How Nabisco Beats Keebler in the Cookie-Cracker Aisle
Most people do not give it a second thought, Stroll down the aisle, grab a box of crackers or cookies and think little of paying $3 for either. But like anything, it is big business and the war between Keebler and Nabisco (owned by Mondelez) is intense competition with new brands and flavors coming out. These two fight for space within the store, with permission of the store manager, on aisles and cardboard hutchs where the products sit. They fight for prime location, mostly, in the entrance areas, near the checkout and elsewhere.
Nabisco earns a bulk of their money from Oreo cookies, which come in all sorts of types and flavors even though they are not the healthiest (just two of them contain 180 calories). They also earn a ton of money from Chips Ahoy chip cookies, Triscuits, Wheat Thins, Ritz crackers, Nilla crackers and European style cookies and crackers. By comparison, Keebler pales in product choice.
The Merchandiser, who earns between $10- 14 hr. is the grunt. He stocks the shelves and both companies try to make sure the shelves in the cookie aisle of every grocery store filled with product. They both rely on impulse buying and creating snacks that "appear" healthy. Smart consumers simply have to read the nutrition panel. The Sales Rep is paid more and is the one that actually orders what each store needs within his area, which is tricky.
Cookies and crackers are a million dollar industry with many products being made in Mexico and shipped and repacked in the USA. For instance, for Nabsico's Northern California region that contains 14 areas and 60 stores their products are in, the monthly target number they want to hit is $2,05 million. That would average $100K a day. The actual income made averages $1.3 million a month. Most of the areas earn $30- 60K a week. Nabisco has about 1000 stores that their products are in California.
Ever wonder what their product markup is? All of their products have a markup of 26%. What this means is a case of 12 Oreo packages costs $40, each package is $3.33. The package then retails to the buyer for $4.50. So, when your grocery store has a sale with the retail of $2-3.00, that is a good deal. Chip Ahoys are similar, the cost $2.81 a package and retail for $3.79 on average. Belvita, Wheat Thins, and Triscuits run $2.73 each wholesale and retails.$3.70.
Knowing this, you, the consumer should stock up on your favorite snacks or cookies whenever the sale is at $2.50-3, because is the wholesale price!
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