Sales have a role in compliance
Compliance is the foundation of your customer relationship
One of the great things about our SKUFood Recipes for Success podcast is that I learn more every episode we record. We do prepare for the conversations and have a plan to cover relevant topics during the episode. Even with the plan our guests say things that are Aha moments for me. I hope they are for you too.
In our episode where we talked to Lee Turner from ADL in PEI, we discussed relationships with retailers. My question to Lee was, ‘How do you develop relationships with Canada’s largest retailers when your office is located in Summerside, PEI?’ I think I will always remember the answer from Lee. He said it all starts with compliance. When ADL can deliver into the retailers and meet or exceed compliance expectations then he can really work on the relationship. If they are not compliant, he will not be able to get past those issues to do everything else he needs to do with each customer. To be honest I was expecting a different answer. It is true suppliers need to get past this hurdle before they can work on all of the other things we talk about.
Nobody likes compliance
There is no doubt that suppliers get frustrated with retailers imposing rules about how they want to do business. Suppliers get even more frustrated when they get fined for not living up to these expectations. Given the flow of the value chain, retailers are able to leverage their place between suppliers and consumers.
If you take a deep breath and think about it there are some reasons for their decisions to create these ‘rules of the game’. We are not defending them, but one thing we try to so at SKUFood is help people see the reason behind decisions. It does not mean you have to like it or that we are trying to convince you it is a great idea.
This is how retailers want to do business and they are the customer.
Retailers work with thousands of suppliers and each one of them has their own way of doing business. Compliance is an attempt to force standardization and increase efficiencies. If they did have pallets coning into the warehouse with different configurations or paperwork in different places it would take more time. With thousands of pallets coming into a facility every day and more reliance on automation, consistency is a requirement. There are some safety considerations as well with pallets 80’ in the air they need stability.
Understand the expectations
Retailers have outlined how they want to do business and it is usually included in listing agreements. For a period of time, it seemed like they were making up the rules as they went and that it was an opportunity to generate incremental money from suppliers. Hopefully those days are behind us and you can understand what they want and how they want it.
Before you enter into relationships with retailers read the agreements carefully and make sure you ask questions or get clarification. They are not the best at teaching you how to do business with them so make sure you talk to other people in the industry and know what is expected of your business.
Educate your business and business partners
Once you and your sales people understand the expectation, someone needs to educate the different parts of your business. Your sales people should be the link between compliance and your business. It is important the people building the pallets and coordinating the logistics understand the expectations.
If you are using third party logistics, they need to be clear about expectations too. Your customers see them as you, not a separate entity. Hopefully they have experience and relationships at the distribution centres.
Measure execution
This can be cumbersome but it is worth it. If you want to reward or celebrate the right behaviour then measure your ability to be compliant. Working with these retailers requires you meet or exceed their expectations. Measure you’re the ability of your business and your people to do this. Celebrate the wins. We see signs in businesses celebrating the number of days with no safety incidents so why not celebrate the number of pallets going into your customers with the right configuration?
When you measure results, you can report on them internally and to your customers. The category people are not close to compliance but it is a metric you can share with them. When you have an annual review, it is good to let them know you have 1,200 pallets go into their system without issues. They focus on service level but this is one other metric you can share to illustrate how your business is focused on their business.
Fight for what is right
We know there are disputes when it comes to compliance. If you believe you have met or exceeded the expectations and they are adding charges or fines, then you will have to invest resources into fighting these arbitrary charges. If it is not fair then it needs to be challenged. This can be difficult and you do have to pick your battles. One factor to level the playing field is the grocery code of conduct and the dispute resolution component. You have to be a member so investigate this option. We have not seen it happen yet but it will where they will begin to mediate issues between suppliers and retailers.
Hopefully you can avoid the conflict.
If you understand what is expected, build processes within your business and business partners to ensure you can meet or exceed the expectations, compliance will be a part of the foundation with your customer relationships.
Peter
SKUFood Recipes for Success Podcast
In this episode of SKUFood Recipes for Success, we head to Prince Edward Island to explore the unique world of dairy with Lee Turner, National Sales Manager at Amalgamated Dairies Limited (ADL). With over a decade at ADL and nearly 15 years of advocacy for local food and beverage in Atlantic Canada, Lee shares how a cooperative rooted in community has built a national presence on grocery shelves across the country.
Lee reflects on his role in launching ADL’s Dairy Isle brand and the importance of strong partnerships with major retailers like Walmart, Loblaws, and Sobeys. He gives us an inside look at what it takes to grow a local dairy brand into a trusted national supplier, all while staying true to its PEI roots.
We also dive into the evolving dynamics of the Canadian dairy market, from shifting consumer expectations to supply chain complexities. Lee speaks candidly about the role of innovation in traditional industries, the challenges of navigating national distribution from a small island province, and why supporting local processors is more vital than ever.
It’s a conversation about legacy, leadership and local pride, straight from the Island to the national stage.
Listen and subscribe wherever you get your podcasts.
If you would like to be a guest send us a note. We are always working on the upcoming episodes.
One of the best parts of my job is the opportunity to moderate peer groups for FCC. We meet once per month and discuss issues in the industry, challenges people have and opportunities. This is a great format for food and beverage entrepreneurs to talk with other people who are trying to accomplish similar goals. I have been fortunate to be part of the program since its inception. If you are interested give me a call or use this link to register.
As trade within Canada changes we are excited to be delivering a program for NS businesses to grow their sales and presence in other Canadian markets such as Ontario.
Grocery prices in the news…again
There is no doubt you have noticed these categories changing in your local store. With changes this dramatic, it will definitely impact consumer behaviour. If you are in these categories or even sell something related to them, you will probably see declines in demand. One interesting impact in coffee is that these increases have narrowed the gap between a premium coffee and the cheaper offerings. Consumers must pay a lot so they might as well pay a bit more for the better cup of coffee. Another example is people will cut back, but go for the premium offering when they do purchase. In our house we buy significantly less beef but when we do we would look for the premium cut.
Where is Peter speaking?
With the focus on Canadian food and beverage we wanted to share a program we have developed with Alain Bosse, the Kilted Chef. We partner to share insights about Canadian food and beverage at conferences and events. We talk about where products come from, share insights about some hidden gems and of course Chef Alain has great tips for using the products at home. This is designed to be entertaining and engaging. Not just for food industry audiences, it works for everyone.
I do have travel coming up to Toronto and Fredericton so if you want to connect or have an event in any of these locations give me a call or send me an email.