Positive outlook forecasted for retail direct store delivery sales
WASHINGTON Most retailers that operate direct store delivery processes have said that they expect that part of their business to grow or remain constant for 2008, according to a study released today by Grocery Manufacturers Association. The study, titled “Powering Growth Through Direct Store Delivery,” was conducted by AMR Research and Clarkston Consulting.
Study results showed that 77 percent of retailers examined said that their DSD business is growing or remaining stable. The study also showed that DSD comprises 24 percent of unit sales and a whopping 52 percent of the grocery channel’s retail profits. According to GMA, this means sales opportunity.
“Direct store delivery improvements represent manufacturer-customer collaboration at its finest,” Stephen Sibert, GMA senior vice president of industry affairs, said. “This study indicates that both retailers and manufacturers are being rewarded for DSD innovations from enhanced promotional effectiveness to increased brand and store loyalty.”
GMA’s findings also stated that seven out of the ten biggest grocery categories use DSD, and between 2003 to 2007, they saw 15 percent growth in sales.
The study on DSD was conducted by GMA Direct Store Delivery Committee and was based on both qualitative and quantitative research on companies that use the practice and those that do not, as well as company environments. Findings are located online at www.gmabrands.com/publications/DSD_Report_FINAL_0808.pdf.
Mountain Dew launches new blue, raspberry-citrus flavor soft drink
PURCHASE, N.Y. PepsiCo has announced the official launch of Mountain Dew Voltage, a blue-colored, raspberry-citrus flavored soft drink that started to hit retail shelves in June, following an online campaign and consumer-guided selection process.
At Mountain Dew’s DewMocracy.com Web site, which was launched last October, the company invited consumers to vote for the most desirable of three limited-release Mountain Dew flavors. Bright blue Voltage, which also contains ginseng, beat SuperNova [strawberry-melon flavor and ginseng] and Revolution [wild berry fruit and ginseng]. The site has had more than 1.5 million unique visitors since the start of the campaign, sources said.
According to a report from Beverage Digest, Mountain Dew is currently the fourth out of ten major soft drinks selling in the United States, holding about 7.5 percent of the market. Mountain Dew’s volume sales were down about 2.1 percent for the first half of 2008. However, Diet Mountain Dew, which holds about 2.3 percent of the market, was the only soft drink to see volume sales increase [2.4 percent] during the same period, the report said.
Hershey hikes prices, says commodities costs to blame
LOS ANGELES Hershey Co. has said that it will raise prices of all of its goods in the United States by about 10 percent. The company cited the rising costs of basic ingredients such as cocoa, peanuts and sugar and the effect on its profit as the reason for the price hike.
“Consumers are likely to see higher every day and promotional retail prices as we implement the price increase and, as a result, we expect volume in the fourth quarter and next year to be lower than previously estimated,” the company said in a statement.
Reports have stated that grocery prices in the United States have risen roughly 6 percent this year. Hershey said that it expects to see the prices of many commodities double in the 2008 to 2009 time period, and is adjusting its prices accordingly. The costs of ingredients including cocoa, corn sweeteners, peanuts and sugar are up by 20 percent to 45 percent since the start of 2008, the company said.
The company said that its 2008 profits were expected to be on the low side of projections [$1.85 to $1.90 per share], and that cuts to sales and earnings for fiscal 2009, will drive the price of its shares down by 4 percent. Overall for 2008, the company said it expected net sales to have a growth of 3 percent or 4 percent.
Additionally, Hershey reduced it growth projection for 2009 form 3 percent to 5 percent down to 2 percent to 3 percent.