Last week we discussed one portion of the money food producers and processors must plan for; trade spend. This week we will focus on the other investment; marketing spend. Consumers are creatures of habit and you will need to create demand for your products. Google and dictionaries can provide definitions, but they do not always help you understand the importance of the term or perhaps even a specific meaning in our industry. We are going to share some food and beverage industry terms and explain how they can benefit or impact your business.
Marketing spend is the total amount you spend that is targeted directly at consumers. This can include social media, mass media, public relations, consumer trade shows, supporting community events, signage at your local rink or any other money you spend to build your brand or drive sales with consumers.
The sales and marketing efforts in your food and beverage business is a job for every day and every week. You should be planning the future and assess what happened. It is a significant investment. You need to know where you are going and the return on the investments you made.
If you have heard me speak at an event or online you will have heard me say “Success in this industry is not just about making great products to sell; it is about selling the great products you make.”
Marketing spend is more than social media posts
Getting your product to the shelf is a great accomplishment. Getting it off the shelf is what will make your business successful.
There are thousands of products in every grocery store. You do need to give consumers a reason to pick up your product and put it in their shopping cart. Creating demand is part of your job and marketing spend is an investment you make to get attention and build relationships with consumers.
Objectives for marketing spend should be to:
- Create awareness
- Change attitudes
- Influence behaviour
When you accomplish these three things you have a much greater chance of getting your product off the shelf and into the shopping cart.
Marketing spend is the total amount you invest to communicate directly with consumers. This can include:
- Social media (generic and paid posts)
- Mass media (radio, print & television)
- Public relations
- Consumer trade shows
- Sponsorship
- Signage
- Packaging
- Influencers
- - Any other money spent on consumers to build your brand or drive sales.
Determining the return on investment for your marketing spend is a challenge. There is not always an immediate response and it does take time to build a brand. Your efforts need to result in sales.
Comparing actual sales to sales forecasts is one tool you can use. Likes and other reactions on social media are great but that is only creating awareness. The success occurs when you can change attitudes and influence behaviour. In other words, get them to buy.
You need a plan and a budget
You know your consumers and your product better than anyone. The most effective marketing spends happen when you determine where and when to invest. It is good to have the ability to react to opportunities but you should have the basic plan in place.
Social media has been a huge game changer for many food and beverage businesses. The barriers to entry are low and you have the ability to reach a lot of people. For these reasons it is a very crowded space. Generic posts are nice but they really do not reach many people and you need to do a great job to influence behaviour.
From my perspective, generic posts on social media are the new in store demos or sampling. They are both realistic for people to execute and they do make you feel good when people like your sample or post. I am not convinced they always lead to the behaviour you need to make your business successful. You can feel good about being busy and getting things done on your list but check the return on your investment.
Social media platforms are in business to make money. They are happy you are posting and creating content for them, but they will not give your posts much airtime if you aren’t paying them or generating interest in the platform. I am no expert at algorithms but I do understand generic posts are not getting much exposure.
Your customers will be looking for suppliers who deliver sales
Your customers will always push you to invest in trade spend. It is part of their job. You need to do both, invest in trade spend and marketing spend. Although it is important to communicate you are doing your part to drive sales, I am not convinced there is a huge payback to talking too much to customers about your marketing spend initiatives. They will demand your sales meet objectives but how you choose to make that happen is up to you. Yes, let them know you are doing your part to drive sales but if you focus too much on the marketing spend initiatives, they will see you spending too much money, driving up your cost, outside their store. It is a balance.
If you have any questions or require help building a marketing spend plan, you can always send me an email peter@skufood.com or call me at (902) 489-2900.
Peter
Service level will get you a long way
On the retail side we used to say ‘volume hides a lot of sins’. Right now, for suppliers, service level hides a lot of sins. If you are able to get your product produced and delivered to the right place you are ahead of many.
It is time to continue reviews of ingredient and packaging inventory to ensure you can meet demand. It is also time to review sales estimates with customers. Perhaps the situation has changed from your last conversation and they might need more. Make sure you are realistic with your predictions. Before you commit to more, make sure you can produce it. Meeting their expectations is a win right now.
IGA accelerator programs supports Quebec suppliers
There are many challenges to getting a food and beverage product to the market. IGA (Sobeys Quebec) have launched an accelerator program to support suppliers.
They offer several areas where they will work with prospective suppliers to help them get to the shelf. It is an illustration how powerful the demand for ‘local’ products is when retailers will help and even finance the development.
When is Peter speaking?
Learnsphere Supply chain 1-2-3 Food & Beverage Manitoba
Sell successfully to retail- May-June
Association of Municipal Administrators of NS- Jun 16
With the Kilted Chef
To help promote the Atlantic Canadian companies participating in SIAL I had the opportunity to create some videos with Alain Bosse, the Kilted Chef. We had a great time putting the videos together and they should be a valuable tool for these companies to help build their brands in the market.