Customer Management -- December 2005

With revenues exceeding $3 billion a year, Del Monte Foods is one of this country's leading food companies offering a well-respected portfolio of brands and products, covering the soup, baby food, pet food, seafood, fruit and vegetable categories. Acquisitions over the past few years and its most recent merger with various businesses from Heinz have further strengthened the company across the board. 

One of Del Monte's keys to success is continued dedication to increasing customer value and broadening its center-store presence while managing cost. This year, CGT recognizes Del Monte for its success following a Customer Management initiative started in 2002, and more specifically, for its commitment to tackling trade spend challenges.

In Search of Clarity
To streamline business processes and save costs, Del Monte turned its focus toward the company's trade spend and promotion planning in 2002. At the time, Del Monte quantified trade promotion management (TPM) overspend by as much as 5 percent. The homegrown system developed to manage trade funds and promotions did not measure the effectiveness of individual promotions or provide a clear view of field sales activities. "Our 'homegrown' system wasn't fully integrated into funding and spending -- [it] couldn't support the introduction of an accrual based funding approach," says Marc Brown, chief information officer, Del Monte Foods. In addition, the cost of maintaining a 'homegrown' solution that didn't meet all of its requirements was expensive. The need for change was without question. After reviewing the trade promotion management tools on the market, Del Monte decided that CAS was the best bet for cost savings.

Instantaneous Return
After rolling out the system, "initial capability improvements have been our 'day in and day out' visibility to trade spend," says Brown. Results included more communication between field and management, more timely information on sales performance against objectives and increased oversight of trade budgets ensuring compliance with corporate strategy.

Today, Del Monte has been live with CPWerx through four planning cycles and the benefits just keep on coming. "Full integration of payment resolution and funds management has streamlined the deduction management process and improved visibility to true liability," says Brown. "We are now beginning to use the CAS information to fuel efficient promotional spending processes that focus on managed return on trade spend investment."

Growing Together
Since 2002, Del Monte has tripled in size with the acquisition of Heinz brands. The CAS system has been migrated to support the new portion of Del Monte's business, helping to further execute efficient trade promotions.

In addition to CAS, Del Monte implemented Cognos enterprise business intelligence (EBI) software last spring to ensure a more effective use of trade funds for promotional programs with retailers to drive incremental consumption.

As a result, the company is now able to track what it expects to spend on marketing programs and what it actually did spend against baseline targets.
"Business intelligence will enable us to analyze whether a retailer is buying more products from us that were discounted by us, and how effectively volume has flowed through retail chains to the consumer," says Andy Wojewodka, director, Business Systems and Decision Support, Del Monte. The company expects to see payback in terms of increased sales and more effective use of its trade spending dollars. Del Monte plans to leverage the knowledge gained from the EBI project across the company. Supply chain management is next in line for improvement.