flanders investment & trade importing into the uk

Creativity – Insight – Delivery

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Hamish RentonAssociates

How to get and keep food listings in the UK retail and food service sectors.


Hamish Renton MBA MCIM AMRS

2Creativity – Insight – DeliveryCreativity – Insight – Delivery

Unique perspective – combining Retail, FMCG & industry commentator:• Retail - Head of Own Label for Tesco & Category Buying Manager at Argos.• FMCG - board member at both St Ivel and Milk Link (Marketing & Innovation Director)• Food Industry - Gold Awards Judge regularly writing for The Grocer & Dairy

Innovation• Professional – Board Member of Chartered Institute of Marketing & Associate of the

Market Research Society.

Actively work in Grocery, run a boutique Food & Drink agency: – small team of ‘blue chip’ specialists.

• Export specialist – representing and advising exporters into the UK• Getting & keeping supermarket listings – category analysis, retail sell in

presentations & promotions• Marketing – strategy, research, branding, packaging & New Product Development

AboutHamish Renton Associates

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Creativity – Insight – Delivery3

Recent Clients 2011 – 2012:

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• Foundational choice for a business – having no customers means no business.

• Route to Market strategy describes the channels, customers, tools and processes used to get products to end consumers.

• Involves Channel Strategy choice e.g. retail, foodservice, direct and exports.

• Can be broken down into your Customer strategy (e.g. for Booker or Tesco) and then your Contact Strategy, which is how you approach and deal with that customer.

• Your Account plan is the annual plan for achieving your volume and margin from that customer (relates to the Joint Business Plan which includes Trade investment, promotions, marketing budget and NPD agenda etc).

What is ‘Route to Market Strategy’

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1. Direct to UK consumers (e.g. local fishing fleet runs fishmongers).

2. Retail – UK major multiples & discounters.

3. Retail – UK Symbols, Independents and C-stores.

4. Foodservice (UK Wholesale, Cash and Carry & delivered Wholesale).

Fundamental question:

Where do UK consumers want to buy your product?

UK Route To Market Options


The UK Grocery market

Structure

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• The Grocery market was worth 156.8bn for the calendar year 2011, an increase of 3.8% on 2010.

• Food and Grocery expenditure accounts for 53p in every £1 of retail spending.

• Groceries account for 12.8% of all UK household spending, the third largest expenditure. First is housing and second is transport

• Food and grocery accounts for 49p in every £ of retail spending

• Market characterised by a dominance of indigenous retailers

• UK has one of the best grocery supply chains in the world, making it a difficult market to enter.

The British stores profileUK has 95,585 grocery stores across four segments:- convenience stores with sales area of less than 3,000 sq ft traditional retail stores, sales area of less than 3,000 sq ft supermarkets and superstores- supermarkets have sales area of 3,000 to 25,000 sq ft. Superstores above 25,000 sq ft alternative channels: kiosks, markets, home shopping.

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Special market features

• Major retailers sell 40% of their packaged grocery sales under their own brand• Most retailers offer a budget range, a premium luxury range, a healthy eating range

and a children’s range of products• Perception that retailer brands provide better value through lower prices is still a key

driver for purchase.

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The UK’s ‘Big Four’

2,975 stores in the UK (including Extra, Superstores, Metro, Express, One Stop, Homeplus and Dobbies.

523 stores in the UK

1,012 stores in the UK 475 stores in the UK

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Who operates convenience stores?

- Co-op

- Petrol station forecourts

- Multiples

- Symbol groups

- Non-affiliated independents

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The discounters

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425 UK stores 580 UK stores

Gaining ground rapidly• Credit crunch has brought a boost as shoppers trade down — especially younger

shoppers

• Market share of 5.97%

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2011 data

Shopping online

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• Online grocery shopping is growing at an even faster rate, rising from 10% to 17% of UK adults buying groceries between 2008 and 2011.

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Whatever your chosen route to market in the UK,

you are going to end up in front of….

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The UK Buyer

• Time in Buying role varies from 12 months to 16 years, average is c16 months.

• Bonused on category sales, availability, waste & profit margin. Softer measures around light weighting packaging, ranging (service lines).

• Core focus is their buying area. Then the wider category & total store.

• Some prefer complicated category diagnostic models, some intuition, but all will ask ‘So What’?

• Classic first move – “Let's change the packaging design"

What gets measured gets done. What gets measured & rewarded gets done well.

volumewaste

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Buyer’s expect

• You to know everything about their category. e.g. price points, trends, their competition, packaging, consumer views & nutritionals.

• You are fully integrated with their systems and know all about current performance e.g. Epos, Availability, Service Levels and to be on top of forecasting and demand planning.

• You to advise, impartially, you to have interpreted and understood consumer trends in your category you to know how, and in what way consumer trends in your category will change..

• An agreed Joint Business plan, quarterly Business Reviews which includes a comprehensive ‘Trade Investment’ plan split into brand support, in-store and promotions.


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Buyer’s expect you to know about, and

practice great Shopper Marketing

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Optimising the shopper marketing mix to maximise sales

• Starts with thorough grasp of consumer research, category data & intuition.

• Leverage this shopper insight to influence shopping behaviour & drive incremental brand and category revenue.

• In store media (including online) POS, shelf talker, ads out front of store

• Above the line brand building, PR, advertising

• Point of purchase tools

• Trade PR campaign.

Point of Purchase:Product, price, promotion

& packaging

In-store media Above the line: brand building,

online, PR


Trade PR

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Shopper marketing• Respect the channel - one size doesn’t fit all - retailers

looking for bespoke and unique retailer programs.

• Differentiate between your strategy and your tactics…

Tactical• Development of point of

sale & merchandising solutions

• Trade Press (Trade PR planning & execution)

• Field marketing program design & management

• Event management

Strategy• Shopper research

design, management & insight development

• Creation and delivery of bespoke retailer marketing calendars

• ROI evaluation and analysis of shopper marketing campaigns

• Promotional strategy development

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Buyer’s expect a strong promotional support plan

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• Important to measure the Return on Investment, by asking key questions:

• What was the uplift (volume increase specifically related to the price discount)?

• What was the giveaway (both customers who would have bought the product anyway, and those who filled their boots as it was so cheap)?

• Post the promotion, how many of the shoppers that participated in the deal stayed loyal to the brand and started buying off deal?

• How did the mechanic chosen (e.g. BOGOF, Multibuy, X for £Y etc) perform?

• This requires an examination of EPOS data, market data showing share of trade, an internal profit and cost analysis and a hard look at the trade investment strategy.

Taming the tiger of promotions – getting the balance right

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Non Promo Volume Sales Subsidised Volume Sales Incremental Volume Sales

Volume kg

Brand A pre pack cheese, 380g

Promotions result in a small amount of giveaway, but new shoppers converted by trial (base rate of sale growth).

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Non Promo Volume Sales Subsidised Volume Sales Incremental Volume Sales

Volume kg

Brand B pre pack Cheese, 400g

Whilst deep cut branded promotions drive volume, they arenot helping to build loyalty or repeat purchase off deal.

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Buyer’s also expect you to be masters

Of Category Management

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Using Category Management to maximise UK distribution

• Retailer Buying teams structured by each Category of goods.

• Be impartial, be grounded in data & be simple in recommendation.

• For NPD, show how you have used a combination of hard data, softer trend data and great creative innovation to arrive at your concept.

• For new listings, always identify the poor performing ‘Victim’ that’s using up space while diluting Category margin, even if it’s your product.

• For greater distribution, show how your product will boost the average profit margin in each store format more that what’s there now.

• In tone, it’s a forensic analysis of category performance rather than a Dragon’s Den pitch.


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Category Management in the UKUnderstand your category – and deliver the ‘So What’

• Get as much category data as you can – both pubic domain & proprietary.

• How is the category performing v other retailers ? What is the category ‘vision’ ?

• Is the range right ? Where are the gaps ? Is the merchandising & ‘blocking’ right ? Has the range been optimised for each store format ?

• Based on data & current trends – what will the future trends be?

• Meta trends are Health, Convenience & Premium – how do they translate into the category?

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And finally - Presenting your proposition• Profit – show how you will raise the category margin

average.

• Presentation – artwork & design, visual appeal,

packaging. Use mock ups to show your vision.

• Point of difference – show clearly how your product

compliments the current offering through taste,

innovation, flavour or usage.

• Provenance – esp. upscale products, are the ingredients

local, simple and easily understood.

• Product Quality – demonstrate food safety

accreditations, show the sourcing and production

process.

• Personal – make the pitch personal if your brand story

supports your brand.

www.hamishrenton.com

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Office: + 44 (0)1803 203387

Mobile: + 44 (0)7740 840071

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Further information:

• Find a PDF copy of this presentation on www.hamishrenton.com.

• For advice and help on how to export successfully, drop us an email.