10 (More) Terms Every Food Business Should Know (Part 2)
Part 1 here!
For small business owners sometime it seems like the retail food industry uses a completely different language. In order to successfully communicate with retailers, buyers, and other companies, here are some more terms you should know.
Sell sheets are marketing tools used to alert retailers of new or upcoming products. Depending on the format, they can be used to highlight single items or new product lines. Typically, sell sheets contain the following information:
•Full-color images of the product or products
•Product specifications (size, package quantity, different flavors, etc.)
•The top features and benefits of the product(s)
•Relevant ordering information (SKU, UPC, item number, etc.)
•Promotional discounts for the first order (these are usually passed on through the distributor and are store specific)
Sell sheets that feature the top-selling SKUs of a brand, or the entire product catalog, can also be created and used when presenting to new stores and buyers.
Also called a “slotting allowance,” this is a one-time fee food brands pay for the initial placement of their products on store shelves. This fee includes the costs of storing the products in the retailer’s warehouses, entering the product’s barcode and information into their system. Since 70–80% of all new food products fall in their first year, slotting fees are a way for retailers to protect their investment, and recoup any losses they may encounter.
Not all stores require slotting fees, and some types of products don’t have to pay a fee at all. Meat, sugar, and non-frozen dairy manufacturers, for example, are typically not charged slotting fees. Beverage, frozen food, and snack food manufacturers, on the other hand, usually are.
Sometimes used interchangeably with slotting fees, pay-to-stay fees are paid by brands to ensure their product remains on the store shelf.
Free-fills are a type of promotion where a store receives a specific amount of free product (usually measured by the case). They are given to new retailers to encourage them to begin stocking a brand, or to existing retailers to encourage them to bring in new products. Typically this promotion is passed on through the distributors to smaller retailers.
This is the formal document that allows your food product to be manufactured for retail sale, usually by a co-packer. Before you can receive a scheduled process, your entire manufacturing process has to be evaluated, which includes the recipe, procedures, ingredients, and packaging.
The FDA requires scheduled processes to ensure that the finished products pose no harm to customers. Many process authorities can be found at universities and colleges.
Shelf life refers to the length of time that your product can be stored before the quality becomes compromised. The time period can be found on packages as the sell by date, use by date, or best before date. Depending on the type of food, the shelf life can range anywhere from several days to several years. If you are selling dairy or meat products, for example, your products will have a much shorter shelf life than if you were selling dried pasta or canned goods.
Most retailers will require that your product pass a shelf life test before it can be sold in stores. These tests are performed by private labs that will test your food products under different conditions to monitor changes in taste, odor, texture, and appearance, and the effect of the packaging on the food.
In-Store Marketing Terms
Point of Sale (POS) Displays
In-store point of sale displays used to call attention to products and brands in an off-shelf location. These may include endcaps, free-standing shippers, countertop displays, and shelf-talkers.
End caps are displays (usually permanent) that are used to promote specific products and drive overall sales. Located at the end of the aisle, end caps are typically changed on a regular basis. Often they are used to promote products currently on sale, or items that follow a specific theme (such as holiday baking, or summertime barbecue foods). They may contain items from one brand only (full end cap) or may be mixed (shared end cap).
The end caps are considered prime real estate in a retail store, and getting your product stocked on one isn’t cheap. While smaller local stores may pick the items on an end cap based on buyer or manager preferences, most retail stores charge high fees for the placement.
Shipper displays create off-shelf promotional opportunities for companies. Also called point of sale displays, shippers are self-contained stand-alone displays usually made of cardboard. They are meant to be single-use and often arrive with the amount of product needed to stock the display (as opposed to being stocked from the current store inventory). Shippers can be used as a way to promote new products or can be themed, containing holiday flavors, seasonal foods, etc. Shippers come in several different forms:
•Floor shipper: These sit directly on the floor. They have large headers to promote the brand and can be placed in various locations around the store according to retailer instructions.
•Counter shipper: Smaller than floor shippers, these are made to sit on a countertop and hold smaller products, such as candy, chocolate bars, energy bars, and other snacks. They may be placed at cash registers, deli counters, etc., and are used to encourage impulse purchases.
Used as in-store marketing tools, shelf-talkers are signs displayed under a product used to grab the customers attention. Shelf talkers may be produced by a retailer to inform customers about products or may be provided by companies to help promote their brand. Unlike sales tags which are used to display promotional information, shelf talkers usually talk about the features and benefits of the product or the company.
For example, maybe you want to highlight the fact that your company donates a portion of your sales to charity. Or perhaps you’ve recently won an industry award for your products. Letting the public know more about your company can help set you apart from competitors and drive sales.