Building Profits With Smart Buying Strategies The 2007 AWMA Real Deal EXPO opened here Wednesday with a special program that offered distributors concrete solutions for increasing profits by fine-tuning the way they make better purchasing decisions and taking advantage of new product opportunities. Moderated by industry consultant Kit Dietz, of Dietz Consulting, Huron, OH, the session outlined the benefits of Activity Based Purchasing (ABP), getting new products to the shelf as quickly as possible, and effectively merchandising the thousands of new products that come to market each year, building consumer excitement, sales, and profits. Discussing the potential for increased sales and profits through ABP were Devin Fogleman, National Account Manager, Convenience Channel, DOT Foods, and Todd Bricker, Marketing Manager, Convenience Channel, DOT Foods. They pointed out that inventory accounts for 35 percent of a distributor’s assets, and that by strategically reducing inventory, profits can be significantly increased. ABP involves identifying fixed and variable costs associated with moving products through the system, analyzing those costs, and making purchasing decisions that will maximize profitability using that information. "ABP helps to quantify purchasing options to maximize profitability," they told distributors attending the session. Dan Sarullo, Customer Insights Manager, Kraft Foods, emphasized the importance of "breaking through the clutter" resulting from 20,000 new food and beverage items being introduced each year. In analyzing which products to accept, he said distributors should assess whether they will either build consumer interest and excitement, at least for a limited period of time, or whether they will be "sustainable" and make a long-term and lasting contribution to sales. The optimum situation, of course, would be products with both attributes. There is much to be gained, advised Sarullo and Shaun Morgan, National Sales Director, C-stores, The Hershey Company, from speeding new products to convenience store shelves and taking advantage of the sales lift that they can provide. In fact, Sarullo estimated that new product sales could be boosted by 15 to 20% if their distribution and placement could be expedited. He said it now takes the convenience channel about five months to build to full distribution of new products after they are released. Morgan emphasized the value of using new item displays to bring those products to the attention of consumers, and Dietz stressed the value of the Multi-Vendor End (MVE) unit program designed by AWMA for new products. "You can capture a lot of incremental sales by getting the product out there fast and in front of the consumer," Morgan said. "It is an $80 million opportunity for C-stores." For more information on attending the AWMA REAL DEAL EXPO, contact customer service at either 800-564-4220 or 703-449-6418 or awmaregistration@jspargo.com