Transcript Category Management and SKU Optimization Roundtable

Category Management
and
SKU Optimization
Roundtable
Spencer Baird
Senior Director of Category Strategy
Kellogg Sales Company
Spencer Baird, Senior Director, Strategy
Remembering the Inputs that Launched 2010 into a Chaotic Place.
A Correction is Usually That of Bad Behavior, Right?
Source: Pew Research July 2010
Per Capita Savings
Down to $613/Year
In 2007 Versus
$2,426/Year in 1982
Net Worth
Per HH in US
$600,000 in 2007
Average Debt
per HH $128,134
Average Debt
per HH $86,346
Net Worth
Per HH in US
Drops -24%
In 2008
Per Capita
Spending
in the US
Drops $16/week
Compared to ‘07
2000
2007
Spencer Baird, Senior Director, Strategy
S&P Loses
51% &
Home Prices
Down -4%
’07 v ‘09
2009
55% of American
Workers Impacted
With Reduction/Loss;
41% of Whites,
78% African American
& 70% Hispanic
81% of African Americans
& 75% of Hispanics Say
That US is Land of Prosperity
Saving as % of
Income Rises
To 4% from 2% in ‘07
2010
2011
The Majority of Financial
Change was the Result of
our Reaction to
Uncertainty…Rather than
Actual Consumer
Uncertainty.
Spencer Baird, Senior Director, Strategy
Learning #1.
The balance of focus between “who we are” versus “who we are not”
was off kilter.
Spencer Baird, Senior Director, Strategy
Shining Star Retailer in the US in 2010. Share of Market Realities.
2010.
One Retailer. Shining Star.
Near Double Digit Total Edible Sales % Change.
2 Weeks. Full Share Point Gained.
2 Weeks. Full Share Point Lost.
Spencer Baird, Senior Director, Strategy
Learning #2.
We Lost Touch with the Reality that the World of Packaged Goods is
Zero Sum…and Has Been.
Spencer Baird, Senior Director, Strategy
Zero Sum. Defense. We “Uncertain’ed” Ourselves to a Slow Top-Line Death.
Top 10 Categories. Total Edibles.
5 Inflated.
5 Deflated.
+1% Sales Growth.
-2% Sales Growth.
Spencer Baird, Senior Director, Strategy
Next 20Categories. Total Edibles.
+4% Sales Growth.
12 Deflated. 0% Sales Growth.
8 Inflated.
*Source. IRI Total Edibles. 2010.
Learning #3.
Without Intention, Results are Merely an Accident.
Spencer Baird, Senior Director, Strategy
Results. Accidental or Intentional.
Yesterday.
50 Priorities Funneled Down
Everything is a Focus
Tomorrow. New Process.
3-4 Priorities – Full Activated
1-3 Prioritized Focus Areas
Focus
Focus
1
100
Action
1
Results are an Accident
Spencer Baird, Senior Director, Strategy
Results are Intentional
100
Actions
Governing Results. 5 Key Acknowledgements Based on a Better Link to Reality.
1. Clarity is the Nemesis of Chaos.
2. Without Vision, Strategy is Impossible.
3. Answers Aren’t the Issue….Questions Are.
4. Don’t Ask Microsoft to Build Powerpoint Slides.
5. Game Change is +1%.
Spencer Baird, Senior Director, Strategy
5 Bias Points for the Future of Managing a Category Organization.
1. Govern, Don’t Manage. Scorecard Everything.
2. Make Compliance Bonus Eligible.
3. Manage Space Top-Down.
4. Embed Loyalty Data.
5. Scrutinize and Reward Presentation of Intention.
Spencer Baird, Senior Director, Strategy