Driving distribution of your best products

All growth strategies in FMCG can be classified as one of two things.  Either they are about delivering new or improved products, or they are about finding new places to sell existing products.  Traditionally FMCG companies have devoted more effort to the former.  We believe the latter deserves equal focus.  We call this “backing winning products”.

Why?  There is a lot of risk for food manufacturers in product innovation.  Fancy investing in a new factory line?  Knowing that most FMCG product innovation fails?   With large supermarkets achieving little or no growth, and now looking to reduce range?  It feels pretty risky.  But there are juicy growth opportunities online, in convenience stores, in food service and overseas.  Isn’t it wiser to focus on getting your best existing products, on sale in such places?

So if you want to back your existing winning products, and drive them into wider distribution, how do you go about it?

First, you need to be crystal clear which your winning products actually are.  Which sell at full price, not just on promotion?  Which hold their place on shelf without question?  Which offer something that competitors cannot?  We know of a snacking category where one brand has refused to promote, but succeeds because its “eat” is so unique.

Next, take those products deeper into UK grocery.  Deeper within your existing customers (more formats, more stores, more locations in store).  Deep into new customers (other supermarkets, convenience stores and Discounters).  Almost every brand we’ve worked with has big distribution opportunities by this definition.

Third, push beyond Grocery.  What about other Retail (e.g. Poundstretcher, B&M, Home Bargains)?  All are growing strongly.  If you have been focussed on the UK, what about overseas?  And what about Food Service?  In a premium category we know, an SKU in one Foodservice player sells fifteen times more per store, than in the equivalent retailer.

Does focussing on finding extra places to sell existing products, mean that product innovation will die, and our industry will suffer?  It should not.  The way the world wants to consume will forever change, and our industry must keep up.  All we’re saying is that when you know you have a winning product, then invest as much effort into finding more places to sell it, as you did into inventing it.  Coca-Cola didn’t get where it is today by inventing lots of different drinks.  But it worked and worked to get Coke “within an arm’s reach of desire” – on sale and highly visible wherever people might seek refreshment.

Jeremy Garlick is a Partner of Insight Traction, consulting with FMCG companies.  He was formerly Head of Insight at Sainsbury’s, Waitrose and Premier Foods.