There are many factors that are important for the profitability of a great produce department. We focus most of our conversations on the buying and merchandising of the produce that we sell. We talk about sales and controlling shrink.
What ties all these topics together into a nice profitable bow is category management, the study of how different SKUs in a department interact with each other. That information guides decisions on assortment, everyday retails, promotion, store sets and more, and it helps the department align with overall company business goals.
So what makes a great produce category manager?
The produce category manager is a procurement professional responsible for a certain category (or multiple categories) of produce at retail. What separates a category manager from a buyer is the category manager develops the overall retail strategy for that category of produce. This is accomplished by examining current trends in the data and predicting future trends.
Category mangers must excel in the following areas:
Critical thinking
As a category manager, you cannot simply accept all arguments and conclusions. As a critical thinker, you must question, debate, listen and interpret data as you seek to arrive at the best decision.
Analytical skills
A category manager must excel at exploring data and reports to extract meaningful insight and to better understand and improve business performance. Data reports provide you with information. Analytics goes a step further by interpreting the data. Reports raise questions that analytics attempt to answer.
Managing suppliers
It is up to the category manager to ensure flow of products. Without strong supplier management, a category manager will fail his organization, leading to a compromise in its product assortment.
Negotiation skills
A category manager must be able to negotiate successful financial deals with suppliers. The person in this role needs to understand pricing models, investment outcomes and other procurement-related risks. A category manager also knows that while pricing is a key factor, it is not the only factor. There are other dynamics that need to be considered when finalizing a deal.
Project management
A category manager be able to manage complex projects involving multiple stakeholders with varying degree of expectations, cross-functional working styles and diverse cultural backgrounds.
Project management also entails staying on time and on budget. Category managers with project management skills win the trust of their people and make a positive business impact.
Communication
Because a category manager works with such a wide variety of stakeholders, the ability to communicate effectively is essential. The person in this role must be able to listen, speak, observe and empathize well. The category manager will need to share new ideas, receive feedback and provide updates on projects.
Passion for produce
Along with the aforementioned attributes, the very best produce category managers have a passion for the produce business.
Value-added partnerships
It is commonplace for one supplier in a category to be nominated by the retailer as a category captain. The category manager cannot expect to have an in-depth understanding of all categories, so they rely on the supplier to be the category expert.
The category captain will be expected to have the closest and most regular contact with the retailer. The category captain will also be expected to invest time, effort and often financial assets into the strategic development of the category for the retailer. In return, the supplier will gain a more influential voice with the retailer. The category captain is often the supplier with the largest volume in the category.
The role of supplier category management is an ongoing, integrated process based on facts and insights into product categories and consumer segments. In a collaborative category management process, the retailer and supplier join to manage categories as strategic business units. Working in tandem, they analyze, plan and execute strategies for each category.
When retailers and suppliers adhere to these principles, the emerging atmosphere of mutual respect and trust fosters the growth of positive, profitable, collaborative relationships.
If done correctly, as the experience, trust, respect and commitment between the two parties grows, their collaborative relationship will evolve to drive sales and deliver superior customer service.
Mike O’Brien, president of O’Brien Innovations, has more than 30 years of retail leadership experience, including 15 years as a vice president of produce. He received the Produce Retailer of the Year award in 2004. His new consulting practice covers retail merchandising and business development, among other areas.
Check out some of Mike's other great columns for PMG at the following links:
What makes a great produce merchandiser — We have a lot of conversation about produce managers, inspectors, buyers and category managers, but perhaps the unsung hero in produce department operations is the produce merchandiser/specialist.
Succession planning for produce managers — A great plan won’t hit your goals without execution at store level. I had a boss once who used to tell me, “Nothing is real until it happens in the store.” To have great execution you need great produce managers.
Winning the war on shrink — Runaway shrink is the nemesis of an otherwise well-run produce operation. It’s almost impossible to hit your targeted numbers if you don’t have a handle on shrink.