Expo West 2023 Hosted Education Session (Key Moments)

EXPO WEST 2023

Hosted Education Session - Key Moments

Managing Growth Through Economic Turbulence

I'd Like to Learn More!

SPEAKERS:

Fred Schroeder

President & CEO,
Adesso Solutions

Nicolas McCoy

Managing Director & Co-Founder, Whipstich Capital

Clara Paye

Founder,
UNiTE Food

Tara Burkley

Strategic Business Development Director,
New Hope Network

At this Natural Products Expo West 2023 Hosted Education Session, Adesso’s President & CEO, Fred Schroeder joined Nick McCoy of Whipstitch Capital, Clara Paye of UNiTE Food and New Hope Network’s Tara Burkley for a conversation on how to strategically manage your business and understand your trade spend to grow responsibly.

During this session, moderated by Nancy Coulter-Parker, we shared expert advice and predictions for the future of CPG and outlined top tactics for staying ahead of economic challenges, technology shifts and retail opportunities.

We invite you to pick from key moments of greatest interest to you below.

Watch Full 1:22 Hr Session

Key Moments

Improving Efficiency is Key to Scaling

Nick suggests companies can become more efficient by pulling a few key levers on the P&L, especially trade spend, freight, and COGs (packaging, tolling & ingredients).

Getting Comfortable with Trade Spending and Working With Distributers in the CPG Industry

Tara reviews the New Hope studies, and how newer companies in the industry are scared to leverage trade spending to grow, which is a common pain point for the industry.

Understand the Level of Expense Trade Spending is for Manufacturers

Fred reviews the main expenses on the P&L, including the surprise to many manufacturers who typically  view their trade spending as 15-20% of their gross revenue on trade spending, but often it turns out to be 40% when they look back.

How is Settlement Process of Deductions Similar to "Doing The Dishes"?

Adesso addresses trade spending in a structured process that includes much more than deduction management. Following this process enables analysis, which enables the manufacturer to improve effectiveness and leverage trade to drive more revenue and volume.

What are the Challenges Small Brands Face When Dealing with Distributors?

Clara discusses Off Invoice deals (OIs), as a necessary part of doing business with distributors. But how do you address over-buying? How do you push back if you see they already have excessive inventory in the DC?

Adesso's Trade Spend Strategies for Maximizing Savings and Investing in Customer Relationships

Clara points out that Adesso addresses trade promotion management from a customer-centric perspective, as she and Nick discuss the importance of looking at the pain points of the customer and buyer to help them be better at their jobs.

Quantify Trade at Each Customer to Evaluate SKU Performance & Avoid Losing Money

Fred reviews an example where a company gave away a free case per store, but the product did not sell as quickly as expected. With additional allowances & deductions, this resulted in no revenue with a cost per case of $197 to give product away.

The Challenges of Coupon Accounting for Small Brands

Nick reviews the challenges a small company needs to watch out for from an accounting perspective, as well as what promotions will be effective spending once you add it all up.

The Impact of Covid-19 on Trade Margins for Companies

Nick discusses how smaller vs. larger companies were able adjust trade and pricing during the pandemic. 

How Can We Help You?

If you would like to have a conversation about how we can help make your trade spending more effective through trade planning and deduction management in the Flamingo TPE Solution.

Let's Talk!

Expo West 2023 Hosted Education (Full) Session

EXPO WEST 2023

Full 1:22 Hour Hosted Education Session

Managing Growth Through Economic Turbulence

I'd Like to Learn More!

SPEAKERS:

Fred Schroeder

President & CEO,
Adesso Solutions

Nicolas McCoy

Managing Director & Co-Founder, Whipstich Capital

Clara Paye

Founder,
UNiTE Food

Tara Burkley

Strategic Business Development Director,
New Hope Network

At this Natural Products Expo West 2023 Hosted Education Session, Adesso’s President & CEO, Fred Schroeder joined Nick McCoy of Whipstitch Capital, Clara Paye of UNiTE Food and New Hope Network’s Tara Burkley for a conversation on how to strategically manage your business and understand your trade spend to grow responsibly.

During this session, moderated by Nancy Coulter-Parker, we shared expert advice and predictions for the future of CPG and outlined top tactics for staying ahead of economic challenges, technology shifts and retail opportunities.

We invite you to watch the full hour and 22 minute educational session to the right.

Click to Watch Full Session

How Can We Help You?

If you would like to have a conversation about how we can help make your trade spending more effective through trade planning and deduction management in the Flamingo TPE Solution.

Let's Talk!

Martin & Pleasance North America Cites Revolutionary Benefits From Flamingo TPE Solution & Adesso Partnership

Rolling Meadows, IL. March 16, 2023 – We are proud to share recent feedback from the Martin & Pleasance North America team, enthusiastically shared with us at Expo West.  M&PNA has been a client for nearly a year & is beginning to recognize the true value of the Flamingo solution & Adesso partnership.

Natural products CPG manufacturers share the day-to-day frustration of managing distributor deductions & attempting to make sense of the pages & pages of backup documentation.  This administrative burden, along with recognizing lack of control of this spending, is typically the initial reason brands recognize the need for a trade solution.  However, companies quickly realize a trade solution addresses the critical need to gain a complete & detailed view of their trade spending at every customer at a granular level.  With this visibility, along with their deduction admin time dramatically reduced, the key benefit is they are now able to analyze & evaluate the effectiveness of each promotion, which provides the advantages of tailoring trade plans to eliminate ineffective promotions that do not drive sales & customer loyalty, thus utilizing trade spending more strategically to grow the business.

Richard Pollock, President & CEO at Martin & Pleasance North America said, “Partnering with Adesso & their Flamingo solution has truly been revolutionary for our business.  Of course, deduction management was the first issue, but we quickly moved to analyze which deals were working & which were not.  We have made major changes to our spending based on the information in Flamingo, as well as recommendations from Adesso leadership.  These folks know the business in and out, have been successfully leading natural companies for years, listen to us & are real partners.  In my opinion, if you are an emerging manufacturer & have a need for a partner to assist with these deductions & trade, I’d definitely call the Adesso team.  As recently as Expo West, they have been sharing new areas they are addressing for future benefit – they are here to make us successful!”

“We highly value the partnership we have with the M&PNA team,” said Fred Schroeder, President & CEO at Adesso.  “It is an extremely bright & diligent group of people, and their setup process quickly led to their Flamingo solution generating a recognizable return on their investment.”

To learn more about Flamingo TPE, Adesso’s complete trade solution for natural-specialty & small-midsized CPG, please contact us at info@adesso-solutions.com or AdessoSolutions.com/Contact.

###

Getting Ready to Grow

The Neglected Cost Center for a New CPG Manufacturer… 

As you may know, we at Adesso, focus within the emerging area of the natural channel. Many emerging CPG companies enter this complex arena with an understanding on how to address payroll (rather straightforward) and the entire Cost of Goods area, ranging from raw materials, to production costs & planned logistical areas. Seems pretty simple as they enter into what seems to be a rather straightforward sales channel with QuickBooks as a financial system & Excel as their basic analysis platform. 

Then they secure a distributor, gain some distribution in retail stores (many call it ‘doors’), get excited & send an invoice. They have an agreement with the distributor, but it is quite complex – most do not read it nor do they align their GL accordingly. While not looking to be crude, in about 20 or so days, when payment arrives, they hit a bit of a ‘holy shit’ moment. 

They receive 20%, 30% or sometimes even a negative amount in return on the invoice and the challenges & confusion begins – why did they not pay the total amount? Not just that, but they paid next to nothing. Then another order arrives, and another – all with this level of short-payment – and the cycle continues. 

We get calls weekly on this. 

The Reality is as Follows & is Not that Complex

There are 3, not 2 major cost centers for a new CPG manufacturer – COGS, payroll (probably #3) and Trade Spending. 

Trade spending has been a part of the CPG industry for over 40 years. We have a term for this here at Adesso; it’s not terribly clever, but it is accurate. We call it ‘consistent complexity’. It is the same for everyone entering the space & everyone has dealt with it for decades. 

It can be relatively simple to solve, but you need to be open to some change & rely on a solution partner with deep industry experience. Our group has dealt with this for over 10 years as a team here, and we all have countless years (well into the hundreds) in the industry from large sales agencies/brokers, CPG manufactures, experts in trade management technology & infrastructure – and, yes, we have exemplary client service references. That is because our clients drive what we do every day.

What we can tell you is that working with us will reduce your internal admin time, you will know what you are spending & where you are spending it very quickly. Then, if someone owes you $ (yep they do) you will have the information to get it repaid, and as you move forward with us as partners, you will clearly understand what works and what is not working in your trade promotions – we do this better than anyone!

If this sounds like what you may need, please contact us.

Bare Bones Selects Adesso’s Flamingo TPE to Optimize Trade Results & Save Trade Management Time

Bare Bones BrothRolling Meadows, IL. December 1, 2022 – We are excited to welcome Barebones Ventures, LLC, a San Diego-based food company and tastemaker of healthy pantry staples for cooking & sipping, to Adesso’s client community. As a leading innovator in the bone broth space, the company offers a full line of nourishing broth products in traditional liquid and instant powder formats.

Being able to analyze promotion effectiveness to enable continual strategic improvement of promotion planning was a key objective of Bare Bones, typically one of the main challenges CPG manufacturers experience when initially managing trade using spreadsheets. The Bare Bones team selected Adesso’s Flamingo TPE solution as it will immediately enable full visibility into their trade spending and significant time savings when settling deductions.  Additionally, having all trade data in the system ultimately leads to powerful analysis, which empowers their team to optimize trade spending for improved results.

Katherine Harvey, Cofounder & CEO at Bare Bones said, “Trade spend in this industry is notoriously difficult to control and leverage effectively, so we’re excited to partner with Adesso, a solution provider that understands the natural products space. I’m confident their tools will enable us to drill down to analyze and understand exactly what we are spending, and where we can improve promotion effectiveness to grow the business.”

“Our Client Effectiveness team is passionate about our client partners’ success, and we have been working closely with the Bare Bones team to guide them through their setup process,” said Claudia Winegar, Sr. Director of Client Effectiveness at Adesso. “We were excited for another rapid setup & assisting them in making a significant change to their business very quickly. That is our mission here.”

To learn more about Flamingo TPE, Adesso’s complete trade solution for natural-specialty & small-midsized CPG, please contact us at info@adesso-solutions.com or AdessoSolutions.com/Contact.

###

‘Working Trade’ vs ‘Non-Working Trade’

Non-Working Trade

Essentially, by non-working trade, we refer to dollars that do not get to the consumer, do not drive targeted distribution, and do not drive repeat purchase.

Examples of Non-Working Trade

    • OI’s & the Resultant Forward Buying
    • Non-Targeted Slotting/Free Goods
    • Administrative Fees
    • Short Coded Buy Downs
    • Unauthorized Deductions That Need to be Repaid

Working Trade

Working Trade is targeted spending with retailers to drive growth, your brand franchise/equity, and represent dollars reflected at the consumer level.

How Can You Measure This?

While short-term results may be difficult to measure, retailer level case growth is a barometer. Longer-term consumption growth, reduced spending per case, and reduced slotting are key metrics. Also, spending can be evaluated and measured by ROI, ‘cost per incremental case’, and customer profitability longer term.

So When Do You Begin to Evaluate This?

It is important to note that these are not ‘big company’ approaches – companies under $10M address some or all of these areas when discussing working trade vs. non-working trade.

On-Demand Webinar - Working Trade vs Non-Working TradeNatural-Specialty Trade Spending Webinar (On-Demand)

Would you like to learn more about ‘Working Trade’ vs. ‘Non-Working Trade’? We have developed an educational webinar for CPG manufacturers in the natural-specialty segment, and invite you to join us at your convenience for this on-demand webinar. Feel free to reach out on LinkedIn to learn more about Adesso.

Learn More

Our Clients Relax About Trade Spending

Adesso-8WaysWeHelpOurClients

At Adesso we help our clients relax about managing their trade, when we begin to speak with a CPG company looking to improve the effectiveness of their trade spending and deduction management. A number of objectives for investing in a solution are consistent among them.  Adesso_2022-03-22 How We Help Clients Relax

In this fact sheet, we’ve outlined 8 specific ways in which our clients say we help them relax. Also, addressing their objectives about trade spending management.

To learn more on how our clients relax about trade spending, click the image to download your copy. Then, contact us if you would like to speak with any of our clients on how they have addressed the common opportunities that exist among CPG manufacturers. 

Case Study: Clients Reduce Deduction Resolution Time

Adesso-DeductionsCameInUnder60Days-CaseStudy

4 Differentiators Among Clients Who Dramatically Reduce Deduction Resolution Time

Adesso Solutions announced today a case study demonstrating 4 differentiators among clients who reduce their deduction resolution time most significantly. As Days Sales Outstanding (DSO) for deduction resolution time remains one of CPG manufacturers’ top priorities, Adesso developed an in-depth analysis of those clients who are most successful, and found four distinct differentiators that were common among these clients.

While extremely important for all CPG manufacturers, this finding is especially critical to those in the Natural-Specialty segment where many lack a defined process and have little handle on their total trade budget at a customer level. In fact, Adesso’s analysis revealed that clients who leverage simple the process within Flamingo, along with these differentiators, reconcile all deductions within 60 days and over 85% within the first 30 days!

“Our brokers enter deals, clear our deductions, do our repay and the check requests – – they do it all and we currently have no deductions over 60 days,” said Karen Prophet, Promotions and Trade Spend Manager at Idahoan Foods. “My brokers tell me that Adesso is the most user-friendly system they have in their office. We have brokers recommend Adesso to other clients that they have.”

“Flamingo TPM is a great place to manage trade and deductions, all in one place,” said Diana Lester, Promotional Accountant at American Pop Corn Company. “Having all trade information in one system gives me complete visibility into our spending; I can log into the system to see what we are spending at every customer, view all of our plans in a Promotional Calendar, and click to drill down and see details and contracts associated with any deal.” 

To request your copy of the case study, or for more information about Adesso’s system and services, please contact Karin Souren, Director of Marketing, at ksouren@adesso-solutions.com

Request Case Study

Adding a Resource Doesn’t Fix Your DEDUCTION CHALLENGE

Adding a Resource Doesn't Fix Your Deduction Challenge
Adesso - Adding a Resources Doesn't Fix Your Deduction Challenge
Download Blog
Often, we get a call from an emerging Natural-Specialty-Organic (NSO) manufacturer telling us that they have added a new accounting resource to assist in reducing their deduction balance, and sorting out all of these trade spending issues. When we ask how it’s going with the new person, the reaction is typically underwhelming.

THE REASON IS SIMPLE: trade spending deductions are not the problem – they are a symptom of the problem.

An added resource will not address this.
The problem lies in not having a clear and accurate understanding of:
  • what you were planning to spend,
  • what was committed to by your sales team and the distributor or retailer,
  • and then not knowing what actually happened in the marketplace.
The deduction is simply a form of payment for the distributor or retailer.
When these areas are aligned within small or emerging NSO manufacturers, ‘matching’ the deductions to the spending is a rather simple process – typically addressed by your broker partners. And, yes, there may be a small percentage of these deductions that are not authorized, or someone made an error. But for manufacturers that have accurate plans and agreements documented, these issues typically begin to melt away.

We’d love to discuss this with you in more detail, and share client results.

[button link=”mailto:natural@adesso-tpe.com” newwindow=”yes”] Let’s Talk![/button]

Face It, DEDUCTIONS Are a Form of Payment

Adesso-FaceIt_Deductions
Adesso-Deductions Are a Form of Payment
Download Blog

Deductions come across as evil to many in the industry. They go by a lot of different names: chargebacks, MCBs, short pays and a host of others, but the common name for decades is simply Deductions. 

And believe it or not, these were originally driven by CPG manufacturers! 

You see, when trade spending was in its infancy 30+ years ago, manufacturers moved from ‘off invoice’ payments to ‘bill back’ payments. Hence, the retailers had to ‘bill back’ the manufacturer to get reimbursed for the dollars they used to discount the manufacturers’ products. Yes, that’s what the dollars were used for back then.

The manufacturers (who had a lot more clout in those days…) would debate whether the dollars were worth it or drove enough cases, which delayed reimbursing the retailer. In this day and age, the retailer was out the money!

As manufacturers became increasingly dependent on this extra volume and revenue, retailers became rather impatient and realized they had more leverage, and soon the balance shifted. It was a lot quicker to take the dollars spent last week or the week before off of the next invoice.

That addressed 2 issues:  

1. The retailer got their money faster.

2. The retailer also shifted the proof and incremental volume responsibility to the manufacturer.

And as soon as one retailer did this, everyone followed!

This is how, somewhere in the 1980’s, deductions became a form of payment for trade spending.

Therefore, if you are a food manufacturer entering this arena, be prepared to address this in a logical, effective manner. Because, in addition to all of the legitimate deductions, retailers and distributors will assume they are always accurate, and place the burden of proof on the manufacturer. Though some are more effective than others in assuring accuracy.

The reality is this is a clear form of payment in this industry. Profitability and effectiveness are therefore dependent on your ability to address this quickly, accurately, and thoroughly.

DID YOU KNOW that many manufacturers – large, small & emerging – now address deductions in 30 days or less? And they account for everything at the same level of granularity as any other item in their P&L!