I’ve been to plenty of trade shows in which food products are sold, primarily as gift items, for example dried fruit, nut mixes, candy and so on. Just about any packaged food can be a gift item. Like any other item at such shows, the proprietors and reps are writing orders like crazy.
Apparently at many food shows, this is not the custom. This strikes me as strange. Stores need products for their shelves. The time to write orders for a store is at a trade show when you see, and perhaps sample, the product. Why wait? Will anyone remember what something tasted like later?
Serious buyers have a buying plan, and they work it. The balance left to allocate at any time is called open to buy. It works roughly like this. There is the standard distribution in specialty goods, 80% reorders across categories and 20% new items.
Of the 20% new, they know how many dollars they need put into each item to test new...
so say they have a $1.2 million a year in purchases, to make it simple, a $100,000 a month (a buyer would never straight-line demand, but let’s keep it simple.)
Retail is theatre and needs constantly changing scenes.
So they need $20K in new product each month, this is their open to buy. “New” may be only 20% of their sales, but it is what keeps people coming into the specialty stores, even specialty food. They may come in and go “ahhhh” when they see the new, but their purchases 80% of the time they buy the same old same old. That 80% same old same old only takes 20% of their time to find, that 20% new takes 80% of their time to find. It is not professional to leave a purchase for later when you have the opportunity to do it on the spot.
They need new, but they do not want a lot, just a no risk test order of new. Say this is $1000 worth of whatever. So that means they buy 20 new items a month to test in their stores.
$100K total purchases, 80% reorders, 20% new. The $20K OTB broken down at $1000 per new item.
So at trade shows they see something new and different and it appeals, the specialty buyers write a $1000 order on the spot to test in their stores, and the order means nothing.... it is just a test and it also serves the purpose of being “new.” You (or your rep) gets say 25 of these orders orders at a show out of the 5000 buyers visiting the show, and you walk away with $25,000 in orders from first rate stores... (Yes, probably more, but you get my point. In any event, then you work the feedback for redesign iteration.)
Retailers buy things for their store... if they go to a show and fail to do so, then why did they go? People who fail to develop a buy plan before going to a show could stand an upgrade in professionalism, and those who do it right have the advantage. Retailing is also a discipline...
Now, having said all that, as a vendor, a reasonable question for you to ask a retailer is what is their plan for promoting your products in their store? What is the OTB for a new item, and the reason you need to know so you can best support their programs.
Feel free to forward this by email to three of your friends.
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