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Retail Seafood - How to Fix It - Seafood Expo 2015

2015 Seafood Expo Presentation - Phil Walsh Moderator
by

Chuck Anderson

on 15 April 2016

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Transcript of Retail Seafood - How to Fix It - Seafood Expo 2015

Fixing Retail Seafood
Moderator
Phil Walsh

Retail Seafood
What's Wrong
and
How to Fix It

Tony Ruccio
TPR Sales and Management
Vice President Alfa Gamma Seafood
FINANCIALS
Tom DeMott
Treat employees as your most valuable asset on the front lines with each of your customers

Create a tool to enable you to communicate on a daily basis with your team. This could be as simple as a running daily email (short & sweet)

Create a weekly sales sheet to Inform, Share Successes, Acknowledge Individuals and Promote Healthy Competition.

Schedule department meeting to get Feedback/Listen, Share Financial Results, Discuss Upcoming Events and also a Platform for Vendors to Communicate with Associates

At least two per year
Communication is a MUST
Planned Events
Differentiates you from your competition, enhances your reputation and develops seafood as a destination department

Gives your seafood department that WOW factor

Planned events create excitement in both your customers and associates

Themed promotions also create excitement
Creative Merchandising
Remember the old rule? – 80% of your sales comes from your top 20 items

Departments offering Fresh Fish on ice need to reduce the size of their ice case. Once 12 to 20 + feet, now 8 to 12 feet

In turn reduce the amount of variety offered now 12 to 20 items

There are many tools to identify those items your should offer
Variety of Fresh Fish on Ice - NOW
Fish on Ice
Self Service Seafood
Now is the perfect time to unite seafood merchandising in service and self-service

Build trust & confidence with consumer in both areas

Convenience of self-service to compliment service

Create incremental sales when service is busy or after hours (early AM or late PM
Marrying Service Seafood
with Self Service Seafood
The service seafood customer is still willing to spend as long as they perceive a value, with quality being the most important aspect

Value does not mean “Cheap”, or lowest cost

Value does mean “Good Quality at a Fair Price”

Create ways to market the value

Take advantage of market & spot buys by creating in-store marketing opportunities where stores anticipate weekly buys
Creating Value
Proper, continuous training is essential for both full and part time associates

Identify a trainer within your seafood department and give that person the time and tools to grow a seafood team in each store

Training topics should include but not limited to; Product Knowledge, Handling, Storage, Ordering, Inventory, Creative Merchandising, Cross Merchandising and Displaying Techniques
Commitment to Training is a MUST
Themed Promotions
Example - 12 feet of Ice
In the 80’s, it was all about Variety. The more, the better (30 to 60 varieties)

Associates manning seafood departments without proper training on Product Quality, Product Handling and Product Storage

The Result – It might have looked good on paper but in actuality there were no profits realized and the only growth in the department was the amount of shrink loss
Variety of Fresh Fish on Ice - THEN
Customers not purchasing fresh seafood - $49

Customers purchasing fresh seafood - $78

Customers purchasing fresh seafood with seafood purchase extracted - $64
Average Customer Spend
Flagship Stores – Define to customers
“Who You Are”, What you offer and differentiates yourself from competition

High Volume Stores – Product is fresher due to higher turnover

High Demographic Areas – Higher education and affluence means more seafood purchases

Increase Basket Size- Research shows that customers who frequently purchase fresh seafood also purchase a higher percentage of other items like Fresh Fruits & Veggies, Premium Meats, and Wine.

Where, When & How Service Fish on Ice Works
Tony Ruccio
TPR Sales & Management
Retail Seafood
What’s Wrong and How to Fix It

The Future of Seafood
For Wild Caught Seafood, Use Seafood That’s

Been
Caught To Freeze
Frozen at – 30 or Colder
Been Frozen
Less than 6 Months
Ship It In Frozen, Date it 7 Days,
Sell It Chilled

For Farm-Raised Seafood

Use Fresh Fish Only
Call It
Chilled, Not Fresh
Supply
Information
with it

The Way
Finger Pointing
Merchandising vs. Operations
Disinterest
On The Part of Meat Specialists
Well-meant
Input From The Executive Suite
Erratic
Product Quality
Erratic
Customer Service
A
Poor Image
for The Entire Store
Hours Reduced
In an Attempt To Boost Profit
1.8% of Sales – Seafood’s Worst Statistic
A Major Department Devoid of Profit
And They Created
Seafood Was Kept Under Meat Management, Continuing To Adopt Its Cultural Practices:


Discount To Drive Sales

Maximize Tonnage – Profit Will Follow

Procure The Product With The Lowest
Price

Senior Staff: Early Start, Early Depart
How Did Retailers Respond?
They hired consultants

PathMark
Led, hiring French Consultants

Whole Fish On Ice!

Open Ice Tables!

On Site Processing!

Training! Seafood Knowledge Must
Be Comparable To That Of Fish Markets!


How Did Retailers Respond?
Retailers Got Serious About Seafood in 1980 Because

SUPPLY IMPROVED
Our 200 mile economic zone was established
The Federal Government Funded Fishing

DEMAND IMPROVED
The Economy Heated Up
The New England Journal Of Medicine Article Was Published
Eat Fish, Live Longer!
The Yuppie Emerged and Seafood Became Hip

THE NEW STYROFOAM MASTER CASES ENABLED SUPERMARKETS TO SELF-DISTRIBUTE



How Did This Happen?
Kings Supermarkets
3.8%
Ritter Sysco Foodservices
The “model fresh program” for our company
(Robert Thurber, VP, Perishables, Sysco Foodservices)
Harris Teeter Supermarkets
Made Profitable on a fully loaded P&L
Stop & Shop Supermarkets
Sales distribution rose by .029 basis points while
net profit increased

Says Who?
Place fillets in an oiled casserole dish, sprinkle
with breadcrumbs and place in a 450 F oven
for 12 minutes - remove and serve
A PRINT AD
DISPLAY CASE SIGN

Permission
to Run Out…
Granted


If You Advertise
…Give item
Description
, How to
Prepare
it and
Price


Limit Fresh Offerings
… 5-8 Monday-Wednesday and 8-12 Thursday-Sunday


Signage
must answer
where
caught,
how
caught, something about
processing
, that it’s
Boneless
,
what it’s like
and
how best to prepare
it…
concisely!


Associates
Have Final Say on
Quality


The BIG Fix


Publish
an Internal Weekly Newsletter


Rank
Sales for Top Ten Seafood Dept’s

Celebrate
Success

Share
Innovations

News
on Resource


Work
in a Seafood Dept.
Once A Month
Open, Close.
Holidays


Identify
and Use Your Top Five Dept. Managers

Fixing Merchandising
PAN SET

Re-establish
The Bar Separating Self From Full Service ($15,000)

Using
Ship Frozen, Sell Chilled

Use
OTR Vacuum Packaging

Drop
your Shipping Gross to
38%

Establish New Shrinks
:
2%
in Cold Weather,
4%
in Hot Weather

Portion Packaging Presents Powerful Price Points
Fixing Merchandising
FROZEN AT -40 F
FROZEN AT -5 F
APPROACH THE FOLLOWING IDEAS WITH AN OPEN MIND

UNDERSTAND THAT HOWEVER RADICAL THE CURE MAY SEEM, CURRENT EFFORTS DON’T WORK

UNDERSTAND THAT THE HALO EFFECT OF A DESTINATION SEAFOOD DEPT. CANNOT BE UNDERESTIMATED
HOW TO FIX SEAFOOD


Full Service Seafood
in The Wrong Stores


Vendors
Were Granted Undue Authority

The Wrong
Display Cases
Were Installed


Unrealistic Shrink Budgets
Were Established


Seafood’s
Numbers Kept With Meat’s

How Did Retailers Respond?
% to total store sales national average is 1.8%

Up To 60% Of Weekly Sales Are Driven By Discounting

Sales are Empty And The Dept. Is Unprofitable

Product is Unreliable (20/20 measure)

For every 100 customers, only 6 stop at the seafood department

What’s Wrong?
Philip Walsh
The Alfa Gamma Group
Retail Seafood
What’s Wrong
and
How to Fix It
Aspirational Seafood Comparisons
Financial Comparisons

Break Even analysis

Minimally Profitable Sales

Aspirational Sales & Profits
Financials Comparison
Service & Self-Service Seafood
Profitable Self-service Seafood
Financials for Self-Service Seafood

Break Even analysis

Minimally Profitable Sales

Aspirational Sales & Profits

Financials
Self-Service Seafood
Service Seafood-Minimum Sales
Service Seafood - Breakeven
Minimally Profitable Comparisons
Aspirational Self-service Seafood
Breakeven Self-service Seafood
Service Seafood-Aspirational Sales

Break Even analysis
Minimally Profitable Sales
Aspirational Sales & Profits

Financials
Service Seafood
Phil Walsh
Excessive Purge, Cardboard Taste
Taste & Texture like the Freshest of Fresh
CODFISH
BONELESS FILLETS
$9.99 LB.
HAND CUT FROM
FRESH, NORTH ATLANTIC
HOOK AND LINE CAUGHT


THESE SEMI-FIRM, SWEETLY FLAVORED


ARE BEST BAKED, BROILED OR PAN-FRIED


Fresh From Nantucket Shoals

Hand-Cut Boneless Cod Fillet $8.99 Lb
Average Spend
No
Seafood
Purchase
With
Seafood
Purchase
With
Seafood
Purchase
Minus
Seafood $
49
78
64
In the Seafood Department
Breakeven Comparisons
Tom DeMott
Chuck Anderson
Retail Seafood Consulting
Sourcing and Sustainability


Supply or Demand?

Are you buying what vendors are selling?
Lowest cost
Most slotting $
What we have always promoted
Source what the market provides?
Are you buying what customers are looking for?
Sourcing
Packaging and Labeling
Specify package type, size, and strength to protect product

Specify refrigerant type and amount - Example (2) 8 oz gel packs
Product Specifications
By species per FDA Fish list
Include acceptable Country of Origin, fishery stocks, and gear type
Specify size, form, trim, and defects
Packaging and labeling
Insist on traceability to the farm or boat
Inquire about reusing product waste
Quantifiable and Measurable
Supply Chain
Source from direct producers as feasible
Farms
Fishermen
Primary processors
Build supplier relationships
Why????
Why Deal Direct?
Applies to warehouse, distributors, and self distributed
Quality
Assured Supply
Traceability
Marketing
Cost
Sustainable
Minimize carbon footprint
Minimize styrofoam
Traceable
Labor standards
Local community support
Find a business friendly partner

Socially Responsible Sourcing

Primarily for large chains
To guarantee supply
To minimize risk
Minimizes upside too
RFP – Request for Proposal
Some legalese / boiler plate language
Minimizes risks

Contract Buying

Urner Barry - Comtell
Seafood Business
Seafood.com
NMFS Fish Watch
Visit the source periodically
Periodic supplier updates

Know Production

Negotiate hard, but do not over do it
Push price too hard and suppliers can:
Short weight
Substitute species
Net weight / glazing issues
Refresh frozen product
Sell you water (brine, STP, protein dips)
Disregard responsible sourcing
On purpose or second hand
Be tough, be fair

High Prices
Develop simple specifications
Glaze %, size, trim, etc
Plan the full supply chain
Package to maintain quality
Package integrity
Labeling
Small packs as needed to keep it fresh
Quality first, cost a close second

Frozen Procurement
Go local whenever feasible.
Easier, fresher, cheaper, greener
Maximize fresh deliveries from points of production / importation ports
Combine loads from various points
Example: Canada, Boston, point Judith on one truck 2x week
Example: Miami, North Carolina, Jessup on one truck 2x week
Logistics
Look for and develop hot buys
Every weekend
Track fishing openings / open areas
Monitor ports for heavy landings
Monitor markets for overstocks
Plan inbounds to account for a weekly hot buy volume
Fresh Procurement
Fresh Procurement
Fresh, wild seafood supply is the most volatile
Develop a relationship with a good company and maintain it.
Farmed raised seafood is less volatile and may allow for more competitive bids
Wild frozen procurement can be volatile and benefits from some partnerships.
Frozen farmed is the least volatile segment.

Buy direct and local as possible
Better quality
Less handling /lower cost
Traceability
Lower environmental impact
Support local communities

Buy Direct Buy Local
Know the market
Supply trends
Availability/Quality
Cost trends
Communicate Immediately
Out if stocks / any bad news
Major cost / retail changes
Product information
Market conditions
Buyers Role - Secondary
Buyers spend money
Buyers rarely make money
Seafood managers and seafood clerks make the money
Buyers support retail counter help.
Be supportive of the money makers

Know the Buyer’s Role

Customer Demand
Quality
Service
Variety

Procurement Priorities

Accept it – high end seafood is pricey
Limited supply = high cost
Sell in high end stores
Spend an extra $.50lb to have the best
Customers will pay $1lb more if the product is always great
Build a partnerships with your fresh and wild seafood suppliers
Quality is worth it

High Prices
Develop simple specifications
Develop / use standards for farmed fish
Plan the full supply chain
Package to maintain quality
Protect product integrity
Warehouse/store friendly labeling
Small packs as needed to keep it fresh
Quality first, service second, cost third
Your most important supplier partnerships
Fresh Procurement
Listen to the stores/customers
Keep the DC/store in stock of key items
Keep costs where the store can sell the product
Don’t spend too much
Inventory turns
Weeks on hand

Buyers Role - Primary

How?
10K OTR Vacuum Sealed
Skin Packaging
Oxygen permeable vacuum sealed
Skin tight for good looks
Close contact with the product to protect from freezer burn
10K OTR Vacuum Packaging
Benefits
Preserves color
Reduces cross contamination risk
Prevents freezer burn
Reduces purge, improves yield

10K OTR Vaccum Packaging
Excellent for raw, marinated or prepared seafood
Meets FDA oxygen permeable guidelines
Fresh From Nantucket Shoals
Hand Cut Boneless Cod Fillet $8.99lb
Put fillet in an oiled casserole dish, sprinkle with breadcrumbs and place in a 450 F oven for 12 minutes - Serve and Enjoy!
Develop measurable, custom product specifications with supplier input for best sellers
QC testing of inbound deliveries
Set up or use farming and production standards
ACC/BAP, Global GAP, BRC
3rd Party Audited
Learn, Know, and Managed Supply Chian
Specify label information
Pack date, font size, species name, COO, MOP, vessel/farm name, catch date, location and method of catch
Packaging and Labeling
COD W/ CRAB STUFFING
TUNA STEAK
SWORD STEAK
Salmon fillet
SALMON PINWHEEL
W/SPINACH FETA STUFFING
COD FILLET
What are customers looking for ?
Quality
Fresh, every time (as opposed to old)
Delicious
Nutritious
Easy
Convenient
New product ideas
Local
Sustainable

Learn the Market
Learn the Customer
Visit the sources
Follow the markets
SeafoodSource
Seafood.com / U.B.
Undercurrent
Walk the isles of the show
Talk to producers about supply
Visit competition
Market studies
Scan data
Work behind the counter
Listen to customers
Listen to seafood managers
Product Deep Dive
Annual calendar of reviews
Request For Information (RFI)
Vendor Interviews
Farm and plant visits
RFP or RFQ
Can lead to contracts and partnerships
Perform just before the peak supply or low demand season
Service Seafood Financials
Self Service
Seafood Financials
Sustainability
Magnuson Stevens Act of 1976
Seafood from God, by the fisherman, for the people, shall not perish from the earth
Sustainability
United States
83% Not Overfish
91% No Overfishing
34 Stocks rebuilt since 1999

Global ( UNFAO 2012)
70% Not Overfished
30% Overexploited
Sustainability
Greg Stone, Phil Walsh and other forward thinkers believed that all consumers have certain unalienable rights. Among these

That all consumers, rich or poor, urban or rural, old or young, deserve access to fresh (not fishy), affordable, nutritious, delicious and responsibly sourced seafood.
Questions and Answers
Phil Walsh

Tony Ruccio

Tom DeMott

Chuck Anderson
Available online at
http://bit.ly/1C4n833
Full transcript