Foodservice Insights

Next Steps: After the Show Follow Up

2011-03-22T13:33:00.007-04:00

It's now two weeks after the CRFA Show. You have reviewed all leads and have found a mixture of smaller customers who have expressed interest in your products and a couple of larger customers that have given you hope of potential entry into Foodservice Distribution. These larger customers are now overwhelmed with several manufacturers who are also following up with them as well. You may feel like you are now hitting your head against the wall. As much as your products may have been of interest to these larger customers, you may not be a priority focus to them at this period of time.

So how do you create the urgency/need to make them consider/prioritize your product?

Find out their menu focus and objectives---review their website. How exactly can your product fit in.
Check out when they make menu changes to ensure that you are included in their menu review.
Create your story again---these customers saw "many" manufacturers at the show---you may have to reintroduce your concept all over again in an even more compelling way.
Do you have the right contact who will make the ultimate decision or a champion who might enable you to get to the key decision maker? This champion can become an even more valuable tool to help persuade the company and build your profile.

It is about now that you might be discouraged. The larger the customer means that the decision process is often slower. If you have at least narrowed down the target market (e.g. healthcare, education) that needs your product, you can now explore other customer opportunities in that market. Don't be afraid to ask for help with this area as it might help you avoid further frustration and rejection.

Launching Products into Foodservice: The CRFA Show

2011-02-19T15:12:00.009-05:00

Every year manufacturers look at the CRFA Show as the key to launching their products into Foodservice distribution. Although this is the highest profile show in Foodservice, it is rare that you will gain your listing from simply showing your product at the show.
Most manufacturers with a potentially strong product for Foodservice will generate pages of customers who would like to purchase your product, but very few customers have the clout to secure your listing at a distributor.
If you do not have your product(s) listed in Foodservice, the following are some tips that can help:
Before show preparation

Clearly understand and summarize the features, advantages and benefits of your products.
Define your target market/customer.
Understand your competition.
Is there a need for your product.
Make your booth stand out to ensure you attract your target customers.

At the show

Target the customers. who have the ability to secure your listing. These are the ones you want to follow up with after the show. Smaller customers will only be able to buy your product once listed at their distributor.
Find out how your target customer's organization works, their needs and the key people who will champion your listing.
Who is their distributor?

Post show

Prioritize the leads that will drive your listing.
Do more research into the organization before contacting the key contact who will drive your listing. Focus on their website, operations people, visit their establishment(s), talk to their customers and colleagues in the industry----Figure out your angle and uncover all possible road blocks. Remember not knowing enough before you call your key contact can close the door to your opportunity.
Use your findings strategically as the most important thing is to listen to your customer and then demonstrate that you can meet his/her needs.

Starting up your 2011 Business Plans

2010-06-07T12:44:00.021-04:00

We are near the midpoint of the calendar year and for many companies, this is also the middle of the fiscal year. This is also a key time to start setting 2011 objectives. By now you should understand if your 2010 objectives are on track and what measures must be taken to ensure you meet budget/plan. Your vision should take you into 2011 opportunity planning.

First initial step for 2011 planning:

As most employees are overwhelmed with current priorities, it's important to make this a fun process. Get your team together and set the rules. Create sheets and divide into 4 columns:

Opportunity
Cost of Opportunity
Probability (1-4) (1 being most likely to succeed)
Potential Dollar Volume

Now just brain storm. No idea is a bad idea, think out of the box and title each sheet accordingly:

Current Customers
New Customers
Promotions/Marketing and Merchandising Tools and Ideas
Food shows and Customer Events
Product and Category Opportunities
Cost Savings

This is a great way to start the planning process for 2011. Include representatives from marketing and finance only if you feel it will lend positive feedback and maintain an open thinking process. Order in pizza/lunch, close the doors and shut off all outside interference. Even offer an incentive to the participant who delivers the best idea---and have the team vote on it. Everyone feels committed. Everyone feels involved. It may even get them excited about the 2011 planning process.

Launching Products into Foodservice: The Consolidation Challenge/Opportunity

2010-05-17T09:20:00.007-04:00

In the last three months I have had the opportunity to work with 3 outstanding entrepreneurial companies who want to enter into foodservice distribution. All 3 have products with unique attributes. They all bring to the table the latest trends highlighted by the top chefs and foodservice magazines. The quality of their products are certainly beyond what is currently available in the market. So why are they not a "slam dunk" easy entry into foodservice?

The wonderful world of foodservice allows a manufacturer to tap on many different avenues to gain profile for distribution either via distributors or operators. However; continued movement towards consolidation and larger customers and manufacturers make this increasingly more difficult. Here are some reasons:

Distributor Opportunity: As distributors continue to consolidate (as with SYSCO Ontario) they will reviewhat they have in their warehouses. They will want to seek out redundancy and look for ways to make more money on what they put in their warehouses. This will be positive for manufacturers that have unique products with customer demand, but there is also the tendancy to want to support the larger manufacturers who are already preferred in the category and drive their purchasing revenue.
Customer Opportunity: There are fewer customers who can drive listings and those who have this power are overwhelmed by manufacturers who see them as the key to their success. Many of these customers do not have the time respond to the constant barrage of manufacturers vying for their attention.
Manufacturer Opportunity: Yes manufacturers continue to consolidate. This can make it more challenging for smaller entrepreneurs as their products often represent part of the larger manufacturer's category and the larger manufacturer could duplicate their product easily if they made it their focus. But there lies the challenge. Big manufacturers cannot turn on a dime. Most have to complete arduous protocol before they can change, tweak or launch a new product and few will be the first to "launch" innovation.

So what are the learnings for the smaller entrepreneur wanting to enter foodservice right now:

Target the key customer(s) who will list your product and understand the volumes needed to secure listings.
Think "out of the box" to grab the attention of your target customers. This involves using your contacts and ingenuity to find out more about the customer--their focus and priorities. Figure out how your product can meet their objectives. Now grab their attention by using your product to show them how they can meet their objectives.
Be perseverent. The customers you are targeting all have their preferred vendors. It is difficult to become part of this circle, especially as most of these preferred vendors are already manufacturing items in your category. It may be a matter of timing and circumstance that will eventually get you their ear and their business.

Remember very few successes come easily. Keep committed to your goals.

Successfully Launching Products into Foodservice Distribution

2010-02-07T16:53:00.010-05:00

As the CRFA show draws closer, many manufacturers look to this show to see if their products are a fit for the Foodservice Industry. The hope: to be discovered either by an enduser who can drive their listing into distribution or a distributor who realizes that there is a need for a specific product in their warehouse.
While this show and most shows are a great tool for growing manufacturer product sales, it will be rare that a manufacturer will launch into strong distribution by being discovered at a show.
Warehouses are bursting at the seams. Distributors do not want product redundancy. Unless you have a unique product, with a desirable price point and a customer who can purchase the critical mass needed to secure the listing, it is tough to launch "easily" into foodservice. Saying this though, there is still lots of opportunities in foodservice for new entries. Here are key criteria needed to secure a listing and grow your foodservice sales:

Know and sell your point of difference in foodservice---your competitive edge.
Know and sell to your target market. Always prioritize your "low hanging fruit"---the most likely "supporters" of your product.
Know the critical mass/product sell through needed to secure a distributor listing and ensure you are targeting customers who can support this volume.
Be competitively priced and target your tradespend money to the customer(s) who will drive your sales.
Commit foodservice sales and marketing resources to maintain and grow your volumes.

Lastly, the above criteria are challenging for a company who does not know the foodservice landscape. It's important to link into key foodservice resources who understand the industry. This can definitely help prevent the added roadblock of hitting your head against the wall.

The 3 Key Business Fundamentals to keep in mind in 2010

2010-01-06T07:46:00.004-05:00

There are three simple fundamentals for foodservice growth that will keep you focused on achieving positive results this year:

Foodservice sales growth means strategically directing your resources to products and customers that deliver profitable return on investment.
Foodservice sales growth is achieved by simplifying and limiting your business objectives and ensuring alignment throughout your company.
Controlling costs mean keeping focus on what truly will grow your sales and managing your spend on initiatives with limited/no return on investment.

Trimming the Fat:: Customer Spending

2009-12-14T22:14:00.014-05:00

Taking away a "precedent" spend is perceived as breaking a promise to a customer. The recession has given further cause to review current customer spending and, yes, take measures to reduce this spend. The key to executing spending cuts is to know when and where to pick your battles.

The above chart is a guideline of what measures you may want to take when trying to trim spending with your customers. Convincing your customer of positive repurcussions to any change is very important in the presentation of your plans. For example: a price increase will mean more generated trade spend/program money that your customer will earn. Eliminating one spend in favour of another that may generate more sales, is a win win for both parties. Any small change or redeployment of spending can become a new way to generate sales if executed well.

To Grow your Business: Pick your "Low Hanging Fruit First"

2009-12-04T15:25:00.008-05:00

There are two sound rules of thumb here:

The 20/80 principle: 20% of your customers will deliver 80% of your sales.
To grow your sales: target the easiest wins/opportunities first.

This drives my next point. In these lean times when resources are stretched thin, it is important to keep focus on the above when implementing your business plans. Often companies becomes too focused on developing new business. Have you analyzed your current customer business well enough to realize all the growth opportunities you have yet to develop? This chart highlights some thoughts to consider when determining where to direct your sales energy. Ultimately though, keep in mind that if you don't take care of your current customers and show them growth, someone else will.

Category Management: A key to profitability, efficiency, cost savings and driving your sales

2009-11-20T10:56:00.015-05:00

It is important to understand what skus are driving your product sales and profits and what products are driving the market sales. Maximize focus on the stars and eliminate the dogs. This is key to category management.

Proper sku and flavour management improves product rotation, production and ingredient efficiences and economises storage space.
Category management is also a great tool to help your customers (both enduser and distributor) maximize their sales with your products. Customers are often blindsighted by their own view/perception of what they believe they should sell, so it is important to back up your sku changes with facts based on the market, similar customers* and your own company information. Customers must understand the lost sales opportunity if they do not promote the top sellers. They need to have the correct assortment of products to appeal to all of their targeted market segments.
Ensuring you have the right products, sizes and flavours will also help pave the way for new product innovation and launches. Do not ignore the need to bring out new news to inject renewed interest in your category. The key here is to grow the category with innovation and at the same time rationalize skus that are stagnating.

Category management is often not well received by many customers. Ensure you present your category management changes with a well prepared win win story. In other words provide proof that their sales will grow with these 3 key changes:

Improved merchandising/marketing of the best selling or new skus.
Suggest a replacement sku for any discontinued sku that will have a better sales success.
Sales support/communication of why these changes will have a positive impact to all their key operators/shareholders. This last point is key to gaining organizational support.

*Use Direct Link or CREST for market/customer/distribution trends and information.

The Foodservice Customer: Who has the Purchasing Power: Part C: The Contract Feeder Segment

2009-11-13T10:35:00.009-05:00

Contract Feeders have the critical mass with "specific" product lines to enforce distributor listings country wide. Both distributor and manufacturer must be aggressive with their trade spend programs to secure this business. Contract Feeders will prioritise:

Inside rebates given directly to procurement
Pricing to the unit level
Product quality and consistency
Product support
Marketing commitment

Product compliance into their units makes them an ideal partner with a secure volume for the manufacturer. They have had more challenge enforcing their preferred products into their buying group members and it is up to the manufacturer to often actively help convert competitive brands. The key to this conversion:

Find members using competitive product through velocity reports (generated from the contract feeder)
Active sales call conversion: features, benefits, costings, samples, distributor codes
Incentives to member or account rep to convert
Attend buying group meetings/trade shows to promote product compliance and extend product usage.

As Contract Feeders tend to hold a low personal brand profile in most of the locations they service, they will support and often market high profile national brands to enforce the fact that use "high quality" products and ingredients. They also prefer to work directly with the manufacturer for all of their key ingredients. To have exclusivity on a contract feeder buying guide is ideal for a manufacturer, but do not neglect to reinforce your product usage with marketing, merchandising and technical support to ensure you remain a top priority in each unit.

The No Fail Strategy to Launch/Promote your Product

2009-11-03T15:57:00.032-05:00

Never assume automatic distribution of newly listed products.

Step A: Your Controlled Customers:

Gain commitment/support from your own controlled customers from their procurement, marketing and operation departments and present the distributor concrete reasons to list the product and next steps to grow their sales:

Test/sample/promote the product
Forecast
Point of sale/support tools: recipes , features and benefits, costings, nutritionals, distributor codes
Ask for suppression of competive products or forced distribution
Ensure technical support if needed

Step B: Promoting your Products:

You will also want to expand your distribution to all other customers. This means taking the "right" initiatives that will give you the biggest impact. It's also important to think "out of the box". This involves 4 key factors:

a) simple sales strategy/promotion
b) creativity to make it impactful/memorable
c) execution of your initiatives with excellence
d) measurable results

An Important Key to a Successful Launch and Broader Distribution:

Do not forget about your distributor sales reps. Make them an integral part of your promotion and launch strategy.

It is a benefit to talk to outside companies about your product promotions. Andrea Orozco from KIK Branding. Strategy. Design. is commited to covering all angles and giving the manufacturer measurable results. The more ideas/information you have, the better you can take the initiatives to ensure your success.

The end result is that your customers and distributors will see that you have taken the initiatives to ensure the success of your product. You will win their support and guarantee return on investment.

The Foodservice Customer: Who has the Purchasing Power: Part A: The Foodservice Distributor

2009-10-29T20:28:00.002-04:00

It is important to understand first of all, the power the foodservice distributor has to support manufacturer listings. While the enduser customer can anchor the product listing at the distributor, the distributor has the ability to dictate the amount of support that the product will get once listed. If the distributor does not want to support the listing, the product may be suppressed to many customers. The means, that only the customers who demanded the product will have easy access to it.
The criteria that distributors will often use in determining their level of product support are:

Customer demand
The profitability of carrying the sku/product line:
a) inside tradespend program given by the manufacturer b) margin potential c) product movement potential d) case cost (>$25 is optimal)
Redundancy/duplication: Distributors do not want to list duplicate product lines. Each slot in a distributor warehouse is an expensive piece of real estate. It is in the best interest of the distributor to expand product offerings to capture all of the total needs of his/her customer so he/she will not have to shop elsewhere.
Warehouse space
Case size and cube---although this is not a main criteria, big bulky boxes that take up a lot of warehouse and trailer space---especially with low margin earning potential will not be a priority focus for a distributor.

Category management is a key tool that distributors need to employ to maximize the profitability of products in their warehouse. Eliminating slow moving redundant products in favour of high volume, value added/profitable, differentiated products, is a key objective of foodservice distributors. For the manufacturer, the foodservice distributor can often be the gate keeper to access the total foodservice market.

In order to ensure the strength and growth of manufacturers' products in foodservice, they must not totally rely on distributors to support their product lines. Manufacturers should strive to:

Grow their business with the enduser customers who drive or can drive their business.
Maintain a good ratio of enduser support to anchor the listings vs. the distributor controlled business (or business that the distributor will easily be able to convert to another of your competitors).

----Now what are your next steps when you find your sales are in decline and there is no "known" rationale? My next article will discuss business decline in distribution and possible strategies/solutions to revitalise your sales.

The Selling Show: Back to Basics

2009-10-26T08:29:00.012-04:00

The Tannis show continuess to be one show where the distributor encourages their customers to buy and their supplier partners to sell hard. How do they do this?

They put no restrictions on what suppliers can show.
They provide all their product codes (listed and special order items).
Each booth has a hot priced item with a low mark up ----always a high volume item.
They offer an extra $ .50 incentive to only those who attend the show.
If customers purchase from a minimum of 7 different show suppliers, they are eligible to win one of 31 prizes ranging in price from $50 to $3,500.
They encourage their sales reps to escort their customers to visit the booths.
They recognize and reward their supplier partners at their dinner, the night before the show.

They have given the manufacturers the tools to impact their sales.

Tom Lawson---one of the most astute people in the industry recognizes that many manufacturers do not capitalize on these opportunities and has some sage advice:

Stand when you greet customers---show you want to do business with them.
ALWAYS ask the question: How many cases can I send you? This is "key" to a selling show. Example: "I'm going to have your distributor send you a case to try. Here is my card. If you are not fully satisfied I will fully refund your purchase."
Do not be afraid to offer incentives/trinkets to build volume commitment and generate extra sales.
Develop the rapport with the DSR. You should know your key operators and the DSRs that will work with you. Excite them/give them an incentive to get them and new opportunities to your booth.

Again the objective at the Tannis show is simple---sell product. The only thing lacking to the manufacturer is the ability to only pay allowances on what is purchased "at the show". Other than that detail, I commend Tannis for delivering strong wins to all participants of their show. Not everyone is this easy. Every show should be analysed with strategies and tactics to meet your objectives. Take the time and given that the distributors deliver the customers to the show, you will see success in the outcome.

Trade Shows: Necessity or Opportunity

2009-10-11T17:18:00.012-04:00

Yes Fall to many manufacturers, represents the time again to be forced into a 8'x10" booth to talk to customers about their products. Many manufacturers have a jaded viewpoint when confronted with the "necessity" of working a tradeshow. It is true that we have all worked foodshows where there were more manufacturers than customers and these shows are deservedly dissapointing. I recently attended the SYSCO Show in Toronto and this show was truly one of the busiest ones I have attended.
I still met manufacturers that were dissapointed as they did not see measurable orders from this show. When I hear this, I wonder if manufacturers are spending the time to set their objectives based on the type of show they are attending. There is a difference between attending a Colabor Show where some manufacturers reap the benefit of purchase orders of $2 million dollars versus this SYSCO Show with no tangible dollars sales. The latter can actually be more beneficial if the manufacturer takes the time to figure out the strategy to make it successful. Here are a couple of thoughts:

Simplify your objectives for the show. You should have not more than 3 to 5 measureable objectives clearly laid out for your team. Examples could be: A new launched or listed item or extended/new usages for current products. Many manufacturers try and put all of their products on display. This does not leave a clear message to customer.

Define your customer targets for the show and get them to your booth-----your prime focus may even be the distributor rep. Is there some way that you can "knock their socks off" and ensure they visit "your" booth at the show. Give the distributor rep and/or customer an incentive to come and talk to you.

Ask the appropriate open ended questions (pertinent to your objectives) to customers so you understand their needs and then offer solutions.

Appropriate DISTRIBUTOR CODES and POS that can be given to customers are a must. At the show, highlight the product and the code for the customer so they can remember and access the product. Many customers are too small to warrant follow up. Meet their needs at the show.

Ensure you have a system to track leads and customer follow ups.

Make your booth stand out. Many manufacturers have an advantage with "wow" products which can be challenging to a manufacturer selling disposables. Put a little thought behind your key objectives. What would you want your customers to see first when they pass your booth and what will make them come and talk to you over your competitors?

After the show "take the time" with your team to review the show: a) Have you met your objectives? b) Ensure customer follow up. c) Evaluate what you could have done better and ensure that you do it at the next show.

This week many customers will be placing their orders at the Tannis show. Have you prepared your strategy to maximize your sales? Each show should have slightly different objectives. Take your time to prepare and execute them. It will be worth your while.

The Foodservice Customer: Who has the Purchasing Power: Part B: The Enduser Options

2009-10-09T10:06:00.015-04:00

Which enduser should you target in order to effect your listings, critical volume and profitability? Let's talk about some of these customer segments and their potential effect on your business:

The Consumer:

In retail, the consumer sees the product on the shelf and consciously decides on its purchase. In foodservice, most products are seen as the creation of the establishment they were purchased in. Unless the product is purchased as a pre-packaged and branded entity, the consumer has little to say in what brands go into the foodservice establishment's menu.
Foodservice operators must make decisions based on what their customers (the consumer) will pay and what quality and menu choices will impact their business.
It is therefore important to understand the trends and innovations that drive consumers to establishments and their menu choices. Market study information is a very useful tool to reinforce your sales story. CREST (Consumer Reports on Eating Share Trends), Direct Link (tracks broadline distribution of foodservice products) and a new product from Direct Link called Menu Insights provide good indicators to product performance and opportunities in the industry.

Key Point

The consumer makes the ultimate purchasing decision---the choice of what they want to eat. The manufacturer must penetrate two layers of purchasers (the foodservice operator and distributor) to get to the enduser. A good sales presentation should cover consumer needs/trends and how the product will meet these needs and ultimately the needs of the foodservice operator.

The Independent Operator (Operators with one to two units):

Unless Independents join a buying group that has the ability to create puchasing scale and a manufacturer rebate program, these operators are too small to dictate distributor product listings.
They are, however; the most profitable customer for foodservice distributors and manufacturers.
Supporting this segment with POS and distributor selling incentives is a good idea. Distributor reps have a stronger ability to access and control this segment of your business.

Key Point

Two key methods to grow volumes profitably with this sector: a) secure a prime vendor or unique vendor/product status at the distributor and b)create awareness through product knowledge, point of sale/recipes and incentives with their reps.

My next blog will cover a very relevant method of reaching your customers: Customer Foodshows. We are at that time of year when manufacturers are faced with an overwhelming number of these events. Are they a vain necessity (forced upon them by customers) or an opportunity to grow sales? I will discuss both sides and more importantly how to maximize your sales objectives through foodshows. Stay tuned for my next blog release, October 21, 2009.