Oliver Wyman: Improve freshness to reduce waste

27 July 2015 Consultancy.uk

Of the seven truckloads of the fresh perishable food delivered to a supermarket, one is thrown out. This waste is known as the ‘shrink’ and, besides being a waste of food and the resources used to produce it, costs supermarkets a considerable margin. A report from Oliver Wyman highlights the importance of freshness that perishables bring in and considers moves retailers can make toward reducing waste and improving customer satisfaction.

In the ‘A Retailer’s Recipe: Fresher Food and Far Less Shrink’ report from Oliver Wyman, the consequences of freshness and shrink are considered in relation to customers and the bottom line. The study involves an online survey conducted by Oliver Wyman and Ipsos Interactive of 8750 consumers.

Freshness counts
In the study, a key message comes to the fore: consumers are put off by food that is not fresh, with nearly two-thirds of customers changing their shopping behaviour as a result of bad products on display or unsatisfactory purchased foods. In terms of what is important to food shoppers in their shopping journey, freshness comes out far ahead of other considerations, at 60% agreeing it is the most important. The second most important, price, is only seen as the most important driver of satisfaction for less than 15%. Variety comes in third in terms of importance to shoppers and staff last. 

Importance of freshness

The importance placed on freshness comes with consequences for retailers as costs of shrinkage are high. The Oliver Wyman report finds that freshness, by attracting customers as well as managing shrinkage, can save $10 billion a year. Customers that are satisfied with freshness spend more than a third more in the produce department of their primary store compared to those who are not satisfied. At the same time, customers will spend 8% more of their total grocery spend exclusively with the retailers whose produce they are pleased with than the shoppers who are not happy with that store’s produce.

Solving the problem
According to the researchers, many executives and shareholders often do not know that the problem of shrinkage exists or its size. “If retailers’ shareholders were to know this – and see how shrink reduction can make or break profitability in perishables – retail executives would be far more likely to look at the problem anew.”

Reducing shrink in a North American grocer

The problem is difficult to tackle, however the consulting firm notes that progress can be made. By developing a rigorous analytic understanding of the issues across the whole company, and setting key metrics for improvement, it is “possible to rapidly build up a quantitative, cross-company picture that no single executive has probably ever seen.” Furthermore, by getting company executives to tackle the issue and by creating a strategy towards improving freshness waste management, with the appointment of a ‘Chief Freshness Officer”, considerable gains can be made

As an example, Oliver Wyman relates that a North American retailer that started taking the issue seriously, and actively worked towards improving the situation, was able to save $10 million in the first year. After three years of cumulative efforts, the firm was able to realise $100 million in annual benefits. At the same time, there was a measurable increase in the freshness of the product and in the customers’ satisfaction.

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Red Consultancy helps Hendrick's to launch new gin

09 April 2019 Consultancy.uk

Red Consultancy has been signed up by Hendrick’s to help launch the famous distiller’s new limited edition gin. The consultancy collaborated with Hendrick’s to install floral phone boxes across UK cities, which presented entrants with free samples to the Midsummer Solstice drink.

Britain’s gin industry is now worth well over £1.2 billion – having more than doubled in size since 2011. With little sign of the industry’s boom going bust any time soon, demand for the trendy spirit has led to a boom in the number of businesses centring on either distilling or selling the spirit, with a growing number of ‘gin palaces’ doing both.

As UK distillery Hendrick’s Gin looks to prepare for another busy Summer, the company has launched its first ever limited-edition gin – Midsummer Solstice – with flower obliterations up and down the country. In order to help promote the new product to a wide audience, Hendrick’s enlisted the help of Red Consultancy, which began working to launch Midsummer Solstice following a competitive tender process earlier in 2019.Red Consultancy helps Hendrick's to launch new ginRed Consultancy’s efforts eventually led to a number of experiential, floral phone box portals being unveiled across London, Brighton, Manchester, Edinburgh and Liverpool to mark the launch of the campaign. Curious consumers who entered the floral phone boxes were gifted with a first taste of the new gin – either with a ‘Stem for a Serve’ redeemable at a local bar or in the tasting room of the London’s Soho Square launch.

Commenting on the campaign, James Taylor, Senior Brand Manager at Hendrick’s Gin commented, “The floral transformation of the once forgotten phone box are the perfect space to create a sensorial portal to our unusual brand world and transport curious minds back to simpler, less-connected times before social media and mobile technology transformed the way we communicate. A space where you can stop, literally smell the roses, and consider your true meaningful connections – the perfect way for us to celebrate the launch of Hendrick’s Midsummer Solstice with a disruptive activation.”

The gin itself is already available at Waitrose, and will become available throughout the summer. Its public relations launch will be further supported by paid social media and in-store activity throughout that time, before its limited run comes to an end.

Red Consultancy is a professional services firm which offers advisory services to clients looking for PR, digital and content expertise via its 140 staff in its Soho offices. The firm develops and manages campaigns, runs major press offices, and steers brands and businesses through engagement with media, consumers, customers, stakeholders and internal audiences both domestically and internationally.

Recently, the firm was involved in a campaign with smartphone maker Huawei, helping it promote its AI-driven completion of Schubert’s famous Unfinished Symphony.