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.

Adesso Connected with Natural-Specialty Manufacturers as Premier Provider Sponsor

AdessoSolutions

Offering Trade Spending Learning at Natural Products Expo Virtual Event

Rolling Meadows, IL. March 10, 2021 – We were extremely pleased to connect with hundreds of CPG manufacturers during Natural Products Expo Virtual March 2 through March 4 as a Premier Provider Event Sponsor. Spark Brand Success, which united service providers and natural-specialty brands in the first Natural Products Expo Virtual event of the year, was all about giving manufacturers the information and resources they need to thrive in 2021—and beyond. In addition to attending presentations and virtual networking events, Adesso’s participation included the presentation, ‘Trade Promotion Strategy: Brand Success Depends on it’ day-1 of the live-streamed event. Another session offered was an on-demand educational webinar, developed in partnership with New Hope Network. Additionally, Adesso’s virtual booth offer a variety of educational materials, such as flyers, brochures, and case studies for manufacturers to take advantage of.

Adesso continues to expand upon its community by offering ongoing trade education opportunities for CPG manufacturers through a number of different media. Current offerings include:

  1. The on-demand webinar, ‘How to master the art of trade spending to grow a healthy business’, featuring guest speakers Thomas Huls, VP of Sales at Chosen Foods, as well as Denise Adamich, Controller at Once Upon A Farm. Both client-partners discuss how they have improved their trade promotion effectiveness and leverage trade spending for business growth, as well as continuously improve upon their deduction resolution process.
  2. The comprehensive eGuide, ‘The Secret to making Trade Spending Your Greatest Ally,’ Adesso developed in partnership with New Hope Network, which is available to download on their website.
  3. The invitation to connect, have a conversation, and request additional materials for learning how to more effectively manage trade.

“Our team enjoyed participating in last week’s virtual event, which was well-run by New Hope Network,” said Fred Schroeder, President & CEO at Adesso Solutions. “We made lots of connections, participated in a number of interesting sessions, as well as met with manufacturers interested in learning more about how they can grow their business through strategic improvement of their trade spending. We look forward to continuing the conversations and to getting back to meeting with our natural-specialty manufacturer friends in-person at Expo East in Philadelphia this fall.”

For additional information, we invite you to visit us online at https://AdessoSolutions.com, or contact Karin Souren, Director of Marketing directly at ksouren@adesso-solutions.com or 847-342-1095 x4031.

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Adesso Has NO Clients on the ‘Forbes Top 25 Food & Beverage’ List

Adesso Has NO Clients on the Forbes Top 25 Food & Beverage List

However, We Make a Major Difference Supporting Small-Midsize North American CPG Manufacturers.

by Fred Schroeder

Other TPM providers in our industry have recently touted their penetration for various types of systems across the Forbes Global ‘Top 25 Food & Beverage’ list. Over half of this list is comprised of tobacco, alcohol and durables. However, we do not have, nor do we aspire to have, any clients on this list.

At Adesso, we hire team members that clearly have demonstrated a background and knowledge on the North American CPG market. Additionally, we focus our solutions around the uniqueness, challenges and opportunities. This includes our clients and ‘not yet’ clients who face trade spending every day – in the conventional retail segment and in the natural, specialty and organic segment.

Adesso Earns CGT AwardsThis focus has been recognized consistently by the Consumer Goods Technology (CGT) Readers’ Choice Award. 

This Award annually recognizes the consumer goods industry’s top technology and service providers, as selected by their end users. With Adesso’s “SMB Market Leader for TPM” recognition, the CGT recently cited some of Adesso’s SMB clients. They called the company and its CPG-focused solutions:

  • “Responsive to our needs and always willing to help.”
  • “User-friendly and intuitive.”
  • “A great system to manage trade.”
    “Very accommodating and easy to use.”
  • “Very simple to use — and it works.” 
  • “The Adesso team is great to work with.”

In short, unlike others in our industry, we do not aim to serve the ‘Forbes Top 25 Food & Beverage Companies’, nor global conglomerates. Our client-partners are small to midsize CPG manufacturers in the North American market with similar challenges and opportunities. They look to effectively track and manage their trade spending and become more effective through a community-based approach.

So, If you are looking for the best TPM system, supporting services to improve usage from your team, and eliminate unnecessary administration – all at a fair price with immediate ROI, contact Adesso Solutions. 

And feel free to ask our clients! 

Ease of Use

The Flamingo TPM system is quick to learn, and easy to use. Additionally, we continually update the system based on client input, to further enhance ease of use.

"Adesso ensures a rapid return on investment. It's easy to learn and use, it helps to control trade spend early on in a company's lifecycle, and continue to grow. Overall , Adesso works for all sized companies, and provides one system of truth for the management of trade."
OFarm
Denise Adamich
Controller
"One of our major objectives was to improve accountability. We previously used spreadsheets to allocate GL accounts to the right customers, and were limited to unofficial deal approvals through email. Flamingo TPM is easy to use, and has the functionality we need."
Blue Marble Brands
Steven Boyle
FP&A Analyst

Would you like to learn more about how to better manage your trade spending and deductions? We invite you to explore our Events and Industry Learning resources.

Face It, DEDUCTIONS Are a Form of Payment

Adesso-FaceIt_Deductions
Adesso-Deductions Are a Form of Payment
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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!

You Can Have Better Visibility Into Your Trade Spending in Just 1 Week!

 

What % of Your Budget is Trade Spending?

To know where your dollars are spent and to make them work harder,
here are 5 reasons to consider Adesso’s Flamingo TPM:

–

The new fees from Whole Foods will be another area of change – and increased spending.

–

The upcharge from distributors is not always known to you in advance, so your retail price isn’t what you thought it was set to be.

–

You’re unable to see exactly where your promotion dollars are being spent.

–

Deduction/MCB management is an accounting nightmare, and it is a challenge to hire someone who has the expertise.

–

You and your CFO are constantly wondering what you’ve spent at retailers through distributors, and would like accountability.

If you’re on QuickBooks, you’ll be up, running – and generating results – within a week, and it grows as you do.

And do not worry about complexity – it is simpler than spreadsheets for your team, and brokers love it, too!

To find out how YOU can be LIVE in Flamingo WITHIN A WEEK,
ask us to shop by your booth at Expo West!

Submit the quick form below: 

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Educational Group & Resources for Emerging Consumer Packaged Goods Companies

Adesso

 

We Invite You to Gain Access to Educational Resources,
and Join Peer & Industry Expert Collaboration

The Consumer Packaged Goods industry is complex, and often leaders and entrepreneurs find themselves struggling with challenges such as managing manufacturer chargebacks, understanding trade spending and expectations, maintaining a sustainable gross margin, and the relationships with retailers and distributors.

Below are two resources that will help you to begin to understand how to navigate the complexity:

1. Join a Discussion Group for Natural & Specialty CPGs:

For individuals looking to learn more about how to navigate the unique, complex CPG industry, where peers and industry experts share best practices to improve the collective trade promotion effectiveness.

Ask to Join Now

2. Sign Up to Receive the Upcoming White Paper:

Our white paper series focuses on topics that arm you with knowledge and recommendations you can implement for immediate process improvement.
Next up: “5 Keys to Competing and Surviving in the Natural-Specialty Segment of the CPG Industry.”

Request Your Copy

 

Imagine…waking up knowing your trade spending is within 1% of what you think it is!

What % of Your Budget is Trade Spending?

To know where your dollars are spent & make them work harder, here are
5 reasons to consider Adesso’s Flamingo Natural-Specialty TPM:

1

 While trade spending may be new to you, we have lived it, collectively, for hundreds of years – it is this experience which has developed our Trade Promotion Management (TPM) system & our supporting services. We have seen it all.

2

 Our client-partners range from $1 million in size to several billion. And through our community, we all learn & grow from each other.

3

 Your pricing would be very affordable; based on your size, with graduated pricing as you grow.

4

 You’ll be up, running & generating results in 4-8 weeks, due to pre-built QuickBooks interfaces & experienced team.

5

 The system is simple for sales & broker partners to use, and evolves with your business growth; immediate results, payback & long-term improved effectiveness.

“Our total lives here are to work with you & your team to measure your trade spending
and help these dollars work harder. We’d love for you to talk to our other client-partners,
and relax about this stressful area like they do.”

Fred Schroeder, President & CEO
(fschroeder@adesso-solutions.com  |  Connect on LinkedIn)

When It Comes To Trade Spending, All Retailers Are Not Created Equal

We have been big proponents of the concept of “Consistent Complexity” when it comes to CPG manufacturers dealing with the trade.

The premise is while trade spending is complex, that complexity is the same regardless of the size or type of CPG manufacturer. So while you can’t use the same trade promotion approach with every retailer, most CPG manufacturers have to deal with the same retailer the same way.

For example, Publix uses BOGO’s. Therefore, different CPG manufacturers can be helped by trade experts familiar with the different accounts and how they handle trade spending.

However, there is also the fact that while all retailers are looking to take as much of your trade dollars as possible, there is a big difference between how retailers extract those dollars. Therefore, the time and effort spent maximizing the effectiveness with your trade dollars doesn’t always match up with your top sales accounts. For example, Walmart is EDLP. Not much trade promotion management issues there. However, go to the major retailers in the northeast and deal with Wakefern (Shoprite), Stop N Shop, Keyfood, A&P, Pathmark, CNS among others and you deal with a myriad of overlapping trade promotion programs, diverting, double billing for the same promotion etc., that makes the effort, money, and approach extremely complicated to manage, to control and to plan for the future.

Therefore, you need both a TPM solution that can handle all these variants and trade experts with experience to help navigate you to TPE – trade promotion effectiveness.

Getting another perspective on trade spending

Many of us often fall into the trap of living in our own little world. We are busy with too many things to do so we just try to keep our heads above water, meet deadlines, and approach problems and retailers the same way we always have.
There’s comfort in having gone down this path before. Tried and true.

But could you be missing something better?

Could you be leaving money on the table?

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