MARCHING ORDERS - Progressive Grocer

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ALCOHOLIC BEVERAGES Category Captain Anheuser-Busch: Beer ALCOHOLIC BEVERAGES Category Captain E&J Gallo: Wine and spirits E&J Gallo’s ongoing consumer research project, Consumer Vinsights, revealed that wine consumers have recently begun dramatically changing their purchase behavior. They increasingly buy wine across price points, sizes, brands, and types, based upon the unique usage occasions in their lives[m]often purchasing for multiple occasions on the same trip. Usage occasion segmentation isn’t new to many grocery categories, but this concept is fairly revolutionary for wine, says Gallo. Gallo leveraged this insight at one of its national grocery accounts, developing an eye-catching, out-of-department pallet program running from November 2007 through January 2008, to remind consumers, in-store, of wine usage occasions. The 48- and 24-case pallet displays included point-of-sale imagery, were easily maneuvered from distributors to stores, and could go anywhere. The grocer installed the 48-case display at 144 stores, and saw a combined 72 percent increase in sales of Gallo’s Turning Leaf wines.Two hundred sixty-two stores chose the smaller footprint half-pallet merchandising vehicle, and saw a 50 percent increase in dollar sales. More importantly,Turning Leaf sales growth propelled the entire popular wine category (the chain’s largest wine category by volume) 8 percent in November, vs. a drop of 1.5 percent during the prior 12 weeks. One of the key factors that enables Anheuser-Busch to command a 64 percent share of the beer category is its ability to develop tools to continually enhance the beverage business of its retail customers. This year A-B introduced Reco, a retailer compliance reporting system, which is an enhancement of the company’s planogram management tool, developed to improve feedback to chain customers about retailer compliance of their plans. The system allows retailers to identify discrepancies between the actual planogram and what’s currently being sold, or not sold, in the account. The end result is a reduction of out-of-stocks and a more consistent and correct mix of product. In addition, this year A-B married its customer segmentation data with retailers’ customer loyalty data,to use the combined shopper insights to develop and implement successful cross-promotions. To provide consistent communications to its distributor and retailer network, the company developed a series of internal Web sites providing information about promotions, management, and best practices. Innovation in product development and distribution has also played a role in the brewer’s success.When A-B introduced Bud Light Lime last spring, it rolled out the new product to key retailers months in advance of the launch. Retailers received every piece of the program, including the strategy behind the brand, packaging options, target audience, sales expectations, recommended shelf placement, and marketing plans, so they could prepare for the launch well in advance. ALCOHOLIC BEVERAGES Category Advisor Coors Brewing Co.: Beer Anational grocer was looking to drive trade-up in the beer category to grow its share of the above-premium segment, while maintaining current cooler space and floor space allocations.To help, Coors analyzed how this segment is presented to the customer every day. It targeted an upscale store cluster and studied the amount of space allocated, and SKUs carried in above-premium. The brewer identified the category segment that didn’t match the shopper profile of the upscale cluster; that was the below-premium segment. Conversely, the above-premium household penetration for upscale stores is twice that of the below-premium segment, so Coors and the retailer shifted space from below-premium to above-premium by culling the below-premium brands with the lowest exclusivity. Seventeen upscale stores got the new sets by January 2008, reflecting an average increase of space for the above-premium segment of 28 percent, an 85 percent average increase in the number of above-premium SKUs. During the 22 weeks following the reset, 89 percent of the discontinued below-premium brand volume stayed in the store; 56 percent of the volume from the deleted brands shifted to other brands within the below-premium segment; 39 percent of the volume was actually a trade-up to the premium light and premium regular segments.Additionally, 5 percent of the dollar volume was a trade-up to the craft/microbrew segment. 42 • Progressive Grocer • November 2008 A H E A D O F W H AT ’ S N E X T www.progressivegrocer.com
GROCERY: BABY FOOD AND PRODUCTS Category Captain Kimberly-Clark Corp.: Baby care Virtual reality is Kimberly-Clark’s latest tool to provide insight and category development guidelines to key retail partners. The company applied the technology as a means of identifying and understanding shopper behavior and impact on purchase decisions across the category. Category management, concept development, consumer research, and the new technology all helped in the redesign of one major chain’s baby aisles.The grocer used many of the recommendations from Kimberly-Clark’s insights in the redesign of a flagship store. Strong sales increases in targeted baby categories in that store and insight from virtual concepts helped the chain continue baby aisle redesigns in five additional stores. Results in six stores showed baby aisle post-redesign sales increases of 4 percent to18 percent, outpacing division sales by an average of 9 percent. K-C group sales in the baby aisle also outpaced divisional results by an average of 8 percent. GROCERY: BABY FOOD AND PRODUCTS Category Captain Nestlé Infant Nutrition Nestlé Infant Nutrition is drawing customers to the baby and toddler category with Gerber Graduates Yogurt Melts.The item, the first shelf-stable yogurt snack with active and live cultures, allows the category to capitalize on the yogurt trend without the hassle of refrigeration. In its first six weeks,Yogurt Melts with three SKUs posted about twice the dollar sales of each competitor’s entire toddler food portfolio; about 20 percent to 25 percent of purchasers are new households to the category. Nestlé’s toddler snacks added $12.4 million of the $14.7 million in segment growth. As it increased toddler food penetration by keeping parents shopping in the aisle longer, Nestlé also enlarged the mature infant food subcategory with Gerber’s premium line of purees and cereals fortified with DHA.The line added new households to the premium segment. In 2007 Nestlé recorded product placement and linear space at the SKU level in a sampling of grocers. The company used a new tool to measure an account’s ability to turn inventory into profit and advised retailers about current and proposed shelf sets. GROCERY: BABY FOOD AND PRODUCTS Category Advisor Abbott Nutrition Of the $2.3 billion infant formula category, tolerance and specialty products make up about 40 percent of the business, outside of standard milk-based items. Noting that infant formulas for babies with tolerance issues account for over $800 million in sales,Abbott Nutrition restaged a lactose-free formula under the new name Similac Sensitive. The product, formerly known as Similac Lactose Free, is designed to address such common lactose-sensitivity symptoms as diarrhea, gas, bloating, and stomach cramps.The new name points up the benefits of the formula, rather than sounding clinical, and avoids the perceived consumer stigma of “lactose intolerance.” Launching the renamed formula in powder,ready-to-feed,and concentrate forms,Abbott aimed to bring new users to the category through online marketing,WIC eligibility, and doctor detailing. These efforts paid off, with the Similac Sensitive reintroduction driving increased sales across the board at a national retailer with multiple divisions. More precisely, dollar sales grew 110 percent over the year-ago period, units increased 89 percent, and the number of households buying leapt 70 percent. GROCERY: BABY FOOD AND PRODUCTS Category Advisor Beech-Nut Beech-Nut, the No. 2 baby food brand, has been challenging the category leader with consumerdriven innovation, including new nutrition-based platforms and cutting-edge packaging.The company has over the past year introduced the Easy Pour Cereal packaging design, which eliminates the mess associated with traditional box cereal and allows for 30 percent more facings on shelf vs. boxed cereal. Beech-Nut’s latest innovation is the Let’s Grow! line of convenient foods for toddlers,All 19 Let’s Grow! items come with a No Junk Promise—a pledge to provide safe,pure,and nutritious foods. Additionally, the company is building a $124 million headquarters and manufacturing site,which it says will be the most modern baby food plant ever constructed. The launch of 12 varieties of Easy Pour Cereal alone has resulted in a 30 percent increase in cereal dollar share and a 20 percent increase in the average number of cereal SKUs per store, according to IRI figures. Overall, Beech-Nut has experienced a 26 percent increase in ACV weighted distribution growth in one year, and a 20 percent increase in dollar share vs. a year ago, IRI found. 44 • Progressive Grocer • November 2008 A H E A D O F W H AT ’ S N E X T www.progressivegrocer.com
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MARCHING ORDERS - Progressive Grocer

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