Optimizing Process

Gus Barber started Barber Foods with one employee, a butcher knife and an old truck. He had a 1,000 square foot facility and delivered beef to restaurants and markets in Portland, Me. Today the family still runs this mid-market company with 700 associates from approximately 50 different nations, now working in a state-of-the-art 150,000 plus square foot production facility. Barber produces a line of frozen chicken products -- stuffed chicken breasts, chicken nuggets, fingers and fillets and chicken snacks -- with sales across retail grocery, club stores and foodservice. Ninety percent of the sales and marketing budget at Barber is allocated to trade promotion.

 

Since the majority of marketing is done through trade events, and with such a high dollar percentage on the line, Barber needed to optimize its process. Margins were eroding due to higher demands for spend rates, in-store merchandising and "pay-to-play" pressures. The company realized it needed to reevaluate its trade promotion strategy and called on Clarkston Consulting to help it do that.

 

Clarkston took a two-phased approach -- Phase I: Process Improvement Plan via a Maturity Assessment; Phase 2: Business Analytic Review. The assessment identified the current practice and how it compared to the industry. This also allowed for the identification of "quick win" opportunities for improvements. After data was collected and the analysis performed, Clarkston recommended that Barber create "Key Performance Indicators (KPIs); develop baseline models to quantify incremental volume and profit to determine ROTI; implement "what-if" simulation models for sales planning and demand-based forecasting; create future trade events based upon historical successes; and eliminate wasteful funding of historically poor events based upon quantifiable evidence.

 

Clarkston also designed a study to gain strategic insights on how consumers respond to Barber Foods' brands during retail trade promotions.

 

Executive sponsorship and leadership was given from the start and throughout the initiative, and was essential for success. A team approach allowed for a clear understanding of the consequences of high trade spend and involving regional sales managers was "vital in gaining acceptance and taking ownership of the changes required for improving sales performances and profitability." Business benefits Barber realized include:

• Greater control over trade promotion expenditures
• Ability to measure performance at retail chain level
• Better understanding of what works best and why
• A base system for predicting the financial results of future trade events

 

Within just weeks of completing the project, Barber Foods was able to use trade analytics with one of their retail customers to show past events that did not work. The company was then able to reallocate spending to yield higher sales and profits, and, with several retail partners, collaborate on trade promotion efficiency, resulting in a stronger commitment to work together on events. Barber Foods realizes that optimization is an ongoing and evolving process, but quickly experienced benefits and financial rewards resulting in its new practices. CG