Tag Archives: food business

The reality of retail

The Food For Thought workshops are truly amazing events owing to the contributions of both the speakers and the food business people who come along. In the aftermath of each workshop I share what I see as the key points of the discussions:

The Dartington Hall workshop focused on growing successfully through selling to retailers.

A listing in a high profile retailer is usually pretty high on the wish list of every food manufacturer. In fact even when you have a high profile listing you will always be on the look out for other good opportunities! But as we have discussed in previous workshops, keeping the customer happy is not, on its own, a recipe for business success – getting the best results for your business means targeting the right customers and selling via the right retailers.

Tickets for the Dartington event sold out and we had a selection of businesses from not-quite-started-up-yet to those who have been trading for over 30 years. The main driver for the business who came along definitely seemed to be that they were looking for better ways to grow both sales and profit so that their businesses thrived.

Our speakers were wonderfully placed to explore this topic. Barbara King has worked in a number of high profile roles with retailers all around the world before taking over the reins at The Shops at Dartington. Her passion for locally sourced food and drink has seen her develop the retail business at Dartington and also become Chair of Food Drink Devon.

Barbara has a clear picture of who her shoppers are; generally they are not looking to buy their whole household shop nor feed a family on a budget, but they are willing to spend on good food and special occasions. As a result the selling points that interest Dartington’s customers are the provenance, local sourcing and quality.

Barbara offered insights into the features of products that sell well in her food shop: eye-catching packaging and labelling which communicates the main point of difference were the top priority. In addition to this she underlined the importance of carefully identifying the best price point.

The margins that retailers add on to product prices may sometimes seem eye-watering to a producer but they are easily swallowed up in the day to day costs of running a shop: the reality is that retailers cannot operate without paying staff, the other costs of running their shop and marketing it to the public.

So with that in mind, when considering a new product the retailer wants to know not just how much the product will cost but also how much margin they will make and how the pricing compares to other products that they already stock.

When it comes to pitching new products to retailers Barbara recommended being prepared. While the retailer will likely understand their own customers’ priorities they will want to be briefed on your view:
– how you perceive your competition
– your plans for sales growth in their store and what that may mean to pricing
– the supply chain that you have in place and the minimum orders that you are looking for.
Samples and examples of the product are the best way to illustrate how the customer will see the product.

When new products list in the Dartington food shop they are usually accompanied by some additional marketing – tastings or “featured product” slots where more information can be presented. It takes time to develop a customer base for a new product so the team at Dartington are happy to watch sales grow over the first few months of trading in the shop. Over this time the biggest factor in successfully growing sales is the passion that the producers can communicate to the consumers, whether that be personally meeting them at tastings or food festivals or supplying information via social media or promotional material.

Overall, Barbara’s view is that despite the current difficulties that high street retailers face the one thing that sets successful retailers apart is the excellent personal service that they can offer to make the shoppers experience a valuable one. High quality products which offer good value to the customer will always sell well in these stores.

2019 will see additional Food For Thought workshops around Devon. Find out more at www.poundlane.co.uk/workshops

Food For Thought: A Workshop for Food and Drink Businesses

Plans for the Food For Thought workshop are coming together now, and its looking exciting.

I’ve lined up great speakers to join me, and together we will address:
* pinpointing what your customers value,
* which products or customers are worth most to you
* getting noticed by the right customers

All building towards making sure sales growth in 2018 brings profit growth at the same time.

The idea behind the workshop was the number of businesses whom I have met with in the last 5 years who have got themselves into trouble because they put all their effort into getting more sales when what they really wanted was more profit.

If you sell more than one product, to more than one customer I would be prepared to bet that some of the sales are super profitable, but some only just cover their costs.

That’s usually unavoidable, but the key thing is to make sure YOU have made a decision to make the not so profitable sale instead of just being led by what the customer wants.

Selling what the customer wants is not guaranteed to make profit for your business. However, direct profit isn’t the only factor to consider; there’s also issues like keeping customers happy, spreading delivery costs, and establishing a reputation to allow you to develop other products. The challenge was illustrated quite nicely by a business that I met with last month:

The have two product lines which sell well, in large quantities, and are profitable. They have another product (product C) which sells in smaller volumes, is not profitable and causes lots of problems for their factory because they need different processes and different ingredients.

From a finance perspective product C is a disaster and should be discontinued as soon as possible and the factory manager would agree wholeheartedly with this.

However there are other things to consider; the customers who do buy the product love it and the retailers who stock it can’t get enough. Also, competitors who make either one or both of the profitable lines don’t make product C so retailers will not move away from this business while they offer something that no-one else does.

So, from the sales and marketing team’s perspective the business should sell more of this product, even though it is not profitable!

The solution here is to have enough information to know that some sales of product C is good, but more isn’t necessarily better. And a balance between the perspectives of sales, marketing, operations and finance is essential to success.

On the day I will be joined by:

The workshop is at The Cedars Inn in Barnstaple on 27th February from 9.30am to 1.30pm.
Tickets are £30 (inc VAT) until the end of January and can be booked here