We would really like to share photos from coast to coast of holiday merchandising. When (not if) you are in the stores it would be awesome if you shared some photos of your products or just great holiday merchandising. The purpose of our SKUFood newsletter is to share information so what better thing than to show people across the country what is happening. You can send your photos to

Peter@SKUFood.com or Susan@SKUFood.com

Please let us know where the photo is and we will share them between now and the end of the year.

There are many industry terms people ask about. This year we are taking a different term each week to define and share some applications.

In and out seasonal programs include products that are listed and merchandised for a limited time to coincide with a specific selling period. These products deliver incremental sales, but they are also a challenge for retailers to manage. The items have a limited time to sell and they have no ‘home’ in the store.

It takes a lot of coordination to manage in and out programs. Suppliers and retailers must execute at each stage to ensure the product flows through the system and arrives at the store when it should. Too early is costly and cumbersome for stores and too late will usually result in lost sales.

The planning starts early

Many retailers will start planning for in and out seasonal programs as soon as the program finishes in the current year. In other words, as soon as Christmas 2022 is over they will make plans for Christmas 2023. There are a few reasons why this works best:

1. The results are fresh in their mind.
2. You avoid the work of a complicated postmortem that sits on the shelf until it is needed. Do the work once to adjust the plan for next year.
3. Lead times on many in and out programs is longer.
4. The extra time is beneficial for the supply chain part of the business to make their plans. They need to know how much space is required in warehouses and trucks to manage the regular flow of goods and the in and out items.
5. Often operations people are given the chance for input into items and quantities.

If you have an in and out item you want to be in the Halloween program you might be too late for 2023! Crazy but retailers are trying to work that far out.

The steps to follow for in and out items

You have to get your item listed for the seasonal program. From some perspectives, this is easier than a regular listing. You usually do not have to pay listing fees and there is no justification to illustrate why you need to take the shelf space of another product. The challenge is to convince the retailer your item will sell through during the seasonal selling period. If your product is a Christmas item, it will need to sell through by December 24th.

As you prepare for the following season you will need to get in front of the appropriate category manager 12 months in advance. You might not even have final packaging but you do need to be close so they can understand your item. One consideration for in and out items is how and where they will be merchandised. If your item requires refrigeration you will need to be put into some existing space. Deli cheese is an example. They prepare for this influx of inventory. If you are a shelf stable item, they will often be looking for a merchandising unit or cardboard ‘merchandiser’ to display the product.

You will need to supply samples for the category manager to consider. They might not make the final decision. Many seasonal programs are opportunities to get input from other merchants and operators. It is tough to predict what will happen in 12 months time, so a few more opinions can be valuable. There is also the idea that stores who ‘book’ seasonal quantities take more ownership in the product. Book is simply another word for confirming the quantity they will take in their store. When they agree to take 50 cases they know they have to work to sell the product. Seasonal items can vary from store to store so it is a chance to customize the program. Many retailers will use an ABCD model. A stores will receive 50 cases, B stores 40 cases and so on. The store will have the option for their particular location. Some of my fondest memories during my time at Loblaw are the cheese tastings we used to do for the next holiday season. 2 days of cheese…mild to strong…all in front of you to try…heaven!

Once the item is listed and the booking complete it is time to confirm orders and delivery dates. The stress on the warehouse and distribution networks can be sizeable. If you consider the 4th quarter they have to manage Thanksgiving, Halloween and Christmas plus other programs. This is a lot to coordinate. The warehouse does not get any bigger. They also do not build warehouses and stores to manage 4th quarter inventory because they would be inefficient other times during the year.

Communicate with your customers about timelines and inventory production. If you are working towards a 4th quarter holiday program and production starts in the summer, it would be good to give your customers an update once per month. Just a quick note to let them know things are on track. Don’t expect a response or a big thank you but if you do get one consider it a good thing. The peace of mind that seasonal inventory is in good shape is a good thing for a category manager. Remember they negotiate these programs so within the retailer it is ‘their’ program. You would not want to be the baking category manager who delivers fall baking items 3 weeks late. If you are having issues assess the situation and determine if you need to make your customer aware or not. If you believe your timeline for shipping could be compromised, the earlier you can let them know the better. This will allow for warehouse and distribution plans to be modified. Do not think because they have trucks going every day, they can just put it on the next one.

Once your product has shipped confirm arrivals and get into the stores to ensure it is flowing through the system. In a perfect world you would have a test shipment but that does not always happen. Monitor the timeline carefully and it can be a good idea to just let your category manager know your product is in the warehouse. Another step in building the relationship to let them know you are meeting or exceeding your commitments.

If your product is scheduled to arrive in the stores November 2nd then you need to be in the stores, November 2nd. If you see it, try to scan it through the front end. Confirm everything works properly. If you don’t see it, ask at the store and try to understand if there is an issue. Chances are there is something you might need to check into. If the plan was built it should be there. Could be an item number with 1 digit wrong. You cannot afford to let it sit there because they have planned for full trucks every other day. This is where all of your hard work building relationships comes in. You will have a person to call to sort out the issue.

During the season continue to check stores to monitor sell through and get ideas for next year. Talk to people working in the stores to get feedback and ideas. They are there every day, talking to consumers.

Once your product sells through…it is time to start thinking about next year and the cycle starts all over again.

If you have any questions about in and out seasonal programs, you can always send me an email peter@skufood.com or call me at (902) 489-2900.

Peter

FCC focus on dairy industry

It was interesting for me to read the FCC diary update as I just had the opportunity to speak to the dairy industry in N.B. The decline in cow’s milk relative to plant-based milk is discussed in the report. The industry is growing in sales but some categories declining in tonnage which is a concern.

As we discussed last week with bakery these are great reports if you are in this category or sector to compare your performance to some national numbers.

Consumers are becoming more demanding about health benefits

There were two interesting takeaways from the following report. The first is how the research was done. Tastewise use a sophisticated artificial intelligence algorithm to capture what consumers are interested in right now. They monitor social media interactions, online recipes and restaurant and delivery menus. The volume of interactions they are measuring is staggering.

The second takeaway is consumers seem to be getting more educated about health and wellness. We know this is a very complicated subject but the fact people are looking for not just ‘better for you’ but specifics is interesting.

Where is Peter Speaking?

Alberta Agriculture Jan 26th

Getting Alberta products on the shelf

Alberta Agriculture Feb 9th

Getting Alberta products in the shopping cart

Learnsphere Feb 16th

Perfect your pitch

I am excited to join the Alberta Food and Bio Processing Branch for a webinar in February. The retail market continues to evolve as consumers and customers are changing, as well as the impact from the recent pandemic on this market channel. We will provide an overview of what is happening in food and beverage with a focus on Alberta products and how to price products and the promotion plan required to get on the shelf. We will break down some of the costs and your return on investment including: category based pricing, setting your price and getting your price; your trade spend investing with retailers and your marketing spend connecting with consumers. You will hear about growing your baseline and take away a glossary of terms and a tool to help build your promotion plan.