1 - Better Wholesaling
Transcription
1 - Better Wholesaling
BETTER COMMUNICATION BETTER SALES BETTER PROFITS exclusive category guidance betterwholesaling.com march 2012 just moved in time to meet the new today’s P08 Export sales soar P24 in the club there’s more to customer loyalty than great promotions How to get it right P12 Tackling compliance P18 Feel the Buzz P20 p1_cover finalV2.indd 1 23/02/2012 20:36 welcome march/2012 Contents Analysis 4 Cover story 12/16 londis’s plan for multiples IT and fresh will secure customers 06/ RED tractor drives sales The food standard is wooing consumers 07/ sustainable dining Restaurants to vet suppliers’ ethics Spotlight 08/09 a vision for today’s MD Bill Laird on the company’s wholesale focus 10/ no big bang for mobile A toe in the water is all you need 11/ olympic chances Jayne Clark on P&G’s 2012 plans how to run a retail club They benefit retailers, suppliers and wholesalers but what’s the best way to manage one? Leader 26 know your customers Get the basics right and you’ll sell more beer and cider Category guide Features 18/19 compliance conundrum Why won’t retailers do what’s in their best interest? 20/21 raising the bar Wholesale loyalty clubs for pubs are winning fans 22/23 Depot doctor – Britvic How to get the best from your soft- drinks stock 24/25 overseas of opportunity The global demand for UK food and drink is growing 30/32 WINEs and spirits Drinks for toasting any occasion offer good profits 38/39 heating up drinks sales Flavoured teas, premium coffees and hot chocolate are key 40/41 the smell of success Toiletries are everyday sellers that can boost your sales 43/ Social networks that really work Welcome to the third issue of Better Wholesaling. In this issue we ask: does every major wholesaler need a club for its independent customers, offering better promotions and help with marketing? The answer, we say, is yes. We look at compliance with promotional schemes and we ask how best to get customers to meet your requirements and act in their own interests. The answer is persuasion and incentives, educating your own staff so that they can educate your customers, and committing to the long haul. Thirdly, we look for a promotions club in catering – an area we were told was not promising – and, to our delight, find a drinks scheme for pubs that is generating raving fans. Plans to boost retail clubs were one theme of our interview this month with Bill Laird, MD of the Today’s Group, in which he presents a clear vision of what the group plans to do as a company wholly focused on serving wholesalers. We also have wide-ranging product information that is concise and actionable, and that it is accompanied by some great category management guidance from leading suppliers. I hope you enjoy this issue. I would strongly encourage you to think about the issues it raises and what else you can do this month to grow sales and profits. editor-in-chief products The latest launches and promotions get in touch Betterwholesaling@newtrade.co.uk our contributors Lindsay Sharman, who writes about retail clubs in this issue, is a former editor of Retail Newsagent, news editor of Retail Express and account manager in public relations for leading food and drink brands. Lindsay loves anything to do with the arts, including mid-century antiques, and cycles everywhere, even in winter. Mike McGee, who writes about mobile apps in this issue, was managing director of Landmark Wholesale for eight years. Mike, who has written about data management in previous issues, founded a stock management software company for wholesalers and set up a wholesaler data management services firm before co-founding wholesale and convenience consultancy Insight Offsite. Nikki Allen, who writes about wines and spirits, hot drinks and toiletries in this issue is a journalist and copywriter who previously reported on alcoholic drink brands for The Grocer. Nikki has a postgraduate degree in psychology and recently returned from a yoga retreat at an ashram in Rishikesh, Uttarakhand, India. Betterwholesaling.com march 2012 p3_contentsCS4.indd 3 03 23/02/2012 17:59 news analysis symbol groups multiple partners Londis is targeting multiple accounts, as it invests in IT and fresh foods. By Nikki Allen W ith three new multiple-store operators joining Londis last year, 2011 was a successful year for the symbol group. Including the newcomers, 65 new stores joined Londis last year. The 17 new stores under service and facilities management company Elior were swooped from Palmer & Harvey, as were stores at FW Kerridge’s forecourt sites in Sussex, Kent and Wiltshire. Convenience and forecourt site operator Chelvam Group switched nine stores to Londis from previous suppliers Nisa and P&H. Penny Petroleum & Top Spot Services Group expanded its 19-store strong Londis business with six new shops, and Petrocell, Carsley Group and Symonds Retail all opened new stores. Brobot Petroleum also plans to develop six new Londis sites this year. It’s an impressive portfolio and one that Londis 04 march 2012 p4 newsCS4.indd 4 sales director Paul Courtney is understandably keen to publicise: “These are challenging economic times, and we are delighted these major operators have chosen to partner with us to develop their businesses,” he says. “We will continue to strengthen our offer to our retailers, putting our partners at the heart of what we do.” The symbol group is certainly doing something right when it comes to attracting multiples, with Symonds’ chief executive Jeremy Symonds praising the “established brand” that Londis provides as the reason he opened a fifth store under the fascia last year. “It’s great to work in partnership with the brand, whilst being able to add our own flair and local flavour,” he says. Londis’s formula is working for independent retailers, too, says Londis Bracknell retailer Arjan Mehr: “Londis has come a long way in its offer and professionalism, with huge sums of money going into IT and logistics, the backbone of any organisation today in the convenience sector.” The group plans to launch an online facility for retailers later this year, with a website providing pricing information and a delivery window countdown, making ordering ‘simple and quick’, according to the company. In addition to investment in IT, the group has ploughed £4m into fresh food expansion over the past year, boosting fresh sales by 26% year on year thanks to promotional and retailer support as well as new product line-ups. We will continue to strengthen our offer to our retailers “We now offer an extensive fresh range of over 1,300 lines and are driving the bestsellers into all Londis stores, providing innovative wholesale deals and helping retailers embrace fresh lines that are relevant to their stores,” says Londis’s Paul Courtney. Londis is by no means the only symbol group to be concentrating its efforts on multiple-store operators. In February, Spar announced the appointment of new business development controller Mark Steven, whose role will be primarily to focus on growing the symbol group’s national accounts. Of the group’s 2,500 stores, 190 are national account stores under partners including leisure group Haven, forecourt chain Total and facilities service-provider ISS. But with more investment set for this year, including plans to double fresh-food sales, the expansion of Londis’ multiple accounts looks set to continue. l Betterwholesaling.com 22/02/2012 16:25 news analysis meat red revolution The Red Tractor meat quality-assurance logo is proving a big draw for shoppers. By NIKKI ALLEN W holesale supplier DBC Foodservice’s announcement last month that it was expanding its range of Red Tractor assured-meat products, the company was spurred by the rise in sales of its Red Tractor meats by £600,000 in 20 weeks. DBC will now roll out a range of Red Tractor lamb and beef products aimed at chefs and caterers throughout the rest of the year. Since joining the supplier last year, DBC’s commercial director of meats Rob McFarlane with has launched Red Tractorassured turkey chicken products, as well as EBLEX-quality beef and lamb products. Evidently, the strategy is working – the company’s total fresh meat sales have increased by 10% during the financial year to date. Mr McFarlane says, “We are very excited to be developing our Red Tractor range of products and are listening closely to our customers to 06 march 2012 p6 newsCS4.indd 1 ensure we consistently have the right products to suit their needs. DBC Foodservice has been working with Red Tractor Assurance for a while, and our expanding range demonstrates our continued commitment to British farming and to offering quality British products to our discerning customers.” But why exactly is the Red Tractor scheme proving so successful? Red Tractor is a not-for-profit product certification programme that comprises a number of farm assurance schemes for food products, animal feed and fertiliser. It is licensed by Assured Food Standards, a British organisation that promotes and regulates food quality. Essentially, when a consumer buys a product with the Red Tractor quality mark, they are assured that it meets high standards of food safety, animal welfare, food origin, traceability and independent investigation. bol explains why Richard Cattell, DBC isn’t the head of marketing only wholesaler at Red Tractor, getting on says the logo board. Brakes is attracting a Group says it lot of interest was the first in the food foodservice service arena. company to “For example, provide Red Tracthe majority of the tor meat in 2007 large contract caterRob McFarlane and it now sells more ers in the UK are Red and Richard Tractor-licensed,” he Cattell (right) than 300 Red Tractor products. says. “They see it as a “We grew Red Tractor prodway of demonstrating to their uct sales by 25% during 2011, clients that their sourcing and beating our target of 20% procurement policies are to growth,” says a spokeswoman. a high standard and the food 3663 also supplies a comthey’re putting on their clients’ prehensive range of products plates is of a high standard.” carrying the label. “Since 2008, Perhaps this host of we’ve tripled the number of information and assurance Red Tractor products that we provided by one on-pack symsupply to our customers,” says the company. If, as Red Tractor argues, the logo is becoming an ‘important We grew Red short-cut’ for shoppers looking Tractor product for food-quality assurance, wholesalers could do worse sales by 25% than to plough ahead with during 2011 certified products. l Betterwholesaling.com 23/02/2012 15:35 news analysis FOODservice food for thought Sustainable restaurants are set to vet their suppliers’ ethics, writes Nigel huddleston I ndependent food producers are being targeted by a new supplier-approval scheme from the Sustainable Restaurants Association (SRA) as part of a first foray into assessment of the supply chain. The approval scheme, which uses a similar process to the association’s star rating for restaurants, gives the growing sustainable-restaurant movement an easy way to identify suppliers that share its ethos. Approved suppliers will be featured in a directory and need to exceed minimum standards for production methods, and client and staff relations, based on a questionnaire completed by the supplier and evidence it provides to support its claims. Membership of the scheme has crept up into double figures since its January launch, and includes bottled water brand Belu, New Zealand wine producer Yealands, the Rough Old Wife cider brand and organic-vegetable company Fletching Glasshouses. Tom Tanner, a spokesman for the SRA, says the association is looking to adapt the scheme to include wholesalers. “A lot more wholesalers are focusing on issues that restaurants and consumers are interested in, such as local produce, and are offering corresponding products within their ranges. “It would be very difficult to assess every product in a wholesaler’s range but we will probably be able to include them for their overall working practices and other aspects of sustainability. There are obviously challenges in how that would work but it should be possible.” Alastair Jessel is managing director of Kentbased Taywell Ice Cream, which is a founding member of the supplier approval scheme. He says: “If you’re a busy restaurant owner who’s just spent six months getting SRA-approval, I’d assume you’d be looking for a list of SRA-approved suppliers. More and more people Sustainable Restaurant Association £300m 2010 Combined turnover Launched Restaurants SRA-rated: Just under 1,000 Members include: neighbourhood restaurants and gastropubs; Michelin-starred Le Manoir Aux Quat’Saisons and Quilon; chains including Geronimo Inns, Prezzo and Carluccio’s. Focus areas: Healthy eating, responsible marketing, community engagement, treating people fairly, saving water, energy efficiency, waste management, fair trade, ethical meat production, sustainable fishing, and local and seasonal products. are interested in ethics and how you trade, and they are more sceptical about claims made by companies, so it’s good to have to have a scheme like this where claims are checked.” Taywell supplies 90% of its products to restaurants, much of it through direct sales, but its distributors include local wholesalers Kent Frozen Foods and Landmark member Turners Fine Foods. It’s also just been listed by Costco. Turners director Simon Raphael says of the scheme: “I’m not sure how big the immediate benefit will be or what will filter through in time. There’s no doubt that chefs are really buying into the whole idea of sustainability, but in the current climate, there are questions about whether people will pay more for those sorts of products.” l Betterwholesaling.com March 2012 p7 newsCS4.indd 7 07 23/02/2012 17:41 interview Buying groups today’s man MD Bill Laird says Today’s has a clarity of focus after the split from Nisa, writes Guy Campos 08 march 2012 Betterwholesaling.com p8-9_wholesalerCS4.indd 8 23/02/2012 18:37 P erhaps the most surprising thing about Bill Laird, managing director of the Today’s Group, is that he feels the need to explain what the group is and what it does to a visitor to the company’s new Doncaster offices. It would be natural to expect people to know. Today’s is a buying group for wholesalers with more than 200 members that completed its separation from retail buying group Nisa a month ago. When joined to Nisa in the Nisa-Today’s consortium, both companies were successful. But Mr Laird, who took over as Today’s MD three years ago, would often be asked “Do you do the buying for Nisa?” and “Where is your depot?” For the record, Today’s didn’t do the buying for Nisa’s retail membership – it acted for its own wholesale members – and it doesn’t have a depot because it doesn’t do any buying itself. Instead, the company uses its clout to negotiate better terms, including over-riders and promotions, on behalf of its members which do their own buying. It also offers members support with business development through retail, foodservice and marketing teams. Newly moved from NisaToday’s offices in Scunthorpe to its Doncaster headquarters, its directors can now focus exclusively on the strategy needed to drive member wholesale businesses forward, says Mr Laird, without attempting to deliver a retail buying group’s business plan simultaneously. But it is not the separation that is on Mr Laird’s mind when asked about the achievements of the last year. Instead, it is the strength of members’ businesses: collectively, they have posted three consecutive years of growth, at rates of nearly 14%, 10% and 5.5% respectively. In the group’s core activity of negotiating terms for its members, it has kept a promise it made to develop longer-term joint business plans with suppliers that are mutually beneficial rather than crudely adversarial. “Three years ago at a conference in Madrid, we said the days of getting the supplier in, grabbing them by the neck and thumping the table were gone. We are moving the majority of our primary contracts with our key suppliers to at least two years, if not longer,” he says. The key benefits of the longer contracts are the confidence that it gives suppliers to invest and the flexibility to deal with unexpected market conditions. Retail development, where the Today’s Group provides a retail club and symbol group service that members can offer to retailers, is another area of progress. “In the last year, we’ve added the best part of 400 new stores to the retail club, about another 150 stores to our symbol fascia group and we’ve got around another eight of our wholesalers beginning to develop retail affiliate programmes,” Mr Laird says. Wholesalers working with the Today’s Group on retail clubs now represent a majority of the sales volume in the group. The progress represents a revival of interest in an area where the group was a pioneer more than a decade ago, but where it had lost focus. Today’s has also been ramping up its foodservice expertise, making senior appointments from outside the group, with more announcements due to be made soon. The aim is to prepare for greater developments in the future. Mr Laird says the biggest challenges members have faced this year have been the depressed economy, with multiple discounting greatly affecting licensed products, 5.5% Today’s growth rate last year and difficulty in borrowing to fund expansion. But he can also list a string of names of member wholesalers that have invested in expansion, among them Dhamecha, First Choice Foodservice, Pilgrim, Regal Wholesale, Soho Cash & Carry and Venus Wines & Spirits. “What I take from that scenario is that there are wise, confident people in our sector. If those guys think now is the time to invest when other people are putting their money under the bed in a tin, they must be here for the longer term. They are banking for the future,” Mr Laird says. If members have a strong balance sheet, they will be looking to grow In fact, Mr Laird’s prediction for the year is that we will see more members growing by acquisition or by expansion, but that there will be some consolidation in the market as other wholesalers are bought. “If [members] have got a strong balance sheet, I think they will be looking to grow,” he says. Some members “have been very prudent in the way they have built up businesses until now, so they will be using their own balance sheet. They’ve got the clout and wherewithal to do it themselves.” Members will also be getting more involved in retail affiliate schemes. “Retail clubs took a huge leap forward last year and it will happen again this year. That won’t just be with the same wholesalers. There will be even more wholesalers doing more.” For many members that are expanding sales, marketing support is available and is highly valued by companies that have spoken to Better Wholesaling. “Our members are highly entrepreneurial so we don’t give them advice. We give them support. As we do things for members, more come and say ‘I’m looking to rebrand a service I give’ or ‘I’ve just invested a six-figure sum in our foodservice business – would you come and help me market it to the local community?’” Looking to the future, Mr Laird says ‘Big Box retail’ will be stagnant and there will be increasing use of technology in wholesale, including the use of quick response (QR) codes. Today’s is experimenting in this area and Mr Laird himself is an enthusiast, having written about the promise that mobiles held while working in retail eight years ago. He talks animatedly about mobile users being open to prompts, teasers and offers. Also coming up in the year are the group’s 25th anniversary celebrations. There will be a programme of event days that move up and down the country, organised from the centre. “Nobody does event days like us,” says Mr Laird, “and we have 34 of those this year happening across the membership.” There will also be a special conference in the Bahamas this spring and a celebration of the official anniversary date in October. In addition, the group will be at the Stoneleigh exhibition in April where a key speaker will be Greg Wallace from the BBC’s Masterchef programme. The Stoneleigh exhibition remains a joint venture with the Nisa Group, as does the Consortium magazine, and Today’s has separated from Nisa on friendly terms. “People ask us what the divorce was like,” Mr Laird says. “We said it isn’t a divorce because that would indicate there was acrimony and fallout. “We’ve had the experience of a 25-year-old growing up beside his mum and then going to his own place now but saying, ‘I’ll still come and visit, I’ll still send you a birthday card, I’ll come round on mother’s day.’ We’ve got a good relationship.” l Betterwholesaling.com march 2012 p8-9_wholesalerCS4.indd 9 09 23/02/2012 18:38 Opinion have your say betterwholesaling@newtrade.co.uk Smaller wholesalers may find a full ecommerce app too expensive but can use apps to build footfall with promotions, writes Mike McGee E commerce has become increasingly important for wholesalers over the past five years, but selling online still has some limitations in this marketplace. To be frank, a lot of retailers do not like ordering online. The process can be cumbersome for large orders, retailers do not always have immediate access to a PC, and many miss the buzz of shopping – from the daily special offers to the social interaction. A mobile app seemingly overcomes all of these problems. It can give customers compelling offers directly using their mobile phones, and offers value for attending the cash & carry. With an app, wholesalers can build on existing gap-filling strategies with tailored offers to extend the ranges and products purchased. It also provides retailers with a chance to keep a record of the offers they have used. However, in a highly fragmented and regionalised wholesale industry, already slow to take up ecommerce or online selling, using mobile apps as salessupport tools is a highly complex and expensive undertaking. To start with, there is the need to consider the way in which the app might be used and the technical implications of getting it to work. If it is used to promote offers, then strict redemption controls and the ability to delete the voucher the moment it is redeemed need to be in place to minimise malredemption and the risk of secondary wholesaling, for example. Such integration is readily achievable in the foodservice sector, where the likes of 3663 and Booker can relatively straightforwardly implement a mobile app for voucher promotions as they have a single sales order-processing system. But it is simply not possible for small- to mediumsized wholesalers, where the cost of integrating apps with their multiple tilling systems would far exceed the cost of setting the apps up in the first place. However, rather than using mobile apps to support an ecommerce strategy or as a sales-support tool, there is an 10 march 2012 p10_columnCS4.indd 10 Wholesalers can encourage customers with a small incentive to provide personal details, which can help them build up current customer information opportunity for wholesalers to use apps as an information portal or as a marketing-support tool designed to generate footfall by highlighting promotions or managers’ specials. Using apps in this manner takes away the technical complexity of vouchers and still presents the customer with additional incentives to visit the cash & carry. In addition, such an app can work without the need for the wholesaler to have access to the customers’ mobile numbers, and the app can be promoted in-depot and accessed by customers at their convenience. Wholesalers can encourage customers with small incentives to provide personal details, which can help them build up current customer information, customer behaviour or buying insight. This more basic use of mobile apps can be supported simply by keeping records in-depot detailing which customers or retailers have bought into which incentives, managing the redemption process cost-effectively while still dipping a toe in the ‘mobile app’ water. Mobile apps as ‘the next big thing’ within the wholesale industry might not be achievable today or even tomorrow. However, the benefits of using apps for marketing and driving footfall are realisable today at relatively low cost. Once these are achieved, there is scope for wholesalers to invest in the next stage of integration. Apps can then be used to leverage additional benefits, such as data insight, to improve the offer and build customer profiles to support ongoing marketing and gap-filling strategies. l Mike McGee is the managing director of wholesale and convenience industry consultancy Insight Offsite Betterwholesaling.com 22/02/2012 16:01 industry spotlight jayne clark P&G Professional away from home team leader the facts company P&G key brands Ariel, Fairy, Flash, Deepio, Daz. profile P&G Professional is the out-of-home division of P&G. It focuses on delivering high-performance, branded cleaning and laundry products to professionals. latest news Pop-up Preparedness Pods to educate customers in-depot about the Olympics. going for gold Guy Campos asks P&G’s Jayne Clark about the opportunities available in the Olympic year BW: What were your main achievements in the last year? JC: In October 2011, we brought Ariel with Actilift to market. This innovative and market-leading product delivers unique cleaning and stain removal benefits to the professional end-user, and has been very well received by our core customers, who demand convenience, value and performance from the products they specify. We also refocused on our fabric conditioner market by adding premium and sensitive variants to our value range. This has allowed us to offer customers a broad portfolio with a wide choice of product to suit evolving budgets and changing demands. BW: What have been the major challenges? JC: Much the same as everybody else, all our raw materials have seen big costincreases, which has meant we have had to work hard to ensure that our consumers understand our brands deliver excellent cost in use. Even if they are a little more expensive to buy, brands like Fairy Liquid and Ariel have proved their heritage of consistently delivering excellent results, ensuring that customers using our brands have one less thing to worry about in the everyday running of their businesses. BW: What are you planning to do in the next six months? JC: We will continue to invest in product innovation and have a dedicated away-fromhome sales team that works with our key customers to ensure we support them in growing our mutual business. This year, we also have the once-in-a-lifetime opportunity presented by the London 2012 Olympic Games. To help independent operators drive their businesses this year, we are setting up a number of pop-up, in-depot Preparedness Pods at a number of key cash & carry locations. Our team of trainer-advisors will be running a series of events across the country to help operators put their best feet forward through early scenario-plan- ning and offering advice on selecting the right cleaning products to get the job done. With thousands of tourists flocking to the UK for what is commonly referred to as ‘the greatest show on earth’, independent operators need to up their game to ensure they set the standard for the UK hospitality industry and cope with increased demand for services. We want to help as much as we can. As one of the major sponsors of the London 2012 Olympics, P&G Professional products will be used to clean hundreds of foodservice areas, as well as cleaning the athlete’s village and also washing their clothes, so that will certainly be a key factor! The halo effect of that event across the rest of the hospitality and leisure industry is certain to 2012 is a huge opportunity for growth for the market overall ensure that 2012 is a huge opportunity for growth for the market overall. BW: What are the biggest market trends? JC: In the current climate, everyone is looking for value for money. Professional users are comparing the absolute cost of products they need to use every day and we are seeing them demand more help in measuring how products perform – and what value they offer in real terms. BW: What advice do you have for wholesalers? JC: Consumers are always reassured when they see the brands they use at home being used in a professional environment, so P&G Professional products can often help wholesalers win new business. Once again, I’d come back to the value message: Fairy Liquid may cost a little more, but in value, performance and many other measures, it is the best choice and the best product for the job. It really is that simple. l Betterwholesaling.com March 2012 p11 industry CS4.indd 1 11 23/02/2012 14:21 COVER STORY 12 JOIN THE CLUB MARCH 2012 p12-16 cstoryCS4.indd 12 Betterwholesaling.com 23/02/2012 16:19 feature U Retail clubs provide great opportunities for retailers, suppliers and wholesalers to increase sales. But, as LINDSAY SHARMAN reports, they can be more complicated to implement than it first appears nlocking the potential of unaffiliated independents is an on-going challenge for the wholesale sector. While symbol-group members offer a more or less guaranteed level of compliance, this is not so with unaffiliated retailers, who more often than not have their own ideas about how they want to run things. As Mark Bottomley, retail manager for Bestway and Batleys puts it, “Dealing with the independent sector is like dealing with 2,000 managing directors.” Retail clubs are one of the main pieces of wholesale activity designed to help wholesalers, independents and suppliers work together effectively. The concept has developed over the past decade to the point where a retail club is essential for every major wholesaler. A retail club has two main functions for the wholesaler, the first of which is to act as a stepping stone between independents and symbol-group retailers. “A retail club is a launch package – a test for non-symbol group customers who want to get involved,” says Simon Hannah, managing director at JW Filshill. Its Smart Buy retail club is a precursor to its Key Store symbol group. “When retailers see the success of the retail club, it is a natural progression into the symbol group,” he says. A retail club is a launch package – a test for nonsymbol group customers who want to get involved This strategy of testing the water with a retail club before committing to a symbol group is widespread across the wholesale sector and can be extremely successful. It’s to the wholesaler’s advantage as well as the retailer’s, giving it the chance to see if a retailer meets the high standards required for a symbol package. Progression to a symbol group is not the only outcome for retail-club members, however. Over time, the clubs have become established in their own right as a second tier of engagement between wholesalers and independents – and have become an increasingly important part of supplier marketing activity. James Russell, formerly of Britvic, is a commercial director at Rowan International, a specialist wholesaler supplying independent discount retailers. While at Britvic, he split the convenience sector into three tiers: Tier A is fascia and symbol retailers, Tier B retail clubs and Tier C unaffiliated independents. Betterwholesaling.com march 2012 p12-16 cstoryCS4.indd 13 13 23/02/2012 16:21 cover story “Tier A was very important, but Tier B was definitely an area of focus because it offered a promotional programme to give us what we wanted in terms of distribution,” he says. Retail-club promotions enable retailers to offer competitive prices and value to their customers, as well as drive footfall and ultimately profit. Being a member of a club is a step up from operating entirely independently, without the level of commitment and investment required to become symbol group members. For wholesalers, it is a second route to market they can offer suppliers looking to drive sales in the independent sector. “Ultimately, we do it as much to protect our business as we do the retailers’,” says Bestway and Batleys’ Mark Bottomley. Retail clubs across the sector operate in largely the same way at each wholesaler: they are a simple mechanism for wholesalers to offer promotions to independents on the understanding that they will pass on the value to their customers. Support for the promotion varies from wholesaler to wholesaler but shelf-talkers, promotional leaflets and other marketing support materials are usually part of the package. Current activity includes the addition of Bestway’s magazine Impact, which is sent to Extra Local retailclub members, giving them notice of promotions and category advice. Mr Bottomley says: “We have received great Booker has two retail feedback from clubs, including Shop retail-club members. Local 2 Go Because the information is endorsed by their wholesalers, they trust it.” Booker has two retail clubs, Shop Local 2 Go and Retail Club, which have 4,500 members between them. Its emphasis is on offering retailers outstanding value. “The deals drive both footfall and incremental sales for members and guarantee retailers a minimum margin of 15%. The PoS package includes shelf-barkers and leaflets to distribute in the local area to drive awareness of the great value available,” says retail sales director Steve Fox. JW Filshill sends out 300,000 leaflets every three weeks for its symbol and retailclub members. The large majority of these go to the members of the symbol group, but some go to the retail club’s members. 14 march 2012 p12-16 cstoryCS4.indd 14 retailers’ views: retail clubs nick southern The Newsagents (Premier Express) “We joined Booker’s retail club when it was first introduced and we were members of the scheme for around four years. There were several things that I liked about being part of a retail club. One of the most useful things was the point-of-sale material provided. Having marketing materials of a professional standard is streets ahead of anything I could produce myself in-store and gives customers the right impression. Having access to promotions and a bigger range was also a great help. “Over time, it became clear to us that moving over to the symbol group was a natural progression and after a re-fit to increase the size of the store so it met with the minimum requirements, we did that. “You could say we’ve grown with Booker as they have developed their offering for independents – the decision to join the retail club and start that journey was the best we’ve ever made.” iain paton Cullen Corner Shop, Cullen, Scotland Iain Paton spent 13 years working as a B&Q executive before setting up his own business in 2008. Retail clubs have a part to play in Mr Paton’s strategy. He sees them as a helpful tool in offering value to his customers but does not have plans to convert to a symbol group. “I appreciate the opportunity that retail clubs offer because it is good for business to offer customers value for money,” he says. “The problem with retail clubs is the products are not always right for my MD Simon Hannah says the advantage of passing on the leaflets to the retail club’s members is that it encourages them to take part in the promotions. John Kinney, retail director at the Today’s Group, says it produces different types of leaflet for different types of store. He adds that it is important to make the right choice about what offers to promote. “Some suppliers want to get NPD on the leaflets but that is challenging because it would need to be in all shops to be successful. It is about getting a balance between the supplier and the customer.” Over the years, although the basic mechanics of the retail club haven’t changed, store – Booker for example majors on alcohol but grocery, dairy and everyday essentials like soap powder or cereal would be better for my business” “The PoS material is useful and there is value in having it, but some people will not see the offer, even with blue flashing lights on, so we always make a point of actively promoting offers at the till point.” “Availability is also a key issue for us. Often the lines on promotion sell out before we have a chance to get hold of them. I think bigger businesses take it all so smaller businesses miss out. “I’d like to see wholesalers addressing this – and listening to smaller retailers more.” the range of activity has expanded, demonstrating the level of support available for independent retailers from the wholesale sector. The kinds of deals and categories have expanded and there’s more club activity than ever before, meaning it is increasingly the role of the wholesaler to oversee promotional activity at store level. But do retail clubs work? Essentially, yes. They allow retailers the chance to be competitive at a time when the landscape of the convenience sector is changing and the market is growing, thanks in part to the entrance of the major multiples. Patrick Mitchell Fox, senior business analyst at the IGD, says that wholesalers understand retailers’ need for flexibility Betterwholesaling.com 23/02/2012 16:22 cover story and their retail clubs enable them to implement professional standards. “For retailers that are keen to be competitive, the opportunity to take part in these clubs is excellent because they get deals that have the value and impact of a symbol group but they don’t have to be a member, which would mean compliance and investment,” he says. “There are plenty of pros and relatively few cons,” he adds. The general consensus among wholesalers is that one of the main reasons retail clubs work so well is because they are consumer-led. Products are promoted based on what will sell, rather than what suppliers want to push. This is particularly relevant for Steve Parfett, chairman of Parfetts, who is passionate about his company’s commitment to promoting only the right products. “We are determined that suppliers cannot buy their way into promotions,” he says. “We decide what is right for the consumer and then we approach the supplier.” It is a similar story at JW Filshill. MD Simon Hannah says: “Promotions are always based on supplier activity, which is based on consumer demand. Everything we do is based on above-the-line marketing. If it’s on TV we have it in-store.” Retail clubs are good for suppliers, too, providing them with an effective route to market and greater access to the independent sector. Mr Hannah says much of the desire to drive retail clubs comes from the suppliers. “Suppliers don’t want to invest in something that doesn’t reach consumers,” he says. “Retailers are more likely to get value from suppliers if they are associated with a retail club.” Ken Cameron, field sales manager at Coca-Cola Enterprises, agrees that the clubs allow the company access to convenience consumers. “Suppliers use the mechanics of retailclub promotions to drive distribution of key lines into an important consumer environment, namely the local convenience and independent retail channel,” he says. “Coca-Cola Enterprises offers consumer deals for retailers, such as two 500ml Cokes for £2, that are designed to drive incremental purchase. In turn, the loyalty that the club’s member demonstrates should grow volume and distribution with that particular wholesaler.” With suppliers and wholesalers on the same page, it’s no surprise that 16 Parfetts has a ‘three strikes and you’re out’ approach to members who don’t comply with promotion rules retail clubs have become prominent. But the challenge, as always, is retailer compliance. The definition of compliance can be different for each wholesaler, which frustrates suppliers. “The level of promotional participation can vary from depot to depot,” says Mr Cameron. “Some wholesalers simply provide customers with a free case at the start of the promotion, whereas others support with promotional leaflets and photographs of additional off-fixture displays. This can sometimes make it difficult to consistently record the overall success of a promotion.” Implementing a retailer club in a way that satisfies both the retailer and the supplier can be complex, too. Iain Paton has run Cullen Convenience Stores in Cullen, Scotland, since 2008. He recognises the value of retail clubs and uses Booker’s Shop Local 2 Go among others. But he admits he isn’t loyal to any wholesaler and bends the rules when it comes to promotions. “With retail clubs, I always put the 15% Minimum margin for Booker retail club members product on promotion but if it doesn’t work for my customers then I’ll stop running it. There is no point me keeping it on if it isn’t working,” he says. The issue of compliance is one that wholesalers are fully aware of and seeking to address. Parfetts, for example, has a ‘three strikes and you’re out’ approach. A Go Local co-ordinator in each depot manages retailers and if one is consistently not passing on value, then the relationship is stopped. “We absolutely don’t want retailers to not pass on value to consumers,” says chairman Steve Parfett. Bestway also takes steps to ensure compliance is well managed by not only addressing under-performance but also providing additional support to educate retailers. “We check our retailers for compliance each period,” says Mark Bottomley of Batleys and Bestway. “We try to educate our retail club members through Impact, as well as communicating with them about planograms and display.” There’s no doubt retail clubs are set to remain part of the wholesale sector for the foreseeable future. Indeed, wholesale expansion into other areas to help support independents is likely, according to James Russell from Rowan Inter znational. “I think wholesalers will start to do more to help independents connect back to their communities,” he says. “The leading retailers are already onto this but there is a core of retailers that are being left behind and this is a big opportunity for wholesalers.” l march 2012 Betterwholesaling.com p12-16 cstoryCS4.indd 16 23/02/2012 16:25 We’d love you to sit on a committee. Not the fence. Lending your support to a Caravan central or local committee is just one of the ways your company can help former colleagues who are struggling to make ends meet. Caravan recognises this support as part of the annual Achievement Awards. Make sure your company’s name is on an award this year! We’d love your support. Just visit www.caravan-charity.org.uk Caravan is the trading name of the National Grocers Benevolent Fund, A Registered Charity Reg. No 1095897 (England & Wales) & SC039255 (Scotland). A company limited by guarantee, registered in England and Wales No 4620683. CARA-0120_ClubCommitteAd_A4_AW1.indd 1 31/03/2011 14:52 compliance the gentle art of persuasion Getting independent retailers to follow best practice is hard work but Landmark is making progress, says DAVID HARRIS W holesalers and suppliers spend a small fortune finding out which products sell best and why. Market research can tell them what retailers should stock, how much they should have available and when they should stock it. Good market research leads to better sales, which is good for both wholesalers and retailers. So it is no surprise that one of the eternal riddles of wholesaling is why retailers can prove so unwilling to stock the key items that wholesalers want them to stock, offer promotions as suggested or generally follow commercial advice that should do the retailers every bit as much good as it does the wholesalers. In short, why won’t retailers do what wholesalers want them to? Even wholesalers find the reasons difficult to pin down. Chris Doyle, business development director with Landmark Wholesale, has been working on the issue for years. In 2010, Landmark decided that ‘non-compliance’, as it is rather inelegantly known, had become such an issue that it was going to concentrate on raising loyalty in 2,000+ Lifestyle Express stores, rather than recruiting new members. Mr Doyle says that what Landmark is looking for is quite straightforward: it wants its stores to stock the core 800 or so products identified as the best sellers. But the average independent retailer is stocking only around 55% of this, even if Landmark’s efforts have nudged the figure up in the last two years. So why are independent retailers so bewilderingly unwilling to do themselves a favour by stocking what sells best? 18 Mr Doyle has gathered a variety of reasons why shopkeepers are unwilling to follow advice that could make them more money: “My store is different”, “I haven’t got time”, “I don’t believe it [the research]” and “I’ve got more important things to sort out” are just some of the reasons given. Market research carried out in depots by Him! shows that retailers are certainly remarkably resistant to stocking items that wholesalers tell them will increase their sales. The research seems to back up Mr Doyle’s own informal conversations, indicating a variety of reasons for this, including the fact that independent retailers simply like their independence. Natalie London, Him! general manager, says that its wholesale tracking programmes, based on talking to thousands of retailers and caterers in depots each year, suggest that two in five independent retailers do not follow core ranges “because they like to make their own decisions”. One potential way around this would be to offer retailers a list of 20 products from which they should sell at least 10 – in other words helping them to feel independent while giving them the necessary commercial guidance. Retailers will often purchase certain items of stock just to be independent 55% Items in Landmark’s core range stocked by independent retailers But when it comes to guidance, the Him! statistics are startling. Only 44% of independent retailers say they understand their wholesalers’ core range and best-sellers concepts, with 17% saying they understand them only ‘somewhat’. A further 27% say they don’t understand them and so do not follow them. Part of the reason for this may be that for many convenience store operators, English is not their first language. However, retailers say they do recognise the importance of stocking the best sellers in each category, but even here the Him! research suggests that agreement is not absolute: just over half say that it’s ‘very important’ that they stock the best sellers, with a further third saying it is ‘important’. In fact, the most important aspects for retailers buying from wholesalers are value (57%) and acceptable prices (49%). march 2012 Betterwholesaling.com p20-21 ComplianceCS4.indd 18 23/02/2012 17:28 retailer insight Put bluntly, some retailers seem more willing to let their profits suffer than to surrender a centimetre of their right to choose Furthermore, one in five retailers do not stock the top sellers because ‘they are not on promotion’. For wholesalers, the issue remains how to tackle such intransigence. Put bluntly, some retailers seem more willing to let their profits suffer than to surrender a centimetre of their right to choose. Landmark’s Chris Doyle says that language is just one of the things that needs to change: “I don’t like the word ‘compliance’. I prefer to think about it as influencing the retailers and sharing best practice.” Getting independent retailers to believe the research presented to them by wholesalers is also part of the secret, he adds. “You need to tell them that if they stock certain products, they will be more successful retailers.” To back up straightforward advice with an immediate reward, Landmark has been offering cash back to retailers that follow its advice. The retailers can spend that money in-depot. The programme is working, but slowly, adds Mr Doyle, who sees it as “five-year mission rather than a one-year goal”. Wholesalers that have set out to solve the problem of persuading retailers agree with Mr Doyle that it is much more likely to work if carried out carefully and clearly rather than by becoming frustrated with them. United Wholesale Grocers in Glasgow is one of those taking the calm, considered approach to persuading retailers to toe the line, and it appears to be working. Rahan Ali Irshad, general manager at the company’s Polmadie branch, says that the first step was to educate its sales team about why core lines and promotions work so well for both wholesalers and retailers. Then the team went out with a clear method of demonstrating to retailers the commercial benefits of promotions and the importance of the core lines. In the case of United Wholesale, the core lines are a modest 50 or so items, so it is not particularly arduous for retailers to follow. In addition, says Mr Irshad, it is important to ensure that group members also comply with other brand standards in things like how their store is kitted out and the uniforms staff wear. Overall, the policy has been a great success. By last year, compliance among United’s 142 members, including its Lifestyle Express, Drinks Express and Shopsmart members, had increased from 45% to 85%. This is going to go up even further in 2012, says Mr Irshad. It seems fairly evident that the firmbut-polite and reasoned approach to persuading retailers is the right one, even if it takes time and planning. Chris Doyle’s plan for Landmark sounds about right. The message for wholesalers must be: don’t get frustrated and don’t give up, because the rewards will eventually benefit everyone. l Betterwholesaling.com p20-21 ComplianceCS4.indd 19 MARCH 2012 19 23/02/2012 17:29 pubs feel the buzz Nigel Huddleston looks at an idea from Booker that is proving popular with customers – a retail club for pubs R etail clubs are a popular way for wholesalers to build loyalty among independent shop customers, but there’s been relatively little similar activity to incentivise the on-trade. One such exception is Booker’s Buzz scheme for pubs, which provides a range of price promotions, mainly on leading alcohol brands, and could point a way to sales growth in the hospitality sector. The scheme aims to drive loyalty towards Booker from existing customers and attract potential customers that are free from the traditional brewery tie with at least part of their ranges. Wholesale schemes to drive loyalty among pub customers aren’t entirely new: Brakes offers Nectar points to its small- and medium-sized business customers, and specialist drinks wholesaler Waverley TBS has its own Total Points scheme that allows operators 20 to save for stock, extra staff training, premium point-of-sale (PoS) material or high-street shopping vouchers to use as staff incentives. What makes Buzz different is that it is a loyalty scheme that’s also consumerfacing, aiming to help customers to build business, not just reward them for their ongoing custom. It effectively provides pubs with a brand to market their venue while keeping their independence. Drinks specialist Matthew Clark Wholesale said it provides PoS material and price 800 The number of pubs in the Buzz loyalty scheme promotions for customers but stops short of creating a marketable pub brand. “A lot of customers are probably more likely to use the drink brands’ owners’ PoS material with their logos if they do want to attract customers with brands,” an MCW spokeswoman says. With Buzz, members are required to commit to the prices suggested in nofrills Buzz PoS material, which features photos of products alongside prices. In return, Booker provides trade discounts and marketing support to help independent pubs compete against multiple operators on their patches. The scheme has a built-in target gross profit of at least 50% on products included in the promotions. Buzz began with a trial of 500 pubs in the summer of 2010, with no cost to join but a minimum order of £200 for each promotional period. It has now been rolled out to more than 800 customers. march 2012 Betterwholesaling.com p20-21 pubsCS4.indd 20 22/02/2012 17:41 feature buzz marketing As well as price promotions, consumer involvement in the Buzz scheme has been driven by competitions. A text-towin competition last autumn offered prizes of weekend breaks, Red Letter Days and iPads and was backed by Blossom Hill, Coca-Cola and Walkers Crisps. The programme has included seasonal promotions such as a £2.25-per-measure deal on Highland Park single malt for Burns Night and a cider festival promotion which ran in early summer 2011. Buzz is backed by a dedicated website that features latest news on prices and competitions. It also has a pub finder, allowing consumers to find a list of nearby Buzz pubs by entering their postcodes. There’s a free mobile app available from iTunes that allows users to track down pubs using the GPS facilities on their phones. As one consumer feedback comment put it, “I always drink in my local Buzz pub, but this was great when I went away for the weekend and found another Buzz pub where I was staying.” Buzz also has its own Facebook page with details of all the offers and a featured pub slot. In all, Booker has in the region of 38,000 pub customers, so there’s plenty of potential for Buzz to grow from the wholesaler’s existing customer base. As is stands, the coverage of the Buzz scheme appears to be big enough to give it workable scale, but small enough not to saturate the market. This has an attraction for pubs as it gives them a USP in their local market. For now, Booker’s competitors have kept the club concept for their convenience retail customers, but if the buzz around Buzz continues to build, clubs for pubs could become a feature of the wholesale landscape. l How the Buzz Pubs package stacks-up l drinks discounts: Pubs get discounts on leading drinks brands in return for commitment to hit price points. l promotions: Deals are supported by seasonal competitions and other promotional activity. l customised pos: Booker supplies Buzz-branded PoS material for the venue and local marketing, including fliers customised with the pub’s name and address. l branding: The club provides outlets with a brand to market around while retaining independence. l online presence: Gross profit A dedicated website and free app target for feature ‘pub finders’ and advertise every Buzz deals to consumers. promotion 50% case studies barrie webb Kevin calladine “We joined shortly after it was launched in the summer of 2010. It seemed like good value for money but what attracted us wasn’t just that it was about selling through cheap stuff to make us competitive with the pub chains, but that it would help to keep customers in the pub for longer, which it has. “It’s also expanded our clientele base. I’d say it has increased our footfall by around 2% and the average spend per “We started taking part in Buzz in January and a big draw for us was the exclusivity that it gives us in our area. It means we’ve got a promotional offering that no one else has in our part of the city. “The main benefit is driving footfall into the venue. We’re very much a night-time venue, and having promotions like this can help to drive business on the quieter nights in the middle of the week. “We’ve been putting the deals on our Facebook page. We also get point-of-sale material with A2 posters for the window and inside, plus A5 leaflets that we put on the tables so that customers can take them away and show to their friends. “There are also promotions that can help drive footfall during the day, such as one at the moment for a Twix and cup of tea for £2, which is backed by PoS material. “The pub already had a really good relationship with Booker and there is an element of discount in the products we buy as part of the Buzz offers. That gives us the incentive to support the scheme and put our all into it, so there’s something in it for us and for Booker. “We checked to see if we were featured on the website to make sure Booker was following up what it says it’s doing and we were on there straight away – which isn’t always the case with online directories.” Swan Inn, Stone, Staffordshire The average spend per round has gone up by about 15% round has gone up by about 15% which is where the real win has been. “We use the PoS in the pub and distribute the leaflets in the town at the local farmers’ market. “You are expected to make a commitment to buying, but to be honest it only works out at around one case of each product that’s in each promotion and we easily sell considerably more than that – so really the commitment is minimal.” Queen’s Arms, Brighton Betterwholesaling.com march 2012 p20-21 pubsCS4.indd 21 21 22/02/2012 17:43 DEPOT DOCTOR soft drinks, hard cash Are you looking after the health of your soft drink sales? Get a full checkup with Britvic soft drinks depot doctor Adrian Howe 1/ the symptoms Soft drink sales are currently worth £639m in cash & carry and growing at 2.3%, but this growth is only half that of total sales growth in cash and carries (IGD, Grocery & Foodservice Wholesaling, 2011). With soft drinks growing at 6.3% in the total market over the last year, it seems that there is a great opportunity for wholesalers to capitalise on the scale and opportunity of soft drinks (Nielsen Scantrack Total Coverage, MAT to 28.01.12). If cash & carries increased their sales by the same growth as the total market, £24m of sales would have been added to the industry. Making small changes to range and layout ensures the fixture is easier to shop and ultimately helps drive growth levels that match the total market. 6.3% The total market growth in 2011 2/ THE DIAGNOSIS 1/ The wrong products Cash & carry shoppers often rely on the same range that they always buy, or focus on the top impulse lines only. However, stocking a broad range that meets all consumer needs, incorporating best sellers and new products, will help to grow sales. 22 march 2012 p22-23 Britvic Depot Doc.indd 1 knowing your customers 2/ Not It’s important not to take a ‘one size fits all’ approach and to appreciate different customer types. Although retailers deliver most soft drinks sales, caterers bring in 35% of soft drink sales and should be catered for with the right products in the right formats. One idea would be for depot managers and staff to speak to customers on their visit to the depot to find out what they want. easy to shop 3/ Not Time is precious for depot customers, and it is important that both the main fixture and wider depot floor are easy and logical for people to shop. The main reasons for lack of purchase in depot are either out of stocks or not being able to find the product in depot. Betterwholesaling.com 23/02/2012 19:30 In association with 3/ the cure 1/ The right range It is key to stock best selling soft drink categories, such as cola. Be aware of trends, such as the growing demand for energy drinks, like Mountain Dew Energy, which can help boost sales. Consider all your customers. Licensees might need glass formats, rather than the PET format a retailer requires. 2/ The right advice Cash & carries can be business advice centres. Research trends, like the increase in popularity of cold hot drinks such as Lipton Ice Tea, so you can tell customers about them. Speak to customers regularly in depot and when they are at work or at home by email and direct mail. 3/ A logical layout Ensure all products are visible, by avoiding single facings, managing your lower performance SKUs and palletising brands that deserve space. Place related subcategories, such as cola and carbonates, next to each other in-depot. Group categories that complement each other, such as soft drinks, snacks and confectionery. 4/ for better health 1/ A new range Work with your suppliers to analyse the current range and how it could be evolved. Try to make sure fixture layout is simple, dedicating more space to the best selling brands. 2/A dedicated area Creating a dedicated soft drinks area in depot can help make shopping easier. Signposts placed throughout the depot will also help customers find it. Break the fixture into different segments (cola, pure juice, energy drinks) and formats (bag in a box, on-the-go, take home) to make shopping simpler. 3/ Category advice Offer engaging business building advice at the main soft drinks fixture to help customers maximise their soft drinks sales. Help customers understand the category, suggesting which brands and formats they could stock, as well as what deals they might offer in store. Keep it simple and focus on the opportunities soft drinks present. Creating a dedicated soft drinks area in depot can help make shopping easier. Signposts placed throughout the depot will also help customers find it Betterwholesaling.com p22-23 Britvic Depot Doc.indd 2 MARCH 2012 23 23/02/2012 19:32 exports fresh fields British food is in demand around the world. TOM FERGUSON looks at how wholesalers sell their goods overseas W ith the government committed to boosting UK food and drink sales overseas, wholesalers are well-placed to carve their own slice of a £16bn annual export market. In late January, the Department of Environment, Food and Rural Affairs (Defra) unveiled a ‘Farming, Food and Drink Exports Action Plan’, aimed at increasing sales to high-growth markets like India and China. Simultaneously, wholesaler Bestway revealed its own exports had climbed 23% in value over the preceding 12 months; earlier in January, Stockport-based Parfetts reported its own substantial increase. “British food is in great demand around the world,” says Elsa Fairbanks, director of the Food and Drink Exporters Association (FDEA), the 95 trade members of which range from suppliers like Asian food manufacturer Geeta’s and confec- 24 “The pound’s recent strength tioner Green & Black’s to helps,” says Ms Fairbanks, specialist wholesaler Suma “and we have some fantasWholefoods and Bestway. tic products – not just the “Exports are going very obvious strong British ones. well at the moment,” deMany of our exports are clares Ms Fairbanks, “and so products like ethnic food.” are wholesalers.” “Demand has been increasWholesalers “offer an exceling,” says Bestway central export lent service for [overseas retail] buyers,” she adds, “with variety Steve Parfett: ex-pats buyer Umar Sheikh. “Over the years, people have been visiting and range. They’re also usually are the main drivers the UK for one reason or another, flexible, can offer help on prob- of overseas sales be it a holiday or education, busilems with labelling, and so on. ness or immigration. [So] millions A lot of smaller UK companies of people around the world have developed in particular don’t have the resources to a taste for UK-manufactured FMCG.” devote to export, so it’s an effective way of doing it.” Defra says food and drink exports There remains room for growth. Defra climbed 12.2% per cent in 2010 to notes the UK exports more food annually to £16.1bn, the sixth consecutive year’s Belgium than to Brazil, Russia, India, China growth. Top earners were whisky and Mexico combined – countries repre(£3.5bn), beer (£536m), chocolate senting 44% of the world’s population. (£376m), breakfast cereals (£367m) and Mr Sheikh declines to put a value on soft drinks (£327m). Bestway’s 23% increase, but attributes march 2012 Betterwholesaling.com p24-25 exportsCS4.indd 24 22/02/2012 14:56 out of the box the government’s big ideas: key points from Defra’s Farming, Food and Drink Exports action plan l promote exporting: Hold regional road shows and B2B networking events to share best practice and encourage exporting. l cut the red tape: Make food-export paperwork simpler and easier for companies to access. l end the meat bans: Work across government and industry to get countries to remove bans on British meat. l build on the olympics: Showcase British food and drink at the London Olympics 2012 to attract international buyers. l nurture the novices: Support inexperienced agri-food companies to showcase products internationally. growth to demand from Africa, the Middle East and Pakistan, key product areas being “all FMCG – grocery, soft drinks, dry goods”. While Bestway has always had some overseas customers, he says “export was never a part of our agenda in the early days of the business”. The company reappraised its position a little over 24 months ago, explains Umar Sheikh. Appreciating that “our export customers needed support just as much as our domestic customers motivated us to apply resources and put into place a strategic plan of action”. That resulted in an expansion of services and export staff numbers, with the company offering full door-to-door assistance wherever possible, as well as a web-ordering service. Bestway now exports to 49 countries. Mr Sheikh pinpoints Bestway’s participation in the October 2011 Anuga international trade fair as a significant piece of export profile-building – the Cologne event attracted 155,000 trade visitors and featured over 6,500 suppliers. Such events are important marketplaces for striking export deals, confirms FDEA’s Elsa Fairbanks, so the association organises British pavilions at “all the major food fairs around the world”. Some companies prefer to take a different route towards attracting export customers. Parfetts sells to “between 20 and 25” countries, says chairman Steve Parfett. “Primarily,” he says, “business comes through word of mouth or our web site.” The company’s key export markets are mainly European, he says, for “a mixture of very traditional grocery products and some very interesting things – for example, we sell far more Atora suet, flavoured teas and flavour essences for cooking overseas than we do in the UK. “We also do well with seasonal goods, Easter eggs in particular. But it’s interest- ing the ex-pat community seems to cook – you can’t use Atora for anything else.” Bestway’s Umar Sheikh says ex-pats are “a smaller percentage of our customer base”. However, for Steve Parfett, they are “the primary driver” of sales. “In European countries particularly, the initial market is ex-pats and holidaymakers,” he adds. “But that also gives a platform to sell to locals.” Ex-pat communities “can often open up markets,” agrees FDEA’s Elsa Fairbanks. “Once UK food is on the shelves, that opens up into more of a domestic market.” Several wholesalers have suc- cessfully built sales in specific regions. Stratford-upon-Avon-based DCS Europe, for example, has strong sales in Libya, Egypt and Iraq, while Landmark group member CPT International is active in the Middle East. Millions of people around the world have developed a taste for UK-manufactured FMCG Manchester-based Rayburn Trading’s largest export destination is Ireland, says director Howard Goldman, although it sells toiletries and cosmetics, household goods, and confectionery across Europe, the Middle East, the Far East and Australia. He says Rayburn’s key markets fluctuate, but the biggest “will probably always be Ireland, because it’s so closely connected to the UK”. Mr Goldman says Rayburn’s long-established export business has steadily increased year-on-year over the past decade, culminating in a June 2011 Queen’s Award for Enterprise in International Trade. leading consumers of UK food and drink 1 2 £2.7bn Ireland £1.9bn France 3 £1.2bn 4 USA £1bn Germany 5 £963m Spain Source: Defra figures for 2010 Rayburn largely exports own-label brands like Hair Academy and Zazie Cosmetics, but UK manufacture still adds a certain cachet, notes Mr Goldman. “We sell more to the discounted end of the market, but people like stuff that’s made in Britain, seeing it as a sign of quality.” While some wholesalers doubt the relevance of Defra’s export plan to their businesses, FDEA’s Elsa Fairbanks insists wholesalers can benefit from the initiative, which was developed with leading exporters and trade associations. The plan outlines ways for government to work with industry to remove trade barriers and promote British products. According to trade and investment minister Lord Green, “We want to see many more SMEs exporting to high-growth markets. By working together, government and industry can help British food producers unlock their potential.” Bestway’s Umar Sheikh is quietly upbeat. “At this stage,” he says, “we feel that any effort made by the government, UKTI and other such bodies will be welcomed by all businesses.” “Export is a key requirement for strong growth for the sector,” Mr Sheikh adds. “Only one in five small-to-medium-sized companies export – we need the support of Defra in highlighting the advantages of buying British.” l Betterwholesaling.com march 2012 p24-25 exportsCS4.indd 25 25 22/02/2012 14:57 BEERs AND CIDERs In association with know what your customers want Get the basics right and you will sell more beer and cider to retailers, says STEFAN APPLEBY S elling more beer and cider needn’t be a difficult aim for wholesalers to achieve. It’s simply a case Availability is as key for of knowing what the people coming wholesalers as it is for the through the doors of your depot want to buy and ensuring that you display it retailers themselves in an exciting and enticing way. Nichola Cookland of Heineken, which Rajiv Chotai of Chatham News Plus and makes Strongbow, Fosters and Kronenbourg, Yogesh Darji of Premier Baddesley note says it’s about getting the basics right. what they need before visiting depots. “Availability is as key for wholesalers as “I always make a list before I go to the deit is for the retailers themselves,” she says. pot. It’s dictated by what the special offers “Depots should make sure that they have are that they’ve got on,” says Mr Chotai. the brands that retailers are looking “I make a list of what we need in for clearly displayed on the shelf the shop,” agrees Mr Darji. “Then with no gaps.” we’ll look at the leaflets and Kay Patel, who owns four see which wholesaler has the convenience stores in east Work with best offer.” London, believes that a guaransuppliers to To alert retailers to your range, tee of availability would be stock it you should make it stand out, a guaranteed sale. says Heineken’s Nichola Cookland. “I don’t mind paying a bit extra “Point-of-sale (PoS) material should for something if I know that it’s definitely going to be available when I get to the be used to highlight the leading brands and to alert retailers to the products that they depot,” he adds. should be buying. Many retailers shop like the average fam“Make sure that you don’t stock too many ily does – with a list of the things that they products in your depot – this could easily need. Most of the time, they’re looking for detract from the biggest brands and biggest the big brands, so depots need to highlight sellers, and confuse retailers.” these in-store so they’re easy to find. PoS To sway shoppers from a list and promote new launches, wholesalers need eye-catching displays. “Sponsorship deals around big sporting events, major advertising pushes or newproduct launches are ideal times to create theatre in-depot,” says Ms Cookland. “Nearly every supplier will have something you can support so get close to your reps and you can create a really exciting events calendar.” PoS material can push products to retailers. “It would be great if suppliers worked with wholesalers to make PoS available in-depot, so that when you buy a product you can simply pick up the relevant shelf-talker at the same time for your store,” says Kay Patel. Nichola Cookland says that the final key element is for wholesalers to understand the value of price-marked packs for independent retailers. “Suppliers are increasingly advertising PMP on the outer shrink of cases so retailers can easily identify them and make sure they are visible and not hidden away,” she says. By sticking to the basics and observing a few key rules, depot managers can really shake up their beer and cider sales. l retailer views: what they want from wholesalers Kay Patel Global Food+Wine, Wanstead “I don’t mind paying a bit extra for something if I know that it’s definitely going to be available when I get to the depot. Availability is the big thing. I’d like people who work in-depot to be knowledgeable about what they’re selling.” Nimit patel Londis, Grays and Dartford; Best-one, South Ockendon “It would be good if wholesalers improved their communications. We don’t have time to read through all the pamphlets – what would be better is if they emailed you to let you know what’s happening with offers and promotions. Then it would be easier to see what you want and where to go.” 26 yogesh darji Premier Baddesley, Baddesley Ensor “The staff in the cash & carries we use don’t offer us any advice on what we should be buying – they seem very busy getting on with their jobs. The Booker staff are good because they listen to us if we have a complaint and we will tell them if we think the prices are too high.” rajiv chotai Chatham News Plus, Chatham “I always make a list before I go to the depot of what I want. It’s dictated by what the special offers are that they’ve got on. The lines that I’m looking out for most of all for promotions on are soft drinks and confectionery.” March 2012 Betterwholesaling.com p26 HeinekenCS4.indd 26 23/02/2012 10:04 AUST R A L I A N for CHIC Grow your lager sales through stocking new Foster's Gold • 33 million bottles already sold within the first six months • Over 3/4 of stores already stocking Foster's Gold in their premium lager fixture • Over 3/4 of Foster's Gold sales add additional value to the category - no stealing from other products • Benefitting from over £44m investment on Foster's in 2012 • Make sure you stock the 6-pack PMP in your chiller so your customers can buy it today STOCK UP TODAY Full mark on blue / dark background Full mark on white / light background Full mark on blue / dark background Full mark on white / light background Source: 1 Iri - last 8 wks distribution to 29th October. 2 Kantar world panel - data to 4th November 44201 Foster'sGoldAFCAd_RetailNewsagent.indd 1 Foster's is brewed in the UK. Over 18's Only. 21/2/12 12:13:58 Discover how brilliant basics sell more beer and cider with HEINEKEN 1 Always stock the brands retailers are looking for Top 10 Must Stocks list • 2/3 of shoppers already know what they are going to buy when they go to a convenience store and that’s national leading brands 1 Stella Artois 6 x 4 x 500ml 2 Foster’s 6 x 4 x 500ml 3 Carling 6 x 4 x 500ml 4 Carlsberg 3 x 8 x 440ml • Make sure you highlight the Top 10 Must Stocks with POS so that your retailers know what they should be buying 5 Stella Artois 6 x 4 x 568ml 6 Kronenbourg 1664 6 x 4 x 500ml • Don’t be tempted to stock too wide a variety of products in your depot as it will lead to confusion and reduces brand visibility 7 Strongbow 6 x 4 x 500ml 8 Strongbow 6 x 2 litre 9 John Smith’s Extra Smooth 6 x 4 x 440ml 10 Guinness Draught 6 x 4 x 440ml • Retailers will be looking to buy the brands and packs their shoppers are looking for so make sure you always have the top 10 must stock products in your beer and cider aisle 2 Always make it easy for retailer to find their way round your fixtures • Catering customers will be looking for bottles, retailers will be looking for all package types, so make sure you understand who is coming into your depot and layout your fixtures accordingly • Have range and merchandising best practice advice available in your depot for retailers to interact with and use in their stores - this could be leaflets or planograms for them to take away 3 Always stock the pack sizes that retailers want to buy • Most shoppers are looking for small-mid sized packs that are easy to carry with 4 & 8 being the most popular so these are the packs retailers will want to buy • Almost 2/3 of shoppers think Price Marked Packs (PMP) represent good value for money and would be likely to buy them so they are becoming more popular with retailers • Retailers will be looking to stock up on these so make sure they are visible in the depot 4 Always look for ways to create interest in the category • Use events such as Heineken’s promotion activity for UEFA Champions League to create theatre in the depot • Retailers will be looking for value adding NPD to offer their shoppers something different • Drive awareness of these through displays in prominent areas of the depot PM Prices indicative only and correct at time of print 44367 Heineken Better Wholesaling DPS .indd 1 23/2/12 17:13:43 wines and spirits raise a glass to greater sales NIKKI ALLEN looks at how premium pricing, new flavours, sizes and quality are driving the wine and spirits markets Worth £5bn and growing at 3% year on year, wine is the largest category in Premium alcohol, four times and sweet bigger than the cereal market and almost double that of chocolate confectionery (Nielsen). In such a key market, it’s vital for wholesalers to understand the trends that are influencing consumers. The biggest of this year’s movements goes against the economic grain. In spite of the current climate, one of the biggest growth areas for wine in the impulse channel is premium wines – bottles costing £6.40-£8.50 (Nielsen), says Lee James, channel director for wine at Pernod Ricard. “Our research suggests that 58% of consumers are willing to trade up to premium wines, but this is not yet being reflected in households,” he says. “Since premium wine on average returns a retail sales value of £2.95 more per bottle (Nielsen), there is a real opportunity here for wholesalers to help retailers add value into their wine fixture.” Wines Best-selling wines by country 1 2 30 16% Italy 3 4 14% France 14% USA 5 8% Chile 6 8% Spain Premium Rioja brand Campo Viejo, for example, is one brand that continues to perform very strongly in the independent sector, says Mr James, with a 46% share of the Rioja category and a value increase of 15.8% year-on-year (Nielsen). “Despite accounting for one in every two bottles of Rioja sold in the independent channel, the brand still only has 38% distribution, making it a good example of a premium wine still to be fully explored.” Another key trend this year is for lower alcohol wines that are sweeter in style, says David Mallory, E&J Gallo’s UK channel controller for impulse and on-trade. “These wines are set to win more shelf space this year and play a central role in our plans for 2012,” he says. “Our recent research has revealed that 52% of those who consume alcohol feel that the majority of white wines are too dry, bitter and acidic, meaning we will be looking at the potential of sweeter styles such as Moscato. It is vital that 20% Australia 8 6% New Zealand 7 8% South Africa 9 2% Germany 10 1% Argentina £5bn Size of the wine market in the UK wholesalers take advantage of this trend by stocking these kinds of wines.” Other successful and sweet low-alcohol wines include Treasury Wine Estates’ Bella Vie, launched March 2012 Betterwholesaling.com p30-32 winesCS4.indd 30 23/02/2012 10:22 CATEGORY GUIDE last year, and Halewood International’s Botany Creek range. When it comes to offering retailers the best possible range to choose from, it’s vital to remember that in your depot, retailers are shoppers too, points out Dan Townsend, Treasury Wine Estates UK and Ireland general manager. “Some wholesalers won’t have reviewed their wine range for some time and could be missing out on new category-driving wines,” he says. And as wine consumers often shop by country, it’s important to display your range in an equally accessible way, making it quick and easy for retailers to shop, he adds. This year heralds a host of exciting social and sportFlavours, ing events that are set to boost spirits sizes and sales for independoccasions ent retailers, as shoppers look to celebrate in the home, says Matthew Critchlow, director of sales in convenience at Bacardi Brown-Forman Brands. “Consumers will be looking to enjoy and make the most of these occasions in spite of the current economic climate, giving wholesalers and their customers huge scope to make incremental sales and profits. “As consumers remain cash-conscious in 2012, shoppers are likely to be cel- Spirits Reflecting a similar trend to wine, the premium spirits category is large, growing and resilient, even in tough economic conditions ebrating these events at home, points out Mr Critchlow. “Consumers will be looking to treat themselves by purchasing alternatives to beer and wine to give these occasions more of a celebratory feel. “Wholesalers can tap into this trend by offering a range of spirit options appropriate for all occasions, such as Bacardi, Jack Daniel’s, Bombay Sapphire, Southern Comfort and Martini,” he adds. Alongside the trend for staying in comes another that can add real value to the category, says Chris Ellis, channel director for off-trade spirits at Pernod Ricard UK. “The premium spirits category is large, growing and resilient, even in tough economic conditions,” he says. “Premium spirits in the UK off-trade are growing by 7% value, ahead of total spirits (Nielsen). In addition, Best-selling brands and suppliers 1/ 2/ 3/ 4/ 5/ Hardys, supplied by Accolade Wines Blossom Hill, supplied by Percy Fox Echo Falls, supplied by Accolade Wines Gallo, supplied by Gallo Jacob’s Creek, supplied by Pernod Ricard Source: Nielsen 24.12.11 6/ 7/ 8/ 9/ 10/ First Cape, supplied by Brand Phoenix Lindeman’s, supplied by Treasury Wine Estates McGuigan, supplied by Australian Vintage Wolf Blass, supplied by Treasury Wine Estates Isla Negra, supplied by CYT top tips: how to maximise your wine and spirits sales l share advice with customers: Keep customers informed about wine – help them stock their fixtures by highlighting the top-selling countries, brands and varietals. Sharing best practice advice with retailers will enable you to build strong relationships, trust and loyalty with them. l arrange wines by country: The majority of retailers will lay their wine fixtures by country so wholesalers should do the same in depots. l stock the top 10 wine brands: Stock top-selling brands – 40% of impulse wine sales come from the top 10 brands (see above). l display promotions clearly: Wholesale customers can be easily swayed by promotions, so make sure big brands and premium bottles are clearly displayed. Clearly mark promotions, but try to be on hand to offer advice and ensure purchases are not made simply on impulse. l educate customers: Nearly a third (29%) of spirits shoppers would like more information in convenience stores, especially on mixing drinks. To help retailers improve sales, you could offer tutored tastings or other educational initiatives to help them engage with shoppers. l educate staff: It’s vital your staff are well informed and knowledgeable when it comes to your wines and spirits ranges. When this isn’t possible, use leaflets to flag key information or deals. l stock several sizes of spirits: Make sure you are stocking a full range of spirits sizes and formats. There is increasing consumer demand for smaller bottles of spirits because of the increase in duty tax. l make your depot easy to navigate: Retailers within a wholesale depot will browse fixtures in similar ways to shoppers in their stores. Depots should be clean and easy for retailers to navigate through. l group similar spirits together: Give enough space to each spirit segment according to its category share. Group together similar products, such as vodka, rum, whisky and gin. Betterwholesaling.com p30-32 winesCS4.indd 31 march 2012 31 22/02/2012 17:10 wines and spirits product lAUNCHEs and promotions 20% Percentage of spirits sales from premium brands premium spirits now account for 20% of all spirits sales – that’s £1 in every £5 spent on spirits. Innovation in the spirits category with new flavours and tastes was rife in 2011, and this trend is set to continue this year. “2012 will see the global trend for flavour innovation continuing, with more spirits brands looking to expand their offerings in a bid to tap into this,” says Mr Critchlow. Flavoured vodka in particular has seen huge growth in the past year, points out Mr Ellis, increasing by 18.3% year on year in value in the off-trade (Nielsen). Pernod Ricard’s Absolut Raspberri, Mandarin and Pears, and Diageo’s Smirnoff flvaours in lime, green apple and blueberry are bolstering growth in the flavoured vodka category. And when it comes to spirits, small really is beautiful. “Another emerging trend within spirits is the growing popularity of the 35cl category,” says Mr Ellis. “The size has contributed £28.4m value growth to spirits in the last year, and research has shown that 31% of shoppers would try premium spirits if a smaller format was available.” The supplier is now offering 35cl bottles of its Absolut, Jameson, Malibu, Martell, Chivas Regal, Beefeater and The Glenlivet brands. BBFB’s Mr Critchlow agrees: “There is an increasing demand for smaller bottles of spirits, partly due to the increase of duty tax, but also because they offer a perfect solution for immediate drinking at parties and events.” l 32 1/ Treasury Wine Estates’ Wolf Blass is launching a £250,000 iPad giveaway this spring with 500 iPad 2s up for grabs. With neck tags on 600,000 bottles, the promotion will run across Wolf Blass Red Label and Wolf Blass Yellow Label. 2/ 3/ 5/ EJ Gallo is launching Gallo Family Vineyards Moscato in March, a sweet white wine with an ABV of 8.5%. Martini has launched smaller 20cl bottles of its sparkling wines in the wholesale and convenience channels. The new 20cl Sparkling Wine range of Martini Prosecco, Rosé and Asti is “cute and highly profitable for retailers”, says BBFB. Bacardi is celebrating its 150th birthday in 2012 with parties, promotions featuring 100 years of groundbreaking advertising, and commemorative gifts throughout the coming months. Percy Fox’s Yellow Tail wine brand has relaunched its taste guarantee promotion with the strapline, ‘Love the taste or your money back.’ The promotion is now running across convenience and cash & carry. If consumers do want their money back, this will be directly through Yellow Tail, rather than the retailer. 6/ 7/ 4/ Absolut is launching its latest limited edition bottle, Absolut London, in collaboration with graphic artist Jamie Hewlett. Set against a backdrop of the city, the bottle depicts key figures from history who have influenced and shaped London’s culture. Jacob’s Creek has recently launched a new range of lighter wines – Jacob’s Creek Cool Harvest. To support the launch, the brand has teamed up with actress Naomi Watts in a partnership that will be supported by a range of activities to target women. March 2012 Betterwholesaling.com p30-32 winesCS4.indd 32 23/02/2012 10:24 New Our Rosé is in Bloom White Zinfandel is the No.1 Rosé varietal with 29% share* Rosé is growing faster than Red and White wines* Consumers are now purchasing Rosé all year round* Rosé is predicted to grow by 47% over the next 5 years to £2billion** Bella Vie is already the No. 5 White Zinfandel brand in the impulse channel since launch under a year ago Stock up now On the radio in 2012! * Source: Nielsen 52 w/e 08.10.11 – Total Off Trade ** Source: Mintel Rosé Wine Market Intelligence report October 2010 – Total Trade BelleVie_BetterWholesaling_Ad.indd 1 21/02/2012 16:07 snacks pricemarking for superior profits Four top crisp suppliers talk trends, with pricemarking leading the way. By guy campos Q&A Kieran south Wholesale director, Director, Wing Yip Plc Pepsico UK&I What is the latest news? For the first time ever, we’ve launched an everyday pricemarked pack of Walkers crisps at 49p exclusively for the independent retailer. It will be in our top five crisp lines, and we’ve invested heavily in it to make sure the retailer and the customer see great value. We’ve invested from the point of view of margins for our retail and wholesale customers as well. What are the key trends? I’ve worked for the company for 11 years and I would say 2012 will be the best year for an independent retailer or foodservice customer for Walkers because of the way we are building our 12-month plans. As with your article last month, we are trying to get the balance right between news and everyday value. We’re in the middle of ‘What’s The Flavour?’, which is bringing in incremental sales, but what our retailers are telling us is we need to focus more on our core, everyday products and help them grow sales. We ran the ‘Three Simple Things’ marketing campaign last year, which said we offer 100% British potatoes, sunseed oil and great seasoning – the feedback from independent retailers was, “If you can just help us with the value message as well, we’re there.” Why have you introduced a pricemarked, premerchandised unit for the till-point? Crisps and confectionery are probably the two most impulsive lines but while confectionery is almost always by the till, crisps almost always aren’t. We’ve worked with some retailers and seen that if you put packets of crisps by the till, you can sell 30% more. Do wholesalers understand this? Our wholesale partners have absolutely got behind this. Since I started in this job nine months ago, the one thing everybody said to me was if we price-marked our core Walkers range, that would be the single biggest thing we could do outside of We’ve worked with some retailers and seen that if you put packets of crisps by the till, you can sell 30% more 34 March 2012 p34-35 snacksCS4V2.indd 34 our launches. It’s nice to go back and say we’ve listened and the response has been amazing. Wholesale partners have said they will put up big, front-of-depot displays and let us use pointof-sale material from the start of this month. What else is happening in the market? Cash in the till for retailers is difficult, which is why we launched ‘What’s The Flavour?’ in smaller case sizes, especially for our independent customers. The crosspromotion and occasion-based merchandising opportunity is also big. The opportunity to grab a four-pack of beer and a bag of crisps in-store makes sense and yet the merchandise is probably 30 feet apart in a wholesaler’s depot. Putting crisps in the soft drinks section with a crosspromotion seems to make a whole load of sense. Betterwholesaling.com 23/02/2012 21:15 CATEGORY GUIDE nick stuart Commercial manager, UBUK What are the key trends and your response? Shoppers are looking for value for money so it’s extremely important for wholesalers to have a plentiful stock of price-marked packs. In response, UB has a wide range of handy-packs pricemarked at 46p, including Roysters, Wheat Crunchies, NikNaks, Skips, Discos, Space Raiders and Frisps, all of which sell well in convenience. A second trend is for added-value promotions and partnerships, such as the sponsorship of PDC darts by McCoy’s. This offers the chance to win VIP tickets to the Premier League darts play-offs. Another great Fiachra moloney Marketing manager UK and Ireland, Pringles What is the latest news? Pringles is launching its bestever chip with an extensive marketing campaign, including TV, print advertising and PR. It has been created with an innovative technique that enables the seasoning to be spread evenly across the whole chip. This is highlighted with a ‘bursting with more flavour’ claim on-pack. Our research louisa grant PR manager, Kettle Foods What is the latest news? Kettle is launching a range of smaller price-marked sharing bags, priced at £1.29, specifically for the independent convenience sector. The ‘little big bags’ provide 100g example is UB’s cross-brand ‘Snack Tracks’ promotion with Universal Music on grab-bags and handy-packs. This encourages consumers to download one of over 100,000 music tracks for free with every purchase, and is on packs of Hula Hoops, Mini Cheddars, NikNaks, Skips, Discos and Wheat Crunchies. Healthy eating is a trend that is not going to go away but will only get bigger. Consumers want their favourite tasty snacks and expect them to be nutritionally improved, so they look for on-pack reveals taste is one of the most important factors in purchase decisions in snacks and we’re confident the new product will not only be a success with existing consumers but will drive penetration with new consumers. What are the key trends? Apart from large sharing, for Pringles over the last couple of years, the main focus has been flavour innovation. To expand on this, 85% of Pringles of the top selling seasonings. Another sharing innovation are price-marked Kettle Ridge Crisps in 85g bags, priced at 99p. They’re aimed at a slightly younger audience than the core range, as well as flashes to tell them of such improvements – a communication method UB regularly uses. Fourthly, over the last year, there has been a resurgence in savoury snacks. There is a perception that savoury biscuit snacks are healthier than sweet biscuits and are a convenient alternative to bread. In fact, classic brands such as Jacob’s Cream Crackers are showing strong growth of 14%, which is outstanding for such a mature brand. To capitalise on this, UB is launching Jacob’s Oddities, a light, crispy, baked savoury snack that comes in unexpected shapes, with no artificial colours or flavours. Fifthly, the ‘big night in’ trend goes from strength to strength. There are key annual events this year, such as Britain’s Got Talent, as well as sporting occasions such as the European Championships in June and the Olympics in July. Popular brands like McCoy’s and Hula Hoops fit in perfectly with the trend and sharing formats are flying off the shelf for retailers. Prawn Cocktail sales to date have been incremental to the category, followed by 78% of Thai Sweet Chilli and 60% for the recent Pringles Great British Flavours. The most recent flavour innovation, Smokey Bacon, launched last year, has seen a strong rate of growth. Another important launch for the brand was the Pringles Xtreme range. Pringles experienced some of its highest repeat rates of sales in recent years following the launch of Xtreme and sales have since exceed expectations as the popularity of ‘extreme’ flavours has continued to boom. those looking for bigger, bolder flavours. Promotional activity remains a key way to drive sales. Kettle is currently offering long-count cases of 24 bags for the price of 18 in 55p price-marked 40g bags. This offers retailers the opportunity to try Kettle chips, while enjoying the enhanced margins the free stock delivers for them. How can wholesalers grow sales? Sales can be improved by changing the layout in-depot to be category-specific, by developing a premium fixture and introducing branded bays. does pricemarking work? of consumers are positively encouraged to buy an item when it is price-marked (Him!, July 2011) 36% Betterwholesaling.com March 2012 p34-35 snacksCS4V2.indd 35 35 23/02/2012 21:17 ...Walkers has created the opportunity to bag some tasty sales with the introduction of a 49p price flash on single bags of your five core flavours communicating value to consumers. Research shows that price marked packs can help achieve positive price perceptions in-store, with an impressive 44% of consumers positively encouraged to buy an item when price marked1. For news and information visit www.pepsico.co.uk/trade Send us your tweets @PepsiCo_UKTrade #hurray49pWalkers Walkers and the Walkers logo are registered trademarks © 2012. Recommended retail price only. Source: 1: HIM PMP Research August 2011. 2: Nielsen, Total Impulse, Scantrack, MAT 31.12.11. 44243 49PMP DPS.indd 1 23/02/2012 16:49 hot beverages drink up Nikki Allen looks at how wholesalers can cash in on those sectors of the hot beverage market that are booming Consumers live in the Age of Starbucks. Coffee Coffee-shop chains Premium continue to dominate is king high streets all over the country, offering pricey but high-quality coffee, tea and other speciality hot drinks – the UK has become a nation of posh-coffee lovers. This goes some way to explaining the growth of premium instant-coffee brands in spite of tightened purse-strings. According to IRI data for 2011, while regular instant-coffee sales were flat, super-premium brands were up a massive 44% while premium rose by 4.3%. Major suppliers have been cashing in on the trend with the addition of luxury variants to their bestselling brands. Kraft Foods, for instance, introduced Kenco Millicano last year, a premium wholebean instant coffee that has already made its way into more than two million UK households and is worth over £10m (Nielsen). On the back of this success, Kraft Foods then announced last month the addition of Carte Noire Instinct, an instant wholebean variant, to its Carte Noire range. 38 “The wholebean instant category really took off in 2011,” says Melissa Neild, brand manager for Carte Noire at Kraft Foods. “We believe that Instinct will encourage consumers to trade up to better quality, higher-value coffee, fuelling further growth in the super-premium segment.” However, while quality is paramount and suppliers urge wholesalers to offer a range of premium and super-premium coffees in clearly signposted sections, value for money is still a strong driver. Nestlé – which produces Nescafé, the UK’s biggest player in instant coffee – launched price-marked packs for six of its bestselling coffees including Nescafé Original and Gold Blend, in a move to communicate value to shoppers. 44% 2011 rise in sales of super-premium instant coffees It might be a British institution, but it Tea turns out even tea Variety over hasn’t been immune tradition to the economic downturn, with volume sales slipping 0.2% last year (Kantar Worldpanel). In a move to combat these flat figures, a host of new launches, promotions, advertising and innovations has been rolled out by the three major brands that dominate the UK tea market: PG Tips, Tetley and Yorkshire Tea. To communicate value to shoppers, price-marked packs are key, according to John Sutcliffe, convenience, foodservice and independent channel sector manager at Taylors of Harrogate, the makers of Yorkshire Tea. “Price-marked packs cover our standard Yorkshire Tea, Hard Water and Yorkshire Gold ranges. They are proven within the channel and we intend to maintain this strategy going forward,” he says. Normal tea represents the lion’s share of convenience-store tea sales, taking 79% of the market according to Unilever. But tea tastes have changed over recent years, March 2012 Betterwholesaling.com p38-39 hotsCS4.indd 38 22/02/2012 16:50 CATEGORY GUIDE product lAUNCHEs 1/ Nescafé Original is back with a new TV advert designed to brighten up people’s mornings – the first new advert for the brand since 2008. Nescafé is investing £3m in the campaign including TV and outdoor advertising, to raise the brand’s profile this year. 2/ Kenco Millicano is now available in a convenient single-serve format. The new packs contain 10 sticks, which Kraft Foods says have been designed to suit busy shoppers looking for a rich aroma in a convenient format. Carte Noire has launched its first wholebean Instant, Carte Noire Instinct, which is available now. The launch will be supported by heavyweight TV advertising in the spring, as well as high-profile print and digital campaigns. 4/ 5/ 6/ Unilever’s PG Tips is expanding and renaming its The New Ones tea range. Rebranded ‘Special Moments’, it will be boosted with a TV, print, radio and sampling campaign totalling £4m in value. New variant The Hint of Earl Grey One was also launched in February. with many people now switching to green, herbal, fruit and speciality teas – and your depots need to reflect these changes, say suppliers. The fruit and herbal market is worth over £54m and has grown 2.8% in the last 12 months, with Unilever’s Lipton Fruit & Herbal Infusions growing rapidly at 20% year on year. The company also launched its Special Moments range last year – a selection of different blends for different occasions – which has already raked in £1m in sales in the seven months since the launch. Tetley is investing in herbal blends as well, recently launching pricemarked packs of green tea and lemon green tea price-marked £1 for 20 bags. Mars is extending its Galaxy Hot Chocolate range with Galaxy Bubbles – the first low-calorie bubbly hot chocolate with only 40 calories per cup. The variant comes in an eye-catching 200g ecopack that uses 83% less packaging than the Galaxy Hot Chocolate jar. It might be the smallest segment of the hot beverages market, but hot Small but chocolate is growing growing at a much faster rate than either tea or coffee. The category is growing at 6% and is now worth more than £90m, according to IRI data. This growth is being bolstered by the trend for drinking hot chocolate as a year-round rather than just a winter beverage, says Bep Dhaliwal, Mars trade communications manager. Mars says its Galaxy hot chocolate brand is certainly experiencing a boost. “Total Galaxy Hot Chocolate value grew by 7.5% in January compared to last year,” says Ms Dhaliwal. “We encourage wholesalers to stock the full Galaxy range to give retailers a choice of products that will appeal to a wide range of customers.” Hot Chocolate 3/ GSK-owned malted drink brand Horlicks has given its range a pack-redesign to highlight both the nutritional value of the drink and its benefits as a hot drink for any time, not just bed time. The refresh forms part of a wider marketing campaign for the brand. The trend for adding a little luxury in austere times is also boosting sales, says Erin Kennedy, marketing manager at Green & Black’s. “Hot chocolate is seen as an indulgence product. We advise wholesalers to capitalise on growth by offering retailers brands such as Green & Black’s to appeal to premium shoppers, while encouraging mainstream shoppers to trade up for an indulgent treat.” Another important factor in hot chocolate sales – as with all hot drinks – is the consumer trend for Fairtrade products. Within hot beverages, the strongest performers are Fairtrade products, with Fairtrade hot chocolate up 45% in volume, according to the Fairtrade Foundation. “This means it’s vital wholesalers stock a comprehensive range of ethically sourced products, such as Cadbury Hot Chocolate,” says Susan Nash (left), Kraft Foods trade communications manager. l Betterwholesaling.com p38-39 hotsCS4.indd 39 march 2012 39 22/02/2012 16:53 toiletries freshen up your depot Budget lines, male grooming products and last-minute buys are what customers are looking for, says NIKKI ALLEN T oiletries shoppers are valuable customers to retailers, spending £8.87 per trip compared to the average shopper’s spend of £5.24, according to supplier research. To help you help your customers improve sales, Better Wholesaling brings you the latest trends, product news and advice from the toiletries category. Since Tesco kicked off its supermarket price war at the end Set up a of 2011, slashing pound zone prices across thousands of essential items, the impetus has been on wholesalers to mount a rapid price offensive to help retail customers survive in the increasingly harsh competition. Toiletries is one category where wholesalers can help offer retailers the best possible value, by stocking £1 and price-marked lines on a range of products including the big brands. Specialist toiletries distributor DCS Central is urging wholesalers to promote the value message to retailers, encouraging them to create dedicated pound-zones in their depots. “In the wholesale channel, major-brand toiletries are one of the biggest sellers, particularly those that are price-marked, along with everyday household cleaning and laundry care products,” says Richard Jorden, DCS group commercial director. “Pampers Nappies and Baby Wipes are among products that sell particularly well in wholesale.” Parfetts is one DCS customer that has seen the benefits of creating a value-based toiletries display: “Pound-zone has been a revelation for us in both wholesale and retail. We have dedicated pound-zones in each cash & carry, and have already achieved remarkable success. This has encouraged us to redouble our efforts to tell our customers about the initiative,” it says in a DCS testimonial. £1 lines 40 Major-brand toiletries are one of the biggest sellers, particularly those that are price-marked, along with everyday household cleaning and laundry care products More men than ever are using toiletries, Male to the Grooming according major manufacturers. A significant “With men becomopportunity ing more and more attuned to personal grooming and aspiring to look their absolute best, the male grooming category shows no sign of slowing down,” says Paul Lettice, P&G’s head of communications. Wholesalers need to help retailers ensure they have a leading, up-to-date range of items such as blades, razors, and accompanying shave care products, he says. “Eight out of ten men in the UK choose Gillette, so it makes sense for wholesalers to help retailers review their current range and evaluate whether they are stocking best sellers to make the most of this huge category,” says Mr Lettice. Jane Boret, marketing manager for Dove Men+Care and Sure For Men at Unilever UK, agrees the sub-category has huge potential for retailers. “The male grooming category is currently worth £607.8m in the UK, and is growing steadily (SIG Data). Whilst a number of segments are performing well, male grooming still has a long way to go before maturity, and presents a significant opportunity for retailers to close the gap between men and women.” Toiletries are often distress or top-up buys, say manufacturers, meaning wholesalers have a Simplicity key opportunity to and visibility help retailers meet the needs of customers who are after an immediate replace- Lastminute buys March 2012 Betterwholesaling.com p40-41 toiletriesCS4.indd 40 23/02/2012 13:49 CATEGORY GUIDE ment. Tom Hazelden, Unilever’s retail execution manager for the convenience sector, points out that with items such as toothpaste, shower gel and deodorant used every day, shoppers look to replace them as quickly as possible. “Top-up purchases form a large part of toiletries sales, so simplicity and visibility are key to the fixture,” he says. Wholesalers should advise retailers to use point of sale to advertise their range, as 18% of shoppers are unaware that toiletries are even sold in their local store, he adds. P&G’s Paul Lettice points out that men in particular will normally only ever remember that they need a blade or a razor while in stores, making visual encouragements key for top-up and distress purchases. Opportunities for impulse purchases also exist alongside occasions and seasonal events, says Mr Hazelden. “Wholesalers should keep an eye out for promotional opportunities such as Fathers’ Day, Mothers’ Day and Movember to help retailers boost sales of appropriate purchases.” l product lAUNCHEs 1/ P&G is relaunching its entire range of Pantene haircare products to give consumers better results and a simplified portfolio. Products will get new packaging and be restructured into three collections: Fine Hair, Normal/Thick Hair and Coloured Hair. 2/ 3/ P&G’s Herbal Essences brand has revamped its entire portfolio, with a formula upgrade and a packaging makeover. The new-look packaging focuses on the natural ingredients in the shampoos and will run across all stock-keeping units. 4/ 5/ 6/ Unilever is taking its Lynx brand into hair-care. The Lynx Hair range comprises five shampoos and six styling products. Lynx is also launching its first ever fragrance for women with Lynx Attract, a body spray available in For Him and For Her variants. top tips: boost your sales l highlight toiletries “Execution in-depot needs to be continuously considered,” says DCS’s Richard Jorden. “Working on display space and secondary siting solutions are crucial to highlight the toiletries sector.” l focus on brands Toiletries, especially health and beauty categories, are dominated by the big brands. Focus on the major brands to grow your business and give more space to these than speciality products. l Use pos Use point-of-sale material to help customers navigate the fixture, aiming to make it as easy as possible for retail customers to find what they are looking for l lay out logically Clearly divide your fixture into product groups – this can be a complicated category, so it’s vital your display is laid out logically l ask for advice Ask for advice from distributors on merchandising. When Bestway worked together with SHS Sales & Marketing and Johnson & Johnson toiletries bays at five depots, it led to a 41% increase in sales. £608m Size of the male grooming category A selection of Aussie’s shampoos and conditioners are now available in larger sizes. Aussie has also added Aloe Vera to its entire shampoo and conditioner range, which will be highlighted on-pack. Miracle Moist, Aussome Volume, Mega and Colour Mate Shampoo larger packs will be 500ml, and conditioners 400ml. Unilever Vaseline has relaunched its hand-care range and introduced an anti-bacterial variant. The range will include three new hand creams: Vaseline Healthy Hand & Stronger Nails, Vaseline Healthy Hands & UV Protection, and Vaseline 2-in-1 Hand Cream + Anti Bac. P&G is relaunching its Always Daily Panty Liners brand. Now called Always Dailies, the range will educate consumers about the benefits of all-day morning freshness, with support from TV advertising. P&G says the focus on all-day freshness will create ‘a whole new occasion for panty liners’. Betterwholesaling.com p40-41 toiletriesCS4.indd 41 march 2012 41 23/02/2012 13:50 latest products Spring’s new looks STEFAN APPLEBY reveals this month’s top product launches and redesigns Limited edition JTI is to introduce two limited-edition packs for Amber Leaf which will be available in 25g and 50g pack formats. The packs comprise two different leaf formations. Mid-priced Amber Leaf is the best-selling roll-your-own tobacco brand, with a 32% share of the roll-your-own market. 0800 163503 Range extension Following on from J2O’s ‘Mix A Flavour’ on-pack promotion last year, the brand is launching a new, limited-edition flavour. Papaya Punch will be supported by point-of-sale material across all channels and a £3 million TV ad campaign. The new flavour replaces Glitter Berry. 0845 755 0345 42 Price-marking On-pack promotion Sterling Rolling, JTI’s roll-your-own brand extension, which was launched in January, is available in limited edition price-marked variants until the end of March. The 12.5g pack will be available at £3.27, while the 25g pack will be marked at £6.40. 0800 163503 New multipacks from Red Bull will flag the launch of the company’s Red Bull Racing Spy app, which ties in with the launch of this year’s Formula One season. The packs will also have a new design and will be supported by a TV ad. Packaging Advertising Range extension Originally launched on Lambert & Butler King Size 20s last year, Imperial Tobacco is widening the scope of its Glide Tec packaging to encompass the King Size Gold and Menthol 20s variants. The packaging will replace the ‘holographic packs’ on Gold and Menthol packs. 01179 636636 01344 418396 Imperial Tobacco is to launch an additive-free version of its Drum roll-your-own brand this month. With RRPs of £3.60 for plain packs and £3.56 for price-marked, the premium blend tobacco will be backed by a new site, www.drum-tobacco.co.uk, for consumers to share tips and feedback. 01179 636636 march 2012 Betterwholesaling.com p42 productsCS4.indd 42 23/02/2012 19:14 len- back page 15 minutes with... I’m a cheeky, bubbly person who likes opera, Adele, Sean Connery and Barack Obama John McNaught is based at 3663’s Nottingham depot and is the company’s first site sustainability champion. He assists employees to reduce their carbon impact and will lead a series of sustainable and environmental activities and initiatives that will result in a greener depot and workforce. What did you want to be when you were growing up? Like so many children, I wanted to be a fireman. The fire brigade visited the school where I was a pupil in a red fire-engine and after they demonstrated how to extinguish a fire, I thought that was going to be the job for me. What’s your proudest moment in your career to date? One of my proudest moments was when I provided a kettle boiler for the homeless at a drop-in centre in Nottingham. It can help the homeless enjoy hot drinks or soups during the winter months. In the months of December and January, I like to assist the homeless where I can. I believe more people need to be involved in assisting the vulnerable in society, particularly the homeless. There are a lot of people that need dropin centres to encourage them to straighten out their lives. Which actor would you want to play you in the film of your life? Sean Connery. I like action movies and all of Sean Connery’s films. In my opinion, he was the best James Bond. How would your colleagues describe you? To my face, they would describe me as What was your first actual job? My first job when I left school was as a tyre fitter, for Watts Tyre Company in Pembrokeshire. I was there for 11 years and became a foreman. I enjoyed the job because I could converse with a lot of people at the depot and would occasionally be called out to help local farmers. Editor-in-chief Guy Campos 020 7689 3360 / guy.campos@newtrade.co.uk CONTRIBUTORS Nikki Allen, Tom Ferguson, Nigel Huddleston, Mike McGee, Glen Munro, Lindsay Sharman PRODUCTION Rob Buckley, Andrew Richards What music is on your iPod? I don’t have an iPod. I like classical musicians like Beethoven and Strauss. I also like opera and saw Madam Butterfly at the Royal Albert Hall in London, which was magical. How do you prefer to relax? I enjoy listening to music at home. I have a cracking selection of CDs and like everyone else, I am mad on Adele. l 020 7689 0600 editoriAL If money were no object, what would be the first thing on your shopping list? I would buy a Victorian house in Pembrokeshire, which is where I want to retire. It’s on the coast and the view is spectacular. Who do you consider to be a good role model for the next generation and why? I think I would say the American president Barack Obama, who is an inspirational character and promotes environmentally friendly issues. What’s the first thing you do when you get into work each day? I turn on my computer, check my emails and start making any necessary telephone calls. contacts a cheeky, bubbly person. My father was a naval officer, but my mother had a very vibrant personality, which I tend to reflect. betterwholesaling@newtrade.co.uk advertising Sales & Production Coordinator Eszter Endredi 020 7689 3380 / eszter.endredi@newtrade.co.uk Account Director Mike Baillie 020 7689 3367 / mike.baillie@newtrade.co.uk Account Manager Jeremy Fordrey 020 7689 3366 / jeremy.fordrey@newtrade.co.uk 11 Angel Gate, City Road, London, EC1V 2SD Account Manager Alex James 020 7689 3370 / alex.james@newtrade.co.uk Account executive Chloe Cardon 020 7689 3372 / chloe.cardon@newtrade.co.uk Head of Face to Face Kate Dickenson 020 7689 3368 / kate.dickenson@newtrade.co.uk Face to Face Executive Caroline Cronin 020 7689 3369 / caroline.cronin@newtrade.co.uk Marketing Executive Ceinwen Jarvis 020 7689 3352 / ceinwen.jarvis@newtrade.co.uk Finance Manager Nicola Holmes 020 7689 3356 / nicola.holmes@newtrade.co.uk Managing Director Nick Shanagher 020 7689 3382 / nick.shanagher@newtrade.co.uk If you are experiencing distribution problems with this magazine, contact betterwholesaling@newtrade.co.uk Printed by: Southernprint, Poole, on 80gsm Galerie Fine Gloss paper Betterwholesaling.com march 2012 p43 back.indd 43 43 23/02/2012 19:08 MARS_12_0557_tradead-210x297.indd 1 07/02/2012 15:44