Investment pays off

With the wholesale grocery market worth £16.7bn and predicted by IGD to grow to £18.3bn by 2007, the sector is an increasingly attractive market for suppliers to get involved in. Of course many big companies have been closely involved with the wholesale sector for years, but more and more other companies are realising the value it can offer them.

And with an increasingly competitive and complex marketplace it is vital that wholesalers and manufacturers work together closely if they are both to achieve profitable growth. There are many ways they can do this and new initiatives and innovations are being introduced all the time. They can range from something as straightforward as Tropicana changing the packaging on its outers to simplify matters for retailers, through to Nestlé Rowntree trialling the use of high-tech plasma screens to promote its message at cash and carries.

In this supplement suppliers highlight some of the investments they are currently making in order to increase sales in their category. Golden Wonder focuses on its biggest brands in the £2bn bagged snacks market. It is currently backing its Golden Skins brand with a £2.5m national sampling and advertising campaign.

Nestlé Rowntree looks at confectionery gifting and how cash and carries can use category management principles to boost sales and profits.

SC Johnson focuses on some of its successful household brands and the heavyweight backing they are receiving; and Twinings highlights its new Twinings Everyday tea and how it is achieving growth in a previously declining category with the help of a £5m advertising campaign starring Stephen Fry.
Category management

Nestlé Rowntree’s feature on confectionery gifting highlights that category management is not just a profitable discipline for retailers – cash and carries can also achieve spectacular growth by employing its principles.

The most famous example of category management in the wholesaling sector is the FWD Take Home Blueprint. This is successful because it has buy-in from all the main companies in the drinks sector and therefore its recommended ranges are not biased towards any one company.

The Blueprint was originally conceived primarily to help retailers stock their drinks fixtures effectively, but as was revealed at Drinksummit last month it also works for wholesalers. Paul Bond, a trading manager at Parfetts’ Aintree depot, described the Blueprint as a “buying bible” adding that the company had used the blueprint to establish a core range within its six depots (see page 31).

Another major category management exercise in cash and carry depots has been carried out by Masterfoods in the Easy 4 You project. Masterfoods’ trading director for the convenience sector Trevor West explains: “The £1.4bn petfood market offers a massive profit opportunity to wholesalers and retailers, however opportunities are being missed when customers come in to stock up on petfood. Simplifying and reducing the number of lines at fixture will benefit both wholesalers and their shoppers.”

Easy 4 You contains just 19 lines, which are not the top sellers but rather constitute an optimum range for a half-metre bay. West is keen to stress that Easy 4 You is a category initiative not just a Masterfoods initiative. “The launch of Easy 4 You follows work we did with Costcutter when Masterfoods worked out a recommended petfood range for 500 of its stores. Having developed the range the key for us was to communicate it across the trade.”

This communication started with briefings to wholesalers last December, where West says it was warmly received. That’s been followed by a leaflet drop to retailers, extensive use of point of purchase information in-depot and the launch of a website – www.easy4you.com.

In-depot, Easy 4 You comprises two bays that are separate from the rest of the petfood aisle. The chosen 19 lines are only situated in the Easy 4 You section – they can’t be found elsewhere in the cash and carry. “The idea is for retailers to have the 19 lines as a starter then build on that range,” says West.

Get Our E-Newsletter - Wholesale News stories in your in-box, delivered weekly.
Will be used in accordance with our Privacy Policy
Share.

About The Author