With a whopping 50 per cent share of crisps and snacks within the independent retail sector, PepsiCo is a company worth listening to. Asian Trader caught up with Matt Goddard, the company's Head of Field Sales (Grocery & Impulse) to hear how stores can grow their sales.
Matt Goddard, Head of Field Sales (Grocery & Impulse) at PepsiCo UK, says the company is passionate about independent retail.
The passion is understandable.
Among the independent retail sector PepsiCo has a market share of just over 50 per cent of the crisps and snacks market with the all-conquering Walkers brand.
With such a huge share of what is clearly an important category for independent retailers, Goddard sees PepsiCo having a responsibility to drive some of the category's growth in the future. “Crisps and snacks continues to be an important category for independent retailers just like it continues to be an important category for us,” he comments.
In the last 12 months PepsiCo has had a host of activity in the independent sector.
The company has ranges that are exclusive to independent retailers including the value snacks range, initially launched just over two years ago. With PMPs selling 20 per cent faster than non-price marked packs, PepsiCo started price marking the 39p value snacks at 3 for £1.
PepsiCo has also brought some of its brands from around the world to launch in impulse, such as Cheetos, introduced earlier this year.
“It is one of the things people have been asking for on social media for years so that was cool to bring that into the UK around June this year,” Goddard commented. “That is the kind of stuff people expect us to do.”
Stuff people expect the company to do less, but which is even more important, is thinking about route to market and how it supports independent retailers.
A good example of that this year has been the reduction in case counts from 48 packs in a case to 32.
“Being an independent retailer is really tough,” Goddard explains. “You have got less than 3,000 sq ft and you have got to provide the right offering for your shoppers. Cash is king and while you have got stock in your store it is tying up your capital and that is really important in the current climate.”
The case size reduction has helped independent retailers with their cash outlay. Traders have been able to reduce the capital that is tied up on the shelf while still being able to offer consumers the same range.
Another way in which PepsiCo supports independent retailers is the work of its field sales team.
In 2017 the company is planning on having over 600,000 conversations with independent retailers, which Goddard calls a “ridiculously large number of interactions.”
Ever since Goddard has been in his current role the field sales team has been growing.
“We have been investing in the team, we have been getting more people, we have been talking to more retailers more frequently,” he enthused.
Add all those components up and by the end of this year PepsiCo will have the biggest team it has ever had calling at its highest level of frequency to independent retailers.
“We will have a conversation with any retailer who wants to have one back,” Goddard added. “One of our guiding principles over the last 18 months has been it is not about sending a field sales team to a certain fascia or a certain size store, will they or won't they do x, y, z.”
If retailers want to have a conversation about how to grow their business, PepsiCo will send somebody to their door to have that conversation and help them, Goddard promises.
He realises if PepsiCo can help retailers grow their business then that will help the industry and help the company's categories.
With PespsiCo having more conversations with retailers than ever before, it has been necessary to expand the field sales team. This is quite an investment for the organisation, human beings not being the cheapest thing to invest in.
“But we really see it pays the dividends, particularly with independent retailing being such a fragmented market,” Goddard pointed out. “The more conversations we can have with more people who want to grow their businesses the better it can be.”
The frequency of visits made by the field sales force to each independent store is already high, at every two weeks. Hundreds of field sales reps are making a visit every two weeks to tens of thousands of retailers nationwide, including both unaffiliated independents and symbol group retailers.
“The message is if you want to grow your business and have an engaged conversation, we will have that engaging conversation with you,” Goddard added.
The field sales team are on hand to help, whether with point of sale material, equipment or merchandising.
PepsiCo has the tools to move a fixture from one end of the store to the other. “We will invest the time if the retailer invests the will,” Goddard emphasised.
PepsiCo offers price marked packs all the way through its range, from a 39p PMP for its value snacks through to its sharing PMPs.
“We believe in PMPs, they sell on average 20 per cent faster than non-PMPs but then equally PMPs aren't for everybody,” Goddard pointed out. “So we offer both versions depending on your route to market.”
Goddard says PepsiCo continues to bring out innovation and NPD that is price marked as the company knows it helps the levels of execution in outlets and retailers get a higher rate of sale off the back of it.
“It has been a really interesting thing to witness over the last 10 years,” he observed. “When PMPs first came out people were very cautious about them. But if you look round the trade now, for a lot of retailers it has become the go to way of offering value and clarity to the shoppers about what is on offer.”
That same team that is going out talking to independent retailers is also talking to wholesalers, Goddard emphasises.
While promotions and listings might be set up at national account level, the team is in those wholesalers supporting the depots with the executions.
“We will create bespoke engaging point of sale to make sure those promotions come to life,” said Goddard. Recently PepsiCo has run the Barmy For A Sarnie campaign, with the different flavours alluding to various sandwich sauces.
The company has bespoke point of sale material for wholesalers to bring the campaign to life and drive awareness.
The field sales team is carrying out the same levels of activation in wholesale as in retail. PepsiCo also supports wholesalers on a local level through community facing activity and trade days. “It is great to be in cash & carries and have conversations with retailers,” Goddard added.
“When we talk to reps about understanding retailers and when we talk to retailers it is exactly the same message,” said Goddard. “It is about right range, right display and right location.”
The right range is all about stocking the best sellers first. “It sounds very simple but it can also be very difficult to do,” Goddard added. “You only have to go round 10 different shops in one area and you will see lots of variations in the range.”
Therefore making sure retailers stock the best sellers is first and foremost.
Right display is making sure people can see those best sellers.
“There is no point stocking the best seller but putting it on the bottom shelf right out of the way where it is dark and dingy,” Goddard pointed out. “You have got to put the SKUs that are going to turn faster and make the most amount of money for you in the line of sight, you have got to make them obvious. You have got to use them to bring people into the category and then allow them to shop around there.”
Right location is about the points of interruption in-store. The right location might of course be the main crisps and snacks category but it could also be about secondary siting.
“Crisps and snacks is an impulsive category, is it in an impulsive location such as at the till point, have you got it where people can see it?” Goddard asked.
Equally, since the huge growth of sharing bags, a lot of sharing products are purchased with other products in the store.
Retailers can also put sharing products near beers, wines and spirits in the store, Goddard suggests.
“It is about putting your standard bag crisps, your 50p price marked packs near the chiller if you sell sandwiches,” he added. “If you are an on-the-go outlet how do you put juices next to Quaker pots so you can get people to start picking up a complete meal solution?
“Our mantra is definitely about right range, right display, right location. That is the drum we beat, whether telling our field sales guys on the front line, talking to the trade press or talking to retailers.”