Vol. 127 - NO. 39

Blog Startup CPG

SINCE 2019

Ranking Retailers and
Channels for your Growing Brand

Jake Huber is an experienced Sales Leader in the CPG industry. He is currently the SVP of Business Development at The Better Food Group and a Partner at Vine Street Solutions, a boutique Kroger strategy and business management service.

How do you build a customer strategy that aligns with your consumer strategy? Are all doors created equal? What channels should we focus on? And why? These questions are always relevant and can be explored at any time. In this piece, Huber shares his expertise on post-launch formal strategy sessions that involve, at minimum, sales and marketing leadership that come together to unearth insights on how the market are receiving the brand and what adjustments are needed.

What Information You Need for a Session

For the record, this type of strategy exercise should be happening at least once a year in a startup. And at its core, each function (primarily sales & marketing) compiles and presents everything that has been done and learned to date since launch or the previous session. This can of course lead into a more comprehensive company summit involving ops and product development, but for the purposes of this exercise you need only sales and marketing to be prepared and participating.

Sales should give an update on:

  • Sales pipeline
  • Doors
  • Existing customers
  • SKU mix (important to see if you internal ranking matches your mix of sales)
  • Upcoming authorizations
  • Trade show or other industry updates
  • Informal customer (buyer) feedback on the products
  • Any other relevant information to understanding your business and category from your customers perspective should be shared with the entire team. This can include things like buyer comments on packaging, claims, flavor, price, and trends in the category.

Marketing does pretty much the same thing; reporting back on:

  • Campaigns ROI
  • Consumer feedback (from all channels, in-person and digital), including feedback on flavor, pricing, packaging, claims, nutritional’s, or recipe ideas
  • Analysis of demographics, usage, attitudes, behavior (for example, maybe we over index with older generations in South Florida or consumers keep mentioning that our sugar content is too high

All this feedback should give everyone on the team an idea of who the current consumer is and you should come away with a firm understanding of why they buy it (or why not). Be scientific about it and be careful not to slip into bias confirmation, which is easy for mission driven companies. Take time to write down the major conclusions and take time to discuss its impacts to all areas of the business. For example, perhaps your 5th ranked flavor is getting authorized at the rate of your 2nd ranked flavor. Ops should know this and product development team might tweak upcoming product launches to take advantage of this. The company may also decide to update the entire ranking of flavors, which in turn changes how sales presents the product and how marketing supports it.

These sessions are about pausing to reflect on the business not as you see it but as the market is receiving it, and making adjustments to how you manage your business. This can include an entire package redesign, a new regional focus, claim restructuring, flavor issues, but overall, the sales team should try to understand how consumer perception and marketing programs impacts their goals and focus.

Evaluating New Distribution

Not all distribution accounts are created equal. Only one or two supermarkets can be the top market share in each market. With all the retail consolidation, you will likely only see one or two players per market (that actually matter). The question is, where are your consumers shopping? And where will they be shopping over the next 1-2 years?

So, we need answer a few simple questions via survey or by observation:

  • Where do they shop?
  • Where would they expect to find your brand?
  • How can you lower the barriers to purchase for them?

As for understanding which retailers attract which customers this is a bit art and science and I encourage you to do your own research here. Ask Google, your consumers, brokers, buyers, and other sales pros how they look at each. But don’t get too complicated about it – the beauty of our industry is that we are also consumers and you have heuristics you already use to make decisions and those are likely true across many shoppers.

For example, Whole Foods and Natural retailers have more health conscious, less budget constrained consumers who are willing to explore new products. But those higher-end retailers do not deliver consistent shoppers as well as other retailers. Walmart is an EDLP customer from whom its shoppers demand value and are more price sensitive, same with Market Basket, and to a lesser extent Shoprite. These retailers may put downward pressure on your balance sheet but you are almost guaranteed volume because of the store traffic.

Publix and many Kroger divisions focus on shopper experience and have good prices, not great, and utilize unique promotional vehicles to drive trial but mostly cater to middle and upper middle-class shoppers. Target is known for its fashion and the food and beverage brands they select often fall in to this category. Costco wants a specific value to cost but they can provide huge volume to more affluent but value conscious consumers.

On average, the majority of shoppers are price sensitive, so almost every retailer is trying to cater to them in some way. Look to see where are the retailer is placing their bets; what consumers are they targeting? Match up that intel with your consumer foundations uncovered in the cross functional meeting we discussed above. Would they expect to find you in Club, Natural, Online, Grocery, Mass or discount retailers? Understand these pieces and how they flow together (in market and in your balance sheet) and you can drive your products to the right channels and customers and have much more meaningful sales meeting with buyers (share that you do this exercise!) when you have a plan and a reason for being there. It shows you know the business, your product, and what buyers most want to hear; you understand your consumers. Because if you don’t, who will?

This exercise or ‘culture’ if you will, tends to drive extraordinary performance because you have a legit strategy that is matching consumers with customers to your brand. It also builds in, what I like to call “brand self-awareness”. It forces patience and thoughtfulness at a time when running at 1000 mph is the natural behavior. Executing this balance will help you raise more money at better valuations and on better terms, keep your consumers happy and repeat purchasing, keep your teams extra sharp and aligned and will allow you to operate a profitable business faster and with less mistakes.

So, pause, learn, understand, adjust, and implement – good luck out there!

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