Calm focus on the priorities

January 9, 2023
/ SKUBlog
/ By Susan Sipos

Calm focus on the priorities

As we enter 2023, each week we will explore one of our 10 trends for the new year. We approach this a bit differently as our trends are developed for suppliers in the food and beverage industry. They are based on what we learn talking to different retailers, suppliers and stakeholders in the industry.

Our first trend is calm focus on the priorities. Everyone has endured 2-3 years of upheaval and challenges to get products produced. Retailers are looking to work with suppliers who are focused on how they can get it done as opposed to the reasons why they can’t.

If you think of the retailer’s roller coaster ride more of their time was focused on the problems. In their supply chain teams they were not celebrating the shelves with product; they were focused on the holes and how to get inventory. In their merchandising teams they were not complimented for prices that did not change; they have been criticized for either negotiating too hard or gouging consumers with inflation.

We are all looking forward to focus on the basics

There is no doubt the last 2-3 years have been a huge challenge for almost every business. Many hurdles to overcome, however we have also learned how to business differently. At SKUFood, we definitely work differently and probably more efficiently than we did prior to the pandemic. The whole virtual communication has evolved so much. We can deliver and share content much more effectively than prior to 2020.

Suppliers in the industry have had to source ingredients and packaging differently and we know labour is not as available or able to produce products as it was prior to the pandemic. It is now time to take all of the challenges and learnings to build your plan for the future.

Now that we are past Q4 of 2022 your customers, the retailers, should be moving forward with reduced emphasis on crisis and more focus on delivering sales and profits. Selling food and beverage has changed, but it is also still about delivering value to consumers in store and online. You should be talking to your customers about where you see the future and how they see it. I am always an advocate of starting a conversation with a position. You cannot expect your customers to tell you where it is going. Share your thoughts but then start asking questions and be open to their interpretation. This should be a great starting point for your approach to the future.

Look for opportunities to deliver stability

We know sales will be a priority for retailers as food service returns to pre pandemic levels and consumers search for deals to lower their shopping bill. Suppliers need to develop plans that will deliver sales. Those plans should include how inventory will get produced, when it is required, and some tactics to generate the increases. The tactics can be item and price, direct to consumer promotions, in store activity or any other ideas to get consumers to put the products in their shopping cart.

These are the basics we see retailers looking for. It does not need to be revolutionary; it needs to work.

Service level continues to be a focus

The right amount of product, at the right time, in the right place with the right packaging will be a good thing for suppliers and retailers. Service level issues cause frustration for everyone.

Service level is defined as:

Cases delivered (on time, to the right place, with the right packaging and labelling) divided by cases ordered.

680 cases delivered (on time, to the right place, with the right packaging and labelling)

720 cases ordered equals a 84% service level.

You should be measuring this in your business, by SKU and by customer. Engage employees in the importance of meeting and exceeding service level targets. Your customers probably expect at least a 96% service level.

Talk to your customer about their expectations and put together a plan in your business to deliver. Report on it to your customer and if you know there will be an issue, be proactive.

Communication is changing

Most of us have endured 2-3 years of challenging communication. Many calls were about product not arriving or missing, costs going up and many of the other challenges the pandemic brought with it. If you did not have to go through a lot of this, consider yourself fortunate.

First you should understand how your customers want to communicate. We have options we did not really consider much 3 years ago. Perhaps one in person meeting is enough and 2-3 30 minute video calls will save everyone time and money.

Perhaps your 2023 plan is already in place, it should be. It is now time to start measuring results and let your customers know how you are doing. Don’t wait for them to check your service level or sales, be proactive. Share the results with them. They can see it but if you provide it, they believe you are engaged and working on it.

Try to stay calm and illustrate to your customers how you are delivering on the priorities. They will appreciate this approach and see it as a breath of fresh air as we move into 2023.

If you have any questions about our SKUFood trends, you can always send me an email peter@skufood.com or call me at (902) 489-2900.

Peter

Beef industry helps stores offer more value cuts

We know inflation is in the news and impacting consumer’s choices in stores. Beef has been one category to increase more than most during this period of food inflation. Here is an example, shared by Canadian Grocer, of how the beef industry is trying to help retailers and people working in stores. The information is designed to put more focus on less expensive cuts and also packages that would be lower in price.

Suppliers should remember how important the people working in the store can be to their success. Any time you can help them understand and execute better it can help your cause. In this example the beef industry is trying to maintain volume by encouraging stores to give consumers different choices.

Inflation continues to impact food industry

Food inflation was in the news again just before the holidays. Some categories are showing signs of improvement, but food continues to rise faster than the overall inflation rate. The attached article from CTV news includes a number of categories and year over year results.

All suppliers should understand how their product cost compares to the overall number in their category. Some issues are commodity related and impacted by factors out of your control. Regardless of what is happening all suppliers should be prepared for the conversation. It does not appear to be going away.