A few simple things to consider:
You own a premium brand, annual sales volume is pretty consistent – even with all the small batch and flavor extensions crowding the market. Your average retail stocking hovers around the upper-90% range, the brand primarily stocks on the eye-level shelf, average facings are respectable at around four per store.
Your wholesaler and marketing team are doing a good job, right? Maybe. Maybe not.
First of all, brand performance is not simply a point in time. Performance needs to be evaluated over time. Your stocking may appear solid but merchandising metrics are rarely static; there’s often a lot of movement under the surface. For instance, you can have a healthy stocking percent today and even in prior periods, however stocking is a measure of product availability; the stocking average doesn’t factor whether you have one facing or many, one size or all sizes, if your product extends along one shelf or is scattered among shelves. The ah-ha! moment.
Some things to look at: is your brand stocking in multiple sizes? Were those same sizes also available a year ago? Or, are category dynamics squeezing you? Are average facings for the brand and by size holding? Are retailers stocking the same number of SKUs versus last year?
Let’s look at an example and, trust me, there are more just like this one. Canadian Club 6yr. has been a popular, category staple for many years. Volume was up 1% to 1.2million 9-liter cases, as reported in the Beverage Information Group’s Handbook Advance. Retail stocking, as reported by ShelftracTM has grown from 91% of stores in December 2013 to 98% of stores in a year’s time.
This is great news, until you dig a little deeper into the shelf metrics. Average number of facings has shrunk one whole facing to 3.5 verses year ago. Above eye level stocking is down by half, at-eye stocking is down 6%, waist level is flat at 31% year over, and knee/bottom shelf stocking has almost doubled. More stores are stocking Canadian Club but it’s being relegated to the lower, less consumer reach-friendly shelves. And there is more. The number of SKUs carried by retailers is also shifting. The number of stores stocking four or all five popular SKUs has shrunk by 26% from December to December, while the number of retailers stocking just one SKU has grown 46%. Examining the brand’s availability by size shows that retailers are reducing stock of 175L (by 16%) and 1L (by 13%) while keeping 750ml and the smaller sizes equally available year-over.
Percent of stores stocking a brand isn’t everything. The quality of that stocking is what really counts.