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  • Writer's picturejohn snell

150 SKU portfolio, really??

Have you ever done a sales analysis of what makes the majority of your sales? I can bet that 90% comes from a meagre 10-15% and that some of those bottom feeders have been languishing on your shelf, dock, at home for as long as it took for a distant farmer to pluck the leaf, a Producer to manufacture and pack said leaf, an exporter get my point!!

Yet we are perversely drawn to the observance by (whom) that ultimate variety breeds success, ultimately...until it doesn't.

Teavana, David's and others have had massive fallings from grace and, of course, there are mitigating factors beyond tea quality and selection for this but these phoenixes rise from the ashes with clipped wings (allow me the poor metaphor) more streamlined, more targeted and yes more profitable.

If we reach back to see where our decisions to extend our tea ranges come from, or indeed how we came to start with such a selection, it is often supplier driven; after all a Wholesaler with 100 different blend requests, cumulatively, would like to sell these to more than just one client and so the varietal sales pitch is revved up.

Please don't read into this that consumer choice is not important, it is, however, if 90% of your sales come from 10-15% of your portfolio then there is room for improvement.

I also consider the old English saying "Jack of all trades and master of none" as a pitfall of carrying huge disparate collections. How does a consumer know what you are about if you focus on nothing but trends?

Not much, frankly, but maybe that's ok. My business is a sales platform and the more stuff I can put on there the more hits I will get, fair enough but, wouldn't you like to spend less, truly be able to address the concerns of consumers about where product comes from and whether it was sustainably produced. Wouldn't higher turns bring you fresher product and differentiate you from others? Couldn't you build a business around fewer raw materials, chosen for their values, that you utilize JIT to produce various finished blends? If a lottery ticket can give you almost infinite combinations from 10 numbers then....!!

I am sure most of you, reading say are thinking " Nothing new here!" but, if so, who or what continues to drive the bus down the proliferation road?

Is it really consumers? Do they demand something new all the time or is it not conceivable that they will, if given a beautiful product, land on a favourite, one to be procured again and again? I believe strongly that tea can be like wine, not just enjoyed but through association a foundation brick in a persona.

I also believe that consumers are confused by too much, like a restaurant menu with too many choices, it is not only uncomfortable but unlikely that everything will be top notch!

In fact, I would go so far as to say that consumers have spoken and that vendors are noticing.

If I look on any of the main e-commerce sales platforms, I am overwhelmed by the offerings of, frankly speaking , the same stuff just clad differently; it's more like a fashion catwalk than a serious tea shop window; style over substance.

This new, well not so new, online channel has enabled vendors to analyze offerings vs demand and hone portfolios accordingly, towards the gap or the most popular (peer reviews are important) product on the platform. The game now seems to be offer that which analytics point to, for that platform, and dress it to be noticed, hence we come to a shocking number of the same stuff all sold with differentiated packaging.

What is also evident is that anyone can launch tea product whether interested or not. Like a Wall street trader, the e-commerce platform vendor analyzes data to a personal model which advises where the greatest bang for their buck will come from. So, they may be selling garden shears, toothpicks and tea which takes me back to "Jack of all trades and master of none" .

So what should we do, as invested passionate tea trade members, how do we sort the fibre from the PF1 (that's my tea inspired "Chaff from the grain" variation!)?

We need to focus on the less is more strategy, quality over everything.

If we concern ourselves about missing out on a customer demand consider a flavour wheel and the large segments that this is made up of.

Barely 6 discernible sectors exist for the human palate, within which there may be many nuances but only a few real sectors, such as citrus, spice or berry.

Given this, consider naturally occurring sources for each of these and aim for these to champion your offerings in each flavour sector. Do not confuse these flavours with more than a handful of "supporting cast" members, leading to simple ingredient statements, manageable inventories and unambiguous quality statements for the consumer.. If you think this is limiting your artistic expression then you misunderstand me, the nuances are there for you to explore, exploit and differentiate your offering.

Does the consumer still want variety? Of course they do but focus on quality and introduce seasonal and other carefully curated "occasionals" and you will ensure that their thirst for variety will be focused on your brand.

At NMTeaB our experience has always been tailored towards those that aspire to manage their business environment in a responsible manner. This desire is best achieved through careful curation and keeping a lid on anywhere close to a Heinz number!!.

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