What’s wrong with the (fill in the blank) category?
Through a special arrangement, presented here for discussion is an excerpt of a current article from Frozen & Refrigerated Buyer magazine.
On April 9, The Wall Street Journal opined that “Yogurt’s big sales run has expired.” What’s interesting is that yogurt’s troubles are symptomatic of what’s happening in many categories. Those struggles provide a good template for studying other categories with soft sales.
Why are sales declining? Yogurt sales dropped to $7.1 billion annually from $7.7 billion three years ago. The Journal says vendors blame retailers for cutting prices and paring shelf space. I hear that all the time about every category and it’s nonsense boiled in vegetable oil. Vendors push prices lower in a bid for market share in a competitive market. Retailers take whatever slotting, promos and funny money is offered — happens in every category. So, why are sales declining? Changing consumer preferences. Sure, there could be waning interest in the category as a whole. More likely, it’s inadequate product curation.
Why has shelf space been cut back? Sales declined, so space was cut back. Retailers want to make money. Although they do silly things sometimes, most put their faith in key business ratios. For my money, yogurt has been over-SKU’d and overspaced for several years. Some retailers respond and quickly meet shopper needs in troubled categories. Some don’t.
Are the fastest growing segments getting their share of space? This isn’t rocket science, but reaction on the shelf can be abysmally slow. Anyone in line at the movies also knows that people are clamoring for healthier, more organic and natural foods. Yet when I visit a supermarket yogurt set, the typical planogram, with 306 different varieties (by Acosta’s count), is duplicative and confusing. Too many choices overwhelm the shopper. What’s needed is better SKU curation storewide along the lines of consumer wants and needs. Do you have an adequate representation of niche and local brands that are in high demand and can help you differentiate? Items with less sugar and more plant-based product are up by 20 percent, or about 10 times faster than the growth of all food, Nielsen says. I see too few of these fast growers in many shelf sets while I’m walking stores. Just sayin’.
- Frozen & Refrigerated Buyer May 2019
- Yogurt Sales Sour as Options Proliferate – The Wall Street Journal
DISCUSSION QUESTIONS: What strategies and tactics should retailers and vendors follow when a formerly hot category begins to decline? Does yogurt’s loss of momentum offer any particular insights or warnings about how retailers are approaching category and assortment planning?