As society continues to adapt to changes brought on by the pandemic, your customers have adapted to a very different environment for selling food. Many of these are big -- in some cases the biggest -- companies with many layers and complicated structures. They cannot change direction quickly. They were forced to make a huge number of changes, very quickly. 

 

One factor that has helped retailers immensely through this past year has been the incremental volume in the retail channel. The shift from food service to retail has delivered a year-over-year, same-store sales increase between eight and 10 per cent. This is a huge number and in retail, volume hides a lot of sins. There are four fundamental questions to ask about customers as you try to determine your approach to producing and selling in 2021:

 

1. How can you understand your customer better?
2. How can you support your customer better?
3. What is the definition of success with your customers?
4. What is your plan to communicate and develop your relationship?

 

Let’s explore each of these questions, keeping in mind the influences of the pandemic.

 

How can you understand your customer better?

 

There have been some significant changes to retail food in the past 12-14 months. Obviously one of them is the shift in sales from one channel to another. Retailer’s priorities change and having the right amount of product at the right time is more important than ever. We have moved past the panic buying and in stock position has been much better. Talk to your customers about volume. When it comes to supporting them, they need inventory so try to understand what they will need and when. I prefer to put a position forward and then let them comment on it to ensure you are able to produce what they think they will need.

 

The retail environment has changed a lot. Make sure you get into the stores to look at how they are merchandising your products and others in the category. Staff in stores are being asked to do their jobs differently so perhaps there are things you could do to reduce some of the work at the shelf? 

 

One big change for many retailers is the amount of product being purchased online. Prior to the pandemic this number was very low in Canada but many consumers are now choosing e-commerce. You can review your customer’s website to ensure your products are there and correct. They are managing many thousands of SKUs and if yours is not there you will both miss sales.

 

How can you support your customer better?

 

When resources are stretched everything has a better chance of working when each member of the value chain delivers what they are supposed to. Look both ways in terms of your own suppliers and the retailers you supply. Check inventories of packaging and inputs to ensure you will be able to produce what is needed, when it is needed. When you do have everything, you need to deliver it on time in full and meet or exceed expectations for quality.

 

Consumers are shopping differently. With so many people working at home the volume is spread out more through the week. It is possible your customers want to change the amount of product early in the week and less at the end of the week. When you ask the question, they perceive you to be interested and knowledgeable about their business.

 

What is the definition of success with your customers?

 

Now is the time to talk to your customers more than ever. The market continues to change so you need to understand what they expect. We might not always want to hear it but it is better when you know how your performance will be judged.

 

Using what you do know about their sales and service level, you can build your plan for the season. It is important you both agree to the plan. They might see a change coming in summer months and you will need to know what they are thinking. It is tough to forecast sales but you need to agree on what will happen in the market.

 

What is your plan to communicate and develop your relationship?

 

Many people are working from home, including category managers. You might have to communicate differently with them in this environment. My experience would be more frequent communication but shorter meetings. In the past you might schedule a one-hour meeting at the office. Now you can accomplish a lot in a 30-minute video call.

 

If your product is available for a limited time you can schedule calls during the season to make sure things are going well for both the supplier and the customer. Shorter calls with greater frequency can be beneficial during the season.

Consumers want to know more about where their food is coming from. Plan to tell your story. It is also beneficial to share what you are doing with retailers. They are also more interested in being part of that story. You might have to develop relationships with different people within their organization. Category managers manage categories, they do not deliver social media marketing. 

 

As you consider each of these questions for your own products, think about what should be done in 2021 to maximize the opportunity. It is a very different environment for selling food and there is potential for producers, processors and retailers who respond to the rapidly changing environment.

 

WHAT’S IN STORE?

 

We continue to see more space devoted to plant-based products. Even during a pandemic some shelf space is being converted from other categories to make room for this expanding listing base.

 

Retailers are also offering incentives to get consumers into the category. Purchases of these products are not limited to vegans. Many consumers are eating a flexitarian diet. They might still eat beef, pork and chicken, but they might be enjoying one or two meals per week with plant-based protein.

 

 

Sidebar:  Walmart to close six stores across Canada

 

On March 15, 2021, Walmart announced the closure of six stores while underlining the record $500 million investment in other brick-and-mortar stores and e-commerce. This includes the launch of the retailer’s first automated market fulfilment centre inside the Scarborough West Walmart Supercentre in Ontario. 

 

The closures will affect: 

- Calgary, AB (Deer Valley)

- Edmonton, AB (Abbotsfield)

- Hamilton, ON (County Fair)

- Kitchener East, ON

- Malton, ON

- St. John's, NF (Topsail Road).