Welcome to the Community Call Podcast.
I am Melissa Travers, Director of Community here at BevNET & NOSH, here with my co-host Sarah Casagrande, Principal and Sales Advisor at Generation CPG.
If you're enjoying the show, please follow and review us wherever you listen.
Sarah, I see you have in your hands one of the two snacks that I thought maybe we could try today.
What do you have there?
I have Sibs Date Bites.
I'm a big date person, so I'm excited to try this.
All right, give it a go.
Let's see what you think.
Have you tried this yet?
Yeah, I had one earlier.
I thought it was tasty.
I liked that they were rolled in coconut because that makes them a little bit less sticky.
I think they're tasty and they have a goji berry and chia skew.
And goji berries were actually one of the items that I saw ticking up in flavor trends and ingredient trends recently.
So I think that's really interesting.
These are very tasty.
We got these into the office.
So thank you so much for sending them.
Sibs Date Bites.
Absolutely delicious.
Only four ingredients.
And then the second snack that I have might be a little bit more controversial.
Are you a spicy person or are you an original?
All the spice.
Okay, you take the spicy one.
I'm going to take the original.
What I have here are Country Archers Ancestral Blend Meat Sticks.
I think that they were talking about these on Taste Radio earlier, and I just had to get my hands on some and try them.
So this is a grass-fed beef meat stick with the inclusion of beef liver and beef heart.
We were just talking about the Whole Foods Market trend.
Organ meat.
It's a trend.
To include organ meat.
I've never had organ meats before.
This is my first time on air.
Pate.
Oh, wait.
Yeah, I guess that is.
Let's talk about what qualifies as an organ meat.
Heart, liver.
I think heart and liver are two of the most common.
I mean, you could get veal sweet breads, but I guess I don't see those in a lot of meat sticks.
I have not yet, but you might start a trend here, Melissa.
Organs are an ancient superfood.
Organs have a higher degree of vitamins and minerals, so things like iron, magnesium, zinc.
And I even remember when I was at Whole Foods Market, we used to have this sort of free shelf after the buyers were done reviewing products.
They would put them out there for us to all try and sample.
And I had a container of supplements that was desiccated beef liver.
And I mean, that was at least six or seven years ago.
I was going to say 10 years ago, but yeah, the texture is really good.
It's good, right?
It's not as chewy.
It's really smooth.
I mean, when you said pate earlier, it reminds me of pate, just in stick format.
These are pate sticks.
Pate sticks.
The spice is really nice on this too.
It just says spicy meat stick.
I think they're really tasty, and I think you're exactly right.
The texture is a little bit softer sometimes with a meat stick, even a chomp.
Sometimes it has almost a rubbery taste, sometimes depending on what the meat is and that kind of thing.
But these are really smooth.
I do not taste the heart.
Do you taste the heart?
I don't taste the heart.
It's a pate stick.
I think we should call up Country Archer.
And Country Archer, if you're listening.
Pate sticks.
I'm so glad that you like them.
You were not excited about trying these at all.
I think I texted you a few times in anticipation of the banter.
And you said flat out, no, I won't try these.
I feel like this is a huge win.
It's a huge win.
And also you are an amazing salesperson.
You kept, she's relentless.
She kept texting me, you're going to try the organ meat, right?
Sarah?
And I was like, I don't think so.
But here I am on air enjoying this pate stick.
Pate stick.
Try in the organ meat.
Sarah has a grande.
Well, a whole new world, folks.
It's a whole new world.
These were also really good, though.
The sibs, I don't know if we gave them enough credit, but really not too sweet.
My daughter would eat these, but so would I.
I can see these going really well in the drawer at my desk for like a midday treat, but also going in my kiddo's lunchbox every day.
And only four ingredients.
I do wonder how many kind of date-based products the market can sustain, but as with anything else, if they're delicious enough, the packaging is good enough, and they have good business strategy, then there's no reason why they can't succeed.
Agreed.
Great packaging, too.
Nice and bright.
The bold fonts that we're seeing everywhere.
Well, I can see those popping off the shelf for sure, and there are going to be so many things popping off the shelves and into customer shopping baskets as we get further into the holiday season.
There is actually a profile on nosh.com that Lucas Southerd wrote about a brand called Little Latke, and he interviewed the founder, Taylor Blue.
I thought it was such an interesting product.
So originally this woman, Taylor Blue, was considering making frozen latkes to sell, and then took a look into the frozen market and decided to do something in ready-to-eat shelf-stable snacking.
What do you think about that decision?
That was smart.
Frozen is really, really tough, really expensive, and you're really...
There's not a ton of space devoted for things like that.
It could work eventually, but I think that was the right move.
I love latkes.
Latkes are...
I mean, it's the might...
What can a potato not do or be?
It can be anything it wants.
I mean, it can be a chip.
Fries.
Fries.
Mashed potatoes.
Bread.
Pasta.
Pierogies.
Mr.
Potato Head.
Anything it wants.
Anything it wants.
So I think Taylor Blue made some really good decisions here with little latke.
I saw on her website, she said, let's take the best part of latke and turn it into a shelf stable snack to enjoy year round.
This is something that I'm sure would resonate really well, obviously, over the holidays.
Hanukkah is on the same day.
It's Christmas this year.
Are there any childhood items that you would like to see reimagined or reinvented?
That was part of the impetus behind little latke.
And it's actually also something that Sherry Frey from Nielsen IQ said today on Community Call when she was talking about flavor trends.
So childhood favorites and seasonal flavors.
Sarah, what's a childhood favorite that you would like to see reimagined in CPG?
Oh, I love stuffing.
And I know that Stovetop is out there and it's pretty good, right?
Let's agree.
But I've never seen like an organic, natural, non-GMO, better for you version of Stovetop.
Why not?
That is absolutely brilliant because it's something that dried bread is dried bread.
But I'm sure if you use higher quality ingredients and you're more imaginative with your flavor profiles, you could capture a good portion of consumers.
I can also see a stuffing flavor, like potato chip be good, right?
Oh, that would be really good.
I would buy those.
You're so smart.
Yeah.
The one that came to mind for me immediately was something that my mom made for my birthday every single year.
It was that much my favorite.
It was my birthday dessert.
It was.
It was a jello salad.
It was Cool Whip, mandarin jello, and canned mandarin oranges all whipped together, and she would put it in a jello mold.
And I just thought it was the most delicious thing.
She cooked pretty much exclusively from the Betty Crocker cookbook with the rings.
So I just love that so much.
And while I will say, I don't know if I would jump to eat the jello salad at a barbecue, I feel like that would make such a good marshmallow or sorbet with mixins or something.
I would eat that.
What you just described is, I mean, that's nostalgia.
It's so comforting and I don't know.
It's so good and so light and airy.
And pretty.
It's jewel toned, right?
I think there's a lot of potential for a jello salad marshmallow.
They should make a comeback.
All right, we're going to work on that.
I also wanted to ask you in anticipation of the holidays.
Would you, for example, promote little latkes during the holiday season, or is it something that's just going to jump off the shelves anyways?
Because it's the time, like, how do you promote a seasonal item like that?
Oh, it really depends on the brand.
For a lot of holiday items, you don't really need to promote.
They're going to sell themselves like cans of pumpkin pie.
You don't need to promote those.
I actually, the other day, I was at Whole Foods and I picked up, do you know the brand Undercover Snacks?
Oh, yeah.
They had their peppermint stick quinoa crisps on sale for like two something.
And I was like, oh, I was probably going to buy it anyway.
But because it's on sale, I'm going to buy five and put them in stockings or eat them by myself while I'm wrapping presents on Christmas Eve.
So that brings up another good question.
When would you promote something like that?
Would you promote it, let's say, the first two weeks of December?
Do you promote it during Christmas or do you even promote it in November, for example?
Again, it depends on the item.
Like if it's a limited run and you only have so much product and you know you need to get through it, maybe promote.
If it's something that will sell after the holidays and you're not really worried about having excess inventory and marking it down then, maybe hold.
I wish I had a better answer.
It just really depends on the type of the product.
The stage that the brand is at too.
I feel like emerging brands, you really have to get, the tags get attention, right?
They get people to pick it up off the shelf when they might not normally.
And if you're an established brand, people already know you, maybe they're going there to buy it because they bought it every year before.
You might not need to promote in that case.
It really just depends.
I feel like I see eggnog creeping up on the dairy shelves a little bit earlier every year.
But certainly it makes you probably buy it more often because you have more time leading up to the holidays.
So yeah, I mean, you can put it in your coffee.
I'm not a huge eggnog person.
I like like one cup of eggnog a year, and it's like right, maybe Christmas Eve.
I'm not really going to do it before that.
It's a little much.
Yeah.
Are you an eggnog person?
No.
Okay.
That doesn't surprise me actually.
I could tell by your face.
No, because we buy it for the boys, but and I take a little sip every now and again, but it's like drinking melted ice cream.
Yeah.
It sounds like you're not putting rum in it though.
That could be the problem.
I'll have to get right on that.
Well, this holiday season, especially, consumers will be on the prowl for great deals, and as an emerging brand, it's crucial to be precise with your promotions.
You need to carefully balance how much you're discounting, the timing and frequency of your offers, and strategies to stay competitive within your category.
In this episode of Community Call, Benji Fitts of Spins will share key category data to help you maintain your edge, provide insights on fine-tuning the amount, timing, and frequency of your promotions, and show you how to officially target the audience that will grow your velocities.
Please enjoy.
Today, we are so excited to welcome Benji Fitts, Director of Education at Spins.
Benji is going to talk about how to run smart cash-efficient promotions without sacrificing velocity.
Benji Fitts of Spins, thank you so much for joining us today.
It's great to have you here.
Hey, it's great to be here today too.
Thank you for having me on the show.
It's totally our pleasure.
We were talking about this a little bit before we came on, but you've had a career in CPG for quite a while.
What's your career looked like?
Yeah, I got my start back in 2009, working for a small plant-based company.
We made tofu out on the East Coast.
I worked there for a couple of years.
Been to good stint at Whole Foods Market and kind of a variety of roles.
And then for the past five years, I just had my fifth anniversary.
I've been working at Spins.
And so I spent some time on the retailer side because Spins, we work with a variety of clients, brokers, distributors, retailers, brands, of course.
But I worked on the retailer side for a bit and then found my home on the brand side of the business where I gave advice to mainly emerging brands on how to win in the marketplace.
And so as Director of Education, do you spend a lot of your time helping brands understand just that, how to win in the marketplace?
Yeah.
So not everyone's born knowing what TDP is, right?
And that's okay.
That's okay.
Data is very useful, but it is a little arcane, I'd say.
And everybody has to learn it somehow.
And so what I'm really spending a lot of my time doing is making people's learning paths a lot easier to understand and then realize the potential of that data and turn it into something to run with.
What kinds of datasets are you helping brands understand, how to look at, and then what to make of the information that they're looking at?
So Spins Data, we have a couple of different sources of data, but our main one is called Syndicated Data, right?
And so Syndicated Data works like this.
At the end of every week, all the grocery stores that we work with and other types of stores send us their receipts, right?
And it goes in this big data lake.
And from these receipts, which have a couple pieces of information, like a UPC, item description, dollar sold, unit sold, and the address of the store, right?
From all that information, we're able to kind of build this big database of a hierarchy of categories, subcategories, and departments, and create all sorts of measures, not just dollars and units, but also distribution, velocity, and pricing, and promotion.
And we're able to kind of look at subcategories and see how all the brands are competing with one another within the space, in either a channel or a retailer specifically.
Let's get on to the topic at hand.
So we're here to talk about the science behind SPARP promotions, which certainly you're uniquely qualified to help us understand how to do this.
I mean, we know why it's important, but why do you think it's important for CPG brands to understand how to run the right kinds of promotion?
Well, that's a great question.
So trade spend is one of the company's probably like biggest expenses, right?
And, you know, sales are an amazing tool to gain market share, to help goose your velocity, to do a lot of great things, to really help build your business.
But most brands are really just kind of flushing their money down the toilet.
And that stinks, right?
You know, in terms of a return on investment, when it comes to good promotions, you really want to see an increase in the amount of people purchasing your product, like buyers.
That's especially important for small and emerging brands, right?
And, you know, you can really look at a couple different metrics when it comes to promotions.
We'll talk about these later, but Market Share and Lyft are the main ones.
And you can kind of use your knowledge of that to see, are these promotions working for me?
And am I stealing share away from the competition?
Am I really smartly growing my brand?
Or am I just, you know, putting stuff on sale, and it's really not stair stepping me to a higher plane of revenue?
You're going to have to run those promos quarterly.
You may as well make them work for you.
That's right.
Well, let's jump into your presentation.
Let's start off with the second slide.
You actually shared some interesting information about sort of the current stage of promotions.
We're heading out of an inflationary period where, you know, prices just keep going up and up and up.
But certainly consumers are still very conscious about what they're spending their money on at the grocery store.
Help us understand what promotions looks like right now in the context of the last couple of years or so.
I mean, why should I care about this, right?
Well, I mean, it's been a crazy kind of world the last couple of years, and specifically around pricing, okay?
So the pandemic happened.
Supply chains got really insane.
Inflation kind of occurred.
All of these things kind of happened from 2020, 2021, to kind of winding down a little bit of this year, right?
So a lot of growth in the marketplace, especially big brands, but was coming from like price increases.
And now that is like cooling down, right?
So inflation is cooling down, you know, prices have definitely settled, though, at a higher amount than they used to be, like three, four or five years ago, right?
But people were kind of like stressed out by that, and people want a deal, you know?
It kind of just comes down to that.
That's a great way to kind of drive trial for your products, is giving a really good deal.
And if we look at, you know, not just like inflation, if we look at promoted volume as well, you know, so that's the amount of like dollars on sale.
So back in 2022, in the Mulo channel, which is like conventional grocery, as well as drug club, mass, military, and dollar, all of those stores combined, it's 110,000 stores combined, the promoted volume, you know, for the year was about 28% in the grocery department.
And 2024, it went up to a third, to 33%.
And that is a huge jump, you know?
So promotions are, you're back in style, they're back.
People are caring a lot more about them.
Just anecdotally, also with Spins' own business, our demand for pricey elasticity studies, you know, among our own clients has dipped, and yet the demand for promotional analyses among our own clients has like really gone to the roof.
So everyone else is doing it.
You should be doing it too, and you should be doing it smart.
That's what we're here for.
Quick question.
When you're talking about the promoted volume in grocery, those percentages, is that a percentage of units that are on sale, dollars that are on sale?
Yeah, it's dollars.
So 28 percent of stuff in 2022 in the Mulo Channel in grocery was sold on sale, like in dollar volume.
Whereas nowadays, you know, 2024 for the last year was 33 percent.
So that is dollar volume.
So what we have listed here are a bunch of categories where they are highly promoted.
For example, potato chips.
61 percent of the volume sold in the channel and conventional was sold on sale, right?
That is a lot.
That is a lot of promoted volume.
And the thing that these categories all have in common, so potato chips, soda, tortilla chips, you know, things like that, is really that they're all kind of nice to haves.
You don't need to eat these things, but we all love to eat these things, of course.
And there is a lot of competition, whether that competition is huge CPG companies, but there's also a huge amount of companies in the middle and kind of just emerging brands.
They're also competing in this space.
These products are kind of easy to make, relatively speaking, and they're nice to haves.
And that's what makes it so, so competitive.
And so if you're in one of these categories here, then you should be aware of that because like you're going to need to be good at promotions to succeed in this competitive marketplace.
You know, we actually have a question.
This is from Michael Russo.
Michael wants to know if Spins is considering expanding its data coverage to include more alt channels like food service, on-premise, and where products are scanned at the register?
That is an awesome question.
Yeah.
So currently, Spins covers...
We have a huge advantage in the natural channel, which is like natural grocery stores.
We have a partnership with Circana, formerly IRI, where we get a lot of our conventional data, so that's the Mulo and convenience channels.
We also have a regional independent grocery channel.
Food service, premise stuff like liquor stores, all that.
I haven't heard anything yet.
We're always trying to sign up more and more retailers, but as far as like whole channels, outside of the Pet Channel, which we launched a couple of years ago, currently do not have any plans I'm aware of to launch new channels.
But we're always looking around to see what's out there.
So not rolling it out, of course, but not our focus at the moment.
He also wants to know, when Spins reports a brand's presence in a certain number of accounts or doors, is there an assumption that this reflects roughly one third of the total distribution?
So if Spins shows a product in 100 doors, would it be fair to assume it's actually in around 300 accounting for the uncaptured retail sales?
Well, that's a great question.
And I think that it is really hard to make any sort of bold claim that applies universally to everyone.
I mean, for example, like the answer would be very different if you were like, well, a tortilla chip company versus like a wine, let's say, you know, because we don't have a lot of visibility into like liquor stores and things like that.
However, I will say that if you look at the composition of our channels and the retailers that we are able to provide to clients out there, you can get a really good estimation of your retail footprint out there.
But it's hard to make a blanket statement.
Let's get back to top and bottom promoted categories.
So you were just explaining the bottom promoted categories in grocery.
Those are more the need to have, whereas the top promoted categories are the nice to have.
Is that right?
Yeah, top promoted categories, definitely, you know, nice to have bottom promoted categories.
Look, you're going to buy it anyway.
Okay, that's the deal.
And, you know, this is this slide, kind of big surprise here when I was building this out.
Some of the least promoted categories here are contraceptives and catnip.
So that's a fun pairing right there.
But if we look at this list here, what are we seeing?
Pet food, infant food, infant formula, anti-smoking stuff like nicotine patches and things like that, right?
These are things that like pet medications.
If you're pet sick, what are you going to wait for a sale?
No, you're just going to buy it, right?
And so these categories are kind of characterized as like, kind of essentials in a lot of cases.
A lot of times there will be like hegemonic competition where like say an infant formula, there's like two companies in America that make that really.
So there's maybe not a lot of competition in some way.
These things are also sometimes like hard to make or they have regulatory hurdles that a lot of small brands don't want to deal with.
I mean, what would you rather make?
Infant formula or hot sauce?
What do you think is easier?
Right?
You know, so.
Right.
That makes sense.
And so many of the brands in our ecosystem are in that top promoted category, salty snacks, kombucha beverages.
So if I'm a brand and I have a product that is very heavily promoted, what does that tell me except for the fact that I better run my promotions and I better get them right?
I think that's what it tells you is like you better buckle up.
Promotions are going to be a key strategy for every competitor that you have.
And why do these brands do these promotions anyway?
It's really to increase your amount of market share.
And if you think about market share a little bit more, less abstractly, it's like you're buyers.
For a small brand, what you need to do is peel away buyers from bigger brands out there.
And often if you're launching a product for the first time, your product's probably going to be a little more boutique-y, and therefore maybe a little bit more expensive than like the bag of Doritos or whatever, right?
With that in mind, people are going to go to the shelf and they're going to see the Doritos that they always buy, and then they'll see your fancy cool tortilla chips.
And it might be a little out of reach for them.
But if you put it on sale, the math changes a little bit.
And essentially, that's kind of what it boils down to, is how you peel away buyers from your competition.
Well, if we're going to understand that, I think we'll have to understand what makes for a good promotion itself.
Help us understand market share and percentage lift.
Why are these important, and what do they tell us about how to run smart promotions?
Yeah.
So, okay.
When it comes to promotional metrics out there in syndicated data, there's a lot of them, okay?
But there's two that you should really kind of pay attention to, or you should start paying attention to if you're just getting into this business, okay?
So, long-term, it's market share.
If you enter into a category, you're going to have zero market share because you've never sold anything there before.
But then once you start selling, you'll start to kind of build it up, right?
And so, over time, you really want to pay attention to market share.
And this is a weird thing because Bob Rands typically don't pay attention to market share.
They pay attention to distribution.
And that's smart, I mean, in some ways, because you want to just grow those doors.
You want to get into more and more retailers, and that's totally fine.
But you should always just be putting your eye on market share and see how that's kind of growing over time.
And the big players, that's all they care about is market share.
One point of market share of tortilla chips is to be worth hundreds of millions of dollars, you know?
So those small fluctuations matter.
Now, in the short term, when you're looking at promotions, you really want to look at percent lift, or the lift of the promotion.
And I'll kind of go into that in a little bit more in depth as to what that really means and how it's calculated.
But, you know, essentially, you want to have a good lift percentages, not only relative to your own sales events that you do, but also relative to the competition.
Do you want to jump in to slide seven, or do you want to go right down to the example that starts on slide nine to explain what that looks like?
Let's do defining market share.
Let's do the next slide.
I'll go through these next two real quick, just so we have a grounding on that.
Okay, so market share.
What is it?
Very simply put.
So within syndicated data, within sales data, there's your department's categories and subcategories, right?
And all of the sales for subcategory total up to some dollar amounts, right?
And that's 100 percent, okay?
And so then if you look at each brand's share of the sales, dollar sales, if you calculate it as a percentage, right?
Then that's like the brand's market share.
So in this example, you know, we have chocolate bars, right?
And see, the thing is that market share kind of fluctuates over time.
And we're looking at it here in 52-week increments.
So this year versus last year.
And in this example, we see that Hershey's had 50 percent market share this year, but they had 75 percent market share a year ago.
So that's like a huge swing.
You really never see that sort of thing, but just for the sake of example, that's a big swing down.
And we see that other brands like Choco Love and Who Kitchen have gained share.
So share is a zero-sum game, right?
If you win, somebody else is losing, essentially.
This is assuming that the category doesn't really change over time.
It does get a little bit more complicated, of course, because categories grow and all that sort of thing, and you can look at incrementality.
But essentially, you want to be growing your market share over time.
I was just going to say that that's certainly got to be very important to investors.
Market share, I mean, it's a foundational metric that again, not enough small brands kind of pay attention to, because when you start out, your market share will be infinitesimally small.
But if you start doubling it, that's cool, and you'll kind of ramp it up over time.
And those numbers will start to matter a lot more as you grow and mature as a brand.
Let's move on to Lyft.
Yeah.
All right.
Lyft.
So Lyft is the impact of a promotion.
And how we define Lyft is your incremental sales divided by your base sales.
Okay.
And I'll get to that in a second.
But the thing is, is like, when you do a promotion, your volume will start to split out.
So it'll spit out into base units and incremental units.
And you'll have a promotion, generally promotions are two to eight weeks long, usually around four to six or something.
And each week will kind of have a different Lyft number.
And the average of all those numbers is like the average of the promotion.
And the thing to understand here is that there's no like magic number.
Is 100% Lyft good?
Well, I don't know, maybe.
Is 500% Lyft good?
It sounds good.
But if your competition is getting a 750% Lyft, well, 500% Lyft maybe isn't that great, right?
So the thing to remember about promotions is, promotions are incredibly retailer-dependent and category-
and subcategory-dependent, okay?
So again, I wish I could come here and say, like, well, if you're hitting 250% Lyft on your promos, you're in the money.
But really, it's so hard to say because every category is so different.
So there's no magic number.
It's all relative to not only your own promotions, because some of them may do better than others, but also relative to the competition.
I'm sure that for a brand figuring out how to balance short-term lift with market share is a tricky proposition.
Yeah.
Yeah.
And I think that, you know, like there's kind of two schools of thought when it comes to promotions, right?
And so one is like, I want to be cash efficient with my promotions.
Look, every retailer that does promotions is going to tell you, you got to do so many per year, and they'll give you suggestions or guidelines or what they want.
If this retailer that you're in is important to you, but maybe the retailer you're really trying to spend your marketing, trade spend, budget on growing.
This is just like one of the solid account you've had for a couple of years.
Maybe it's smart to be cash efficient and phone it in with the minimum, that just makes the retailer happy.
That's totally a valid strategy.
On the other hand, if you're in a retailer and you really want to be aggressive about getting market share, then you will take a hit to your margin because you will be going deeper and longer with promotional strategy.
So you'll be more aggressive in going with bogos and other sorts of deep discounts and those sort of things.
So it's kind of two schools of thought, cash efficiency versus promotional aggression.
Can you walk us through the promotions and action example that you have?
You have a good way of really simplifying it so we can see the details.
You got it.
Okay.
So imagine this.
You're in a grocery store.
You're looking at the pasta sauce set in front of you.
Grocery store shelves are measured in linear feet.
Usually, it's like four linear feet per section.
So four linear feet of beautiful pasta sauce jars right in front of you.
And then it's like idealized grocery store.
We're going to be doing this over the course of like a long weekend, Friday, Saturday, Sunday.
We're going to look at the set.
And so on day one, there's three brands on the shelf.
Nothing's on sale.
A hundred people come into the store, and everybody buys one unit of pasta sauce.
Okay?
The brand A, they sold 50 units in this first day example.
So they have 50% share.
Brand B, they sold 30 units.
They have 30% share.
And our brand sold 20 units.
So we have 20% share.
It's not bad.
So our American share in this example is 20%.
So that's Friday.
All right.
Saturday comes around.
Let's go to the next slide and talk about what happens on Saturday.
So on day two, our brand goes on sale.
And 100 people come to the store, and everybody buys one unit of pasta sauce, right?
So brand A, they sold 40 units that day.
Brand B sold 20 units, and our brand sold 40 units.
So on that one day, our brand's market share increased to 40%.
I mean, we doubled our market share.
I mean, like, break out the champagne.
That's awesome, right?
And, you know, because we put our stuff on sale for that day, we were able to drag away buyers from all the other pasta sauces, and they were going to take a chance on our pasta sauce, you know?
They were like, oh, man, you know, I saw this.
It was expensive, but now it's the same price I pay for the rest stuff I normally buy.
I can't wait to try it.
Oh, I saw it on TikTok.
I saw it on social media.
I can't wait to try this thing.
I'm really stoked that I'm trying it out.
So on that second day, Saturday, we doubled our market share by doing a really good promotion.
Let's go to the third day.
How does this kind of conclude?
So on day three, our brand goes off sale and no one else is on sale.
Just to make this simple.
So again, there's a hundred people coming to the store and everybody buys one unit of pasta sauce.
The brand A on that day sold 45 units.
Brand B sold 25 units.
And our brand sells 30 units.
So by taking a cut in price, temporarily, we attracted a wide net of buyers.
And some of them are like, gosh, you know, this pasta sauce is amazing.
I'm going to continue to buy it even at the right price because I love it so much.
Some people will be like, man, that was gross.
I hated it.
Never going to buy it again.
The thing about promotions is you're doing something to get people to try it, to drive trial essentially, right?
Like sort of like a demo in a sense, right?
You know, just trying something out temporarily for one time.
And some of those people to try it will stick around.
Some of them won't.
That's fine.
Sometimes people will just buy it on sale, you know, and that's fine.
But you were able to temporarily increase your sort of share on that third day.
Now, the thing is, this is three days.
This happens every day, 365 days a year on the grocery store shelves, right?
And every day is a battle for gaining market share.
But each day is very important, right?
And the cumulative results of these 365 battles, right?
You look at the data at the end of the year, and you see these changes in market share between big brands.
You're adding it all up at the end of the year to see what's changed.
And that's really when you can see and validate your strategy and check and see if it's working out for you.
I noticed any trends as far as the categories that consumers maybe have less brand loyalty to.
So they're kind of like promotion hoppers where they'll buy what's ever on sale versus staying loyal to a brand, or is it all over the map?
Yeah, again, you know, it's very category, subcategory and retailer dependent.
You know, I think that for pasta sauce, for example, you know, there's a couple of big brands out there who have done a really good job with like positioning, let's say like super premium pasta sauce.
When I was a kid growing up, I mean, what are the choices?
Yeah, like Prego and Ragoo, right?
I mean, like you go to the grocery store now, you're buying like a 1099 jar of pasta sauce, right?
You know, and that's great because it's good stuff.
It's good stuff.
And like those manufacturers that make that stuff, I think that they got to where they are today from really being aggressive with promotions.
Like I was just at Sprouts yesterday shopping, and Carbone is there on an end cap, and it's buy one, get one, right?
And so again, like some of these like strategies to go kind of like deep with promotions can be really good because they will, you know, temporarily attract a wide net of shoppers.
Sometimes, in some cases, you know, like you'll get so much of your volume on sales, like a brand can kind of almost get addicted to sales in a sense, you know?
But there's other factors too, like subsidized volume and things of that nature.
It gets complex kind of quickly, you know, but it's very category and retailer dependent.
And I guess that Carbone is going to be looking at Rayo's Market Share to see if they are able to move some folks over to their side.
Oh, 100%.
What does the promotional data look like?
So this is a screenshot from our tool and spins called Satori.
So this is one of the dashboards you would get if you were subscribing to Spins Data.
And you go to the promotional dashboard.
You know, like looking at this, we have sort of a table and then sort of this trended chart over time.
So on the bottom axis here, we have just weeks, you know, because that's how promotions are trended out.
And we see kind of what appears to be sort of like a heartbeat, right?
It goes ba-bump, ba-bump, ba-bump, ba-bump.
And each time you see like a heartbeat and this kind of promotional EKG, that's a promotion, right?
And so you'll see like this, this trended chart.
And so it's like these kind of darker bars.
And then when the heartbeat kind of happens, you start to see this lighter bar getting on top of it.
Those are the incremental units, right?
And the thing here is to go back to base and incremental.
What do those mean?
So base sales, you take your sales over time and you look at it by week.
And when you put something on sale, your sales get divided into two buckets.
They go base sales and incremental sales.
And base sales are what you would have sold anyway.
It's based on like a rolling average that accounts for a bunch of factors, but it's basically a rolling average of the last, you know, X amount of weeks, right?
That's what we think you would have sold anyway, if you hadn't put it on sale.
Incremental sales are what we attribute in new sales because of the promotion, right?
And you want to see high levels of incremental sales as you analyze your promotions, whether that's like dollars, for example, or units.
And then here on the bottom, we also see, I think we'll go into this a little bit more in depth later, but the lift of the promotion.
So these four promotions that we see here, they're all, three out of four of them did over 100% lift, but then there was like one stinker, it's the purple one here where we had 35% lift.
So without digging into it more, if I was a brand and looking at the last four promotions I did, maybe the first, second, and fourth ones were 30% offs, and then I snuck a 10% off in there, and people didn't really respond to that.
So there's other levers into it too, but that's essentially how you would read promotional data when you're looking at Satori.
You can't do anything with the data if you can't figure out how to read it.
So thanks for that.
That's super helpful.
All right, so we've set the stage with some of the different kinds of data available, some trends in data, and then market share and lift.
You have a real life example that I love us to walk through.
We are a little tight on time, but I think it's an important one.
So please take us through this real life example.
All right, let's look at this example.
So let's go to step one.
Let's go to the next slide here.
Okay, so to kind of quickly crunch through this, let's say you're a brand and you're going into a category for the first time.
You've never sold in this retailer before, but you're selling in it for the first time.
And you want to make a smart promotional strategy that you're going to like execute on, okay?
So what are you going to do?
First thing you're going to do is you're going to look at those brands that are, what brands are doing well and what brands are not doing well.
And you're going to look at your sales, sales percent change, but also the market and the market share change, okay?
In this example, brand A's market share, they're going up, that's good.
Brand D's market share is going down.
Okay, so we know who's doing good and who's not doing so good.
So if they're a market share and probably their sales percent change are changing like this, then what else is changing?
So let's go to step two.
So there's a lot of reasons why brands' sales could be up or down, or their market share could be up or down, but a big one is like velocity.
And velocity is pretty intimately tied to promotions, okay?
Not in all cases, but in a lot of cases.
So if brand A, they're gaining a lot of share, how are they gaining that share?
Are they gaining it from price increases, from distribution increases, from velocity increases?
Here their velocity has really increased, and their promotional spending has also increased.
If we look at their amount sold on promo this year versus last year, they're spending a lot more money on promotions.
So their velocity went up, their promotional spend went up, but it's all good.
It seems like it's working out for them because they're gaining market share too.
Brand D, total opposite.
Their velocity is down, their promotional spending is down, everything's down.
Okay, so let's go to step three here.
So then, like, let's look at each of these brands as promotional activity over time.
So, again, this is the same slide we saw a little bit earlier.
But here we see for that brand A, if we, again, think of this like a heartbeat, like, is the promotional activity kind of speeding up.
We knew in aggregate that it was from the numbers here, but the heartbeat is going, ba-bum, ba-bum, ba-bum, ba-bum, ba-bum, it's going faster like a runner, okay?
So we see that their promotional spending is kind of like increasing, ramping up, and they're getting some really good lift numbers here.
So we want to look and see kind of like which promotions here worked the best, because they're not all going to work great.
You know, that's something you got to realize.
Let's go to step four.
So which of these promotions worked the best for this brand?
Well, the big levers here are going to be how many stores did the promo, which is a max ACVO of the promo, how long the promo was, and how deep the discount was.
And so here in this example, we see that basically the max ACVO of all these promos is over 95.
So almost every store did the promo every time.
That's great.
The number of weeks, generally speaking, varied between five to eight, but they were all kind of about samey samey here.
The big thing is, the big difference that the third promotion didn't do so hot relative to the other ones was, it was only 10 percent off for those eight weeks, as opposed to a brand doing 30 percent off.
Now, there's a variety of reasons why a brand would do that.
Maybe they want to save money or something, or they want to test something out.
But we see here that this kind of didn't work out so great compared to the competition or compared to their own other promotions.
So maybe it's worth repeating, maybe it's not worth repeating, but it's good to at least know.
And then if this brand that isn't performing as well as they want to, wants to try something different next time, how do you know how much to increase the promotion?
And how do you sort of tweak your actions in order to get better results?
What are some of the things you should look at?
Well, definitely, okay.
So if you see a promotion that's kind of like underperforming, you know, there's a variety of reasons that it could be, but it generally boils down to a couple of things, like the discount level, the execution of it, the timing of it.
Sometimes there's like competitive overlap too, like two pasta sauce brands go on sale at the same time, you know, so that can kind of like undercut your promotion.
There's a couple of things.
There's also kind of like simple, tragic things that can happen, you know, where like, oh, the guy that was supposed to print tags got COVID, and so like they never got printed, which is a huge bummer.
And then that means that pretty much the sale didn't really happen because no one was aware of the sale.
I mean, stuff like that, it's more common than you can believe.
Distribution issues, you know, all sorts of stuff like that.
But generally, you know, in a clean environment, it kind of boils down to like the timing, the length, and the discount level.
So, all right.
Let's look at the next slide here.
So, what did the competition do?
So, we know that their promotional spending, they cut it, right?
So, their heartbeat is going, ba-bump, ba-bump, ba-bump, ba-bump, ba-bump, ba-bump.
Ha-ha-ha.
Not healthy, right?
So, their Lyft numbers all look pretty good, you know, honestly.
But let's dive into kind of this a little bit more and go to step six here.
So, out of the competitions promotions, what was going on?
Well, the percent of stores participating in the promotion actually lowered than the other ones.
So, they had some real challenges, especially with this third promotion that was hitting at 71% versus 90, 95% for the other ones.
This third promotion, like, something happened.
Like, maybe the product was out of stock or something like that that, you know, caused about 30% of stores to not be able to execute the promotion.
That's bad, right?
That's bad.
You know, timing-wise, they were all kind of like on the longer end, and discount-wise, kind of a similar pattern here as to the other ones.
You know, there are other promotions were around 25%, let's say 30% off, but then the stinker promotion was 10% off.
So, whatever category this is, what's this telling us?
Don't promote a 10% off because this just ain't working.
Like, people just don't respond to that sort of like level of discount, right?
And so, if we go to the last slide here, the major differences are between the successful brand and unsuccessful brand.
The successful brand was doing kind of like shorter promotions that had higher discount levels, and their execution of those promotions was like a lot better.
Maybe they had their sales team out in the stores, maybe they had a brokers, partners out there, making sure that the tags were hung and printed and yada yada, right?
The frequency was actually pretty similar, but if I had to go into a retailer with a promotional strategy, I'd never promoted there before, but I've got their data in front of me, I'm looking at it.
Look at a successful brand and look at an unsuccessful brand, try and find the differences in what the successful guy is doing versus the unsuccessful brand and then replicate what the successful brand is doing.
And it comes down to length, again, length, discount depth, execution, and frequency.
That's a great tip.
How often should brands be monitoring their promos and what do they look for at each stage?
I would say that on a monthly basis, if you have access to data, you should look at the execution of your promotions using store or market-level data.
If you program the promotion and it's happening, awesome.
If it's not, uh-oh, get in there and go figure it out and see what's happening there.
Figure out the grim reality there.
On a quarterly basis, you should make sure that your promotions are hitting your lift targets that you set earlier.
And then finally, on an annual basis, you really want to look at your overall strategy and adjust your strategy from one year to next.
I have had clients that I have worked with who have not adjusted their promotional strategy in like nine years, right?
And that is surprisingly common, as a matter of fact, yet it is a big bummer for those brands because they're really not maximizing their dollars.
And what happens is if you go that long, then your competition knows when you promote because they can look at this data, too.
And they say, oh, well, this guy always has a sale on 4th of July.
Well, what's the best time to promote?
That's a question with a lot of different answers.
But one answer is right before your competition.
And if you make something like it doesn't move fast, you know, like the opposite of a drink like shampoo or something that somebody uses for three months.
If you can like kind of cut your competition off of the past, so to speak, and promote right before them, you can really kind of cripple that brand over the next couple of months because you'll have taken buyers away from them.
Well, that's great advice.
We're coming towards the end of the year.
I'm sure that this is the time when a lot of brands do take a full year look at all of that.
So I hope everyone keeps that in mind.
And thank you so much for sharing all this information.
To wrap this all up, you have a nice way of kind of succinctly describing how to figure out where to how to run the best promotions.
How do you find the sweet spot?
Yeah, well, okay.
So again, that sounds like a broken record, but it is very category, retailer, subcategory dependent.
But generally speaking, if I had to give just anybody some advice, lower discount levels, if you're trying to aggressively gain market share and compete, and you're not just phoning it in, which is totally legitimate, especially if you're a bigger brand, but if you're really just trying to break out, right?
Five, 10, 15% off, sometimes people just don't even like, doesn't even register with people, right?
And it really won't drive a lot of lifts.
Sometimes 40, 50% off can be a little too much.
Bogos can be cool, yet they can really hurt you sometimes, especially in terms of marginal performance.
20, 40% off, it's a pretty good place to be.
However, I think the best thing I could tell someone is that instead of just picking an arbitrary discount, 20, 35% off, whatever, figure out who your competition really is.
If you make kombucha, and you know that GTs is like the mac daddy of the set, like they're the share leader, and you want to peel away buyers from them, then try setting your promoted price to their everyday price.
And hopefully, they won't be having a promotion at the same time.
But by doing that, you will have this apples to apples comparison as a shopper.
You'll go into a store and be like, wow, I always buy GTs because trilogy is good, right?
And it's $3.99, and that's what I want to pay for kombucha.
But I've been thinking about trying this other brand, Rowdy Mermaid or something, and that's like $4.40.
Oh, but now they're the same price?
What?
That can really wake people up and make an apples to apples comparison in people's minds.
And they'll maybe give you a shot.
And if you're lucky, they'll like it.
And maybe they'll stick around.
My last question for you, I think this is a question that so many brands are trying to figure out.
How do you run promotions that actually move the needle without sacrificing too much margin?
Well, you know, it all kind of comes down to like being intentional about it.
I mean, I worked for a small brand before, and I've worked with a lot of other smaller brands.
And like, maybe they're just going on the advice that their broker gives them, which is sometimes good, sometimes not, or someone else.
But like, just be intentional about what you're doing.
A retailer is going to ask you to promote, in a lot of cases, in their stores, right?
And they'll maybe give you some advice about doing that.
But you know, like think about, their goals are going to be very different from your goals, right?
Sprouts' goals are different from like, GT's goals, you know?
And so whatever you decide to do, whether you decide to be cash efficient with this retailer in particular, or you decide to be aggressive and really go after gaining market share, just be intentional about it, you know?
And part of being intentional about that is to review what you're doing and make sure if it's working or not.
So the only way you can really do that is by looking at your own performance, you know, versus itself, and then also versus the competition, to really assess like, am I winning or losing here?
Because again, like market share, it's a zero-sum game.
Well, I think a lot more folks are going to be winning after this conversation.
Benji Fitts, thank you so much for joining us from Spins to help explain how to run smart promotions.
Thank you so much, and we'll see you next time.
That concludes another episode of the Community Call podcast.
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