HighJump Software

The pursuit of revenue growth...while not unique to direct store delivery (DSD) distributors, the challenges/opportunities affecting these DSD businesses, especially some of the smaller distributors, may be. I would like to discuss some of these below.

1) Market Share: this is a never ending battle. Customer service, marketing, even geographical trends are among the many factors impacting what portion of the “pie” your brand captures.

2) Territories: there have been a lot of headlines dedicated to recent market consolidation efforts. I don’t think I need to say much to illustrate how adding additional territories or “markets” to your existing account base can be difficult for the majority of DSD players.

3) Product Line: just walk past those refrigerated glass doors in a local grocery store and you will surely be surprised by some new product line / package size that has recently been added. This is certainly an area that has been exploited over the years, but as a consumer of these goods, the product line additions can often be qualified as “more of the same”.

I would like to expand a little further on one particular area that I think is under utilized by many DSD players, and that is product line. Rather than focusing on ways to place more SKU’s that serve the same market, what about expanding beyond your traditional product line? Here is one example where I would like you to think of a typical soft drink distributor or beverage route. They have delivery trucks visiting restaurants, bars, and the like on a daily basis and the route salesman are trying to pry more (or better) shelf space from competitive products. Rather than continuing the Red vs Blue product battle (no matter where your soft drink allegiances are, I am sure you can relate) what about carrying other consumables that these customers need? This soft drink company already has a relationship with the customer and an established method of distribution. If their trucks are not loaded to capacity every day, why not add a snack component? Or perhaps their customers have deep fryers requiring cooking oil? Some cleaning supplies may not be suitable for storage with consumable goods, but there are many that are. The options are surely far greater than the three obvious ones that I have referenced.

I have seen a great many operations over the years, and during these visits I have heard lots of conversations about promotions and initiatives that help drive sales. However, the number of times that I have heard conversations about customers expanding beyond their traditional product lines pales in comparison, and I have never really understood why.

With today’s economy presenting new challenges on a seemingly daily basis I think any method of increasing the revenue to offset the existing cost associated to your fleet requirements has to be a good thing.

Food for thought – perhaps others can share their stories on how this expansion of product line has helped or hindered their bottom line?