CONCORD, Mass. -- Welch's frozen juice category management program has achieved a total of $2.7 million in incremental profit.
As reported, the one-year-old program has been installed in American Stores Co., Salt Lake City; Tops Friendly Markets, Buffalo, N.Y.; the Atlanta and Indianapolis Kroger Marketing Areas; and Ralphs Grocery Co., Compton, Calif. Welch's is looking to expand the program to 15 to 20 additional chains this year.
Called Harvest, the program involves three stages: assortment, pricing and promotion, and shelf management. The company recently completed the assortment stage and is now moving to pricing and promotion, said Dave Lukiewski, vice president of sales at Welch's here.
In the assortment phase, Harvest found the retailers had too many of certain frozen juice stockkeeping units.
"In a number of cases, there was a tremendous amount of duplication," said Peter Martin, director of customer alliance and category management.
Orange citrus drinks accounted for the majority of deleted SKUs. "For the most part, if anything was over-SKUed, it was citrus," Martin told SN.
Harvest enabled one of the retailers, whom Lukiewski declined to identify, to achieve a $96,000 profit and $400,000 in sales. A total of 17 items were added, while six were deleted. Orange citrus accounted for the greatest number of deletions (three SKUs). Other deletions: one SKU of noncitrus cocktail/juice blend, one SKU of apple juice and one SKU of fruit punch drink.
The 17 additions were: five noncitrus cocktail/juice SKUs, along with three cran/blend SKUs, three apple/blend SKUs and six fruit-punch/blend SKUs.
Welch's used consumer data to determine which products should be added or taken out.
As Harvest moves into pricing and promotion, which will last for about six months, Welch's is concentrating on how to deliver to retailers the right type and frequency of promotion.
Preliminary results indicate that some retailers may be overpromoting the category in terms of frequency but are not delivering the right kind of promotion.
