The Branded Pantry

The trade papers are riddled with announcements from manufacturers about their new product intentions.  Unilever, Procter and Gamble, Pepsico, Nestle, Kraft and many others have announced their intentions to introduce products into a myriad of categories over the next three months.  New product activity which largely took a hiatus in troubled 2009 is back with a vengeance.  Every manufacturer we have talked with is hoping that they won’t need to pare their line down to make way for the new items.

How will these new products fare when many key retailers have significant SKU rationalization programs underway?  Coupled with retail efforts to broaden private label brands, how new introductions will fare is anybody’s guess.   Oh, that’s right, with ShelfSnap you no longer have to guess. Here is how two recent launches are faring.   ShelfSnap and our Canadian field partner, ForeKnowledge, analyzed two 4^th quarter launches made by two top food manufacturers.

New Item Introduction 1

The first product introduced two new flavors into an existing snack category product.

•  Eighty percent assortment distribution was achieved across the top Canadian grocery banners.

• During the introductory period 20% of the shopper base was not exposed to the product at their primary store locations.

Positioning of the product (facings, shelves, proximity) were literally all over the category. 

Here is an example of placement in three stores across one chain.   New Product Placement and Facings

Same Chain – 3 Stores

• Overall, this new brand achieved a 59% assortment distribution.
• SKU Assortment achieved for the brand ranged from 47-65% across the various retailers.
• In retailers authorizing the new brand, the new items only achieved distribution in 81% of the stores.
• In authorizing stores 76-80% of items in stores that had agreed to list the items.
• Regardless of whether the chain has yet approved listing, 40% of all shoppers will have to work very hard to find this item.  It is not available in their primary stores.

So, as this crush of new products is working its way onto the store shelves, what are YOUR objectives?

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1. What percent of the stores should handle these items?
2. What are your assortment objectives?
3. How many facings of each item are you hoping for?
4. Do you have a specific shelf you are targeting?
5. What would you like the new item merchandising next to?
6. What items are you targeting for delisting?
7. What existing items must not be sacrificed for these new items?
8. If a new, competitive item is launching, how will your items be affected?

At this time of any year we would be starting to come out of the malaise that affects most of us from our end of year holidays and we would be starting to execute the plans we put into place during the planning-budgeting cycle from last year.  Those plans were probably based on a management perspective that included continued bad economic conditions and news.  They no doubt reflected a “hunker down”, conservative fiscal philosophy that had the impact of putting a moratorium on hiring and on investing in new products, services or change-outs of any sort.  In short, this translated into “let’s do the same with less…and keep our heads down.” 

Peter Drucker would ask us not to yield to the temptation to “just get on with it”.  He would recommend that we step back and recognize that “virtually no program or activity will perform effectively for a long time without modification and redesign.”  Business professionals “are likely to respond to the failure of a program, process or program by doubling the efforts invested in it.”    “First class resources, especially those scarce resources of human strength need to be pulled out immediately from operations that have ceased to be productive and put to work on the opportunities of tomorrow.”    

We talked recently with a company where the ShelfSnap service had uncovered assortment voids ranging from 10% to almost 30% of the plan for that manufacturer…with facing-shorts much more significant than that in a major account.  They were “hoping” that their recently purchased information program consisting of some new DSR tools and some Task Management reporting systems would take care of the problem.  Those tools had already been deployed in the account where ShelfSnap had found the significant deviations from plan.  In other words, their new information system might have yielded other benefits but it was not helping them in dealing with their compliance issues.  Dealing with those issues would yield between 8 and 20% volume increases.