Fashion styles change… sometimes to make a bigger impact the second time around… but they definitely change. And why is that? Why can’t we wear the same skirt forever? Well, sometimes it is classic enough to last a long time, but usually enough details will transition so that we want to update.
There is high-fashion; the stuff that is so edgy and expensive that most of us take a pass. And there are the basics like a crisp white shirt that a man only replaces when the collar is worn or his size changes.
When you shop for something new for your wardrobe, you’ll see fresh arrivals as well as markdowns. If you shop at outlet malls, you are likely looking at last year’s offerings.
How does this model translate into the specialty food world?
High-fashion: from the consumer’s point of view, these are trendy new products that they don’t know what to do with, and which are priced too high for them to experiment with. I’ve sold $20 vinegar. Most people bought it for the beautiful packaging, used it as décor, never opened it and never repeated unless it was to give it as a gift. Some adored it, used it daily and were upset when their favorite specialty outlet was out of stock. But the market was limited to a few upscale consumers.
Basics: if you like Greek food, you must have oregano, feta and olives. But the depth and breath of offerings these days is staggering. How does one know which to buy? Since the majority of specialty foods are sold in supermarkets (Mintel says 72%), most consumers are only going to experience the products stocked there. Americans have become accustomed to cheap food. Even ethnic stores sell low priced feta and olives. If it tastes sufficiently like what they expect, they buy based on price. If your product has plenty of competitors, you’ll need to price it right and find appropriate retail partnerships – you want partners who will give your product some TLC. You’ll be asked to support the in store marketing, so be sure you have a budget for that.
Always offer the basics in your category: if you sell yogurt, you have to have plain, unflavored as well as strawberry and goji berry. Don’t be so esoteric that the consumer avoids trial.
What does this mean to your specialty food production and marketing company?
While new products are great to drive publicity, be sure you continue to support your best sellers. When gaining a new retail partner, be sure they start with the best seller so you will ensure a reorder; if you sell them the newest product, it might not sell and you’ve closed the door on repeat business. Your newest products can help you get an order from an existing customer who has been procrastinating. With your urging, he’ll normally add the best seller along with the new items he is lusting for.
If your customers say they have a lot of inventory, you might offer mark-down allowances to make room for your products. Be sure these are the stores that can move your product; perhaps they just have the wrong selection. Offer 25% off the entire new order or 50% off old inventory (require a count and a picture of the discount bin) to help them turn the trash to cash. Just about anything will sell at 50% off and you might gain a consumer because they have now tried your brand.
If you have new products every year, then treat them like the newest fashion trend:
• Support them with advertising, recipes, social media and demos.
• Use markdowns to buy them a place on the shelf.
• Have promotions that encourage stack displays.
• Offer them seasonally so that there is a short window of opportunity to purchase.
• Allot so many cases to be made and only offer those to your best customers, or
• Require the purchase of basic stock items to qualify for the right to buy the limited edition version.
Be aware of the cost of new products: R&D + new labels + new sell sheets + samples to reps and distributors + + +. You’ll likely need smaller production runs, which are more costly. Understand your time commitment to this as well. Many companies spend time on these activities to avoid sales and marketing their best sellers because it’s more creative and more fun. If this serves you, fine, but it might not be best for your business.
Use your fashionably trendy product ideas to build your PR portfolio while your basic white shirt sells repeatedly for high margin and efficient production.
For help analyzing your best sellers and how to maximize sales contact Deb at Deb@CoachMaz.com