SKUd Reality

I was recently fortunate enough to spend an enjoyable time at the Fancy Food Show at the Jacob Javits Center in my home town. I couldn’t beat the commute, as it’s on my side of Manhattan.

I always enjoy the show, if only for the extraordinary culinary delights that dot every aisle. The creativity, the selection, and the sublime taste assortments are unmatched by any other show I attend. While I was surprised that there seemed to be fewer beverage offerings than in previous years, the variety and quantity was still vast. There has been a tremendous crossover of products going into channels that they never occupied before. It’s fair game for marketers to reach into various channels to sell their wares into now.

It was great to see so many friends exhibiting to show their latest creations. Everyone wanted to show me the latest additions to their portfolios. The mass of flavors and sell sheets brought me to a question: Just how many SKUs should you carry? Not can you carry, but should you?

In the old days, the strategy was occupation by mass proliferation. I vividly remember when Snapple, followed by Arizona, Mystic, and dozens of other companies had mind-boggling flotillas of SKUs and facings in the store. There were shelves of Snapple products garnering rows and rows of space. The average seemed like 30 facings. There weren’t so many companies in the game, so they could be accommodated. Now it’s a different story.

With the variety of new brands and the desire for placement, the competition for space is fierce. The big guys still control the shelves in most retail situations, so the little guys have to fight for the limited amount to real estate they can get.

That being the case, I don’t understand why so many little companies are coming out with more than six SKUs. They will not get that many facings. That’s just not realistic. When I meet with new brands, I always try to put a sense of reality into their planning. For the most part, it’s hard to to garner more than four facings on the shelves. As terrific as these brands are, it won’t grant you any more property. Choose wisely in your selection. Rotation is important; by tracking your best performers, you’ll be able to figure out the right lineup. It’s okay to have more than four sku’s as your creativity should know no bounds, but accept retailer limitations. Maybe your newer varities will be rolled into the planogram, but it’s usually at the expense of your present SKUs.

Management of your brands, their production, warehousing, and promotion should be a reflection of how much space you can receive. Plan accordingly.