CPGmatters: Kraft Foods Scores with ‘Wall-to-Wall’ Strategy

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Jul 07, 2009
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By Dale Buss

Through a special
arrangement, presented here for discussion is a summary of a current
article from the monthly e-zine, CPGmatters.

In the low-margin
grocery business, every one percent – of anything – counts for a lot.
By that measure, Kraft Foods’ new strategy for deploying sales reps in
stores has been a big success. Called Wall-to-Wall, it has single-handedly
boosted sales by more than one percent at the 16,000 stores where Kraft
has rolled it out.

In fact, after only
two years into the program in which individual reps now handle more brands
and fewer stores than before, one top Kraft executive is ready to declare
Wall-to-Wall a key piece of the company’s retailing arsenal.

"We’re happy with
our progress, and now we’re going to focus on optimizing it," Darryl
Brown, Kraft’s senior vice president of retail sales, told CPGmatters. "Wall-to-Wall
is a weapon that we can use to help the business long-term."

Before Wall-to-Wall,
Kraft maintained three separate organizations of store reps. One group
mainly handled Nabisco cookie and snack products and would be in any
given store three to five times a week. The second group handled the
rest of Kraft’s dry-goods portfolio and were in stores only every two
to four weeks. "It’s hard to sell incrementally when you’re only showing
up every 30 days,” Darryl Brown, Kraft’s senior vice president of retail
sales, told CPGmatters.

So, about two years
ago, Kraft collapsed the barriers between those two groups and created
a new Wall-to-Wall organization that now handles more than half of the
total of 30,000 stores with which Kraft does business. (Kraft’s third
group of reps still represents Kraft’s frozen-pizza brands separately.)

"We are in every aisle,
and Wall-to-Wall was an opportunity to give one face to the [retailer]
customer, so they could relate to ‘one Kraft’ coming in,” Mr. Brown said.
"Once we gave them one face to go to, the intent was to have that one
person become almost a consultant to store management to help them piece
together their product portfolio.”

Immediately, Kraft
noticed that the Wall-to-Wall reorganization provided a big lift in three
areas: easing out-of-stock situations, enhancing special in-store promotions,
and ensuring overall optimization of the merchandising of Kraft brands
in customer-specific ways.

"Our Number One issue
is out-of-stocks,” Mr. Brown said. "But now because we’re in stores more
frequently, we’re able to assist in that area.”

In promotions, he
said, Wall-to-Wall reps "can more easily partner with private-label or
other [brand] partners in the store to create in-store excitement.”

Of course, the progress
driven by Wall-to-Wall has come at a price: higher labor costs. For one
thing, Kraft has boosted compensation for reps who enter the Wall-to-Wall
program because of the richer mix of skills and higher levels of training
required for them to become successful.

"The old warehouse
reps were really focused on selling, not as much on merchandising,” Mr.
Brown said. "Now we need people who can understand the complexities of
all our product categories and bring them to life to make them sell.
We’ve got them representing multiple categories and multiple meal-usage
occasions that we weren’t able to bring to life before.”

Discussion Questions:
What do you think of Kraft’s Wall-to-Wall reps program? What are the
advantages and disadvantageous of having reps covering more brands
and fewer stores? What areas do you think such a program would provide
the most benefit?

Please practice The RetailWire Golden Rule when submitting your comments.

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20 Comments on "CPGmatters: Kraft Foods Scores with ‘Wall-to-Wall’ Strategy"


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Charlie Moro
Guest
Charlie Moro
11 years 10 months ago

This is a great change and reminds me of my days (long ago) as a grocery manager dealing with P&G. I would meet four to five different people that were specialized in all the different aspects of soap to snacks, to laundry…to whatever. It was the most confusing part of keeping track of what part of the brand they covered. All I wanted was one person to cut through the clutter, lay out a plan and free me up from having 4 more conversations.

This has to make Kraft more valuable and value-added to their customers.

Nikki Baird
Guest
Nikki Baird
11 years 10 months ago

Hmmm…. This sounds an awful lot like a localization strategy at play. I’ve only seen this executed to this degree in one other place–and that’s at Follett Higher Education Group, where they organize their merchandising teams by school, not by product line. The only way to be sure you know individual markets well enough to successfully localize is to organize by market, not by product (at least, as you get closer to execution).

The very interesting thing that Kraft proves is that while it is a more expensive way of doing business, the results more than pay for the incremental cost–at least in their case.

Ben Sprecher
Guest
Ben Sprecher
11 years 10 months ago
In a world where few chains share detailed sales data with the brands, a program like Kraft’s Wall-to-Wall makes sense–it’s the only way to keep an eye on the nitty-gritty of store-level operations. Unfortunately, you have to have a brand portfolio the size of Kraft’s in order to justify the added costs per store. For the other 90% of the products in the store, a similar program would either cost too much or spread the reps too thinly across multiple stores. To benefit all products in the store, chains must become more transparent with their sales data. Sharing detailed sales data with brands in a controlled, secure way can be a very expensive proposition, and the cost and difficulty has been an impediment for all but the largest chains (notably, Walmart and Kroger *do* share sales data through Retail Link and dunnhmuby, respectively). Only now are the technologies becoming available to make the process inexpensive and easy for chains of all sizes. And what’s in it for the chain? Well, the Kraft program illustrates the… Read more »
Gene Detroyer
Guest
11 years 10 months ago

What took Kraft so long? This is what food brokers have been doing for over 50 years.

The commentary misses the single biggest benefit: that is, building a relationship with the store management and personnel. Even in controlled chains, relationships built at the store level can accomplish significant results. And, when that relationship is really strong, somehow out-of-stocks go down, displays are restocked and the competition doesn’t do quite so well.

J. Peter Deeb
Guest
11 years 10 months ago

This is a classic case of “back to the future”! I competed in stores against Kraft Reps in the 70s when they touched every item in the store and some of them had only 5-8 retail stops. In those days, before more sophisticated Category Management and Shelf optimization, the Kraft rep owned the store. There is no reason why they can’t be just as effective today!

This can still be a relationship-based business, particularly at the individual store level and improving out of stocks, better merchandising of headquarter driven promotions, and assisting the store in creative in-store merchandising will definitely drive sales for Kraft and hopefully, for the retailer.

Steve Montgomery
Guest
11 years 10 months ago
I agree that this is a great idea as long as it can be executed. As the article points out, the skill sets to do so are greater than were required in a segmented model. Naturally the more alike the items are, the easier and more likely successful it will be. For example, I don’t see PepsiCo doing this with it Pepsi, QTG and Frito lines. As noted, Kraft elected to keep it frozen pizza line separate (I assume for this reason). While it didn’t mention any impact on SKU rationalization, I wonder if it also helps Kraft keep items in the line up that would otherwise have been reduced or eliminated. With someone in the store who is concentrating on a limited numbers of SKUs, it is easy to see why it would have a positive impact on OOS, promotional opportunities and overall merchandising. It appears that the cost for Kraft is outweighed by the benefits. I am sure companies with fewer products would find it necessary to have their reps cover more stores… Read more »
David Livingston
Guest
11 years 10 months ago

I like this program. It gives Kraft a more intimate knowledge of the stores they are selling their products in. The sales reps can learn on a store level the unique characteristics of each market along with the operations aspects of each supermarket.

I recently met with a Kraft exec and found one benefit is they know sooner when stores will be running into cash problems and can adjust their credit exposure. Their reps will see first hand the telltale signs of financial difficulties.

David Biernbaum
Guest
11 years 10 months ago

The most important variable in the Kraft “wall-to-wall” sales coverage program is that local reps are developing personal service relationships with store managers and in-store personnel. This is a throwback to the ’60s and ’70s and it’s very positive as long as the sales organization is properly managed and motivated to be “real” and excellent.

Mel Kleiman
Guest
11 years 10 months ago

Better training.
Higher level of expertise.
Consultant selling.
More interesting job.
Better compensation.
Stronger relationships at the store level.
More control for the sales person and the local manager.

What took so long to get there?

Herb Sorensen
Guest
11 years 10 months ago
I see this as one component of what I call “The Return of Personal Selling to Retail.” I will be doing a keynote on the subject at the Shopper Insights conference in Chicago next week (5:30pm on Wednesday.) Admittedly, wall-to-wall has a strong retailer-Kraft component, but putting sales people in the store, with direct exposure, if not contact, with shoppers, has to raise the shopper selling expertise of Kraft. A good part of what is wrong at retail is that it is nearly devoid of genuine personal selling skills, largely supplanted by a promotional machine that often acts in ways oblivious to what is really going on with shoppers in the store. And this as just as true of retailers, as it is of their brand suppliers. Both of these parties “target” shoppers without any real engagement, which is left to “marketers” and “agencies” and other non-holistic, non-personal, pieces of the sales puzzle. And this move by Kraft reminds of the path taken by P&G in moving from their “seven dwarfs” that called on retailers… Read more »
Ben Ball
Guest
11 years 10 months ago
Many of the posts here compliment the Kraft W2W effort, but then ask “what took so long?” or refer to the effort as “back to the future.” Both comments are fair. Here’s at least a partial explanation. The article does not make mention of the screening process that went into deciding which stores would receive coverage. Multiple criteria were used, of course, but one Kraft has discussed in other forums is the ability of the rep to impact the store. “What has taken so long” is a combination of two factors. The first is retailer initiatives to centralize store operations, reducing manager discretion to approve any variations to the planogrammed programs for the store. This along with clean aisle policies and similar caused the second: manufacturers reduced their investment in retail because “the rep’s can’t do anything in the store anyway.” We talk a lot about collaboration and partnering today. Perhaps the best “back to the future” aspect of W2W is the cooperation between empowered store managers and responsible manufacturer’s representatives to do the right… Read more »
Richard J. George, Ph.D.
Guest
11 years 10 months ago

The biggest advantage of this program, beyond those noted in the article, is the physical presence of Kraft personnel in the store aisles. Their presence combined with some observation skills could provide Kraft with “troops in the trenches” interacting and watching the behavior of shoppers. While their primary role is merchandising, nothing precludes them from being Kraft ambassadors as well as another set of eyes and ears to the market place to complement the formal research efforts of Kraft. In essence, each of the Kraft personnel becomes a Kraft merchant.

Gordon Arnold
Guest
11 years 10 months ago

Flooding the retail sales floor with vendor “Product Barkers” free to roam and pounce on the shoppers will produce those effects found and discussed in “WALL-TO-WALL STRATEGY.” And in a very short amount of time it will produce fewer shoppers in the store.

Retail customers walk in the door with a specific purpose in mind and do not want to be interfered with while on this mission, which usually ends at the cash register. Big ticket information seminars, 24 hour tech hot lines and product awareness booths with printed information and practical low/no cost samples are expected and appreciated. A good understanding of what is going on with floor traffic is best obtained by being there to help and observe only.

jay heinrich
Guest
jay heinrich
11 years 10 months ago
The Kraft move to more intensive retail support is logical, beneficial and cost effective. All major CPG manufacturers used to merchandise at the retail level and gained enormous advantages in “owning” retail data, shelf merchandising and in-store promotion. In-store merchandising is basically maintained at HQ level now with limited ability to manufacturer incremental sales at the store level. However, shelf management and data gathering can be a major competitive advantage. General Foods (prior to Kraft’s purchase) had an automated retail reporting system giving management clear visibility to conditions at the store level. In today’s world manufacturers could have visibility to store conditions on virtually a real time basis. The advantages are obvious for the manufacturer and retailer. Cost cutting initiatives forced manufacturers to reduce the dependence on “retail” service personnel. With retailers demanding incremental spending to defray costs, manufacturers had no alternative but to sacrifice retail activity to fund alternative expenditures to the retailer. With brokerage fees escalating it may be time for manufacturers to revisit the benefits of utilizing retail representation. Especially in high… Read more »
Mark Price
Guest
Mark Price
11 years 10 months ago

There is no question that having a single consistent contact for the customer will result in superior performance, when that contact is (1) trained to a high level of competency in the broad array of products and (2) when the contact is in the store very frequently.

What keeps most companies from executing that strategy is the labor cost. As companies have increasing pressure to manage SG&A and their overall earnings flow, the tendency is to try and manage their way out of trouble by trimming labor. The only way Kraft can continue to achieve success with this strategy is to avoid “getting cheap” and maintaining the focus on highly trained reps and a high-contact strategy.

Lee Peterson
Guest
11 years 10 months ago

This is not a new strategy as Home Depot’s been doing it with tool vendors for years and to go back further, the cosmetics companies have been doing it in department stores for close to a hundred years. So, there’s history that it works, or, given department stores’ demise, that it in fact doesn’t work for the store (vs. the vendor).

Having said all that, isn’t it actually just a sad comment on the state of grocery retail? What does it mean when you give up your aisles to another brand and another brand’s associates? Isn’t there a certain control of your retail environment that you’ve just given up? Are those associates concerned about the rest of your store? Sad that the store’s owners would throw up their arms and let it happen.

Joan Treistman
Guest
11 years 10 months ago

The applause meter is way up there on this strategy. Most of the comments focus on the back to basics nature of Kraft’s initiative. Part of their strength is that Kraft is willing to consider innovation that has a 360 degree perspective grabbing whatever works out of their tool kit.

The wall-to-wall approach undoubtedly integrates technology that wasn’t available in the past along with the face to face contact that insures thorough coverage and forward momentum.

Kraft is not stuck in the past or in the future, but clearly striving to make the most of what they can do in the present.

James Tenser
Guest
11 years 10 months ago

Kraft’s W2W program hints at what is possible if we pay real attention to store performance. The story as related so far focuses on the way Kraft organizes and deploys its people to the stores. I think the industry would be interested in learning more about what tools and practices it is applying to enable them.

Of significant importance: How is Kraft relating its W2W activities to measures of merchandising performance? Are outcomes shared with the participating retailers in a way that is both managerially useful and shopper-centric?

This is one of the very important cases in the realm of In-Store Implementation. Kraft is a leading actor in this respect and its Wall-to-Wall program is worthy of ongoing close attention.

Ralph Jacobson
Guest
11 years 10 months ago

This is great! Kraft gets it! 30 years ago when I was in the stores, the reps who showed up had the best in-stock conditions–for many reasons. Isn’t that what it’s all about? Now 30 years later, we still have 10%+ out-of-stocks, and we’re all so surprised to see that hands-on store visits are working wonders. I’m more surprised that more CPGers don’t do this. When was the last time they visited a store after 6pm and looked at their items?

Kai Clarke
Guest
11 years 10 months ago

Kraft is going back to the merchandising that manufacturers used to do, and which really worked, 20-30 years ago. Higher frequency, lower store calls and more valuable visits all combine to make the merchandising force more important, more impactful and successful. This means that this strategy creates a successful position for the product, eliminates out of stocks, drives premium shelf presence and ensures that products are where they are supposed to be merchandised, when they are to be merchandised, for the correct price. Success, success, and more success will always be the result of any effort that uses these metrics for their focus. Go Kraft!

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