Slotting
In the course of churning out new products, we came perilously close to putting ourselves out of business because We hadn’t taken into account a new phenomenon in the food business, a diabolical supermarket invention - slotting. If ever there was a dirty word in the food business, slotting is it. Competition for shelf space had always been intense, and products were selected at the whim of the supermarket buyer. Some traditional emoluments were involved in getting a new product on the shelf, like giving one free bottle for every ten purchased or offering an introductory promotion - we would lower the price and pass the savings on to the consumer, who instead of buying one jar for $1.99 would buy two jars at $1.59; the extra sales generated by the promotion would make up for the price reduction.
But slotting involved actual cash payments of $28,000-$30,000 to each store for the privilege of displaying a new product, and there was no guarantee as to how long a store would keep it on the shelf. Thus, if you simultaneously introduced two new products in twelve different markets, you would have to pony up as much as $400,000.
Unlike some of the other immature ventures that foundered and sank under the bombardment of slotting, we flourished, and in a relatively short time we had a platoon of Newman’s Own pasta sauces attacking the shelf spaces.
Shameless Exploitation In Pursuit of the Common Good
by Paul Newman and A.E. Hotchner
by Paul Newman and A.E. Hotchner
