March, 1992

Cover & Feature Stories

Nuts & Bolts

One of these days I’m going to send an invoice to Dave Riggs. Dave runs the California Strawberry Advisory Board, and sometimes I think I should be on his payroll because, as I travel around the country, I find myself consistently urging more strawberry promotions. More often than not, when I study retail merchandising programs I find that stores are missing out on volume and profits because they don’t adequately promote items that move quickly, excite customers and make money but that require special labor allocations to be done correctly.

In fact it is shocking how often people miss opportunities for profit just because it means adjusting labor schedules or restocking racks. The problem is not confined to produce. Jeff Filliater, Chiquita’s division marketing manager, is one of those super-sharp young men with experience outside of the produce industry that Chiquita has brought into the produce field. Jeff once told me a story about his days working for a candy company that had introduced an inexpensive series of chocolate bars, which were to be displayed in supermarkets complete with a rack the manufacturer provided.

Jeff called on a particular store every week and the sales on that new rack were terrific. In addition the store was realizing an exceptionally high gross profit. In fact the few feet the rack was taking up had probably become the most profitable display space in the store, and Jeff was enjoying seeing that store sell record amounts of candy and making record amounts of money doing it.

Then one week, Jeff went on vacation. When he came back to the store, his rack was gone. He eventually found the rack in the back room up against the wall empty. Needless to say, Jeff found the store manager and asked him what happened. The manager was specific in his reply: “I got so sick of having to refill that rack I took it off the floor.” In other words sales were too high, and they were an inconvenience for the manager.

Jeff Filliater’s anecdote describes a problem that occurs in produce departments every day. The problem is even more pronounced in produce than in other categories because it is so easy to decide to avoid promoting high-labor items. Just pick something a little easier and nobody will ever know. In fact management, usually ignorant about produce, might applaud your keeping labor costs down. Nobody will know, except the customer, that is.

In your hands, you hold the Second Annual PRODUCE BUSINESS Merchandising Manual. This project grew out of a realization that much of the merchandising talk that goes on in the industry is, in fact, very narrow. What typically happens is that a magazine, a company or a commodity board attempts to show some terrific ways to merchandise a particular item. Display techniques, cross-merchandising opportunities, and more are often provided, but they are all focused on one particular commodity.

There are terrific exceptions, however. Ron Roberts, manager of marketing services at Dole Fresh Fruit Company, travels around the country giving workshops on fruits and vegetables. You might not even know what items his company sells, because he tries to really deal with the whole produce department. But Ron is definitely the exception.

Because merchandising advice so often comes from partisans of a particular commodity, merchandising is often totally focused on an item-by-item process. This leaves retailers frustrated as every commodity’s proponent urges larger and more prominent display spaces for the commodity, without any indication of what is supposed to get less space to compensate.

For a while, we thought science would save us, especially with DPP and all the rest. Then DPP studies came back showing that items like sweet corn didn’t have a very high DPP. So produce directors looked at that information, saying, “Well, we still have to sell sweet corn,” and ignored it. So much for science.

So, this manual focuses on the big picture of merchandising, all the thinking processes that go into developing a proper merchandising strategy. In fact, maybe that’s the word: STRATEGIC. If most articles about merchandising are tactical, giving 57 ways to merchandise an item, this manual is strategic, analyzing the considerations necessary to build a well crafted merchandising strategy for your store.

Though the basic themes have arisen in the course of my talking to retailers and suppliers around the country, Lee Smith, formerly director of marketing of deli, produce and prepared foods with Wawa Food Markets, Wawa, PA and now an independent consultant and contributing columnist for PRODUCE BUSINESS, wrote the first part of this manual. Karen Michals, our Editor-at-Large, put together the glossary, which, with some updating, we are reprinting from last year’s manual.

Taken together, these parts provide the sort of “nuts and bolts” that are needed to make the merchandising of produce a key component of any retailer’s success. A special thanks goes to the sponsors of this manual: Chiquita, Dole, Pacific Fruit and Sun World. Many firms support special sections dealing with their own commodities. It takes a company with a rare vision and a special dedication to the trade to support this type of project that helps retailers sell more produce as a category and to sell it more profitably.  pb