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    A la cart
    A la cart
    A la cart
    Ebook237 pages2 hours

    A la cart

    By Peter Chapman

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    About this ebook

    A la cart is for suppliers, producers, processors and others in the food industry who want to understand what is important to food retailers. Everyone in the food industry needs to understand what retailers are doing and why. A la cart will help you drive more sales and get your items in the shopping cart more often.
    Go behind the closed doors of the retailers and understand what they are focused on, why and what you should do about it. Benefit from Peter Chapman's 25 years in the food industry with the ultimate goal to get more of your product in the shopping cart!

    LanguageEnglish
    PublisherPeter Chapman
    Release dateMay 26, 2014
    ISBN9780993673412
    A la cart
    Author

    Peter Chapman

    Peter Chapman understands the food industry. Benefit from this valuable insight as Peter helps you understand the retailers and get your items in to the shopping cart of the consumer more often. An in-depth knowledge of the retail landscape and the consumer is invaluable to producers and manufacturers who want to grow their sales. Peter has considerable experience – from developing relationships with suppliers throughout the supply chain, to retail merchandising. Peter's company, GPS Business Solutions, provides services to producers and manufacturers who want to increase their sales to large, centrally structured retailers or specialty food stores. Prior to starting GPS Business Solutions, Peter worked for 19 years with Canada's largest food retailer, Loblaws. He held positions in various departments, including merchandising, marketing, advertising and real estate. This experience has given Peter considerable insight and understanding of food retailing. Peter speaks to audiences of producers, processors, industry associations, store managers and retailers. He has helped all of these groups navigate through their business challenges. He is a member of the Canadian Association of Professional Speakers and is a past president of the Atlantic chapter. Benefit from Peter's passion for retail. Peter's book A la cart and his speeches and workshops include many real examples of what is happening in retail today. Go behind the scenes of the retailers with Peter to understand how to maximize the opportunity; with the ultimate goal to get your items in to the shopping cart.

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      Book preview

      A la cart - Peter Chapman

      Introduction

      Our retail landscape is constantly evolving and food is a powerful traffic builder. Traditional food retailers are competing with more diverse competition every year. This book is for suppliers and other people involved in the food industry to help them understand what is important to their customers. Everyone involved in the food industry needs to understand what retailers are doing and why they are doing it.

      The chapters in the book are designed to share why a priority is important to the retailers, what they are doing about it and how suppliers need to address the priority in their own business. The final page of each chapter is an opportunity for the reader to include some specifics from their own business.

      During the planning process it is easy to focus on your own business and the opportunities within. Every supplier or business involved in the food industry should be aware of the retailers’ priorities when they conduct their business planning. The final chapter provides a process for this to ensure there is alignment, which leads to prosperous relationships.

      Preface

      There were so many times when I was sitting across the desk from a supplier when it was apparent an item would not achieve its full potential. Two thoughts would come to my mind:

      You just don’t understand me as a retailer;

      It’s your job to get the item in the shopping cart, not mine.

      I know our respective sales would have been much greater if the discussion was built on these two key points. These discussions can be more productive and there are so many opportunities for suppliers who see the retailer as a customer. Despite a common goal, relationships between retailers and suppliers can be very adversarial, an oddity that happens when each party does not understand or respect the challenges facing the other.

      One of my biggest frustrations was suppliers who believed their job was to produce a product and get it listed. Retailers have thousands of items to manage and sell, so here’s a clue to your success; they will only keep the ones that make it through the cash register. Suppliers have to produce products and entice the consumer to make the decision to purchase.

      During my twenty years with Canada’s largest food retailer the retail landscape and the sales mix changed dramatically. Suppliers need to evolve with the changes. I saw items that should have performed so much better. It really was disappointing to see items perform poorly when they had so much potential. Collectively we can have such a powerful influence over what the consumer buys. I am committed to helping suppliers understand the retailers so that they will be more successful.

      The chapters in this book are designed to help suppliers and others in the food industry understand what is important to the retailers, what the retailers are doing about it and how suppliers can incorporate this in to their own business. I will take you behind the closed doors of the retailers to offer some insight in to the most important issues and how the retailers are trying to drive traffic and sales.

      Products will be successful when they are aligned with retailer’s priorities and when they resonate with consumers. We all win when products get to the shelf and the consumer puts the item in the shopping cart.

      Peter Chapman

      Chapter 1

      Cart

      Survive and thrive in the complex food industry

      Why do we have to make this so difficult?

      Selling food products should be such a simple business: you produce a product, deliver it to a store and watch the consumer put it in their shopping cart. Unfortunately, the industry has made it so much more complex. Today’s food industry is a myriad of challenges, throughout the entire value chain. I will explain what the retailers are doing and why. There are suggestions for suppliers that will conclude with a recipe for success.

      To be successful the supplier must satisfy two masters:

      1.   The customer who is the retailer;

      2.   The ultimate consumer.

      Customers and consumers are not the same

      There is a fundamental difference that can be the determining factor between success and failure. In our system of food retail, the retailer issues the purchase order and is the customer of the supplier. The consumer rarely ever pays the producer for the product; they buy it from a retailer.

      The customer pays a business for a good or service;

      The consumer purchases a product for personal consumption.

      I have seen many great products that do not succeed because the supplier has only focused on the consumer. It’s critical to understand who your customer is and what they are focused on today and into the future.

      There are great opportunities for suppliers who commit to understanding ‘the retailer is the customer.’ I believe that by understanding and anticipating the needs of retailers and consumers, suppliers can become much more valued and in demand.

      Productive relationships require both parties to understand and respect each other. Ensure your organization understands and respects the priorities of the retailer.

      There are thousands of great food products being produced today and in development for production tomorrow. It continues to amaze me how people can introduce new items and reinvent old ones. Just when you think you’ve seen them all, a new item will hit the store shelves that generates a loyal following of consumers. It is vitally important to understand that retailers control the store shelf. Category managers decide if it will be available before the consumer ever has a chance to put it in their shopping cart.

      A well defined customer base is very important. In food processing, there are many options for selling product. Make sure you explore all avenues to find the right fit for your business. It is important to remember that medium and large retailers are not going to change their methods of operation for suppliers—you need to understand them and design a business model that will be successful satisfying their needs.

      Selling product to the retail trade can be challenging, however, there are some benefits that are often overlooked.

      The challenges include:

      1.   Large retailers can exert influence over suppliers;

      2.   Selling product to large retailers can be intimidating to smaller suppliers;

      3.   A small number of category managers can have a significant influence over the success or failure of a producer or processor;

      4.   The retailer has made the investment in the store so they control what goes in;

      5.   Product specifications and standards are often challenging for producers and processors to meet;

      6.   Central distribution is difficult for some producers and processors to accept;

      7.   Central procurement often requires travel and developing relationships with people in different regions;

      8.   Retailers have their own language and they expect suppliers to understand the terms and words they use (see The language of retailers).

      There are also many benefits to selling product to the medium and large retailers:

      1.   A small number of customers allows the producer or processor to really understand the customer in detail;

      2.   Retailers focus on volume which can be a benefit to suppliers;

      3.   Improvements in the retailers’ distribution systems can result in cost savings for producers and processors;

      4.   The focus of retailers is relatively consistent. The overall priorities are similar. They each have their own version of sales as a priority but all have sales as a top priority;

      5.   The expectations of retailers are well defined;

      6.   The resources within retailers are becoming more limited, therefore, when you provide a valuable service to them you have increased your value.

      You have to know what your customer is doing!

      If you determine retailers are the best distribution channel for your products, you must understand the priorities of your customers. These are key areas of focus for the retailers, where they are investing money and resources to be successful. The business priorities among different retailers are surprisingly, relatively consistent.

      Sales

      Sales are a top priority of every retailer. To be successful they have to get their products through the cash register. This is the first number they look at each week. It is critical that your products will deliver sales to the retailers every week. You should have targets for sales within your business and if possible relate them to your own metrics as well as to the retailers. For example: you might require 10,000 cases per month to get the level of efficiency required for your packaging equipment, but you should also quantify that in terms of cases per week per store. That’s how your customer measures success. Look at sales within your business and through the eyes of your customer.

      Differentiation

      In a crowded marketplace, every retailer is trying to carve out its own niche. It is critical for suppliers to treat each retailer with a unique strategy. Every retailer is trying to sell food but each has its own method of doing it. Suppliers must understand this and develop a solution that supports the point of differentiation for each retail banner.

      Supply chain

      Getting the product through the supply chain to the store is very costly and complicated. All retailers are working to improve efficiency and reduce the costs of the tasks involved. This is one area of the retailer’s operation that is not only expensive, aside from getting product to the store, but delivers very little value to the consumer. The end users expect the product will be there for them in pristine condition, but there is no premium for getting product to the shelf in great condition. Therefore, retailers are very focused on moving products as efficiently as possible. It is critical to the success of an item and a supplier that products flow through the entire supply chain system properly. This starts when the purchase order is issued and ends when the product gets to the store shelf.

      Food safety

      The topic of food safety has become a non-negotiable issue in the supply of food to retailers in our marketplace. Retailers have their standards and expectations for food safety and it is the responsibility of suppliers to understand these and meet or exceed them. Suppliers who do not have adequate processes in place run the risk of providing unsafe food and seriously impacting the relationship with retailers.

      Health & wellness

      As consumers learn more about the impact of food to their bodies, shifts have occurred. People are looking to move back to products which are better for them. People want to live longer and healthier. Food producers and retailers are changing the products and stores to accommodate these changes in the marketplace.

      Global foods

      Our population is changing and consumers are becoming exposed to more and more diverse tastes and products. The growth of sales in the ethnic categories is driven by immigration and access to information. The world is a much smaller place in terms of ingredient sourcing and cooking methods. First, second and third generation Canadians are looking for many products that were never available in Canada, even 10 years ago. Food producers and retailers are responding quickly to make these items available. There are many opportunities for suppliers who are able to produce these products or bring these items into the country.

      Food solutions

      One of the most valuable commodities to the consumer is time. Producers and processors who are able to reduce preparation time and effort will generate sales. The new caveat to this opportunity is that items should also provide some health benefit. The end user is focused on reading nutrition labels and finding items that meet the need for convenience, yet are not excessive in sodium,

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