Click to read the original text for details. Summer is the peak season for beverage sales, making it a prime opportunity for beverage companies to showcase their strengths, but it also means intense market competition. If distributors simply place products in stores and wait for natural sales, they will find it hard to take the initiative in the competition. So, how can distributors double their sales during the fiercely competitive summer? The following three key points deserve attention.
Select and Focus on the Top 20% of High-Performing Stores
The Pareto Principle states that 80% of wealth is created by 20% of people. This principle also applies to the food industry, meaning that 80% of sales come from 20% of retail stores. This implies that distributors must prioritize their distribution and promotion efforts. Before investing energy, distributors must carefully select the top 20% of high-performing stores, which requires a detailed understanding of the local market. So, how can distributors identify these top 20% stores?
Generally, high-performing stores meet two to three of the following criteria: From a geographic perspective, they have an advantageous location, convenient transportation, high foot traffic, and strong influence and visibility in the local business district. From a product category perspective, they have a large sales area and a comprehensive range of products, covering most daily necessities. From a store positioning perspective, they offer relatively low prices and are more consumer-friendly, such as hypermarkets and large supermarkets. From a customer perspective, they are often special channels with a closed customer base, such as hospitals, prisons, schools, and community convenience stores.
After selecting high-performing stores, distributors should focus on relationship building, distribution, display, and promotion. First, distributors must build good relationships with these stores to ensure smooth subsequent operations. For example, giving gifts like umbrellas, coconut juice, or cups during holidays, organizing summer rafting trips for store owners, or hiring kindergarten teachers at their own expense for weekend promotions. Second, ensure sufficient stock in high-performing stores. Only with adequate distribution can a visual impact be created, making sure consumers "see" the products. Third, besides securing freezer space, distributors should also focus on in-store displays, creating as large a display as possible to attract consumer attention, and using branded clothing or props for lively displays.
Finally, promotional efforts should not be overlooked, such as hanging banners on streets, cooperating with schools and beauty salons, and using packaging, posters, and advertisements in stores. Jia Zhanqi from Qirui Trading in Xiangcheng County, Henan, introduced that to promote his agency's Happy Family coconut juice, he customized advertising posters with an area cost of about 1-2 yuan per square meter. Initially, they were posted at cash registers, freezers, windows, and pillars in stores, which required good relationships. Later, they extended to crossroads, bus stations, hospital entrances, street freezers, restaurants, hypermarkets, and small and medium supermarkets—anywhere with high foot traffic.
Frozen Display Is an Urgent Priority
As we all know, cold beverages are the top choice for consumers to quench thirst in summer, which means freezers are the key to summer beverage sales. According to extensive survey data, sales of frozen beverages in summer are 3-5 times higher than those at room temperature. If distributors cannot secure terminal freezers in summer, their sales velocity will significantly decrease. Most retailers only display best-selling or high-margin products in freezers, so distributors must "fight for" freezer space for their beverages. Since freezers are the focus of competition among brands in summer, how can distributors secure them?
Provide freezers to terminals. Distributors can offer freezers with product promotional labels to retailers and sign agreements specifying that a certain proportion of display space and specific positions are reserved for their products, and that competitors' products cannot be placed in the freezers. Additionally, incentive policies can be established: initially, retailers only have the right to use the freezers, but if they meet sales targets within a specified period, they can gain ownership. Meanwhile, some strong companies have already placed freezers in terminals, so distributors need to negotiate with retailers to ensure their products' rights in those freezers. Currently, most freezers in the market are provided by Coca-Cola, Pepsi, Jinmailang, Ganten, and Evergrande. Besides freezers, distributors can also use displays and cut cases to create a stronger visual impact.
Share competitor resources. Due to limitations in display space and promotion costs, distributors may not achieve full coverage of freezers. In such cases, distributors can negotiate with retailers or companies providing freezers to share freezer resources. Although this may not secure the best position in consumers' sight, it at least secures the sales outlet of the freezer, a critical condition for summer beverage sales. If a distributor represents multiple beverage brands, they can apply for a freezer from each company and place them in different terminals, then coordinate resource sharing among brands.
Build relationships and use policies. Although some terminal freezers are provided by companies with strict display ratios and positions, they do not occupy all freezer space, leaving room for other brands, which depends on the retailer. Additionally, retailers may have their own freezers, typically stocked with best-sellers and high-margin beverages. To gain access to these freezers, distributors can build good relationships with retailers or implement incentive policies, such as rewards for reaching certain retail sales levels, to encourage retailers to place their beverages in freezers. At the same time, during each distribution or market inspection, distributors should promptly check the freezer display situation at terminals.
Manage Inventory to Prevent Stockouts
Summer beverage demand is high, and distributors of all brands will stock terminals heavily. This requires distributors to do a good job of warehousing and prepare sufficient manpower, materials, and funds for rapid distribution to seize terminal capital, shelves, freezers, advertising, and channels, giving products a first-mover advantage in the competitive market. At the same time, summer beverage sales are significantly affected by weather; prolonged rainy days can cause a sharp drop in sales. Therefore, managing inventory and terminal stock becomes particularly important for distributors in summer.
Distributors should manage inventory from three aspects: First, the conventional method is the 1.5 times inventory method, meaning inventory is 1.5 times the average monthly sales. For example, if monthly sales are 10,000 yuan, inventory should be maintained at 15,000 yuan. Second, because each brand has many varieties with different sales levels, back-office staff should establish a database based on sales patterns and prepare stock accordingly. Third, companies will issue annual tasks in advance, broken down into monthly targets.
Distributors need to break down monthly tasks layer by layer to each business group, typically setting targets higher than the company's monthly allocation. This arrangement prevents stockouts during the summer peak and avoids inventory pressure from the rainy season. Summer beverage stockouts are normal, but distributors should control the stockout rate within a certain period, especially ensuring that the top 20% of high-performing stores never experience stockouts.
Terminal stockouts usually occur because distribution logistics cannot keep up during the peak season. It is rare for both terminals and warehouses to be out of stock simultaneously; it usually happens during specific periods of the peak season, such as a few days around Spring Festival, Dragon Boat Festival, or Mid-Autumn Festival. If this occurs, distributors must have contingency plans. Since manufacturer shipments take too long and cannot solve immediate problems, distributors should urgently contact nearby distributors to coordinate and exchange goods, helping each other through difficulties. Additionally, based on knowledge of terminal inventory in their area, they can transfer stock from terminals with high inventory to those with high sales to temporarily alleviate the shortage.
The more popular summer beverages are, the more challenging distribution, promotion, and management become. Distributors' teams should focus their efforts rather than blindly following market trends. By grasping the key points and solving difficulties, achieving sales growth is not difficult.
Source: Food Board -END-