CG companies are struggling with the prospects of having line items, entire brands (and in some cases entire companies) delisted from the shelf lineup at the BIGS. The BIGS are the large retailers such as Safeway, Kroger, Wal-Mart, Walgreen, 7-Eleven, Target and others. These retailers have been the engine of growth for CG companies for over 20 years. The retailers, following each other and now being followed by mid-tier players are all pursuing at least a two prong strategy to bolster profits and build a stronger bond with their target customer segment. Prong one is the systematic reduction of entire national brands or sizes/flavors of national brands in order to reduce stocking and inventory costs. Prong two is the introduction of a stronger lineup of Private Label items.
CG companies will lose sales on the items and brands rationalized out of the lineup. Profitability on items that remain on the shelf will be challenged as the CG companies are being asked to spend more of their ad & promotion dollars supporting those remaining items. Interestingly the items that will no longer greet consumer on the shelves of the BIGS all have assets, the most important of which are brand equity, roughly translated into consumer interest and loyalty. Manufacturers who own these brands/items now have decisions to either harvesting them or to build a strategy to thrive, without the BIGS.
Life is possible, and can be quite good the BIGS. There are tens of thousands of items and thousands of brands that have never been distributed, at least broadly, through the BIGS. One such product is SPARKLE. Sparkle was born in WWII as a military formula for reliably cleaning B29 Gun Sights. After the war it was produced and sold by a paper company, A.J. Funk throughout select channels nationally and more broadly in certain geographies. Over the years Sparkle was sold by a direct sales group coupled with brokers and distributors. It gained distribution primarily in grocery stores. It used the usual promotion and advertising vehicles including radio, print and some local TV.
As more and more retail consolidation occurred, it became evident that Sparkle needed to find distribution independent of the traditional grocery channels. Sparkle feared delisting due to limited geographic distribution. It was also tougher to fund promotions profitably in a market dominated by national brands with much deeper pockets. In one sense Sparkle was very much caught between a rock and a hard place. It was a product with some unique glass and plastic cleaning characteristics, but was used most often for cleaning windows and in that regard, was unremarkable vs. the national brands. Dick Lane came to Sparkle from Jewel to head up sales. He moved into the President slot after a few years. He put his very considerable skills to the task of laying out a strategy that would see less dependency on traditional, more competitive markets while developing a path to increased consumer brand recognition and appreciation.
Dick recognized early on, the appeal of home centers as an alternate shopping choice for Midwest staple needs, particularly general merchandise and cleaning products. There are some strong local and rural retail brands in the home center space and Sparkle worked hard at becoming a featured brand in those outlets with key seasonal promotions. He also moved the brand, and high end companion products onto the consumer direct web store years before most brands even began to think about that channel.
Leveraging the unique streakless-smearless cleaning characteristics of Sparkle, particularly on sensitive surfaces, was the next target. Sparkle re-sized the product and packaged it with accessories for the professional the academic and the scientist. Reaching those audiences with a focused message, focused media and focused distribution put Sparkle on the map, and more importantly in the supply cabinet of this new niche group. The native green status of Sparkles formula was the next brand focal point; with a line extension brought out to accentuate that status, again well ahead of the trend.
These moves have not just kept the brand in consumers pantrys but increased year over year sales consistently, with the latest quarter ahead by 30% vs. year ago. Life after the BIGS? Heck yes, and then some. According to Dick, who has worked with Panther Mountain for years, to stay ahead, you need to re-invent your brand every day.