Unpacking data to grow distribution, velocity, investment

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Unpacking data to grow distribution, velocity, investment

23 Nov 2022

Joanie Spencer

Since 2008, Joanie Spencer has covered the retail and wholesale sides of the baking industry.
Serving associations such as the American Society of Baking (ASB) and BEMA, Joanie is also in demand as an industry presenter on bakery operations and trends. She holds a bachelor’s degree in communication from Rockhurst University and a master’s degree in journalism from the University of Missouri.

When she’s not running or playing soccer, Joanie spends her time with her husband and 11-year-old son.

CHICAGO — For brands to expand their marketing footprint, data is the modern currency. But for early-stage bakers, that’s a big chunk to bite off in a business plan. Data can be expensive, but when properly used as a strategy tool, it can also be a worthy investment.

During an Emerge CPG lunch and learn webinar held in November, members of the Emerging Brands team at SPINS outlined how smart analytics can help early-stage brands expand their reach.

“Data is a foundational piece of starting and running a business, but it’s also really hard to manage,” said Nathan Van Drunen, account executive on the SPINS Emerging Brands team. “It’s important to look at why syndicated data is useful.”

So, what exactly is syndicated data? According to Van Drunen, data that’s syndicated by SPINS is what’s collected from point-of-sale systems at retail outlets that partner with the market research firm.

It benefits retailers as well. Just as brands want to know what’s happening across the category landscape and with their brand in particular, retailers also want to know who the exciting players are in the space and what innovation is happening in all retail outlets.

“Retail outlets have a lot of data and know a lot about specific categories,” Van Drunen said. “So, when brands come in, they expect them to know what’s happening in their category and what makes them stand out from the other brands also looking for shelf space.”

For brands wanting to make their mark in a category, it’s important to know that retailers aren’t the only one with syndicated data on the radar.

“It’s brokers, distributors, investors,” Van Drunen said. “They all need to know this data to do their jobs. Investors want to know who the next unicorn will be, who’s exciting, where’s the white space.”

Ultimately, brands need to understand where data can move the needle for their business.

For young CPGs, gaining distribution is the endgame.

Many brands lean on a great “sell story,” which often stands on the emotional appeal like the vision statement or a clean ingredient list. But by infusing data, brands can argue why their product can elevate the category.

The first step is often looking at a brand’s top-performing SKU and looking at the activity across all retail locations, then steadily moving down the next top performer and so on. For data aggregators like SPINS, it’s a way to make recommendations on how to weave the numbers into a brand narrative and bolster its claims.

“Even when you’ve got your foot in the door and your product is on the shelf, you have to continue to sell them on your brand’s success every step of the way.” —Jennifer Simko | account executive | SPINS Emerging Brands Team

Syndicated data can also gauge a brand’s velocity at the store level and how fast (or slow) a product is moving off the shelf.

“Every retailer has an invisible ‘velocity threshold,’” Van Drunen said. “Those below it could potentially be at risk of discontinuation, depending on the category dynamics. And the ones who are above will want their customers to know because that’s an exciting thing.”

The biggest point to remember is that the deal doesn’t end when the product is on the shelf. CPG brands will continue fighting for that space.

“Even when you’ve got your foot in the door and your product is on the shelf, you have to continue to sell them on your brand’s success every step of the way,” said Jennifer Simko, also an account executive on the SPINS Emerging Brands team.

Filtering down the data can dial in the message to a retail customer. It’s important to look at data from the overall market to the channel and then the specific retailers inside those channels.

“Then you can see the broad view of the category and understand what’s driving growth by knowing the key players and seeing you stack up against them,” Simko said. “And you can get into the key accounts by drilling into retailer-specific data in areas where you have distribution.”

By unpacking that information, brands can make strategic decisions based on where they’re performing in key areas.

Data can also support innovation by creating more targeted strategies than throwing things “against the wall to see what sticks,” as the saying goes.

“That’s how innovation has been for many years,” Van Drunen said. “But there’s also a data piece to it. Looking at the market, you can identify if there are like-products out there and how yours can be differentiated.”

When a product launches, the syndicated data can help a new brand understand what product attributes are currently driving growth and how specifically to innovate on those attributes. Data can also spur ideas on better ways to call out product characteristics that are driving sales in a particular category.

As syndicated data gives a realistic picture of an overall market landscape, it can then become a tool for early-stage brands seeing investors. Just as data bolsters a brand story for a customer pitch, it can do the same for an investor pitch as well.

“When you go into a competitive landscape, you want to point out what the advantages of your brand are,” Van Drunen said. “If you’ve already launched, you want to identify the traction you’ve had so far and how you’re comparing in the market versus similar brands.”

Syndicated data — or their aggregators — don’t tell the brand story. But it can illuminate areas that will refine it.

A wellness-focused data technology company aimed at increasing the presence and accessibility of natural and organic products, SPINS is part of the Emerge CPG partner group developed to guide early-stage CPG brands in various aspects of business and brand development. Monthly lunch-and-learn webinars are available to all Emerge CPG members.

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