Category Management: Collaboration, Technology and the Future
Collaboration between retailers and CPG suppliers is essential to shopper-centric category management.
We asked some of this year’s Category Captains honorees to share their thoughts about the supplier-grocer relationship, technologies most essential to success, and what’s in store for the industry in 2020. The following are their edited responses.
Progressive Grocer: What factors are most important to the supplier-retailer relationship in category management?
Tracey Boyd, Category Development Manager, Dole Food Co.: Dole prides itself on clearly understanding and addressing the different needs unique to each of our retail partners. Building that true partnership in which retailers trust us and our knowledge of the business is the most critical aspect in that relationship.
Gil de Cardenas, CEO, Cacique Inc.: Above all else, operations excellence, quality and authenticity are paramount to both our business and retailers alike. Our continued investment in operations innovation allows us to offer impressive speed of delivery and nimble in-store executions to meet specific retailer requests and needs. Our deep-rooted values of quality and authenticity – two of the four pillars our company is founded upon – guide our approach to driving category awareness through an optimized experience for all shoppers.
Matt Corona, Senior Director of Category Management, Molson Coors: We believe that relationships are earned in three ways: a deep knowledge of how consumers think and behave; understanding our retailers’ strategies and goals; and seeking ways to help retailers solve their most important problems. Over the last three years, we’ve invested over $20 million in technology and analytics to bring forward-thinking solutions to the marketplace.
Shaf Lalani, VP, SDL, Mars Wrigley U.S.: We are committed to meeting our retailers where they are today and identifying how we can help them grow to meet our consumers ever-changing shopping demands. To do this, we must have a shared trust and openness to change, as well as an understanding of their goals and how Mars Wrigley can drive success. With over 100 years of category management, we’ve been able to partner with leading retailers, implement our solutions and grow the category, through these factors and our results-proven recommendations.
Stacey Ring-Sanders, VP Category Management, Kellogg Co.: The key component to a successful supplier-retailer relationship is establishing a process that enables collaboration, defines shared goals and focuses on long-term strategic planning. Long-term planning requires agility to adapt to both micro and macro trends and aligned KPIs to measure success. In the supplier’s role in this partnership, it is imperative that Kellogg supplies best-in-class tools and category insights through a shopper-first lens that are data and research driven and unbiased. Ultimately success is defined by established aligned expectations and proven impactful shared outcomes.
Kerry Rose Stein, Category Development Analyst, Chiquita Brands LLC: The premise of total store growth is changing as global trends shape the grocery retail outlook. As category experts, retailers trust Chiquita to identify areas of opportunity within the banana category as well as recommend and implement strategies to capitalize on these opportunities. Through strategic thought leadership in category, shopper and consumer insights, Chiquita identifies successful and innovative ways to drive category sales. Taking a “one size does not fit all” approach, we tailor our services to support each retailer' specific needs.
Mark Stoddard, Managing Director, Category Leadership, Nestlé Purina Petcare: The most important factor is establishing a common view of the category and its future growth drivers. When supplier and retailer see the category the same way, we find that more significant and long-term category-centric solutions will be developed.
Joel Warady, General Manager, Enjoy Life Foods: The most important fact is trust. The retailer must trust that the manufacturer has done the necessary research for that particular category and thus trust that the manufacturer possesses the necessary knowledge and expertise as to what is currently working within the category, as well as how the category will evolve. Finally, the retailer must trust that the manufacturer is truly looking out for the success of the category as a whole, and not simply for their brand. A rising and successful category truly benefits all stakeholders; the retailer, the leading brands and, most importantly, the consumers.
Ben Woodbridge, Director, Marketing Research, Litehouse Foods: A consumer-centric model, focused on growing a retailer’s reach with shoppers, is important in order to build trusted relationships with retailers. This means bringing business analysis and solutions that are geared towards growing our retailers’ category sales, like sharing consumer insights from multiple data sources, focusing on the four P’s of marketing (product, promotion, placement, pricing), and measuring success through performance.
PG: Explain what technologies are most significant to growing sales for you and your retailers.
Boyd: The human element will always be the most important factor in impacting sales. Understanding that knowledgeable staff have the biggest influence at point of purchase, some favored technologies that enhance sales growth include reliable sales databases, shopper data and predictive analytics on the four P’s.
Cardenas: With an ongoing commitment to plant and operations optimizations that allow us to better serve our customers, we’ve recently introduced several system upgrades that allow Cacique to boast efficiency around goal tracking and real time pivots to maximize results. Additionally, we see it as our responsibility to expand the category through consumer-centric innovation and, as such, created a dedicated innovation group to understand developing consumer trends. This group deploys several technologies in order to best craft products that meet consumer needs, including a custom Stage-Gate process, rapid prototyping and experiential intercepting. These technologies allow the Cacique innovation group to take an idea from concept to shelf in eight to 12 months, inclusive of extensive consumer/customer feedback and iteration through the company’s proprietary consumer panel.
Corona: The retail and consumer product marketplace is teeming with nascent technology, and the potential to drive decision-making more efficiently is great. Through our investments in machine learning, we are expanding the scale and efficiencies in decision-making, particularly in space and assortment optimization. We’re doubling down in work automation efforts to engage with more retailers across all classes of trade. Yet technology alone won’t be a cure-all for sustainable growth; more than ever, collaborative research across suppliers, retailers and distributors is essential.
Lalani: Today, consumers are mobile and looking to make purchases throughout their day. This means mobile shopping options must be easy to navigate and encourage impulse. To grow sales, our retailers have an opportunity to redesign the e-checkout for mobile shopping and connect with consumers while on the go. For example, Mars Wrigley leveraged a national ecommerce site to implement an EEG and eye tracking test-and-learn, to understand what motivated shoppers’ purchases to help retailers create a more intuitive site. From what was discovered, Mars Wrigley offered a top national grocery retailer online navigational tools and browser designs to update its online shopping experience and drive sales on mobile. We’re also looking into new technologies to inspire innovative products. Products like M&M’S Hazelnut Spread, with a soft center, allow our retailers to offer new and different textures that spark sales.
Ring-Sanders: Delivering validated insights through cutting-edge technology is an important deliverable for Kellogg. We employ extensive usage of ShopperMX virtual store platform to prove out winning solutions via virtual store shopper testing (96% correlation, 25 tests conducted in latest year) before retail implementation to drive improved sales and reduced costs with validated ROI. We also utilize Applied Predictive Technologies (APT) to conduct test and learn scenarios in-store across all marketing variables. In the last year, we have conducted 120 tests helping our retailers and categories win. Kellogg leverages the Rich Mix assortment suite to optimize assortment with detailed understanding of incremental contribution, cannibalization and transferable demand, unique to our categories and retailers.
Stein: There are a variety of technologies that Chiquita uses to support sales growth. With digital capabilities and technologies becoming more integrated in the lives of consumers, the ability to engage the shopper and the retailer have proved most successful for driving in-store growth. In 2019, Chiquita launched a B2B website dedicated to ensuring its retailer partners enjoy the full benefits of its focused and excellent service. The website is offered as a one-stop shop of information on how to grow the banana category through the Chiquita banana brand: a product and services catalog; details of quality standards; a segment highlighting the brand’s category leadership, with white papers available on best practices; plus, details of sustainability, news and fairs, and contacts for the sales team. The company aims to ensure that the customer experience is consistently improved and optimized to enable them to meet constantly changing consumer needs. Chiquita also leverages its iconic Blue Sticker through several annual campaigns that drive shoppers into the store and encourages them to participate in online contests and digital activations that create excitement and loyalty for both Chiquita and its retailer partners.
Stoddard: With the data that can measure and track the behavior of today’s omnichannel shopper, you begin to see the shopper not as a single purchase transaction, but a series of “transactions” along their journey. Today, those data solutions are limited but continuing to get better all the time. It requires a long term investment to build these solutions, but critical to the relevancy of today’s retailer.
Warady: Being able to connect with our consumers via various technology platforms is an integral part of our overall growth strategy. We use technology to drive consumers to our brand within our retail partners, and this is a result of a growing and robust CRM platform that we utilize in-house. The more we know about our consumers and are able to communicate with them on a 1:1 basis, the better we are in recommending products and retail partners who stock those products. In-store, we use technology to answer questions regarding nutritional facts as well as providing our consumers with targeted discount offerings based on their profile. Ibotta has been a great technology partner allowing is to facilitate this in-store connection.
Woodbridge: Growing sales starts with understanding consumers, shopping patterns and assortment performance. Litehouse utilizes technology to drive insight throughout the category management process. We utilize data visualization tools like IRI’s Unify platform and Tableau to look for performance patterns in point-of-sale data, and we also look for consumer panel insights through Numerator to build robust consumer behavior models that influence our category recommendations. Understanding the demographic and psychographic profile of new consumers to a category can help us make assortment recommendations for a retailer that will increase long-term category value, rather than cannibalizing existing items.
PG: What trends or other factors will have the most impact on your business in 2020, and why?
Boyd: As always, demographic, economic and competition greatly impacts business decisions and ultimately sales. Additionally, produce is a volatile business—Mother Nature’s impact on supply and yet-to-be identified disruptors—also factor in greatly. The expertise in the Dole CD team allows us to react quickly in order to evolve and lead.
Cardenas: First and foremost, we know authenticity remains a value across our core, bicultural Millennial and general market consumer targets, and will always be a guiding principle for our business. We’ve believed this since our inception and our proprietary consumer segmentation confirmed that today’s consumers want to create authentic Mexican food at home. We also uncovered the insight that today’s consumers not only shop based on specific consumption occasions but also seek in-store destinations that can easily facilitate these behaviors. Already, this finding has informed the “Mexican Meals Made Easy” theme consumers today will see as they shop our gold standard destination sets, and this will continue to drive our in-store marketing activity.
Corona: Beer will remain a highly dynamic category, driven by changes in consumer preferences and expectations. Segment boundaries are blurring, particularly among flavored malt beverages, seltzers and ready-to-drink spirits, as consumers are demonstrating interest in “better than” options. Shoppers are also raising their expectations for their path to purchase, driven by the shift to quicker trips to retail and their omnichannel experiences. Despite these emerging trends, much will remain constant: Consumers will still make occasion-based choices on the products they buy. More than ever, a balanced strategy across the entire category is key.
Lalani: We know the way in which consumers shop and what they shop for today will not be the same tomorrow. We’re working with our grocery retailers to adapt their offerings to match the rapidly changing retail landscape. We’re also working to unlock impulse purchases through new flavors and products that meet who the shopper will be in the next year, in five years and in 10 years. For example, more and more consumers are looking for products that blur category lines, like salty and sweet. We’re working to create more of these innovative products to excite consumers and pairing these products with our results-proven, best-in-class merchandising guidelines to drive sales for retailers in 2020 and beyond.
Ring-Sanders: Kellogg Category Management’s mission is to be the preferred partner of our retail customers by providing insights and actionable execution to deliver mutually profitable and sustainable growth. The factors and trends that will have the most impact are varied but are all grounded in Kellogg’s deliverable to meet people when and where the opportunity to eat occurs. We will do this by providing a deeper understanding of the shopper and consumer and extending knowledge of the trip mission and motivations through occasion understanding.
Through this shopper-first lens, a few key initiatives have been identified to drive success in 2020. They include partnering with retailers to build loyalty to total store not just category basket. We will do this through our understanding of where our categories and brands play in building retailer loyalty. Secondly, unlocking the potential of growing urban markets and small formats that have unique requirements. And finally, bringing thought leadership to omni-channel and the changing expectations to optimize in-store space and assortment allocation.
Kellogg’s focus will be to reset category dynamics through shared profit pools to unlock sustainable growth for both Kellogg and our retailer partners delivered through innovation, merchandising and thought leadership.
Stein: There is increasing evidence regarding the need for significant change in how businesses think about and interact with the environment. Chiquita’s work with key stakeholders, actions and projects to improve biodiversity demonstrate the leadership role that it has taken in this field. The company works hard to increase productivity on its own and supplier growers’ farms, while also working to maintain and improve the biodiversity of this land. Constant in these sustainability efforts is a focus on minimizing the impact of its supply chain and distribution operations on the global climate and environment. Chiquita believes that 100% product-focused companies such as its own global operations must take the lead in the transformative change needed to achieve this goal.
Stoddard: Today’s shopper environment is truly omnichannel. We see great upside in partnering with our retailers to help them develop omnichannel solutions that are relevant to their shoppers, but importantly, are also unique to the pure play ecommerce solutions that exist today – this is the key to long term sustainability for store based retailers in today’s omnichannel environment.
Warady: Consumers are becoming more knowledgeable about the food they eat and the choices they make. Our role is to provide our consumers with as much knowledge as possible around our products, our category, and the way we manufacture our products and the ingredients that we use. At Enjoy Life, we launched Project Transparency in 2019; version 2.0 will be online in 2020. In Project Transparency, we are informing our consumers about all of the ingredients that exist in our facility, how they are used, and where in the bakery they exist. Because we cater to people with food allergies and intolerances, transparency of manufacturing processes is key to continuing our foundation of trust with our consumers. Trust and transparency will be major currencies in 2020.
Woodbridge: The demand for real ingredients will carry into the new year, with 85% of consumers sharing they are at least somewhat concerned with the quality of ingredients and eating healthier. We’re also going to see purchasing power transition to Millennial parents, which means developing products that meet their household preferences and needs, like creative twists to familiar flavors and convenient offerings, within the refrigerated dressing category and beyond.