Discontinuation Fears
How to stay on shelf
2-min read
To all food makers,
Staying on shelf should be a constant preoccupation. Waiting to address possible discontinuation at category review time is too late.
The only instance where you shouldn’t fear getting discontinued by a retailer is when you have intel that your SKUs are performing at the top of the category.
To the commodity supplier moving into value-added offerings: This is a new concept. Commodity product sales cycles are not the same as value-add. Commodity or bulk items require little to no marketing, and sales is a front-end function – i.e. prospecting and closing – which hinges on winning the bid. If you meet spec and offer the best price, you’re in. Every year the bidding process renews. As long as you’ve been a consistent supplier, your biggest concern is a competitor that underbids at the next cycle. This business model is simply managing PO to PO.
Moving into value-added consumer products requires thinking beyond when the truck leaves the warehouse. It is taking responsibility for and activating on everything that occurs to get your product into consumer baskets.
To all branded food makers: You might think you’ve taken care of marketing your product because you submitted promotions. But more needs to be done. Also, do not make the mistake of relying on how friendly or complementary the buyer was when they brought your products in. This means nothing the day after the reset.
How to prevent getting disco’d
The #1 thing that will keep you on shelf is to be turning at the top of your category. Retailers rank products by Sales per Store Selling. This is a velocity metric and you want at least one of your SKUs in the top third of the category.
Let’s pause here for some Q & A.
Q: Why do discontinuations occur in the first place?
A: They occur to allow physical space for new items.
Q: Why do retailers need new items?
A: Because consumer needs change, desires are fickle, and retailers have FOMO on new trends.
So, if your products are turning in the middling or lower third of the category, here are some other considerations that might help keep you on store shelves:
Channel strategy
· Grocers prioritize items that have a clear channel strategy (i.e. natural, specialty, discount), especially exclusives to the channel and/or retailer
Merchandizers
· Do you have boots on the ground checking the shelf to ensure placement, tags, and out of stocks? Get the support you need to ensure on-shelf execution.
Hype
· Are you engaging directly with retail marketing teams? Help them with events and content. And don’t overlook in-store staff – giving out samples and swag gets them excited. The retail team make great brand champions which translates to stickiness in uncertain times.
Don’t wait until category review time to make your case for staying on shelf. As Whole Foods likes to say, “the time to prevent discontinuation is every day, all day, right now”.
All my best,
Jennifer
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