‘Local’ might get you to the shelf - SKUFood
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‘Local’ might get you to the shelf

‘Local’ might get you to the shelf

Consumers say they want local, but do they really buy when they are in the store? With more focus on value than we have seen for years people need a compelling reason to buy.

We will take the first 10 weeks of the year to dive into our 2024 trends. We want to provide you with as much context to determine where to focus the efforts of your business. Everyone has a limited amount of resources and dollars so it is important to consider the best return for your investments.

2024 Trends

8. Your product needs to be more than ‘local’

No doubt, consumers want to know where their food comes from and retailers are putting these products in stores. The “Local Sourcing” trend, which was accelerated during Covid, continues to grow among all leading retailers and food service distributors. The wide array of local brands and skus put even more pressure on suppliers in crowded categories to communicate why they are different and better.

‘Local’ can get you on the shelf

Retailers and consumers will tell you they are looking for ‘local’ products. This can be a tremendous opportunity for small to medium sized food processors. Larger companies pay a lot of money to get their products into some stores.

Assuming you meet the minimum food safety requirements, your labelling meets or exceeds regulations and they like your product, you can get to the shelf. This is a great achievement and one to be celebrated.

The focus of your work needs to change at this point. You do need to continue producing a great product but that is not your only job. You need to shift to selling the great product you produce. Retailers will only keep your product on the shelf for so long. The space is valuable and your product needs to deliver sales and margin. The analogy I would use is think of the store as an apartment building. Retailers are landlords and they will try to find the tenants who can pay the highest rent, which are the margins your product earns for them. An apartment building with a lot of tenants who pay low rent is not good for the landlord.

Leverage the opportunity

If you are on the shelf as a ‘local’ product you are probably doing your own distribution or have a distributor. You should know exactly how many cases you are selling to each store each week or each month. Set targets and measure the results. Sales are how you will be judged at any retailer. They can be all in for your product, but if it doesn’t sell your product will not stay on the shelf.

Try different trade spend tactics like in store specials and loyalty programs. Some of you might want to do demos. I am not a huge fan but I understand they can be a part of the strategy. See if the retailer will let you put up any signage or recipes. Use your social media to let consumers know where to find you and give your stores some focus too.

Your job has to shift to really selling that great product you produce. A big part of that is to understand and share your value proposition. Stores are crowded spaces and people are bombarded with messages from some of the largest consumer packaged goods companies in the world. The big players should not go after ‘local’ products, but you can bet Kraft are not ok with losing sales to a local coffee roaster.

Ask yourself these questions

1. How does being local make this a great product?

If you are going to use ‘local’ as part of your value proposition you will need to explain what difference it makes. One benefit can be your product has less miles than products produced elsewhere. For some consumers this can make a difference.

We see some ‘local’ products with unique ingredients. This can certainly differentiate your item and resonate with consumers in certain areas.

When you have figured out what makes it great you need to make sure your packaging delivers the message.

2. Why your target consumer is willing to pay the premium for your product?

Most ‘local’ products are more expensive. You just do not have the economies of scale for production and ingredients and packaging cost more. Your volume does not warrant being in the retailer’s warehouse so distribution so distribution costs are higher. This will all result in a premium on the shelf.

If people are buying you need to ask them why. They obviously see value so it is important to understand this and then use the answer in all of your marketing.

The answers to these two questions will be the story you need to tell.

Peter

SKUFood Recipes for Success Podcast

We are super excited to announce we have launched our SKUFood Recipes for Success podcast. We have been working on this project for a while and it is finally ready to share with all of you. Our intention is to share the stories of food businesses and others in the value chain while also providing insights that are interesting and helpful to people in the food and beverage industry.

In this episode of SKUFood Recipes for Success Podcast where we talk with Hannah Mollegaard, the founder of Snak Bakery. A passionate advocate for wholesome living and mindful consumption, Hannah shares her journey of transforming a simple idea into a guilt-free pleasure. Hear about the challenges and triumphs of entrepreneurship and Hannah’s commitment to make snacking a celebration of well being on SKUFood Recipes for Success podcast, presented by FCC Food and Beverage

Listen and subscribe where ever you get your podcasts.

Where is Peter Speaking?

Retailers could be legislated to sign code of conduct

It must be very frustrating for the people who have worked on this project to listen to the stonewalling coming from Loblaw and Walmart. I still think it goes back to politicians blaming retailers for higher prices. Walmart and formats like No Frills and Maxi at Loblaw depend on price image. Politicians have been using their soap box to point the finger in their direction and they are tired of it.

We do need a more level playing field and we understood this was very close to happening. We do need a better process to resolve disputes that is impartial as opposed to a big retailer with a big market share punishing a supplier.

It is unfortunate if it has to be legislated.

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