Elizabeth Hemphill-Burns’ Post

Ever wondered how that ketchup bottle reaches your local supermarket and how price markup happens along the way? In this article, several inner workings are explained, the role of the Distributor is highlighted, fees and deductions are briefly explained; it's clear that for manufacturers, limited access to the point of sale information and lack of collaborative forecasting with distributors impacts their cash flow, inventory carrying costs, profitability amongst others and on the other end of the supply chain, consumers pay - or not - for the inefficiencies and partner margins #grocerydistribution #pricingstrategy #cpfr #deductions #profitability

It’s not just bottom-line profitability of small CPG brand that is impacted by the distributor chargebacks. Cash flow uncertainty is also a major concern to a CPG brand when they don’t know “what, if anything” , the brand will be paid for its products. This lack of certainty of payment forces many early-stage CPG brands to fund their working capital needs with dilutive equity (if even available) rather than more cost-effective debt alternatives. Some lenders are also thinking twice when funding working capital for early-stage CPG brands who don’t have longer, more established relationships with certain distributors. These lenders don’t want to assume the risk that the distributors will pay the brands less or much later than anticipated.   #workingcapital #CPGbrands #cashflow #grocers #distributors

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This is a great The Wall Street Journal article everyone, including those in Washington need to read. Retailers and manufacturers have been hammered for price gouging even has margins have decreased. Some of these price hikes are a direct result of increased fees and charge backs manufactures face from distributors delivering products to stores. These fees are a challenge for all manufacturers but disproportionately impact smaller vendors who don't have the resources to challenge every short pay or charge from the large distributors. The passage below gives a great overview of the "inside income" manufacturers face as they try to get product from their bakery to the shelf. "To win business, distributors often bid against one another to be the primary supplier of food brands to grocers. The resulting contracts typically limit how much distributors can mark up prices on goods they buy from food makers. In practice, what large supermarkets pay distributors frequently doesn’t cover their costs. That leaves distributors reliant on so-called inside income, or revenue generated from food manufacturers."

Retailers must balance cost management with competitive pricing strategies to attract and retain customers.

Forbidden Foods (ASX:FFF) saw higher revenue in the fiscal fourth quarter, which it attributed to improved inventory management. #fmcg #insidefmcg #business #brand #inventory #management

Mastering Pricing Strategies in the Three-Tier System: Balancing Profitability and Competitiveness In the intricate world of alcohol distribution, a deep understanding of pricing strategy across the three-tier system – suppliers, distributors, and retailers – is not just important; it's crucial. This knowledge is a critical factor in any brand's long-term profitability and market penetration. Each tier has its own pricing considerations and challenges: 🍷 Suppliers: Must account for production costs, desired profit margins, and leave room for distributor and retailer markups. Pricing impacts brand perception and competitive positioning. 🚚 Distributors: Typically work on a margin basis, adding their markup to the supplier's price. They must cover operational costs, sales force expenses, and profit margins while keeping products competitive for retailers. 🏪 Retailers: Have the final say in pricing to consumers but must balance profitability with consumer price expectations and competitive pressures. Often aim for specific price points (e.g., $19.99 or $24.99 for a bottle of wine). Managing margins across all tiers is vital to creating a pricing strategy that works for the entire supply chain while delivering value to consumers. Typical margin expectations vary: ✔ Suppliers: 50-70% gross margin ✔ Distributors: 25-30% for wine and spirits, 25-35% for beer ✔ Retailers: 30-50% gross margin, with higher margins for premium products Balancing profitability and competitiveness is essential. While higher margins are desirable, they must be weighed against the need to remain competitive and achieve volume goals. These margins vary by product category, brand prestige, and local market conditions. By crafting a strategic pricing approach that accounts for the unique dynamics of each tier and the delicate balance of margins, you can set your brand up for success in the complex world of alcohol distribution. #PricingStrategy #AlcoholDistribution #ThreeTierSystem

When premade bag package enters supermarkets and chain stores, are you still relying traditional packaging method? Sauce as one type of fast-moving consumer goods, also is undergoing packaging changes! We have been making the impossible possible and providing customers with the best solutions. The following is another successful case, appearance determines sales. Are you still hesitating?

Food Surplus: Over 38 different grocery retail businesses from around the world will be represented at our annual online review of "markdowns" on June 11th at 3pm BST. We have new academic research to share and many retailers sharing new ways to optimising margin, sell through and labour. This meeting is for retailers, producers and academics only. Click to register. https://lnkd.in/ecuYVPhY #foodwasteECR Retail Loss

The Invisible Hand Behind Rising Grocery Prices When a bag of coconut-cashew granola at Whole Foods jumped from $5.99 to $6.69, the culprit wasn’t just manufacturers or grocers. Instead, a hidden force in the supply chain is squeezing the industry with mysterious fees. Known as grocery distributors, this opaque network has become a critical link between manufacturers and your grocery bill. Grocery distributors like UNFI ($UNFI), KeHE, and C&S are the intermediaries who buy, store, and ship products to supermarkets, managing programs for thousands of small food makers. Industry consolidation has reduced alternatives, forcing manufacturers to pay increasingly aggressive fees that can net a mere $2.50 from a $10K granola shipment. The pricing paradox: Operating on razor-thin margins, distributors rely heavily on charging suppliers with shipping, promotion, and processing fees — in what industry veterans liken to “the Wild West” of pricing. With the system becoming so complex, manufacturers often have to hire full-time employees or outsource to costly “deduction buster” firms to dispute charges and recover funds. But as costs stack up, pressed manufacturers note, “In the end, consumers pay for everything.”