The Importance of Secondary Placement

I want to thank all the new subscribers who joined over the past two weeks after the Instacart newsletter. It was great to see how well-received it was and I look forward to doing deeper dives like that in the future.

I didn’t post last week given everything that is going on in the world, but I do want to return to my normal cadence and also work to get some bonus content out this month.

Today, I am diving into the importance of secondary placement and being in the store, especially in the early days of your brand.

This is a picture circa 2017, when I just started with Fine & Raw Chocolate. I had previously helped run sales for a seafood distributor and managed a $8M book of business that consisted mostly of restaurants and corporate food service accounts.

I knew I wanted to get out of food service sales and into retail, which required me to take a bit of a step backward and find a role where I could live in the stores for the next year.

I accepted the role of Sales Director at Fine & Raw and traded going to a smelly, freezing cold warehouse in Secaucus to a hipster-inspired, heavenly-smelling warehouse in Brooklyn.

My first goal when I got there was to go into all of our accounts and create a strong relationship with the buyers and managers. Most of our accounts were in the tri-state area, so it was convenient for me to be in the stores, especially the days I was in Manhattan because I could hit 10-15 accounts in a day.

The picture above is from Whole Foods Market in Bryant Park. I believe it had recently opened, and the store was great. We were in most of the Northeast Whole Foods, but we were mostly in the chocolate set with all the other premium bars (Raaka and Mast Brothers).

The chocolate sets in these Whole Foods locations were extremely territorial. I would go in on Monday to organize the set and when I would come back on Wednesday, my product would be pushed to the back and a competitor’s product would be in front of mine or my product would have found its way to the bottom shelf.

I would fix it, move on, and continue to fight that battle weekly, but I would also strengthen my relationship with the store staff, specifically the Café team.

I knew our new Chunkies, which were a smaller, truffle-like product would be a great complement to someone’s coffee order and add a $5 item to that receipt which would help the Café make their daily goal, and that became my pitch.

It was an incremental, impulse purchase that wouldn’t take sales away from any of their core offerings, and simply increased the basket size for their department.

I would refill that basket 3-4x a week and I didn’t have to worry about competitors in that department because they were too focused on stocking the chocolate set.

Selling a $10 SRP chocolate bar to new potential accounts is not easy, but securing secondary placement and cross-merchandising in current accounts was easy for me. It’s also the only way I made my monthly numbers. I knew that even if I couldn’t open up enough new accounts to hit my goal, I could always count on that small wooden box.

I would have never known that there was an opportunity for same-store sales growth if I wasn’t in the store.

I would have never known that my product was not getting on the shelf and when it did, it was getting moved, if I wasn’t in the store.

I would have missed my sales numbers if I just focused on new accounts and if I hadn’t been in the store.

I love seeing the LinkedIn posts from brands (mostly beverages) about the monumental displays that they just built inside one of their core accounts. These brands understand that placement is just as important as promotions and that if you’re on promotion, you better be securing secondary placement to maximize that discount.

There are amazing companies out there that help with merchandising like Dirty Hands, Basemakers, and Trax. These companies though have their playbook and processes that work for them. I think it’s important as an emerging brand that you develop your processes and playbook that make sense for how merchandising and secondary placement work for your brand.

Then after you have refined it in your backyard, you can use these companies to carry out what has worked for you on a bigger scale or go the route of building your field marketing team in-house.

Either way, if you don’t have a presence in the store you're going to miss out on potential sales. Here are some other examples of cross-merchandising that have worked for me in the past and can hopefully be applicable to you:

• Chocolate syrup - We had a food service chocolate syrup at Fine & Raw that we started to sell to Cafés and even though we didn’t sell the syrup at the store, the placement of the syrup on the Café menu and getting our brand name on the menu led to an increase in bar sales.

• Fresh + Frozen - When I worked for the seafood distributor we had a frozen salmon burger line. Instead of only providing the burger in the freezer section, we sold the fresh seafood department on the idea of slacking our frozen burgers in their fresh set and selling them individually. This lets shoppers try our product and increased the sales of our 4-pack in the freezer section.

• Collaborations - At Delighted By, our chocolate hummus paired really well with pretzels. So we partnered with a gluten-free pretzel company for demos and cross-promotions. This led to secondary placement with the pretzels and those pretzel shoppers trying our product for the first time.

The other key for secondary placement is creating space that didn’t exist before for your retail partners.

When you can propose secondary placement through floor shippers, branded coolers, or even something as small as clip strips, you can remove the decision from the buyer of what they have to take off the shelf to make room for your brand.

Instead, you're paying for them to have more real estate to sell more products. Of course, this is more expensive, but you will see a lot of FMCG deploy these strategies as they scale.

Hopefully, this gets the merchandising juices flowing for you and you can see that the quickest path to your revenue goals is maximizing your current accounts.