C-Store Dive’s Post

Breakfast cereal exemplifies the ongoing transition period for many food and grocery products. #Consumers are recalibrating their behavior and their value perceptions after a couple years of rising prices, a trend which I view as an overdue correction. #CPG companies in turn are shifting their focus to growing volume. #PriceChanges normally cut through the noise in the Uniform Game, but when price changes become part of the noise, companies need to look at their promotion and portfolio strategies to help consumers make their choices. That was the topic my colleague Max Holz addressed in last week's Game Changer Newsletter, and it's a topic we will continue to monitor.

Supply chain professionals must get acquainted with financial terms because their work has a massive impact on business performance. Cost of Goods Sold (COGS) is the sum of all direct costs associated with making a product, including money mainly spent on raw materials and labour. Frequently monitoring COGS at granular level (i.e. SKU) is very important because it helps you identify negative trends with direct repercussions on gross margins and profitability. When the right information is made available at the right time, a supply chain pro can act wiser and faster. While always relevant, this is even more important in some specific scenarios, such as: - Times of price volatility/uncertainty (i.e. raw materials facing demand/supply tensions) - Early stages of New Product launches. Benchmarking COGS is a powerful tool for identifying opportunities for improvement. Starting with an internal analysis (ie, month-over-month trends by SKU) and adding external points of reference (ie, COGS by industry, revenue size, location). Reach out to Olivia S. for more insights into our benchmark tool.

More evidence that unit volumes aren't bouncing back like many hoped they would. This, to me, is a telling quote: "Like most of the food industry, management teams of snack companies attribute the slowdown to price shock. Consumers have yet to acclimate to the 25%-plus price increases in snack products they are seeing on shelves. They view this a transitory issue that will normalize as wages continue to rise and consumers eventually realize that these higher prices are ‘the new normal.’ Historically, this has proven true, but economists and industry experts have been surprised by how long it has taken consumers to acclimate to the current environment.”  Food Business News PepsiCo Russ Redman Cowen Inc.

Campbell Soup Co. reported another quarterly sales volume decline as families keep looking for savings on groceries and projects to improve this trend during the year as consumer confidence brightens. This major US food player will surely benefit from its $2.7bn acquisition of Rao’s sauces maker Sovos Brands, a deal under antitrust review but expected to be completed next week. Read more about the brand whose canned soups were depicted by Andy Warhol in a series of pop-art paintings in this article by Just Food. The article also covers the decline of the FAO food price index, the spikes in Chocolate and Sugar prices, and much more. #futureoffood #futureofretail

July was a very strong month for the meat department, especially on the fresh side. 🥩 With July delivering another strong performance, year-to-date retail meat #sales reached $58.7 billion, an increase of 4%. 🍗 Read the article below for more meat department insights. 👇 https://brnw.ch/21wLSdr #MeatDepartment #MeatIndustry #retail #ConsumerTrends

This is such a great article by Errol Schweizer, a former Head Merchandiser at Whole Foods Market. If you ever wanted to know how grocery prices are set, this is a great read. One note, consumers often look at a price and assume the brand is getting 50% or 60% of that price. The reality is the price on shelf it typically 3, and sometimes 4x what the brand sold it for, because of the multiple levels it goes through before getting on shelf. Keep that in mind next time you think brands are gouging you with pricing. And be sure to subscribe to The Checkout, Errol's highly insightful newsletter on the grocery industry. https://lnkd.in/ghspEwgK #grocery #inflation #cpg #foodprices https://lnkd.in/getCKZaW

The big brands in #foodandbeverage are feeling the pain of consumers shifting spending to #privatelabel in #groceryretail. Meet me at #IFTFIRST to discuss how #plm can help you be more competitive on either side of this epic unfolding battle in the American #food supply. See you in Chicago next week!

Interesting article from Food Business News... Given that a bag of Fritos is $5.69 at my local King Soopers/City Market........ seems that a couple priority areas will be of focus looking ahead to the remainder of 2024 and early 2025: 1) Price Elasticity (Van Westendorp or another approach) - Need to re-align perceived value to shoppers 2) In-Store Shop Alongs - Understand where trade-offs are occurring at shelf 3) Cart Analysis: Inflation Trade-offs, Private label vs National Brand

Why should manufacturers care about COGS and how does it relate to their supply chain? For example, let’s review the Food & Beverage Industry across multiple sectors. Here's a closer look at how these numbers are shaping the supply chain landscape. 1. Food and Kindred Products: - Variations were minimal, with the largest changes being -3 in 2020 and 2023, and +3 in 2021. 2. Beverages: - Significant variations include a consistent -3 in 2019 and 2020, followed by a positive trend with +3 in 2021 and +2 in 2022, reaching +3 in 2023. 3. Dairy Products: -Variations showed an upward trend with a significant increase in 2022 (+6). 4. Meat Products: - Variations indicated some volatility, with the most notable increase in 2019 (+4) and a consistent rise overall. 5. Miscellaneous Food Preparations and Kindred Products: - Variations were less significant but showed a minor downward trend in 2021 (-2). 📈 Overall Industry Trends: 1. Grand Total %COGS: Increased from 39% in 2018 to 48% in 2023, indicating a rising trend in overall costs. 2. Grand Total COGS Variations: The industry saw significant variation in 2023 (+18%), the highest in the given period, indicating a substantial increase in costs. ✨ Summary: • The Food and Beverage industry experienced varying %COGS across different product categories, with notable increases in Dairy and Meat Products. • Beverages saw a decrease in %COGS until 2020, followed by an upward trend. • Miscellaneous Food Preparations maintained high %COGS with minor fluctuations. • Overall, the industry's costs have been rising, as evidenced by the increase in the grand total %COGS from 2018 to 2023. Manufacturers should care about COGS because it directly impacts profitability and can reveal inefficiencies or strengths in their supply chain management. 🔍 Want to interpret your company's performance data easily? Register for our free benchmark tool today to gain insights within seconds! #DataAnalytics #Benchmarking #BusinessInsights

Understanding Cost of Goods Sold (COGS) is crucial for supply chain professionals. Why? Because it directly impacts profitability and highlights inefficiencies or strengths in the supply chain. Here are some stats for the Food & Beverage industry. 🔍 Want to understand your company's performance data better? Register for our free benchmark tool today! Link in the comments #SupplyChain #Benchmarking #Performance