Did you hear the news? Recently, Loblaw announced changes to its local produce programs and payment would be within seven days.

The truth is that local programs are a challenge for retailers. Their systems, processes and supply chain are designed to strive towards the most efficient methods of food distribution and retailing. We are talking moving full pallets, plan o grams for consistency and driving category sales. Small volumes of products in a select group of stores are not really in line with these objectives. That being said, consumers are looking for local and retailers must meet these expectations.

Some retailers, such as Sobeys, are better than others. Sobeys have dedicated people in each region to work with local suppliers and help them navigate the Sobeys formats. Loblaw has operated a local program, which was managed by people who were not Loblaw employees. These contractors were also responsible for distribution.

Recently, Loblaw announced a rethink of its program – a win for small business!

But preliminary research indicates there might be a catch. The fast payment may be a reduced payment to accommodate the quick turn-around. Every retailer is different and you should check out the programs offered in your region.

Local programs are a great opportunity

Getting on the shelf is a major accomplishment and one that should be celebrated. A lot of work, dollars and hours need to be invested to get a product to market. The local programs with retailers are a great chance to allow small- to medium-sized processors to take the next step. Large, national and multi-national companies pay a lot of money to get on the shelf.

Most retailers are very flexible with these programs and allow suppliers to put their product in a select number of stores. This really is a win to enable you to determine the right move into retail for your business. It is always better to start small and do a great job than to spread yourself too thin and struggle to deliver results.

If you do get on the shelf, use this as a tremendous opportunity to understand how your products perform in this environment. Do not assume because you are on the shelf that the sales will just happen. Think of this as a retail lab and experiment with as many tactics as you can. Figure out what works and what does not work to grow brand awareness and drive sales.

10 things to do if you are considering the local program
 

1. Do your homework to understand the food safety and other requirements this particular retailer might have. It is their store and they will control what goes in there. Each retailer will have its own definition of a local program. Do not assume the expectations of one will match another.

2. Develop a distribution plan for your products. How will you get them to the store and how often will you do this? It is expensive and it will be your responsibility to replenish inventory. It is very rare the store will call you. If you project to sell six units per store per week and the shelf holds 12 you need to be there more often than every two weeks. It is not good to leave the shelf empty. They have provided this space and want to generate sales from it. Holes on the shelf (where there is no product) do not generate sales, they just frustrate customers and consumers.

3. Establish the sales estimates for your products. You should use your own history, experience in other stores and any other information you have access to that will help you create a sales estimate. Talk to the retailers about this number. Good retailers will have input into this estimate. Ultimately this will be how your products are judged.

4. Create a 12-month sales and marketing plan for your products. It is your job to ensure your products sell, not the retailer’s. They are providing shelf space. It is your job to get consumers to pick it up and put it in the shopping cart.

5. Create a quality presentation to pitch your products to the retailer. A great product is definitely part of the equation but not everything you need. Explain why your product deserves to be on the shelf, how it will support their position in the market and what you will be doing to ensure the sales materialize. Once you get the approval, make sure you understand the timelines and get your products on the shelf.

6. Build relationships with people at store level and the key contacts at the retailer. With people at store level, work to get the best placement of your products, talk to them about sales and ask for feedback. They are in the store every week and have a lot to contribute. The local program manager or key point of contact is very important as well. You need to be able to communicate with them. When you have a good relationship, they will share valuable information and could be the decision maker to help your business grow.

7. Tell as many people as possible you are in the local program and where to find your products. Do not depend on them just finding it in the store. Use every tactic you can such as social media, mass media and public relations to get the word out. You have to do your part to generate sales. On social media tag your customer and reinforce you are doing your part to generate sales.

8. Try as many tactics as you can. This is the chance to understand how consumers react to cents off, multi buys, loyalty programs, local product ads and whatever else you can manage. Work with stores to add a second display for busy weeks. Now is the time, while you are in a smaller number of stores to make mistakes. They are much less costly in eight stores than 28.

9. The key to understanding what is happening is to measure the results. It is also easier to measure results in a smaller number of stores. Most suppliers in the local program are doing their own distribution. You should know what your sales are on ‘regular’ weeks and then you can measure sales when you make investments.

10. Visit stores as often as you can. It is one thing to deliver product, it is another to stand back and assess what is happening and how your product is performing in the category. Set up a schedule to visit stores, if you are on the shelf in retail. It is now part of your job.

Bonus

11. Your experience and sales performance in the local program should help you figure out the right next step for your business. If sales exceed expectations, you and your customer might want to take your product to a regional listing. This could include being in the warehouse and listed in the plan o gram. You would also ‘graduate’ to working with the category manager as opposed to the local program person.

If sales are not meeting expectations, there might be something wrong with your value proposition or how consumers perceive your product in the category. Now is the time to resolve the issue. Very rarely do more stores fix these problems. They just end up spreading your resources thinner and costing you more money.

Local product programs are here to stay as long as consumers want local products and retailers see sales and margin from the products. Take advantage of the opportunity but make sure you have the people and processes in place to understand how you are doing and make the most of the shelf space you get.