Peruvian Onions

Impactful Merchandising: A Q&A with Bob Kirch

As demand shifts and new products and trending items vacillate in and out of grocery aisles, having a well-thought-out approach to merchandising, as well as solid merchandising fundamentals, and the right partnerships in place to drive sales can be important—if not indispensable—in determining store success.

I had an opportunity to speak with Bob Kirch, Executive Vice President of SpartanNash and President of Caito Foods, to learn more about merchandising produce and making the most of fresh fruit and veggies at the store level.

Q1Generally speaking, what does the role of a merchandiser with Caito Foods entail, and how does a merchandiser approach fresh produce? Are there any particular 'first principles' or fundamentals through which Caito Foods approaches merchandising fresh produce?

Bob Kirch: Simply stated, the role of a merchandiser is to find ways—at the store level—to sell more fresh produce and produce department complementary items—and to sell these items profitably. We also recognize that making our customers successful leads to our own company’s success.

We view store-level success as a way to grow sales, profitability, and customer loyalty. To do so, our merchandisers help our store customers develop sound, fundamental product knowledge, storage and handling skills, as well as operational expertise—ordering, scheduling, cleanliness, and customer service programs. Once these fundamentals are achieved, merchandising comes into play.

There are some basic principles that govern our merchandising approach: bigger displays sell more produce; presentations that face the traffic flow sell far more successfully than those that do not; it is nearly impossible to sell anything without a sign; and items should be grouped to ease the shopping experience.

Q2Can you describe some of the ways in which implementing good merchandising practices can benefit a grocer—in terms of sales and other benefits?

 BK: The foundation of good merchandising practices is a knowledge of—and reliance on—“Produce Science.” Knowing, for example, how fast raspberries respire will lead us to merchandise them under refrigeration. The same knowledge will determine where we place bananas in relationship to heating vents and where we display mushrooms and packaged salads. All these decisions lead to fresher, more vibrant products on display, which reduce shrink, enhance shelf-life, and, ultimately, increase sales and profits.

Because the end consumer relies on all of us—from seed to shelf—for the safety of the products they buy and serve their families, merchandising takes on a much more profound importance.

Caito Foods and SpartanNash offer cut fruit and vegetable items produced in a completely sanitary environment under the most rigid food safety regulations imaginable.

Q3Are there any common misconceptions about merchandising fresh produce or any mistakes made at the store level that the Caito Foods team regularly encounters?

BK: Yes. Foremost is the misconception that it is acceptable to display and promote almost any fresh item on an unrefrigerated display fixture. While a center-aisle display of fresh strawberries is eye-catching and enticing, that display is starting a downward spiral for the quality of those berries—a spiral that might end with moldy, bruised berries in the customer’s refrigerator.

Another misconception is that proper rotation—a very basic “Produce 101” skill—solves all product problems. While we certainly advocate product rotation, we see countless examples of older, blemished product spread out on top of fresher, more vibrant product, with the result being a display that has simply lost its appeal to the shopper. Sometimes, discarding product that is noticeably older and less fresh than new product being delivered is a courageous and wise decision. Stores may also look to alternative ways to merchandise ripening products—bananas for example could be displayed—and sold at a lower price—for baking.

And since customers “judge what they cannot see by what they can,” store cleanliness and sanitation are important merchandising practices.

In addition, when it comes to variety, more is not always better. In some scenarios, it makes more sense, and generates more sales and customer satisfaction, to offer 10 juice varieties within a four-foot set than it does to offer 25.

Q4What are some of the most common challenges associated with merchandising fresh produce? Can you describe some of the ways it differs from center store/CPG merchandising?

BK: One significant challenge to merchandising fresh produce is that fruits and vegetables have a limited margin for error in ordering product on a day-to-day basis. Displays need to be large and inviting, but cannot feature too much product for that store’s volume. Product cannot be stacked so deep that bottom items are damaged. And, while a dent in a can might mean nothing, a blemish, scar, or wrinkle on an apple could be a sure sign of problems.

One of the biggest challenges associated with merchandising in supermarket produce departments is the incredible array of products currently available. In the fresh juice area alone, there are literally hundreds of juices that can find their way into the juice “set”—if SKU counts are not managed, the shopping experience can become frustrating for the shopper.

Q5How has merchandising fresh food changed in recent years with the increasing popularity of value-added products and shifts in consumers’ diets?

BK: Current impactful consumer generations, especially millennials, have changed the landscape throughout the store but most noticeably in the produce department. These new consumers express a love for cooking—but cooking is defined differently than ever before. The need for semi-prepared ingredient goods—diced onions, for example—as well as ready-to-use vegetable side dishes appeal to a time-starved shopper who still wants to eat at home and prepare meals for family and friends. Similarly, meal kits are also growing in popularity.

In addition, the former “three-meals-a-day” scenario has been replaced with more numerous mini-meals and a great deal of on-the-run snacking. Hence, trail mixes, nuts, and juices all sell at record levels.

"...merchandising needs to be tailored to fit a store's demographics and customer base."

These consumers are more socially conscious than any generation before, so they expect transparency about the growers and companies represented in the produce department. Simply put, today’s consumer needs to know the philosophies and missions of the companies from which they choose to buy products. And the wise produce merchant soon learns that “telling the story” about growers is the most powerful marketing tool.

Q6How has Caito Foods’ relationship to SpartanNash—a company uniquely positioned as both a major grocery retailer and distributor—provided insights into grocery merchandising?

BK: SpartanNash leverages its knowledge and expertise as a retailer to be a better wholesaler, whether through its merchandising programs and product offerings or its many value-added services. Additionally, SpartanNash has a wonderful training program for produce managers and associates, and we find their dedication to training an ongoing inspiration.

Q7How much does regionality affect merchandising at the store level? How does Caito Foods offer tailored merchandising advice/solutions to stores in very different markets?

BK: Regionality affects product assortment far more than it does merchandising. Every area has its farmers who supply top-quality fresh produce to the marketplace, and SpartanNash and Caito Foods are committed to offering local products wherever and whenever possible. This reduces food miles, improves quality, appeals to customer’s growing appetite for local products, and stimulates local economies. Our merchandisers are trained to seek out those growers and present them to our buying staff.

Along with that, merchandising needs to be tailored to fit a store’s demographics and customer base. We study a store’s target clientele.

Q8How much does data at the store level affect merchandising practices? How does a merchandiser utilize store-level metrics to change merchandising practices? 

BK: We firmly believe that there is a level of consistency in consumer demand for fresh produce items no matter which part of the country a store is located in. On a periodic basis, we compile national sales data results and compare those to a specific store or company’s performance. While there could be slight differences from one region to another, every store in every location should have significant sales in the berry category, for example. Furthermore, packaged salads should be a significant contributor to department revenue.

The next step is to take a deeper dive into subcategories: what percentage of the berry category, for example, is represented by blueberries? Comparing subcategory performance to best-in-class retailers gives the merchandisers a strategy from a display and promotional perspective. The very design of the berry display is determined by the need to sell more of a specific berry variety.

Q9How can a retailer who wants or needs help merchandising fresh food get more information?

BK: The best way for a retailer to get more fresh food merchandising information is to partner with a supplier that values the importance of sharing that information. Enlisting the assistance of companies like SpartanNash and Caito Foods is a profound step towards finding fresh foods solutions. Both companies believe in the importance of fresh foods and are equipped to share ways to market and merchandise those foods more effectively. Most importantly, while the business world would be quick to point out how a supplier should seek to be valuable to a customer, a retailer should always strive to be a value to its suppliers as well. That’s why aligning with a comprehensive program—like that offered by SpartanNash and Caito Foods—is far more conducive to success than utilizing multiple suppliers.

Q10What are some of the highlights of Caito Foods’ and SpartanNash’s merchandising programs?

BK: The bottom line to any merchandising effort is this: how does it impact the customer’s shopping experience and how does it make a retailer distinctive from its competition? In the fresh produce realm, freshness and quality beat price. While current and future consumers will always value price, they also place a high premium on social interaction—meals with friends and family. During those times, who would argue that poor quality asparagus, for example, is acceptable?

We must return to a day where our store level merchandising reflects enthusiasm and passion. The excitement of large, colorful displays is contagious and carries forth throughout the store.

Moreover, consumers want to know that the growers, harvesters, and transporters of their food are treated with dignity and respect. They feel the same way about the associates who work at your store. At SpartanNash and Caito Foods, we refer to this as our corporate responsibility. We are mindful that the decisions we make impact our coworkers, customers, communities, and planet. We publish an annual CR Report to showcase our commitment.

Merchandising, more today than ever before, speaks to the heart and conscience of the consumer—and today’s merchants must recognize that as they go to market each day.

While trends may affect category assortment and consumers’ attitudes toward shopping, Bob tells me a focus on bringing enthusiasm to the grocery department and appealing to consumers’ values as well as their tastes is a time-tested recipe for success. And while ways of shopping may shift, the future of fresh produce, under the stewardship of capable merchandisers, is looking bright.