LAS VEGAS – The 2008 AWMA Real Deal EXPO opened here Wednesday with a special program for buyers that offered distributors a strategy for boosting sales and profits by leveraging category management and working closer with suppliers to find new business opportunities.

Presented by industry consultant Kit Dietz, of Dietz Consulting, Huron, Ohio,and Frank Davoli, Director of Purchasing, Master Distributors, the program outlined the benefits of optimizing assortment, sales and margin through category management, category assessment and multi-vendor strategies. Also discussed were the benefits of better managing supply chain costs by applying activity based costing (ABC), through better communication and cooperation among trading partners, and of moving more products through the warehouse distribution system.

Using the snacks category as an example, Dietz contended that the convenience channel has over-emphasized the role of direct store delivery (DSD) and has under-utilized category management in snacks. “High margin power brands are overlooked, under-spaced, poorly leveraged and improperly positioned,” he said.

Distributors attending the session were told that significant sales and gross margin improvement can be achieved by reinventing their approach to branding in the snacks category. “Properly balance the role of DSD and warehouse-delivered snacks according to consumer brand preferences to maximize sales and gross margin opportunities in each snack segment,” Dietz advised.

Improving the use of category management in the snacks category should be focused on meeting consumer demand in the store, maximizing the total snack category’s performance, and increasing retailer’s sales, margin and profitability, he explained.

Distributors were encouraged to conduct category assessments to determine the margin differential of products to more effectively merchandise the store. Take advantage of multi-vendor merchandising opportunities that will help retailers improve sales at higher gross margins, Dietz stressed.

A study of two convenience store chains representing 600 stores demonstrated that the Snack MVE program developed by AWMA generated more than 20% increase in dollar sales and 23% increase in gross profits across all snack segments, according to Dietz, who said that program can be used as a template to be applied to other categories and category segments.

Pointing out that AWMA’s Distributor Value Equation study identified SKU proliferation as a major problem for distributors, Dietz urged trading partners to work more closely together to better manage product assortment.

He also urged attendees to brainstorm with their manufacturer partners to identify new opportunities, such as performing new services, streamlining promotional processes, reconfiguring case pack sizes to help minimize single pick, and developing multi-vendor strategies across categories to better compete against DSD.

“Build your own list,” he suggested. “There are plenty of opportunities if we just put our mind to it.”

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