Startup To Scale

95. Key Sales Data for CPG Brands

March 01, 2023 Foodbevy Season 1 Episode 95
95. Key Sales Data for CPG Brands
Startup To Scale
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Startup To Scale
95. Key Sales Data for CPG Brands
Mar 01, 2023 Season 1 Episode 95

Today I want to talk about how to manage your grocery business as your number of retailers and doors grow. I’ve found that once you surpass about 500 stores it becomes really challenging to understand what’s happening at each one.

Some of the key data you need to measure and track are your velocity by SKU and retailer, Flagging spoiling product and out of stocks, tracking distributor charge backs.

To help me with this conversation I’ve invited on Maya Blackburn and Tony Miller, who work with emerging CPG brands at Crisp, one of my favorite data partners.

Startup to Scale is a podcast by Foodbevy, an online community to connect emerging food, beverage, and CPG founders to great resources and partners to grow their business. Visit us at to learn about becoming a member or an industry partner today.

Show Notes Transcript

Today I want to talk about how to manage your grocery business as your number of retailers and doors grow. I’ve found that once you surpass about 500 stores it becomes really challenging to understand what’s happening at each one.

Some of the key data you need to measure and track are your velocity by SKU and retailer, Flagging spoiling product and out of stocks, tracking distributor charge backs.

To help me with this conversation I’ve invited on Maya Blackburn and Tony Miller, who work with emerging CPG brands at Crisp, one of my favorite data partners.

Startup to Scale is a podcast by Foodbevy, an online community to connect emerging food, beverage, and CPG founders to great resources and partners to grow their business. Visit us at to learn about becoming a member or an industry partner today.


[00:00:00] Today I wanna talk about how to manage your grocery business as the number of retailers and doors grow. I found that once you surpassed about 500 stores, it becomes really challenging to understand what's happening at any given one. Some of the key data that you need to measure in order to be successful in retail are things like your velocity by sku, by retailer, by store flagging, spoiling product, either at the distributor or the retailer measuring outta stock so that you are able to fulfill the consumer demand and tracking things like distribute their chargeback so you understand the impact on your business and the bottom.

So for this conversation, I've invited on Maya Blackburn and Tony Miller who work with emergency CPG brands at Crisp, one of my favorite data partners. Welcome. Thank you. Thanks Jordan. So I'd love to get into it and think, lemme ask , you know, you talk with founders every week. What are the biggest questions that they're coming to [00:01:00] you with to understand about their retail?

Yeah, great question. I think, you know, from a founder perspective, you know, they're thinking big picture, kind of how to plan out the rest of the year. They have distribution goals. How do we get there and how do we get there with a lean team a lot of times. , you know, it's looking at the data that you have, the, even if it's limited because you just don't have those broad, you know, national brokers managing these kind of things for you.

So getting down to the store level, you know, Hey, I was supposed to be in all 300 and something Sprout stores by the end of January, but I don't know if they've all ordered. I don't have any visibility into that. I paid for it. , how can I check that that's actually happening? And that's really, I think, the goal for, for a lot of these folks is just, you know, is are things going according to planned?

Yeah. I think I was gonna say, I think I hear a lot of, you know, what do we do next? How do we go from here and keep building on this momentum of knowing how essential it is to lean into data, but not necessarily knowing how to [00:02:00] take action on all of the different data points and data sets that they're getting.

And Tony, I'd love to hear from your experience working with some larger C P D companies. Like what are those data points that you know, that you are tracking or keeping up with, and what did that type of that schedule look like? So you can make sure you're kind of bringing actionable points back to the business.

Yeah, I mean, I think it's Velocity's king when it comes to looking at, at these sort of things of understanding where that velocity is the strongest both within the category that you play into as well as within, you know, other regions that you're performing better or certain stores that you're performing better in and understanding why.

Is it a unique product for that particular region or something just happening better of, sometimes it's a broker performing better and putting a product on the shelf, or someone getting you better placement within those doors and stores. So we really managed data on a, you know, a weekly basis on running.

Regular reports of here's what happened versus the same week or the same time period a year ago, and understanding is their growth or declines. And what was driving that [00:03:00] the rest of my week after Mondays was really spent diving into ad hoc of what did we uncover from that weekly reporting and how to go either put fires out or build on momentum that we discovered.

And when it came to velocity, were there any things that really stood out in terms of things that helped grow your velocity or things that hindered it? It was understanding, like from promotional perspective, are you getting enough lift on that? Promotion was a big thing. Making sure that you weren't just paying for promotion, that wasn't driving enough philosophy and incremental growth to, you know, with you margin that you were eroding.

So that was always a big one, is did that add, did that promotion, did whatever discount we gave the retailers actually pay off and it's worth. So tracking that, as well as tracking those trailing weeks afterwards to see was there an additional boost of repeat customers and people coming back to that product.

So trying to kind of understand when you're seeing spikes, what was driving that and how do you repeat that and how do you then repeat that at a, you know, a higher margin than you maybe do in that first market event. . I love that. I think that velocity is the one thing that founders [00:04:00] know is important, but don't actually have the tools to accurately measure where we'll take a single snapshot, you know, one month and they're still using that same day, those six, eight months, nine months later, and be, be really become under or over reported depending on their business.

Yeah. I think if you can ever show that you're growing velocity within a retailer within a particular set of stores, you can show that. . That's kind of the thing that's you can build on, and that is undeniable when you're talking to a buyer. When you're growing velocities consistently over a time period, that's an easy way to have a conversation to grow your distribution.

In the next interview, Maya, what are some of the other things that founders are really asking about when they're looking to uncover some of those pieces within their business? Yeah, I think another piece obviously that comes up a lot is supply chain. Understanding what is. , what's already set up in a dc, how much inventory they're sitting on.

If a new retailer comes on board, do we have that product set up in that dc? Do we have enough? Do we need to ship more? I think just again, this whole holistic planning from point A to [00:05:00] point B, it's so much more than just having a great conversation with the retailer and getting into stores. It's like, how do we physically get there?

and having a good grasp on the inventory side of things. Everything from, you know, shelf stable products that last two years to yogurt and something with a 15 day shelf life. It all really comes down to managing that inventory. And then as Tony mentioned, you know, you've got these upcoming promotions or successful promotions.

How are you planning those from an inventory perspective as. Yeah, I think those are important. There's a lot of conversation that's going on across LinkedIn, some other channels right now about how, you know, some of the national distributors, while you know a lot of, they're very well intentioned, don't do the best job at managing every single individual brand, especially on the smaller side and how as a brand, you need to be an advocate for yourself and for kind of ordering, because we've seen lots of situations.

Distributors will over or their product just because they have the wrong [00:06:00] forecast or they are buying, you know, they're doing an off invoice discount and so they're kind of over ordering to build up their supply. And really I think by having that clear understanding of the data allows you to say, Hey, our actual forecast are this and might be lower than what you're expecting or a little bit higher based on our data.

And we have the data to kind of back it up and, and showcase that. I think that's really powerful. . Yeah. Yeah. I'd say that's, that's one of my favorite you know, things to help brands look into is, all right, so, , let's say your, your Sprout sales are down and , you wanna know, what is that?

That shouldn't be down. Why are they down? Whether you're looking at spins or just your own orders, it's just not making sense. And so, you know, we have a way that we can show brands, you know, their fill rate right from a distributor to the retailer. And if that fill rate isn't. As expected then you can jump back, look at those inventory views and say, Hey, is this an US issue?

Is this, it looks like they've got plenty in the dcs, but they're not shipping to the stores. That's a them issue. [00:07:00] And then you're empowered with that information, take back to them and again, kind of take ownership of that business and be an advocate for yourself as you've mention. as founders think about kind of planning around using data and looking at these things, what's the right cadence do you think that they should be looking at their business from a data perspective, knowing that a lot of times, you know, the smaller 2, 3, 4 person teams can't live in the data all the time.

Maybe they can't do it weekly, Tony, like you can because it's your core job, but like, what's that right cadence to get a good understanding of how the business is. Yeah, I think, I think you can get away with looking at things like sales and velocity on a monthly perspective. , but then you're still gonna want to dive into it in between those times.

So like inventory is something where I would still wanna make sure I at least pop in and understand what are my weeks on hand on a Monday morning? Do I have enough to cover what I think will be upcoming orders for next week or two? Probably dive into a little bit deeper as I'm prepping for a promotion that might be the biggest winter, holiday season, whatever that is for my product to make sure those are the time periods.

I'll be really [00:08:00] diligent to make sure I have. Enough product to flow through these distributors, to the retailers and so on. So I think you can get away with a standardized reporting on, you know, a monthly basis if that's really your time crunch. But being able to quickly find insights or at least find those red flags that can jump out at you on a Monday morning or, you know, I think a lot of times we're in the data Sunday night at times.

We don't wanna be, but that's, that's kind of the nature of the business of being able to find those things quickly to go put those fires out because it's an endless list of things you're working on, but the faster you can get through that, the more efficient it. . One of the things I found that is challenging for some founders is they're like, I'm not a numbers person.

I am like, I know the basics, but it's hard to like dive into, to really deep into like data because it's just low overwhelming for some. Do you have any tips on how they can manage that to really service those insights in a way where they don't get lost? Yeah, I mean, I think there's some standardized reporting views , that are offered through, you know, Programs like CRISP and others, where you can quickly come in and see, all right, green is good, we're up, sales are driving forward, velocity's up versus [00:09:00] previous time period by simple line graph where you can see it high level, very quickly come in for a overall summary that makes it easy to dive into it.

 Data's intimidating when it's just an eye chart. I think when it's put into visualizations that are quickly and easily understood and understood by anyone, that's when there's really a lot of value there cuz you can then dive into details without fear. I think so many of us have dealt with large Excel charts in the past where you're hunting and trying to find what the issue is compared to if it's brought to your 10 chart away, it makes it a little bit easier to focus your time.

Mm-hmm. . And to Tony's point, you know, if you've got some good visualizations, a lot of founders have amazing stories behind them, their brand, their product. It really is just storytelling, right? You just got a couple facts and charts to go with it. But these, you know, these founders are already great storytellers as it is for their own brand.

It's just a different type of story. They're. Yeah. One of the biggest pieces of advice that I learned and was told, because I'm the type of person that goes deep into like data and get lost for hours or definitely could when I half the time is that to go into the data [00:10:00] with a particular goal or number that you're looking for and actually like write it down and so that when you're in there you might see all these other things and you might like note those things as jot down and like, Hey, let me come back and look at that later.

I think one of the biggest things, if you get into the data, you find the piece of information that you're looking for, it feels a lot more satisfying than getting lost and realizing you never actually found what you were there for in the first place. Yeah. I think that's where, where I've been, you know, even at larger companies had the most success of selling things in the buyers and other stuff is it's using the data to tell the story you want to tell If I'm talking about a brand growing in a particular region, whenever that region is up, maybe I'll send the buyer nugget and tell them again that it was up and really pushing that story and that narrative further forward where I'm, you know, I might not be as obvious about when it's down in those particular weeks and not highlight it cuz I wanna spin the story.

I wanna spin, I'm gonna use the data to tell that story. And that's kind of the key is you can keep it high level, but also let the data tell the story you. , were there [00:11:00] some of your favorite pieces of data that are great for highlighting those opportunities to like expand in the region or retailer? Like what are some of those, those data reports that you're like, oh, this is actually really interesting or powerful.

Yeah, I think heat maps are always a cool thing to understand. Is anything jumping out at me of where of velocity is super high in one particular region versus another, as well as just being able to see straightforward year over year? Where are we having. Growth where we having declines. Sometimes you can learn more from what's happening in those weeks, whether there's declines and figure out what happened, what was the issue?

Was it out of stocks or something else That can actually help you spin a better picture when you're talking to those retailers. . I love that. And one thing we mentioned earlier, we're kind of managing promotions and it's so interesting, like when I was pitching my brand to Whole Foods, we knew we had to run promotions.

I think we like just put in the sales deck, like we're going to do demos and we're going to do a quarterly, you know, 20% off price reduction. Right? But there's no data behind [00:12:00] it, there's no insight. It's just what other founders said that they would do. How. Have you used data to really measure how promotions perform and whether those key parts of the planning for promotion, then they're important.

Yeah, I think it's understanding what your actual lift is. How much increased incremental sales are you seeing and is that, is that making up for the discounts you're providing? So looking at the sales for Friday, the first, the four weeks leading into that, and then what were they for the two weeks it was possibly on promotion and did you actually grow your sales enough to pay for that promotion?

Sometimes you are willing to run those at a loss because you are trying to drive trial and, and do things like that, but it's understanding what your goals are. and having those kind of goals set to make sure that you're not gonna be eroding your, your price and your brand and your promotion as you're doing that.

I think those are kind of the, the keys when it comes to looking at if a promotion was successful and planning for it. It comes into a lot of inventory perspective. Do I have enough on hand? Do I have enough in the dcs? Dealer distributors load up on inventory enough to. [00:13:00] Actually last throughout the entire promotion, I've seen too many promotions where sales spike for that first week and then fall off in that second week.

Not because the demand wasn't there, but because the inventory wasn't there to handle that multiple week spike of, of increased philosophies. . Yeah. The other thing that's interesting that I've seen is a lot of times brands will use a generic kind of sales calendar, maybe like once per quarter, but there's not really much insight into that.

But by having the data they've seen, like when are the natural highs and natural lows in your business, you can plan your promotions for, you know, those lows. Or maybe you do the opposite plan for the high so that you're really capitalizing like when people are shopping the category. Cuz you might be able.

to really source some new business that way. Yeah. And you, you mentioned, you know, the cadence of looking at it. I think to Tony's point, you could always do that on a monthly basis or whenever you have time, but still having the granularity of daily or weekly data is so important to get to that level of detail when you're looking at promotions.

Yeah, I think that's so important. And the other thing that I [00:14:00] found right when you're launching in the chain, that. A hundred, 200, 400 doors, your product's not gonna perform well in every single store location. And a lot of times, like the retailers might know that and they might have special programs set up, but as a brand, that also allows you to see exactly which stores are performing the best.

Maybe they're certain cities, which ones are performing the least. And then you can do targeted interventions. Maybe it's educating the store team and sending some free swagger products down there to their team or other things like that. You can do a off-shelf placement to really drive some awareness and you can get that granularity in your business where a lot of times you're just, instead of using like broad strokes, I think that's can be really important too.

Yeah, and using that data again to, to tell a story. Tony mentioned heat maps earlier. That's another one. I love as well is, you know, you can say, well, our, you know, spicy skew is doing really well in the Northeast. Who would've thought? And then, you know, you can use that story as you're pitching other retailers in those areas is, Hey, we're in this major [00:15:00] retailer and this item, or these two top items are, you know, the highest velocities.

And you can paint that story. For even pitching to another retailer, just cuz you had that additional level of data. One of my favorite things when I was able to dive through the Chris dashboard is understanding distributor chargebacks, what they're for and where they're coming from. Can you talk about some of the data that you're able to provide and those views?

Yeah, so really what it can lean into our MCB chargebacks of kind of those manufacturer chargebacks that are seen as trade spent. So that's where you have a dashboard built today. That kind of helps really understand what that is. What are my chargebacks as a percent of sales to really see? Is there a trade rate that we're trying to stick to?

Are people really spiking? And one particular retailer is always there buying free fill. And then maybe I wanna go back into my, you know, shipments and sales information to see. , did they ever purchased it again? Cause I think we know some retailers and locations are notorious for never following up on those free fills.

It's gonna see continued [00:16:00] expansion for what's available. Building on our partnership with Unify and getting deeper into the actual deduction side of things that's coming. So part of the, when that partnership continues to grow as we'll be additional vis additional visibility into what those deductions are and how they can be categorized and tracking those similar, like those mcb's.

Yeah. You know, one thing that, just as a quick story that I've been telling a lot recently because it's been so powerful, is when I was running my brand, we were selling through a retailer, through a distributor, and the retailer buyer contact there left. And so we didn't have good visibility into what was happening at the stores.

And it turned out that the product was not selling in a lot of the locations yet. They were continued to buy and after a couple months, some of the product expired and they were able to return that product through the distributor and then we got charged back for that amount. And at the end of the day It was like thousands of dollars that were returned that we had to pay for spoiled [00:17:00] product.

And we weren't using any data. We had data showing like where our sales were or expiring product. We could have done some interventions to really move that product. But it cost us, I think like $8,000 of kind of spoiled product. Right. And that was just, In one retailer for one kind of nine month period.

And so that's why I'm a huge advocate of really understanding what's happening in your business because so much of it's a black hole. And if you don't know, you're gonna get charged for it on the back end. Are there any other data points that are really exciting that you find within Within this kind of network or, or what, like branch should, should look at.

I'm always, I know like velocity and outer stacks are always really cool, but I always feel like there's sometimes some hidden gems in there that you're like, oh, this is one of my favorite things. Yeah. I like being able to see it all in one spot. So combining my distributor data sets to see what's my full actual distribution for this product.

I think a lot of brands are, you know, long term they wanna go direct to some of these retailers, so understanding that. To the distribution network and where they actually have distribution and maybe they can lean into, you know, [00:18:00] another form besides some of the major ones of a DST provider. Having that full holistic view of where my points of distribution are across the country, I think is really pivotal to try and make those long-term supply chain decisions have about you

maya, anything that you found brands find like really interesting , or kind of a unique view on their business that they weren't thinking? . Yeah. I think, , you already mentioned voids. I to your earlier point of just, you know, my thing is I love helping these brands be more proactive as opposed to reactive with this data.

I hate hearing those stories that you just shared. I It's just heartbreaking saying similar stories on LinkedIn for these emerging brands. And what we're really trying to do is, again, help them be. As proactive as possible to avoid those situations in the first place. So, you know, let's say this particular retailer used to be ordering.

Every two weeks, but now it's been four weeks, six weeks since they ordered. Was this a new buyer? Why are orders dropping off? They worked so hard to get this distribution. Is it ghost inventory? Is [00:19:00] it there's a new buyer who didn't know that brand and they stopped ordering? Or you know, it could be the missing shelf tag.

Lack of resources at the actual store. It could be a number of things, but again, pointing folks into kind of where the needle in the haystack is to. Be as effective as possible with continuing to grow those brands. We've been on a couple calls where, where brands have noticed those things on the training call and they're like, oh, this is great, but I need to hang up because I've gotta call so and so because this is our number two item and they haven't ordered in four weeks.

And that's very unusual. So the, those kind of situations make me really happy cuz it feels like we're having a direct impact. Right. Yeah, I love that idea. You mentioned it a couple times, but the story behind, within the data, that they're not just numbers, but it's really insight onto, you know, what's happening with your business and then how do you showcase that to others as well.

And I think this, there's tons , of these nuggets, they're really great for your buyer sales presentations category reviews with a [00:20:00] retailer. When you're pitching to investors or even, you know, banks or if you're looking to get debt or loans, like all this data is really valuable. So that one, you can show how your business is growing with quantitative kind of proof behind it, but then also everyone would feel like you know your business so well if you're coming with like real numbers and what the data is and understand your position in the market.

And I think that's so key. You know, one of my favorite things to do, Is to pair like your velocity numbers with some of the data from our partnerships with Neils IQ, where brands can get free data reports. And so you can see whether the category, velocity averages and then how does your brand compare?

Is it higher? On par or lower? If it's lower, what are the things that you can do to really improve that and why? And if it's higher, how can you tell that story to everyone? Right? Tell it to the retailer and say, Hey, we can get, we need more slot, more slots on the shelf because we're outselling everything else that's there.

Let's get some more facings. [00:21:00] Or you can go through investors and say, Hey, our product is seen as great consumer adoption. Here's why you shouldn't invest with us. And so I think the storytelling is, aspects are so powerful within. Great. Well, perfect, Maya. Tony, thanks so much for being on today and joining us.

. Anyone wants more information on how to best use data for their brands, I highly recommend reaching out to the CRISP team. They particularly work with the foodbevy community, and give great discounts for founders as they are giving set up. And so reach out to me. I'm happy to provide an intro to them, but do this early before it's too late and it costs you thousands of dollars on the back end because making the mistake.

Are , way more costly than trying to prevent them in the before they become a problem. So Maya. Tony, thanks so much. Thanks, Jordan. Thank you.