"Plan-o-gram" may sound like the newest board game to hit the toy stores this past holiday season, but it is no game at all in the beverage industry. A plan-o-gram is the organizational chart for a chain store's beverage shelf. And though I had no idea such a thing existed when we started 12 years ago, I've learned how important those official "sets" are for determining which brands and varieties occupy which shelves and coolers for the year.
It may seem counterintuitive that salespeople from iced tea and soda companies are all running around the country scrambling for shelf space in December and January. You'd think we'd be busiest in April and May as the weather heats up, but by then it's too late. Decisions about what plan-o-grams are going to look like are made months ahead of when the shelves will actually be set.
So our fates are cast over a four- to eight-week span that starts in December when representatives from Honest Tea spread out in as many directions as possible, making calls on all the major national and regional supermarket, drug, mass, and club store chains. We are still a relatively small beverage company and aren't physically able to get in front of all the beverage buyers around the country. Occasionally, we do get lucky and have a buyer call us unsolicited, seeking information about our brand. In fact, a buyer from one of the largest retailers in the world called into our 800 line last month.
Our presentations focus on beverage trends, facts about organic cultivation, and why we think our beverages belong in their stores. Unlike the first eight years of our business, it hasn't been hard to convince buyers that consumers are gravitating toward healthier/lower-calorie, more environmentally sustainable options. It's also our chance to present new varieties (we're launching a very tasty half tea and half lemonade for 2010). These sales calls are also a great opportunity to solicit input from the buyers about new products or packages we are developing. If a buyer helps steer us in a particular direction with a label design or even the taste profile of a new drink, he or she often feels a greater sense of ownership of the brand and more committed to making it succeed in the store.
As we expand, we're finding ourselves confronting an issue we've avoided until now —- slotting fees, a cash payment to help the store "set up" our product in their system. Though we haven't traditionally paid slotting fees, we always provide some kind of support, whether it is sampling (our most frequent type of marketing), customized displays (we have created a new rack made of recycled and sustainably harvested wood), or participation in store promotions and advertisements.
This year's plan-o-gram season has been especially busy and productive, as we seek to expand our national distribution with Coca-Cola, and as the health and eco-conscious living trends accelerate. Honest Tea was out in front of the organic curve for a long, long time, but now it's clear our time has come. In just the past five weeks we've gained approvals for Honest Tea and Honest Ade to expand into more than 25,000 new outlets around the country in 2010.
So though we've been spending a lot of time up in the air, and endured a few unscheduled sojourns at various airports, the welcome result is that American beverage shelves will be more organic, healthier and Honest as the Spring approaches.
Last updated: Jan 15, 2010
SETH GOLDMAN is the President and TeaEO of Honest Tea, the company he co-founded in 1998 with Professor Barry Nalebuff of the Yale School of Management. He's preparing the September release of a graphic novel titled Mission in a Bottle. @HonestTea