Working with health food stores, independent supermarkets, and pharmacies over the last three years has made me wonder – what is going on in the health food industry?
Sales are not analysed, good products are placed in the worst positions while slow performing lines are being promoted, and buying decisions are made based on the personal relationships with sales reps and not on data.
Snacks are purchased for an immediate or later consumption, mums also buy snacks for kids’ lunch boxes. This means there are places in your store where snacks are expected to be available, as well as places where impulse decisions can be made.
It is a matter of finding those places, and finding high performing snacks by testing and measuring their performance.
Here is a simple process on how to get the best out of your snacks.
1. Get a report on overall snacks performance
If you are a small operator and don’t have access to sophisticated systems you can get totals from suppliers invoices.
2. Decide on products and locations to test
Pick five products within the same category to start experimenting with, some category examples are bars, dried fruit and nuts, and chips, and pick two testing locations such as at the front register, kids snacks section, next to protein shakes or drinks, the baby food section, or snacks section.
3. Start testing
Keep products in one location for a minimum of two weeks to get an idea of their performance and then move to another location.
Large companies also experiment with various locations. For example, Hershley’s is currently exploring a number of methods for unplanned purchases such as upgraded kiosks or menu boards instore that have curbside pickups so that buyers can grab a Kit Kat before they pull away.
Also being tested is a special dispenser installed at the self checkout machines that dispenses chocolate bars on demand.
4. Enter data
Start entering total sales at the end of every two weeks such as product name, number of packets sold, net profit, and revenue into a spreadsheet or any software that allows you to do a data sort.
5. Analyse data
At the end of a 10 week testing period, you will have three reports:
a) Location performance
b) Product performance
c) Overall product and location performance
For example, the report will be able to show that 10 units of product A were sold in location one, and only three units of product A were sold in location two. Or, the report will find that five units of product A in location one were sold while 20 units of product B in location one were sold.
Once you combine the two reports, you can get total number of each product in both locations, and most importantly, net dollar value (some low margin products may give you higher turnover and therefore may outperform high value – slow moving items) so you can clearly see best performing and slow performing lines.
6. Promote well performing lines at NO COST to you and discontinue with non-performing ones
Approach distributors, manufacturers, brand promoters, and importers for those winning brands and ask for promotions (POS displays, price promotions, competitions, tasting samples, taste testings) to even further increase sales.
7. Carry on this test with the rest of your snacks
8. Use this technique every time you introduce new lines and compare with benchmark
Overall, in order to get the best out of your snacks, you need to find the winners, eliminate losers, and approach distributors, manufacturers, brand promoter, importers with a request to contribute towards promoting the winners. Most importantly, don’t let your emotions overpower your logic. It is about making money at the end of the day.
Amelia Priest is the founder of Just Snacks, a non-traditional distribution company that focuses on a single category healthy snacks and multi-channel distribution. Amelia can be contacted on 1300 480 255 or by email at ameliapriest@justsnacks.com.au
