Fred Schroeder’s Post

CPG Is Constantly Changing - Except When It's Not (part 16 in a series) 'We're A Preferred Supplier' - Great, But at What Cost? If you've followed these posts, or seen a couple, there are a variety that focus on the value (or significant lack of value) of Off Invoice (OI) promotions, particularly to distributors. Other than it's quite simple to give $ away. For the time the OI is passed through, there is limited performance or incremental volume unless you add a scan promotion on top of it. There goes simplicity out the window, why not make the whole deal a scan? And very often the timing is off, so the OI is not reflected anyway. When I speak with brands about why they do it, the most common response is 'Well, we're a preferred supplier at Distributor X; we won't be if we stop OI's'. So, the logical follow up is, 'Well, what benefits do you get?'. Almost always the response turns into the areas they will lose, not what they gain. So, what the price of being a preferred vendor? In quick math, if I plan a 15% quarterly OI (very common), the distributor will bridge the deals. Suggesting 80% sold to the distributor on an OI is quite conservative. We don't need Excel for this one - it's quite simple. If I'm a $5M brand, doing 80% of my business through these distributors, it's pretty simple - it's about 15% x $5M x 80%. It's $600,000. If you're a $1M brand, it's $120,000. If you're just starting out, and at $100K, it's $12K. You get the idea. There's a decision here for everyone - is the OI worth the benefits with all the other challenges you face, or would it be a 'nice to have'? Also, if you've read this down to here, you have some quick decisions to make - I just saw another post this weekend stating 2025 deals are due shortly! 1Q 2026 is a long way off to be stuck with an expense you may not be able to afford! ________________________________________________________________ To follow all my posts, or to contact me, feel free to DM me here on Linked In or visit my website: www.schroedercpg.com .

CPG Is Constantly Changing - Except When It's Not (part 19 in a series) Why Are 75% of Your Trade Promotion $'s Going to Increased Others' Profitability? Seems crazy, no? Isn't the role of trade promotion in CPG rather simple when you break it down? Isn't it to get consumers to look at your brand, try your brand and keep putting more of your brand in their shopping carts, their cars, their homes and eventually their stomachs. You're spending a lot of $ to do this to, right? Look at the last invoice you sent out and what you got back - most of that difference (deduction) is trade promotion. Now, look at the difference between your list price and your net price on the invoice going out. There might be a 15% difference on a lot of them. Now add the two together - probably well over 25%. What are you getting for this? No, in real results. By retailer. If you're like most, 15% of this 25% you are spending on trade is for OI's. Recognize 15% once a quarter is pretty much 15% on everything - analyze it. What are you getting for it? No, not in 'soft' benefits - this is business. In real extra cases. With details. I'd challenge any brand or broker to challenge this will real facts and feel very confident >90% cannot do this. Next, look at all the fees and other charges that are related to scans, MCB's, etc. It's significant. Probably over 5%. Well, just with that, we're at 75% of your trade promotion budget - that's close to 20% of your gross revenue - you could probably use this for other brand building activities, no? Maybe to get consumers to look at your brand, try your brand and keep putting more of your brand in their shopping carts, their cars, their homes and eventually their stomachs. Seems crazy, huh? Let's develop some objectives, a strategy and a process to address this - quickly and painlessly - before 2025 planning hits. We'd look forward to assisting. __________________________________________________________________________________ For more information visit us at www.schroedercpg.com, contact me at fred@schroedercpg.com or just send me a DM - why wait?

Considerations Prior to a Trade Promotion Solution Let’s face it, trade promotion is complex. It impacts your entire team. It’s part of your day-today business. And the spending can most likely be improved to drive extra volume and revenue for your brand. And, of course, deductions are driving you nuts! With that situation, many brands look to a trade promotion management software solution to address this challenge. This can obviously make sense. After all, trade promotion is most likely your second largest expense line (after COGS) and over 20% of your gross revenue – it deserves attention. However, also recognize that solutions are (or should be) built around the best practices for the challenge they solve. This is important to understand – they do not fix a broken process. For these solutions to be effective and drive value, your team needs a clearly defined process around trade promotion – and the starting point is NOT clearing deductions. This process also spans your entire team, simply put: ·      Sales/ Brokers à trade planning, trade execution, sales analysis. ·      Finance à budgeting, accruing, settlement, financial analysis. ·      Manufacturing / logistics à forecasting ·      Leadership à rapid analysis & KPI reporting This process is also time consuming – and in smaller organizations everyone is stretched!  Wouldn’t it be wonderful if we had an expert that could assist with this process? Schroeder & Associates has this experience and addresses this affordably!  With decades of CPG management experience, coupled with trade solution experience at 3 solution providers, we are uniquely qualified to address the trade challenges & opportunities of smaller CPG brands. And we do address it affordably. So, as you consider this opportunity – or have questions about trade promotion in general, consider contacting Schroeder & Associates. It’s worth a quick discussion! www.schroedercpg.com #cpg #webinar #learning #tradepromotion #tradeexpertise

🙌 It's happening and I need your help! The free Guide to Starting a Food or Beverage Business will be launching next month and if you're a CPG founder I'm looking for your stories to include. Here's what I'm looking for: 1) Choose a topic below that you have a strong point of view about. 2) Share your best lessons learned that other founders should know below in the comments. Each should be 2-5 sentences. 3) I'll let you know if you're selected to be included in the guide! Topics: 👩💼 Starting a Business - Operating Agreements - Co-founders and early team 🍫 Creating Your Product - Consumer Research and Testing - Product Development - Certifications - Ingredient Sourcing - Product Packaging - COGS - Pricing and Margins 🎨 Building a Brand - Brand and product naming - Packaging Design - Brand Identifying Elements - Trademarks 🏭 Manufacturing - Self-Manufacturing - Co-manufacturing 💰 Sales - E-commerce - Amazon - Grocery and Retail - Foodservice - Brokers and Sales Agencies 🚚 Distributors - National and Regional Distributors 💻 Marketing - Retail Trade Spend (Demos, Promotions, Merchandising, Free Fills and Slotting) - Digital Marketing - Public Relations 💸 Financing - Cashflow - Debt Financing - Investors 🏗 Operations - Hiring - Inventory Management - Warehousing / 3PL #CPG #Foodandbeverage

AG Lafley, Procter & Gamble’s ex-CEO, came up with the marketing concept “moments of truth”. What does it mean? “Moments of truth” stands for the four consumer touchpoints in which your product needs to perform at its best to be able to succeed. I was fortunate enough to work under AG in my past career as a buyer. I learned how to apply his marketing philosophy in my procurement space. I always found it interesting though how little my suppliers knew about the part they played in helping us, their customer, to win in these “moments of truth”. To this day, I have only met a handful of suppliers that were able to relate to this concept. Bizarre, since pretty much all sales methodologies preach to focus on clearly articulating the value suppliers bring to their customers. Do we not see the forest for the trees as sales professionals? Have a look at the concept of “moments of truth” below and check where you add value as a supplier to your customers. Leave a comment and help us build bridges between sellers and buyers, #procurement and #sales.

An 18% Pricing Opportunity In discussions last week, a brand had a $.20 price advantage to their 3 key competitors at a large retail chain. When brought to their attention, they were unaware of it, and turns out, was doing little for extra sales. Through additional discussion, there had been OI's on the product they were never reflected in the retail price. It turns out there is an 18% price opportunity with this one brand that could either be added to GM or reinvested with the retailer through trade so significantly increase volume / revenue. As this was a 'hi / lo' retailer, there was a high level of confidence they would buy in to a revised plan (a winning combination...). Are you analyzing retail pricing & merchandising trends with your key retailers? Are plans changing based on these results? There are countless opportunities to analyze - and the decisions to change are yours. We can assist you in addressing these very affordably. Check out our website & let's have a quick discussion. www.schroedercpg.com.

Hello #sales, #keyaccount, #globalaccount, #strategicaccount, #salestraining, #salesenablement, #salesexcellence, #traininganddevelopment, #executives, #leaders & #managers! DO YOU KNOW YOUR CUSTOMERS' MOMENTS OF THRUTH? WHAT ARE CUSTOMERS' MOMENTS OF THRUTH? HOW DO CUSTOMERS' MOMENTS OF THRUTH IMPACT YOUR CUSTOMERS' SUCCESS? HOW DOES KNOWING CUSTOMERS' MOMENTS OF THRUTH IMPACT YOUR OWN SUCCESS? I encourage you to review this post from my good friend and professional buyer expert --Jens Hentschel--, and leave a comment or a question. Reach out to me via WhatsApp/Viber at +38163330025, email me at ivan@trustlearnimprove.com, or mention me in the comments, if you are curious to hear more about how FIVIS's Customer Centricity Model works and helps effectively imbed #customercentricity in your organization DNA. #sales #salestraining #salescoaching #salestipsandtricks #salesprofessional #salesexcellence

So, since the first of the year, I've seen 4 separate posts from brands commenting on the challenges of working with demanding (in 3 cases, over-demanding) distributors & retailers. A few points to start: 1. None of this is new - it's a demanding business & they have challenged brands for well over 3 decades. 2. Distributors are under significant challenges with fuel prices, competition & pricing demands from retailers. I'd suggest they are not in an enviable position. 3. Your retail partners, in addition to addressing their traditional competition, continue to face challenges from away-from-home consumption, as well as the various formats they face & growing businesses such as Amazon. It's safe to say it's challenging for everyone. With that, I'd suggest the emerging brands faced with these challenges increase developing their focus & expertise on addressing trade spending. After all these are the dollars that are being referenced & they are significant. Typically, well over 20% of topline sales. Some questions to consider: 1. Do we have a clearly defined trade budgeting & spending process with roles & responsibilities or is trade more about 'clearing deductions'. While this settlement process can generate some repayment, it is essentially cleaning up after the trade process happens. 2. Are we analyzing our results, with both internal information & readily available external data to significantly improve our decision making at a customer level? 3. Are we properly understanding the profitability of our spending at a customer level? Both indirect & direct retailers as well as distributors? 4. Are we properly accruing for trade spending with the volume to avoid any surprises when the deductions happen? Trade spending is complex - and few emerging companies have the ability to hire leadership resources in this space. Fractional Trade Marketing exists to be both a true partner & assist you in capitalizing on these opportunities. Feel free to check out our website (www.schroedercpg.com) to get a bit more understanding. And if there are questions you have that we can address in a more educational fashion, please surface these as well. We are all in this together - brands, retailers & distributors.

The journey from manufacturer to consumer involves several crucial steps, with two key stages standing out: CPG sell-in to distributors and in-market sales from distributors to wholesalers and retailers. These stages play a pivotal role in ensuring products reach the hands of consumers. These stages exhibit distinct characteristics that are pivotal to understanding the intricacies of the supply chain, in this post let's delve into the unique differences and characteristics of both processes. CPG Sell-In to Distributors: The sell-in phase marks the initiation of the distribution process, where manufacturers negotiate and finalize agreements with distributors. During this stage, manufacturers focus on presenting compelling product offerings, pricing strategies, and marketing support to entice distributors. Clear communication, robust forecasting, and aligning on mutual goals are paramount. Manufacturers may offer promotional incentives or volume-based discounts to encourage larger purchase orders, ensuring a healthy initial inventory placement. The sell-in phase is characterized by strategic planning, negotiation prowess, and the establishment of a strong foundation for distribution. In-Market Sales In-Market Sales from Distributors to Wholesalers and Retailers: Once products are in the hands of distributors, the in-market sales phase ensues. Distributors shift their focus from negotiations to active promotion and fulfillment. Their role transforms into a delicate balance between managing inventory, servicing orders, and fostering relationships with wholesalers and retailers. In-market sales require efficient logistics, order processing, and timely delivery to meet retailer demands. Distributors may also provide additional value by offering merchandising support, point-of-sale materials, and localized marketing efforts. Building strong partnerships, maintaining accurate inventory tracking, and optimizing the distribution network are vital elements of this phase. In summary, the CPG sell-in to distributors and in-market sales stages exemplify distinct yet interdependent facets of the supply chain. The former thrives on strategic negotiations and setting the stage for efficient distribution, while the latter hinges on operational excellence, relationship management, and meeting retail demand. A holistic understanding of these differences equips stakeholders to navigate the intricate landscape of CPG distribution successfully. #inmarketsales #routetomarket #cpgsales #cpgmarketing

Remember the "distributor company model" most principles adopted in the middle east region decades ago? While many principles have taken more control over their distribution strategies over the past years, this does not necessarily mean the distributor model is soon to be gone. In fact, an alternative model in this region is having a hybrid approach where the principle takes ownership for part of the business and the distributor manages the other. Each leveraging their strengths in managing a certain part of the business and both contributing to a stronger, more innovative and efficient approach to add value. What are your thoughts on this hybrid model? #FMCG #Distribution #retail https://lnkd.in/d4rNJjjQ