Marzetti’s New Category Expertise
Strengthens Partnerships with Retailers
By Dale Buss
Chrissy Peplinski spent more than 20 years rising through the vast category-management matrix at General Mills in Minneapolis. But when she left a couple of years ago for Westerville, Ohio, to take the first category-management leadership position ever created at T. Marzetti, Peplinski had to radically shift her mindset as well as her location: She was now in charge of what was essentially a start-up operation.
T. Marzetti’s emphasis on category management has already benefited retailer partners and the CPG company itself whose brands include its eponymous salad dressings, Reames frozen egg noodles, Chatham Village croutons, New York Bakery garlic breads, Sister Schubert rolls and Flatout flat breads.
“We’ve had favorable results,” Peplinski told CPGmatters. “We’re meeting retailers where they are and growing it from there. So, we are strengthening relationships with our retailer partners.”
For instance, Marzetti has been applying its new category-management capabilities to helping retailers in various parts of the country understand and apply regional differences in consumer preferences for frozen-bread brands and products. “It has many sub-categories that have developed differently in different parts of the country,” Peplinski explains.
For example, frozen biscuits are especially popular in the Southeast, but not so much in the West; certain brands in that segment fare differently even within the overall favorable Southeast. Meanwhile, savory Texas toast and garlic breads elicit varying degrees of interest depending on where Americans live.
“By helping retailers tailor assortments and facings, we are helping them meet the consumer demand in that area and pull it through their department,” Peplinski said. “There are various ways to handle it depending on what part of the country the retailer is based in, or if it’s a national retailer, we can help them take a regional approach.”
Not long ago, Marzetti couldn’t offer any such of category-management help to stores. “It didn’t exist as a capability,” Peplinski said. “The day I started was the day category management started.”
Of course, Marzetti helped retailers in many other ways, including the quality of its brands, a commitment to partnership with stores, and delivering on commitments.
All of that helped T. Marzetti, a unit of Lancaster Colony Corp., get to its first $1 billion in annual sales. But after he took the helm about two years ago, President and CEO David Ciesinski was challenging the company’s leaders to figure out how they would get to “the next billion dollars” in annual sales. “He recognized that what would get us there wasn’t the same thing as what got us to the first billion,” Peplinski said. “And he started building teams and recognized that category management should be part of it.”
Peplinski’s first obligation was “to educate the organization” about the value of category management and how to obtain it,” she said. “That was one of the biggest hurdles. It was hard to develop cross-functional partnerships [internally]. If people didn’t know what they were getting into, what could they offer you? And as we looked for resources to invest in category management, they needed to understand the benefits and ROI – what could it accomplish internally and externally?
Peplinski recently outlined her approach to “start-up” category management at the Category Management Association (CMA) annual meeting. She defined the category leadership opportunity for Marzetti as involving five great results:
- Building credibility and developing collaborative partnerships with retailers beyond sales.
- Influencing the direction of categories including assortment, space, flow and innovation.
- Making buyers look good within their own organizations.
- Becoming a potential source of competitive advantage.
- Helping steer your own company’s ship more efficiently and effectively.
“The company already had a long history with retailers and had outstanding business in a traditional sense,” Peplinski said. “But in addition to those partnerships, we wanted to address what category management could do for them.”
Among the assistance that Peplinski initiated with the category- management function at Marzetti was “understanding what the trends are projecting so we can bring that back to the retailer and help them ideate on what they could do with what they have.”
Peplinski noted that “there are varying levels of sophistication across retailers” when it comes to managing their categories. “So, what we say is, how do we meet them where they are and help them move from their foundation to something that is differentiating and visionary?”
If a retailer has been soft in sales in certain categories, for instance, “how can we put a plan together to help them reverse that trend? Or if they’re leading in certain areas, how can we help them widen that lead and be a bigger-share retailer?”
As she has built category management at Marzetti, Peplinski has had to help the company navigate some of the built-in challenges of offering that capability to retailers. One of them is finding ways to assure them of the company’s neutrality.
“You’re Switzerland,” Peplinski explained. “Everyone knows that you’re paid by a certain company, but your role first and foremost as a category management leader is to grow the category. And that’s beneficial to grow your company as well, because all boats rise with the tide. And if you bring bias that is self-serving to your brand, that is sniffed out. Also, if the category declines as a result of one of your recommendations [that favors the company’s own brands], that’s not easily covered up. You need to be unbiased.”
Competition, of course, is another huge challenge. Wishbone and Paul Newman’s may, for instance, offer some of the same category-management capabilities as T. Marzetti in the crowded salad-dressing aisles. How do you compete?
“We’re definitely not huge in size,” she conceded. “But we can offer unbiased, well-founded recommendations based on insights into what’s going on today for the category and with consumers, and foresight about where those things are going to go. That goes a long way.”