always appear in themes and ads online when they are there in store. Consumers shopping online never see the store so you are both missing the opportunity for those incremental sales.
4. Trends
We know there has been so much change as a result of the pandemic but consumers are also thinking about sustainability or plant-based proteins. You should know your target market better than any retailer does. Do not lose sight of these trends and how important they are to your consumers.
When you have the opportunity educate your customers about them and help them see where the opportunities are. They are focused on service level, operating stores with restrictions, e-commerce and other issues. Make sure you remind them about consumers as well.
5. Cost of Goods
Similar to trends this is not going anywhere. There is a good chance your cost of production has increased and you need to make sure you have the facts if you believe a cost increase is warranted. Retailer’s costs are increasing too so they will be looking to keep their cost of product lower.
Trade spend will always be a part of this business so you should continue to look to the future to see where you can invest with your customers and get a return.
As we said at the beginning it is always a negotiation. Share issues and increases with them now to set the table for the future.
These are 5 areas we suggest. You might have different topics where you believe it is important to support your customers. Make sure these are a component of your communication and in these challenging times you might need to be more upfront about the support to ensure it gets noticed.
If you have any questions about how to get your local products on the shelf or in the shopping cart you can always call me at (902) 489-2900 or send me an email peter@skufood.com.
Peter