7 Highlights from Smoke Jumpers XVIII
When more than one hundred trade spend professionals get together, we’re bound to chat about best practices in promotion management, CPG current events and pertinent spending challenges. This year’s Smoke Jumpers strategic meeting gave CPG retail and foodservice professionals a chance to network, present and explore industry topics, and we’re here to delve into the event’s highlights.
What is Smoke Jumpers?
A smoke jumper is a highly trained individual who provides the initial attack to fight fire. We take that notion and translate it to our business: There are burning issues surrounding us, and together, we can blaze new trails, acting together as the initial attack to industry changes and trends. (Watch this video to learn more)
We’re a community – an organization of trade management professionals across CPG retail and foodservice.
[1] 78% want restaurants to offer more foods and beverages with functional benefits.
As a culture, we’ve gone from caring about foods that are labeled low-fat and low-calorie to wanting feel good foods that are local and natural. Today, organic is on 23% of US menus, which is a 22.3% increase since four years ago.
Now, we’re pushing away from feel good foods, advocating for functional foods. Functional foods are superfoods with positive nutritional attributes. Take chia seeds, for example, which are enriching menus 244% more than they were four years ago.
“You are what you eat” is shifting to “You eat what you are” – so we select the brands and menu items that reflect who we are.
[2] Total growth for consumer product goods in retail is strong.
In the last 52-week period, dollar sales accelerated 3.8% to $800 billion. Across generations, Costco and Dollar General are gaining momentum in the retail space. Younger boomers prefer the convenience channel. Millennials and Gen Xers tend to shop at mass super centers.
The top US retailers and wholesalers are:
- Walmart/Sam’s Club: $270.12B
- Kroger: $117.18B
- Costco: $72.15B
- Albertson’s: $60.25B
[3] We are witnessing the biggest revolution food has ever known.
- 52% say speed is the #1 or #2 highest decision factor when deciding dinner. 14% snack 5+ times per day (a 2.7% jump in one year).
- 77% of retail sales will be influenced by digital with 1:1 potential.
- 9 fewer store trips annually for groceries. 5% increase in average basket size, driven by price.
- Gen Z (born after 1997) influence more than 50% of household grocery shopping.
[4] Operators receive a small portion of your GPO spend.
Despite manufacturer’s headaches with GPOs, spending continues to climb. GPOs tell manufacturers, “Give us a program, and we’ll make a lot of money,” but there’s no transparency around a GPO program’s business impact. And, on average, operators only receive 25% of your GPO spend.
When Gregory Packaging, a juice manufacturer, filed a lawsuit against Foodbuy, the largest foodservice GPO, Gregory Packaging was awarded $9.3 million. The findings from the case conclude that “Foodbuy simply bills for every case they receive information about from the distributor, then waits for manufacturers to bring issues to them.” (Read more here. Free registration required.)
[5] A common challenge to achieving meaningful post-event analysis = having the right data to determine incremental.
If this sounds familiar, ask yourself:
- Can you determine non-promoted baseline?
- How does diverting impact the analysis?
- Do you have clear view of consumption from which we can calculate incremental?
- Do you have a good estimate of the volume expected in the absence of a promotion?
Once you have data at the right level (and it’s cleansed), you can bring it all together.
[6] Machine learning is a machine’s ability to learn from experiences it is exposed to and to apply learning to solve a problem without the need of any explicit programming.
[7] There is too much money at stake for companies to continue inefficient and unprofitable practices. According to Gartner, 67% of trade programs don’t break even.
To build top-line and bottom-line growth, today’s CPGs must use their data in way that make them more efficient, more competitive and more profitable. Using a TPO solution, you can automate cleansing and harmonization of POS, shipment and spending data. Integrate TPO with your TPM to easily monitor and compare promotional performance with competitor activity. Then, measure your ROI and promotional effectiveness.
A special thanks to this Smoke Jumpers XVIII speakers:
- Jack Li, Datassential
- Mike Druga, Butterball
- Julie Michel, Rich Products
- Tina Wefer and James Miller, FSIC, Inc.
- Amy Clark, J.R. Simplot
- Mike Bruening, Genpact
