Growing sales in existing markets usually pays dividends before you reach for the shiny penny in a new geography. - SKUFood
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Growing sales in existing markets usually pays dividends before you reach for the shiny penny in a new geography.

Growing sales in existing markets usually pays dividends before you reach for the shiny penny in a new geography.

This is a good week to talk about sales. The week before Easter is a big sales week. Did you know the Thursday before Easter can be the single busiest day of the year in food retail? There are bigger sales weeks in December, but the day before Good Friday is often the highest sales day of the year.

One of the exciting conversations we have with food and beverage business owners is how they will grow their sales. It is great to consider the options for the business to grow and generate more sales and profits.

The two most common alternatives put forward are to enter a new market or to introduce new SKUS. No doubt these should be considerations but there is one more that is usually a better option than these two:

Grow your sales in the stores you are already in.

It is not as exciting or interesting but it can deliver a better return for your business and keep you from being stretched too thin.

Understand your sales

Determining the best strategy requires some numbers to measure results and figure out how you are doing. If you are delivering direct to stores (DSD) you should know your sales in each location. Select a period of time and review your sales by store and calculate the units per store per week or per month. It is best if you have some history to analyse such as sales from the last 6 months.

If you are using a distributor you will need to get sales reports from your distributor. This should be part fo the service they provide to you.

If you are selling into the retailer’s warehouse it can be more difficult. Sometimes they will cooperate and share some sales data but this does not happen often. You can invest in some form of third party information like Nielsen but this can be expensive.

Compare actual results to targets

Talk to your customers to understand the targets they have for your products. If you do not know these and cannot get them from customers then you should set your own targets. It is difficult to provide one number that works for all categories but one target that does get used is a case per store per week. In other words if your product has 8 units in a case then the retailer would be looking for your product to sell 8 units per store per week.

Once you determine the sales targets, compare your actual sales results to these targets. In most examples we see you will have a range of performance. Split the stores into A B and C with A being the top third in sales per store or sales per point of distribution (SPPD).

Figure out what works

Look at what is happening in your A stores. It can be product placement, merchandising, promotion or other factors. Learn from these stores and incorporate these practices into your sales plan for all stores.

Your goal should be to get the SPPD in the B stores up to the level of the A stores.

A 20% sales increase

Consider the following example:

You have your product in 450 stores

You average 10 units per store per week in the A stores

You average 6 units per store per week in the B stores

You average 3 units per store per week in the C stores.

Total sales = (10 x 150) + (6 X 150) + (3 x 150)

Total sales = (1,500) + (900) + (450)

Total sales = 2,850

Increase B store sales to A store levels = (4 x 150)

Increase B store sales to A store levels = 600

This is a 21% sales increase (600/2,850)

You do not have to get into any new markets, invest in new sales and marketing campaigns, pay listing fees or free fills or stretch yourself further.

Our example assumes the 10 units per store per week is a good number for your A stores. Perhaps this could be 12 or 14 units? Try to understand your market share in the category. If you are below 30% you can probably grow your sales just by getting the attention of the people already buying in the category in these stores. They are there, you just need to get them to switch to your products

It is not as exciting but the ROI might be better

No doubt launching in a new market or developing and introducing new SKUS can be exciting. It can also spread you too thin and require considerable investments. Take a look at how you are performing in the stores where you have done the hard work to get to the shelf. It is a different kind of work to grow these sales. Perhaps not as exciting but consider the return on your investment and what will be best for your business.

For those of you celebrating Easter this weekend we hope you enjoy the holiday with family and friends.

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, we sit down with Shivani Dhamija, the founder of Shivani's Kitchen, a company that's been making waves in the world of ethnic food products. Join us as we explore Shivani's entrepreneurial journey, from establishing her CFIA (Canadian Food Inspection Agency) certified facility in 2020 to the remarkable progress she's made since.

Discover the secrets behind Shivani's success in manufacturing authentic and delicious ethnic products for grocery stores. Learn about the challenges she faced, the milestones she achieved, and the passion that drives her to bring the flavors of her culture to a broader audience.

Get ready for a conversation that delves into the art and business of creating ethnic products, with Shivani as our guide through the aromatic and flavorful world of Shivani's Kitchen on SKUFood Recipes for Success podcast, presented by FCC.

Listen and subscribe where ever you get your podcasts.

Where is Peter Speaking?

Food & Beverage Atlantic’s next Sobeys Pitch Program is accepting applications.

For those interested in learning about the application process, they will be hosting an information session this Thursday March 28th at 11am.

KD Not mac and cheese launches in Canada

Line extensions are not new. Is used to be new flavours, now we see many products reinvented as vegan options. It is interesting in the article to see the statement that close to 50% of Canadian consumers “are either plant-based, or looking to incorporate more animal-free foods into their diets.” That is a big number, bigger than I would have perceived. Obviously looking to incorporate does not mean 100% change, but it is significant. We also know what consumers say and what they do is not always the same.

I will have to look for this in stores. It has been a while since I had KD so I might have to do a comparison to check out the differences.

We are really excited to partner with Food and Beverage Manitoba on this program for food and beverage businesses. The objective is to help companies take advantage of the opportunity in retailer’s local programs and take the next step. We are delivering the first 3 sessions virtually then I will be in Winnipeg for the last session in person.

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