Bringing a product to market is a complex and thoughtful process. The items and statistics below are intended to provide our potential clients with an opportunity to plan for leading topline considerations prior to committing time and resources. While the example is Grocery oriented, it will also apply to Drug, Mass, Convenience and Club class of trades.
The average grocery store has (appx.) 45,000 sku’s (stock keeping units) on their shelves. Each year, nearly 18,000 new items or line extensions are presented. Of those 18,000, only about 3,600 make it to shelves and of those, about 1,700 hundred survive until year two. It is a cautionary tale that can be partially offset with planning and addressing obstacles, pre-launch. To the extent that larger retailers have a known economic value, strategy, and tactic for every one of the 46,000 items, overcoming these odds is mostly tied to meeting a retailer’s objectives. Here is a list of the primary ones:
Innovation
Increased transactional uptick- penny profit
Increased marginal transaction- ex. category yields a 35% average margin and your product provides 40% margin at like price
Supply chain is buttoned down and not adding any complexity to an already stressed process
Merchandising funds have been established to promote the sale of your product.
Ten Considerations:
Do you have a business plan? Is it on paper and has it been vetted?
Competitive marketplace analysis- Where do you fit in the context of a retailer’s objectives (above).
Who are your target retail customers, based on demographics, supply chain, cost of doing business, method of distribution, and the hard and variable costs of being accepted, have you accounted for the variables?
Who are your target consumers, and do they match the demographics of your target retailers?
Category analysis; Are you participating in a growth, static or declining category? Syndicated data (IRI, Nielsen, Mintel) can help identify.
Are you in regulatory compliance? GTIN and UPC codes secured? Best used by codes? Corporate registrations in place? Insurance? EDI (electronic data interchange) platforms. Nutritional Panels created and vetted by 3rd party.
Packaging supply considerations: Case corrugate, Product packaging, labels, Nutritional Panels
Supply chain considerations: Weight, dimensions, cubes, pallet patterns, Bracket Pricing schedule, FOB Plant or delivered, freight, lead times for production and shipping.
Sustainable Merchandising Plan; Customer specific, market centric, national? If customer specific, what vehicles work best and in what frequency?
How do you intend get your product in front of a decision maker? Most sales will be made in national or regional offices. In person? Utilizing Sales agents? Via Trade shows?
Blue Frog Foods is here to assist you with your food manufacturing needs once you determine you are ready to move forward into the marketplace. We trust the above will be helpful as you evaluate your next steps.