TROPICANA DOLE JUICES UP CRP

MINA WILLIAMS

SAN FRANCISCO -- Continuous replenishment programs have enabled Tropicana Dole Beverages North America to reduce lead times and inventory held by retailers, while increasing turns of its refrigerated products. In the larger sense, CRP can be applied successfully in other perishables departments, according to Bob Burroughs, manager of electronic data interchange and Efficient Consumer Response for the brand marketer, based in Bradenton, Fla.

"Traditionally, ECR was thought of mainly as a center of the store function. When you evaluate what makes refrigerated products different, you discover how to make this system work," he said in an address at a vendor-managed inventory conference here sponsored by the Institute for International Research, New York.

As a result of employing CRP systems, inventory was reduced by 12% to 19% overall, with one account reducing inventory by as much as 51%, said Burroughs. Sales increased between 1.5% and 6.18%, with a high of 26% reported. Lead time was reduced between one and four days. The return per dollar invested in inventory improved significantly, he said. At one chain, the return went from $9.48 based on 38 inventory turns, to $12.24 and 49 turns, an improvement of $2.76. In the best of several cases Burroughs cited, a chain's return went from $15.02 on 34 turns to $30.86 and 72 turns, a gain of $15.84 per dollar invested.

"This customer was able to double turns, while reducing inventory. Based on each $1 the customer invested in Tropicana inventory on a 25% margin, we increased turns, adding to the bottom line. This was the bonus the retailer realized for sharing information and letting Tropicana manage the inventory," he said. According to Burroughs, the company asks for more endcaps and more displays than vendors not on CRP. CRP has also enabled Tropicana to increase the visibility of promotions nationwide from two weeks to one month. Between 60% and 75% of all products are now sold on promotion within the refrigerated juice category, according to Burroughs. "It used to be that we would have a $1 off-invoice deal every four weeks and then we would be off deal for four weeks. What this did was create a spiking. Now we have 75 cents off for 26 weeks to level out the spikes," he said. Tropicana also is using CRP as a means of establishing customer relationships and building on these relationships to strengthen them. This effort can give manufacturers a preferred supplier status, according to Burroughs. Tropicana is a leader in the dairy case due to its powerful brand portfolio, headed by Tropicana Pure Premium. The seventh-largest brand overall in U.S. grocery stores accounts for 25% of all juices sold in the United States. Other brands include Season's Best, Dole Juices and Juice Blends, Juice Bowl juices and Tropicana Twister Beverages. "As a leader in the category, we are looked to for solutions to issues," said Burroughs. In addition to replenishment and turns, these issues include out-of-stocks and in-store loss. "We felt that CRP should be used to reduce out-of-stocks and in-store loss," Burroughs said. "If in-store loss can be reduced, there would be a tremendous savings of money." To achieve its desired goals, he said, Tropicana had to change its business processes. Customer contact is a key component for the success of a continuous replenishment program. "Accounts that operate on a high-low basis, such as Jewel and Dominick's, are on the phone with us every day," he said. This contact is vital in streamlining the process, according to Burroughs. When one customer in upstate New York placed an order, Tropicana's analyst felt that in some areas there needed to be adjustments, so the retailer adjusted. "You have got to be willing to look at how you do business and change to streamline and take waste out, using EDI standards wherever possible," he said. "Just make sure the management information system can support EDI."