During Smoke Jumpers XVI, Paul Wietecha opened the strategic sessions with an overview of industry benchmarks based on Blacksmith Applications aggregated data. He also offered his perspective on strategic trends affecting the foodservice industry and CPG manufacturers today. Read on for highlights from his keynote.


Wietecha compared final transaction data between the period ending September 2016 through the end of September 2017.

The benchmarks were derived from the following data:

  • More than 425,000 promotional events and contracts
  • $4.2 billion in discounts
  • $43 billion client sales dollars under the traditional foodservice, grocery/supermarket, convenience stores, mass merch, club, and industrial umbrellas.


What we learned:

Trends are moving in a concerning direction. The way today’s trade dollars are spent is not favorable for manufacturers, and it is even less favorable than benchmarks from the prior year. Consider these key metrics:

  • 70% of trade spend is indirect, and the majority of the remaining 30% of trade dollars goes to corporate earned income.
  • Discounted share averages increased by 3.5 percentage points year-over-year, to 54%, Operator’s depth of discount is greater than ever, averaging 16%, a 2-point swing in the wrong direction when compared to metrics reported in the 2015-2016 industry presentation.
  • Operator discounts are more than 85% deviated price that is mostly deducted by the distributor.
  • Direct trade is more than 80% rebate/allowance that is deducted.




A few industry wins:

  • Product innovation leads to margin boost
  • US Foods pricing and contract entry (PACE)
  • Gordon Foodservice CSV


Things to think about:

  • Street erosion
  • GPO membership integrity remains weak
  • Amazon as a food distributor
  • Aramark buys Avendra



Moving forward, manufacturers should work to create and activate course corrections that address the following opportunities:

  • Shrink non-performing dollars by controlling budgets, focus on economics to drive accountability, and drive discounts to the operator.
  • Broadly report on street vs. chain and track all agreements for expected vs. actual volume.
  • Drive your discounts to the operator with recapture, automated blended rate, automated exclusions, and a quarterly review of discrepancies.


These benefits align with the ultimate buyer, reduce trade for more competitive pricing, and encourage a higher payout on full list business rewards street growth.


State of the Industry Infographic

Discussion Questions to Consider

  • Are your company’s results consistent with our all-inclusive data?
  • What factors are you thinking about moving into 2018?