Coca-Cola’s Big Strides with Smaller Packaging

By Jennifer Hoffman

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If you’re familiar with the hit television show, “Mad Men,” you know it ends with a reference to Coca-Cola’s iconic “I’d Like to Buy the World a Coke” ad. For the main character, Don Draper, Coke was the ultimate creative account. It’s a widely consumed beverage enjoyed by both young and old, with a certain nostalgic element. This ad also serves as a prime example of Coca-Cola’s ability to reinvent itself over time.

The brand’s creativity has been put to the test in recent times. Today, it’s quite a challenge to be in the soft drink industry as the public has become increasingly aware of the sugar content in foods and beverages. Last summer, a Gallup poll revealed that there were only three types of food that 50% or more of Americans say they actively try to avoid—diet and regular soda and sugar. In 2002, 41% of Americans said they are trying to avoid soda, compared to the 61% who say so now.  Gallup concluded, “This is a drastic change from just over a decade ago.”

Coca-Cola has experienced the effects of this changing consumer climate. Sales have suffered dramatically here in the U.S. But recently, there has been some encouraging news for the company. Coke’s global soda volume sales rose in the last three months of 2015.

When put against the ropes, Coke responded with smaller packaging. The goal is simple: downsize the container to boost sales. Mini cans and bottles allow the company to save money on aluminum and glass, while offering a new option to consumers who drink less soda. Studies have shown that consumers are incredibly responsive to labels, and Coca-Cola doesn’t attempt to hide the effects of its new approach, either.

One month before the Gallup poll results were published, Coca-Cola published a report on its own website titled, “Less is More: For Coca-Cola, Small Packs Mean Big Business.” Coke reports that while 12-ounce cans and 2-liter and 20-ounce bottles still represent more than 70% of the volume of bottles and cans of Coca-Cola sold in North America, “those package sizes are declining as consumers downsize to smaller options.” In the U.S., sales of Coca-Cola mini cans have increased at double-digit rates since they were first introduced in 2007.

Coke’s article also highlights how smaller packaging is a return to the brand’s roots, before the push to upsize in the latter half of the 20th century.

“When we were growing up, Coke was eight ounces and we’d drink it and go for that extra sip and wish there were more,” said Sandy Douglas, president of Coca-Cola North America. “That’s a good experience.”

Experience First, Sales Volume After

That focus on experience is ultimately what’s driving Coca-Cola today. The company’s focus is no longer just about meeting sales volume goals through quantity—it’s about selling the experience. If you think about that goal, the brand’s new global advertising campaign “Taste the Feeling,” makes perfect sense. The campaign reinforces that Coca-Cola is for everybody, said Chief Marketing Officer Marcos de Quinto.

“We’ve found over time that the more we position Coca-Cola as an icon, the smaller we become,” de Quinto said. “The bigness of Coca-Cola resides in the fact that it’s a simple pleasure—so the humbler we are, the bigger we are. We want to help remind people why they love the product as much as they love the brand.”

Takeaway: What changes in your product packaging can you implement to better serve today’s customers?

Related Topics

Topics: CPG

Your Out-of-Stock Problem Runs Deeper Than an Empty Shelf

By Brian Harris

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In your common retail “nightmare,” customers come into your store looking for a hot product, and you don’t have it. They walk out and you lose the sale. That’s the most basic definition of an out-of-stock. But the reality is that the out-of-stock problem runs much deeper than lack of product.

Out-of-stocks can occur for numerous reasons. Here are just a few:

  • Inventory reporting inaccuracies – a mismatch between basic supply and demand
  • Customer can’t find the right item – a planogram compliance issue
  • Customer can’t find the in-store promotional item – lack of product or lack of communication about product placement/materials
  • Poor customer service - inadequate staffing or lack of customer service knowledge

In other words, if the customer is not leaving with a purchase, it’s the equivalent of an out-of-stock.

How to Eliminate Out-of-Stocks

Retail out-of-stocks are not a new phenomenon. They’re an age-old industry problem that cost billions of dollars in lost sales every year, detract from customer satisfaction, and inflict costly damage on brands. But what has changed is the retailer’s ability to do something about out-of-stocks.

All of the previously mentioned scenarios have something important in common: They can be prevented with timely and accurate information, otherwise known as actionable insights.

Monitor Your Retail Programs

New merchandise programs take time and energy to roll out. Don’t let the effort of your planning go to waste. Checking for compliance throughout your network ensures that you’ve optimized store conditions, your employees are knowledgeable about the new product, and you’ve addressed any issues that may arise in the stores.

  • Verify planogram compliance to ensure products are placed correctly on the shelf and in the store.
  • Verify in-store displays and signage with a photo.
  • Verify compliance by region and individual location.

Now, do something with the information you’ve collected. More importantly, do something that goes beyond email or phone calls. In real time, you’ll be able to view important metrics concerning the product rollout. Have managers check in once the product hits stores and ask them to share a photo to verify the display.

Basically, don’t just say a prayer and hope that each store got it right. When you have the ability to pop into your stores from anywhere, you’re bound to see greater returns.

Sample Planogram Implementation Form

Topics: Retail, CPG

How CPG Rebate Verification Grows Your Brand

By Vladik Rikhter

supermarket-cpg-rebate

CPG (consumer packaged goods) rebate verification works a lot like the "gold star" system in grade school. When retailers are compliant and correctly execute the program the CPG company rewards these retailers with a monetary incentive. Both the retailers and CPG company benefit from improved sales.

Here is what a field merchandising rep should be looking for verifying a CPG rebate:

  1. Are the correct SKUs set up according to planogram?
  2. Are promotional displays set up correctly?

No free lunch: Of course, these two items should be part of the rebate agreement. Did a retailer actually meet sales and volume criteria by following the planogram? Is there enough product available, and is the facing correct?

When done correctly, CPG rebate verification programs will save your organization the money and time critical to growing your brand.

3 Advantages of digitizing CPG verification for rebate programs:

  1. Eliminates the “middle men” of paper sheets and Excel. There are no duplication of efforts in recording notes, taking photos, and sharing them with your team. All of this information is collected on a central platform.
  2. Easily verifies time and place. Mobile platforms use GPS location and timestamp, ensuring that your team knows when and where these photos were taken.
  3. Quickly generates reports with actionable results. The right program helps you work smarter, not harder. Ideally, you can set the system to alert you of exceptions.  

Remember: You know best when it comes to your brand! The CPG company needs its own process for verifying that retailers are reaching sales and volume criteria according to the agreed upon terms—the methods that are best for your growth.

Need Proof? Don’t just take our word for it. See how Zenput helped Jack Link’s capitalize on its large direct and indirect teams

Topics: C-store, CPG

5 Ways to Get More from Your Merchandising Audits

By Scott Hill

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So, you’ve revamped the way your field reps conduct merchandising audits. Now you’re using mobile software to track compliance from product facings and out-of-stocks, to planogram and promotional verification. You’re accounting for all of the merchandising variables… or so you think.

But what about those other store variables that may affect your bottom line? Are your field reps accounting for those as well?

Here are 5 things your reps should document while conducting a merchandising audit.

  1. Neighboring Products
    Two things don’t exist in a vacuum: Art and CPGs. What products are next to yours? This is another variable to account for when determining the best shelf location for your product. Don’t forget to snap a photo!
  2. Marketing Materials
    These materials go beyond the in-store promotions your team created. It can include promotional displays, stickers, posters, signage and radio spots. If you’re paying for this extra exposure, make sure your retail partner is in compliance. A feature like GPS is especially helpful for gathering individual store feedback.
  3. The Premises
    Maybe you’re a company with a food product or beverage, and you’re relying on the retailer to keep it clean and orderly. You have every right to monitor their compliance. Is the floor or restrooms dirty? Are the refrigeration and lights working? Property inspection should be part of your merchandising audit. Problems that extend past your company can be communicated in a professional way, so long as they are reported with photographic evidence.
  4. Knowledge of Average Store Employee
    Just out of curiosity, does the average employee know your product? Can they direct a customer to the correct promotion? Again, this could be more of a retailer issue than a merchandiser issue, but it could be affecting everyone’s bottom line. Be sure to ask your retail partner if you can question their employees in the field. There’s no need to make it the inquisition either—a couple of simple “yes” or “no” questions in your custom-built form will suffice.
  5. Follow Up
    You’ve complete the merchandising audit, so now what? It’s time to assign tasks from your findings. Hopefully your software as real-time exception notifications as well as the ability to assign tasks based on those notifications. Compliance becomes much easier when tasks are assigned to specific stores and senior management can track their progress by region, district, or team.

To watch a video overview of Zenput and learn how the mobile app integrates with CPG operations, click here.

Topics: Retail, CPG

Bridge the Gaps in Planogram Verification With Zenput

By Scott Hill

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A planogram is a visual diagram that details where every product in a retail store should be placed. No detail is spared when creating a planogram. The schematics usually present a flow chart for the particular departments or sections of a store, and what aisle and what shelf each product is located. A planogram also shows how many facings are allocated for each SKU.

What does a planogram look like?

It can be as simple as a photo of a preset section or more detailed with numbered peg holes and shelf notches. Of course, the complexity can vary by the size of the store and the needs of the retailer.

See Also: How to Implement and Verify a Planogram

Other than helping with product placement, what is a planogram’s purpose?

Here are the two realities of retail in today’s world: 1. Competition is increasing. 2 Channels are blurring. A planogram assigns selling potential to every square foot of space, helps to maintain tighter control of inventory and can serve as a effective communication tool for staff-produced displays.

However, planogram creation doesn’t occur in a vacuum, nor does planogram verification.

Zenput bridges three gaps in retail execution:

  • The gap between creating a planogram and verifying it.
  • The gap between planogram verification and identifying actionable results.
  • The gap between identifying actionable results and carrying them out.

With Zenput, a planogram audit is carried out in four steps:

1. On their desktop or mobile device, a senior manager uses Zenput’ flexible platform to create the Planogram Audit Form  with prompts and fields of measurement. Some questions may be simple “yes” or “no” responses, while others may require an employee to input a price or scan a barcode. Ideally, the planogram audit also requires photos of a completed promotional display.

2. The senior manager attaches the visual planogram for reference. There’s no need to email or print out copies; this file is accessible on Zenput’s cloud-based platform.

3. The senior manager uses Zenput to create a new planogram auditing project with a deadline. The task of verifying the store planogram is assigned to all store managers. The senior manager can track submission statistics, and Zenput’s integration with Google maps pinpoints tracks when and where each submission occurred.

4. Senior managers can verify planograms once the forms are submitted. Real-time exception notifications can alert the retailer to a problem in a store. For instance, if a store in the network does not submit photos for verification, the senior management team will be alerted to find out why. Or, perhaps photos were submitted but the senior manager notices something is awry in the product display.

Either way, auditing the planogram results in actionable insights. Error in retail execution can be addressed that same day, rather than waiting for a weekly sales report to reveal problems in merchandising strategy.

Sample Planogram Implementation Form

Topics: Retail, C-store, CPG

Why Pumpkin-Flavored Everything is Here to Stay

By Brian Harris

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If it seems like the calendar flipped to September and everyone started talking about pumpkin-flavored products, it’s not your imagination. Get ready for the great pumpkin invasion, as coined by Nielsen.

Since 2011, sales of pumpkin products have grown 79% and last year, sales accounted for more than $361 million. A large slice of the pie is-- well, it’s actually pie filling, with $135 million in sales. As seen in the graphic below, however, there are a variety of consumer packaged goods (CPGs) contributing to the sales.

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Interestingly enough, sales of fresh pumpkins have been declining in three of the last four years, while indulgent treats, dips and sweets continue to steadily increased. We see evidence of this trend in Hostess fall product lineup of Pumpkin Spice Cupcakes and Maple Glazed Donettes.

But pumpkin-flavored cookies and cakes are merely grazing the surface of fall-flavored CPGs.

How big is pumpkin? Big enough for People to compile “The Comprehensive Guide to Pumpkin Spice Flavored Foods.” I’ve organized some standouts by category:

Breakfast Foods

Kellogg’s Frosted Pumpkin Pie Pop Tarts
Quaker Pumpkin Spice Instant Oatmeal
Pumpkin Spice Mini Wheats
Kashi Pumpkin Spice Flax

Pumpkin Spice Coffee

Keurig McCafe Pumpkin Spice Coffee
Bailey’s Pumpkin Spice Coffee Creamer
Starbucks Instant Pumpkin Spice Latte

Don’t forget the Baileys Pumpkin Spice Coffee Creamer!

Bakery

Keebler’s Fudge Striped Pumpkin Spice
Nestle Toll House Pumpkin Cookie Dough
Pepperidge Farm Pumpkin Spice Swirl Bread
Pepperidge Farms Pumpkin Spice Milanos
Nonni’s Pumpkin Spice Biscotti
Pumpkin Spice Oreos

Confectionery

Nestle Pumpkin Flavored Morsels
Hershey’s Pumpkin Spice Kisses
Pumpkin Spice Latte M&Ms
Just Born Inc. Pumpkin Spice Peeps 
Nestle Toll House Pumpkin Cookie Dough

Dairy

Chobani Pumpkin Spice Greek Yogurt
Yoplait Greek 100 Whips! Pumpkin Cheesecake
Ben & Jerry’s Pumpkin Cheesecake Ice Cream

Salty Snacks

Planters Pumpkin Spice Almonds
Boulder Canyon Pumpkin Pie Flavored Chips 
Food Should Taste Good Harvest Pumpkin Tortilla Chips

Cheer to Pumpkin Beer! 

I was surprised to see pumpkin beer in August this year, but an earlier release makes sense when the general consensus among brewers is that consumers stop drinking pumpkin beer around Halloween. According to market research firm IRI, seasonal beer makes up 15 percent to 25 percent of the more than $19.6 billion in annual craft beer sales.

Pumpkin Alternatives

Don’t like pumpkin but still want to get into the fall season? People also profiles these flavors for “pumpkin spice haters”:

Apple Cinnamon (of course!)
Brown Butter
Candy Corn
Chai
Pecan Pie
Salted Caramel
Snickerdoodle

...But did I mention there’s such a thing as Khalua Pumpkin Spice Coffee Liquer? OK, I’ll stop now.

Topics: CPG

CPG Industry: Do You Know The Status of Your $300B?

By Scott Hill

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Did you know that each year the consumer packaged goods (CPG) industry spends $300 billion on trade promotions? According to a Data Informed article, that’s more than 17 percent of revenue at an average CPG company and nearly twice the marketing budget.

With the stakes that high, business must be booming at these companies, right? Think again: More than half of all promotions fail to deliver a positive return on invest, and many lose 50 cents on the dollar.

Let’s face it. Promotions can either be a gigantic success or a colossal failure for your bottom line. Or, maybe they fall somewhere in between, making the executive team wonder what could have been done differently. It’s time to take the guesswork out of promotions. And no, I’m not talking about running point-of-sale software after Week 1. I’m talking about finding out what’s going on in your stores at any time.

Think of CPG Promotions Like Social Media

The human race is connected to each other through social media in ways that have never existed before. At any given moment, you know if your best friend is dating someone, what she ate for dinner, or how annoying her commute was. It’s time the CPG industry starts treating promotions like a social media experiment. Spy on your promotions. Gossip about them with your team. Try to tweak them, like you would crop that terrible photo of yourself or edit that misspelled comment. It’s time we start looking at promotions through the lens of human behavior and all of our glorious imperfections.

Why wait to learn from mistakes when you can jump in and fix the issues that are affecting your bottom line? It just makes more sense to utilize real-time data, and it’s feasible with 21st century technology, including mobile devices.

Just like a digital company launches social media campaigns, test campaigns with your new products. See what works before rolling it out across your network, and use that valuable time to adjust the offering.

Even on your corporate social media account, you (hopefully) wouldn’t let a week go by without checking your messages. Don’t let the same interval of time pass before learning about your promotions from the field.

Topics: CPG

Rewinding the Clock in Packaging

By Brian Harris

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About a year or two ago, out of sheer curiosity, I asked my friends, part of the Millennial generation of consumers, about the types of products they’d like to see at convenience stores. Not to my surprise, they indicated their preferences for unique flavors and fresh foods, which are well-documented c-store trends among this age group.

One response, however, did surprise me. One of my friends lamented that there were not enough old-fashioned soda fountains in retail today.

Really? Old-fashioned soda fountains? I thought it was odd until I read about 7-Eleven’s high-tech store in New York City’s Financial District. Lo and behold, the store offers beer tap-style beverage dispensers.

What’s the deal with Millennials and their odd cravings for nostalgia? Huffington Post contributor Elena Weismann theorizes that this is a generation that has grown up with “unparalleled accessibility to the past.” It’s why in today’s packaging, mason jars, old apothecary bottles, stencil graphics and plain white paper wrapping are “in.” It’s also why in the past few years, we’ve seen the resurgence of clean, nostalgic designs. These packaging innovations are conveniently showcased in Buzzfeed’s 34 Coolest Food Packaging Designs of 2012.

Ironically, Millennials often complain that CPG companies are trying too hard to get their attention, but here is an entire listicle devoted to packaging. (Millennials, you are asking for it when your go-to hub of viral Internet content posts such an article!)

Sure enough, CPG Marketing Trends saw Buzzfeed’s article and published a reactionary piece. CPG contributor Brad Hanna pointed to findings from a Brand Amplitude study, which found that Millennials seek healthy, sustainable, on-the-go choices. They also look to purchase these foods from convenient locations that provide quality and efficiency, as well as speed. Lastly, innovative cartons and pouches, like the ones seen in Buzzfeed’s article, help create new perceptions about the food inside.  

This is a particularly interesting point. Millennials aged 24 to 35 perceive carton packaging to offer healthier and fresher items, while being better for the environment. Grab-and-go and sustainability are two trends that are here to stay in the convenience channel. Bottles, cans and jars are also recyclable and reusable, indicating how “innovation collides with old-school,” writes Hanna.

“The key for big brands is finding the balance and daring to try something fresh. It’s what Millennials are looking for,” he concludes.

Topics: CPG