STUDY: USING DATA IS THE KEY TO PRODUCE CATEGORY MANAGEMENT

AMY I. STICKEL

NEWARK, Del. -- Just the facts, ma'am.

That's what retailers are going to need, if they hope to propel category management into the produce arena, according to a study released by the Produce Marketing Association here.

"There is a lot of information available to retailers, but accessing it and processing it is key," said Bruce Knobeloch, director of produce for Schnuck Markets in St. Louis and chairman of the PMA Category Management Task Force.

"One of the findings of the study is the importance of utilizing the information that's available to make better decisions," said Knobeloch, whose chain is one of the few deeply involved in produce category management.

The study, coordinated for PMA by Willard Bishop Consulting, Barrington, Ill., explores the hows, whats and whys of bringing the traditionally grocery-based principles of category management to the hothouse world of produce and floral. It also made clear how little category management has advanced until now in the produce department.

"I guess the fact that the industry is not further along in category management in produce surprised me," said Steve Ahlberg, vice president of member programs for PMA.

"During our study, maybe less than 10 retail chains surfaced that told us themselves that they had some degree of confidence in implementing category management," he said. The study pointed out some inherent ways produce and floral differ from the grocery side of the business. When it comes to tracking and accessing data, grocery category managers

can rely on Universal Product Code data, shelf-stable products and regular supplies, for example, while seasonality, lack of standardized sizing and perishability are trademarks of produce and floral, according to the study.

Getting solid facts, and using them intelligently, is a crucial part of adapting category management techniques to the produce department, the study found.

Knobeloch speaks from personal experience. "After determining how the buying office would be structured, one of the biggest challenges we faced at Schnuck's when we implemented category management was the access of good information," he said.

Schnuck's data is culled from the front end, in terms of scanning and price look-up codes, from shippers and from consumers.

Price look-up codes are a boon for Schnuck's when it comes to collecting front-end data. "It would be extremely difficult to implement category management without the standard codes," said Knobeloch. His chain converted to PLUs as part of the move to category management about two years ago.

After collecting the data, setting aside the time and labor necessary to analyze it intelligently is also critical, said Knobeloch.

"Several times within the report, it stresses that the importance of time management cannot be overlooked," he said. "At Schnuck's, we are analyzing and reviewing categories on a scheduled basis, instead of a seasonal one. It's extremely important.

"We've traditionally made a lot of decisions based on instinct, based on what we felt we knew. Without PLUs and UPC codes, we haven't had the ability to track the product," Ahlberg said.

While category management has been a hot topic on the grocery side for several years, it is only now catching on in the produce department, the study found.

At the same time, Ahlberg told SN, he was surprised by the interest the study has sparked in the industry.

"We've sold hundreds of copies so far to people who are eager to get their hands on anything that has the phrase 'category management' attached to it," he said.