Welcome, Guest |   Sign In   |   Register  
 
Print Email Page RSS Feeds

Posted Date: 5/9/2012

Diamond Foods Completes Mission Critical TPM Journey

By  Alliston Ackerman
With strong brand names, including Pop Secret, Emerald and Kettle Brand, Diamond Foods often plays above its weight. Its products compete against food products sold by regional and national companies, many of which are larger and have substantially greater resources. The bottom line is that for a company of its size (net sales equaled approximately $680 million in 2010), every dollar counts.

“Our strategy today and tomorrow will be to build brands from the ground up as well as identify opportunities to energize and add value by making a relevant connection to the contemporary consumer,” says Marie Hanson, senior vice president, Sales, Diamond Foods. “Yet, we don’t have the luxury of spending against efforts that don’t provide positive long-term returns.”

So, when it came time to make an important investment in improving its trade promotion strategy, Diamond Foods opted to take a calculated route marked with due diligence beforehand rather than the more common “spend and learn” approach of its larger competitors.

“At Diamond Foods, I’m most proud of all the work we do in advance of any program we invest in. We do all the extra little things that end up separating us from our competition and often mean the most to our trading partners,” says Hanson.

Over the years, Diamond Foods acquired several companies with different trade management business processes and systems. Thus, a project was chartered to create “best of both worlds” processes using a new solution and best practices from each business.

Improvements were needed across a wide spectrum of processes, including demand forecasting, volume management, promotion planning, budget development, lift simulation, and trade analytics and reporting.


Doing the Homework
When searching for a new trade promotion tool, Hanson rested on personal experience working for other companies that had very difficult systems to navigate. From there, she developed a very clear perspective on what success looked like using the right promotional insights platform. Above all, it had to be accurate, intuitive and easy to work with.

“I wanted to ensure that we secured a tool that was going to be both flexible for us to design around our business and able to grow with us as well,” says Hanson. “Ultimately, I wanted a tool that would give all parts of the organization the visibility they needed to run the business.”

After evaluating several trade promotion platforms, Diamond Foods chose Oracle Demantra Promotion and Trade Planning and set out to implement the suite’s Predictive Trade Planning as well as Deductions & Settlement Management products over a three-year timeline.

“We felt the partnership with Oracle Demantra could offer us implementation insights and savings that simply were not available from the other providers,” says Hanson of the company’s choice.

From there, several meetings ensued with members of the Oracle team to ensure that they knew Diamond Foods’ goals. Through those meetings, Hanson and her team gleaned significant insight about how its partnership would respond and evolve toward meeting its objectives. From this work, the company achieved a clear and unfiltered line of sight into how it would be able to maximize promotion effectiveness.

Inspirage, a consulting firm specializing in the implementation of Oracle Demantra applications, was then chosen as Diamond Foods’ implementation partner. This was a necessary step, according to Hanson, as Inspirage served as both an objective partner that could help them understand the full capabilities of what was purchased as well as act as a conduit for converting one trade system to another.


Keys to Success
Aside from selecting the right solution and implementation partners, Diamond Foods credits two very important steps as critical to its new trade promotion strategy’s success:


1. Clear Ownership: Ultimately, Oracle Demantra is considered a sales tool used to run Diamond Foods’ respective businesses. Because the sales function holds intimate knowledge of the customer and how Diamond Foods goes to market, it was charged to identify key stakeholders for the platform implementation. Based on its extensive research of similar implementations in the industry, the sales department maintained ownership and led the implementation process with leadership from the IT function.

During the development phase, sales and IT engaged multiple departments in planning discussions to understand how each user would view and use the information, and aligned their objectives accordingly.

“We needed to secure insights as to what was needed by other departments for the tool to be truly successful,” says Hanson.

2. A Realistic Timeline: The implementation of a new trade tool is a long-term project. The appropriate time needs to be allocated for design, data cleansing, testing and sell in to the rest of the organization. Thus, Diamond Foods’ implementation spanned three years, going live in August 2011.


Hard Work Pays Off
Now live, significant value has been achieved. For example, Diamond Foods now enjoys synchronized promotion planning business processes for all of its brands.  

“We now have a clear line of site into promotions, allowing us to make critical time-sensitive adjustments as well as predict what will work for our unique brands and consumers,” says Hanson.

The company is also enjoying improved internal communications across different functions, which enables efficient management of budget, volume and forecasts.

For example, as Diamond Foods continually makes adjustments to promotions based on changing market conditions, the operations team can extract a forecast on a biweekly basis and look for changes in both the shorter term and longer term. In addition, the adjustments that are made by the sales team help the operations organization look across current inventories and warehouses to ensure that they have the products in the right place at the right time.

Likewise, when Diamond Foods recently secured a significant increase in distribution with one of its retailer customers, the assessment done by the operations team (based on the same biweekly forecast review) ensured that speed to shelf was maximized by having product ready to ship and placed on shelf as the modular space was being reset.

The newfound capability to analyze the impact of promotion to budget, volume, revenue and profitability during the promotion planning process also helps the sales manager to make informed decisions on effectiveness of the promotions.

Overall, these insights and capabilities will continue to help optimize trade funding and achieve higher levels of collaboration with Diamond Foods’ retail partners.

“It’s very exciting to be part of a company that is gaining and using insights and knowledge to successfully compete in the marketplace,” closes Hanson.





BRANDS BY NUMBER
• Emerald Snack Nuts: $1.1B category, 11.7 share, +2.3 share points
• Diamond Culinary Brand: $580M category, 27.2 share, -0.3 share points
• Pop Secret Popcorn: $500M category,  27.4 share, +1.4 share points
• Kettle Brand Potato Chips: $3.3B category, 3.2 share, flat


Growth Plans without Pringles
In February 2012, Diamond Foods and The Procter & Gamble Company mutually agreed to terminate Diamond Foods’ proposed acquisition of the Pringles business. The acquisition of Pringles would have more than tripled the size of Diamond Foods’ snack business, catapulting it to the No. 2 spot in the global savory snack category. The news of termination left many scratching their heads. But Diamond Foods remains committed to growth in other ways, by optimizing the strategy, performance and execution of each of its existing product lines. For example, extensive efforts are underway to reset the company’s walnut activities to address the rising demand and rising cost of walnuts. Meanwhile, Diamond’s snack brands have continued to deliver strong retail sales, with share gains for Emerald, Pop Secret and Kettle Brand in the most recent 12-week Nielsen tracking period.  


Rate this Content (5 Being the Best)
12345
Current rating: 4.1 (38 ratings)
CGT Media Kit Edgell Privacy Policy Edgell Terms & Conditions CGT Contact Us CGT Form Links Bottom nav bar of CGT