Snowman In Cocoa

Planning is the Key Ingredient When It Comes To Holiday Products For Food Manufacturers

Nov. 2, 2022
The special effort to get holiday-only products on market in the right packaging and the right quantities involves work on multiple levels, from ingredient sourcing to packaging design to on-point seasonal marketing.

Rastelli Food Group makes premium meat products, such as its line of EZ Cook Roasts, year round. But for the holidays, the company shifts into high gear and creates several products that are on sale only as long as the Christmas trees are up.

“We have both holiday-only items and products that are a variation of products we offer year-round,” says Lauren Rastelli DeMarco, the company’s director of marketing and events. “For example, we produce filet mignons year-round, but only offer our Chateaubriand during the holiday season. Our Prime rib roast is an item we offer throughout the year as a 3 lb. roast, but during the holiday season we offer an additional 5 lb. version.”

The special effort to get those holiday-only products on market in the right packaging and the right quantities involves work on multiple levels, from ingredient sourcing to packaging design to on-point seasonal marketing.

“Pre-planning is everything when it comes to our seasonal/holiday offerings,” Rastelli DeMarco says. “It is the single most important step in our process, since we are delivering fresh products that have a shorter shelf life and limited seasonality to our retail customers.”

Months in advance

A food processor creating holiday-only products starts the process as long as a year in advance. Since there is a specific deadline for both the beginning of the selling season and the time the products need to be off the shelves, the process differs from that required of regular, year-round products.

“Seasonal products are specifically impacted by launch timing in accordance with the seasonal/holiday calendar and largely impacted by consumer buying periods, which can be a few weeks or months; year-round goods that can be launched at any time have a reduced sense of urgency,” explains Joelle Dove, director of business development for Daymon, a private label consultant. “Best-in-class food processors should plan their seasonal products 10-12 months ahead of the targeted season, and more if they are new to the game.”

The process begins with an assessment of sales from the previous holiday season, Dove adds. That data, combined with forecasts for the next season, helps manufacturers plan quantities and sometimes reveals opportunities for new products.

For example, Rastelli Food Group sells a great quantity of filets during the holidays, which means there are excess trimmings from the beef tenderloins. They don’t want those trimmings to go to waste, so this year they have an idea for them.

“We are already planning to take the tails to make filet medallions, which we will then sell through our e-commerce channels like QVC,” Rastelli DeMarco says. “We will also take the heads to sell through our retailers as a value roast item, leaving the centers to be utilized as our best-selling center cut 6-8 oz. filet mignons.”

An important part of the process, of course, is working closely with the retail partners, Dove notes. Because the retailers know their customer base better than the manufacturers, they can help create more accurate quantity predictions. For the holiday season that’s approaching in 2023, for example, Dove says “value-focused” holiday products are hot because of inflation.

Brian Chau, a partner in Bentley Specialties, a contract manufacturer of confectionary items, says they ask their clients to order at least six months ahead of the holiday. This gives them time to order raw materials and prepare for the holiday rush.

Chau, who also is principal of Chau Time, a food consultation firm, says the time restrictions of a holiday product can actually be an advantage for a manufacturer in some cases.

“Holiday offers are easy to understand in terms of expected volume, predictable flavors and overall project management,” Chau explains. “The timing to go from concept to commercialization is more automated with a seasonal product over a year-long product because the seasonal products are less likely to change formulation over time.”

Packaging concerns

Most holiday products, of course, come in holiday packaging. That adds another layer of concern and required planning for food processors. This is especially true when considering that holiday-packaged products – even if they are not beyond the “sell by” date – are not likely to stay on store shelves much past January 1.

Packaging concerns have grown due to supply chain problems, Rastelli DeMarco notes. “Due to limitations that we are now up against with packaging material lead time, we need to be at least 6-10 weeks out to get the packaging in time for when the product is being produced,” she says.

“We used to only be concerned about securing the raw material, but now we need to plan to get all the components together to make up the final product. We try to do as much in-house as possible, so we can meet tighter deadlines when they arise. We’ve even gone as far as bringing in printers to run our own labels and equipment to produce our own dry ice so we are no longer dependent on outside sources and can meet our demands in e-commerce fulfillment. The more we can control in the process the faster we are able to bring new and innovative products to life, with fewer hurdles.”

Store brands have an additional challenge when it comes to packaging – their print runs are much shorter than national brands, which drives up the cost per-unit, Dove explains. If a retailer is able to use the same packaging year over year, more of the cost is amortized, increasing profitability.

What about overage?

Planning the correct quantity to produce is a special challenge for food processors making holiday products, since the selling season is relatively short.

Chau says his company recommends adding 15-20% overage to quantity estimates for holiday products being made for new clients (who don’t have a sales history for that particular product) and 5-10% overage for returning customers. If the product does not sell out, retailers typically mark it down to unload it, of course, but that’s still preferable to running out entirely, he says.

“Overproduction is often preferred by our customers as the opportunity cost of losing a customer due to shortages is riskier than to overproduce and sell to Grocery Outlet or donate to a food bank,” he says.

Chelsey Capps, director of thought leadership for Daymon, emphasizes the balancing act food manufacturers face when estimating quantity: “Too much product means heavy clearance with degradation of margin, while too little product means empty shelves and missed sales. There is a wide discrepancy amongst retail channels in delivery of allocation and inventory planning, but in all cases the ultimate onus lies on the ability of the suppliers and manufacturers to produce enough to support the season.”

Rastelli DeMarco says her company plans a 5% overproduction to prevent running out of product. Because meat products in general are not holiday-specific, the limited selling season of the holidays may not be quite as big of a problem for a meat producer. But shelf-life certainly is, and Rastelli has addressed that this year with new equipment that makes modified atmosphere packaging (MAP), which replaces air inside the packaging with a protective gas mix, extending shelf life.

“Using packaging that helps extend the shelf life is very important for us,” Rastelli DeMarco says. “We just installed MAP packaging equipment this year and it has allowed for extended shelf life of our products, especially heading into the holiday season.”

Companies that make products that are strictly holiday-focused – think candy canes and Hannukah cookies – but also make year-round products need to keep timing in mind even more than those that only make holiday products, Capps notes.

She explains that when the holiday product leaves the shelf, either because it sells out or the season ends, the retailer has to replace it with something, so the manufacturer needs to have that replacement available.

“Products like seasonally flavored ready-to-drink pumpkin spiced iced coffee have time-stamps that make planning for the item that is going to replace the LTO [limited time offer] just as important as reasonably forecasting the existing LTO’s inventory,” Capps says.

The “wow” factor

Ultimately, despite the challenges, creating holiday products pays off for many food manufacturers.

“During the holiday season we always set out with the intention to create items that our customers can use to make their meals more enjoyable and are easier to prepare; as well as add that ‘wow’ factor when sending gifts,” Rastelli DeMarco says.

“For our Rastelli’s retail line we are producing holiday ready cuts for two or more people. For example, this year we are doing our Tomahawk Bone-in Ribeye Steak, paired with our garlic and herb butter and signature seasoning packet, making it the perfect option for an intimate holiday meal for two or an impressive gift to give to family and friends.”

Daymon’s Dove expresses the same excitement about holiday products when it comes to retailer’s private label products: “When retailers utilize their private brands to introduce new, fun, and creative seasonal assortments they do more than just offer variety, they are emotionally connecting with their customers. Private brand seasonal assortments meet a consumer desire for seasonal indulgences and fulfill their customers’ excitement to celebrate the season.”

Sponsored Recommendations

F&B Manufacturer Implements Powerful Cybersecurity

A leading F&B manufacturer has moved to harness the skills of Rockwell Automation and Claroty to harden their OT and IT defences.

6 Ways to Augment Your Food and Beverage Workforce

Modern digital tools and technologies help attract, retain and empower a modern workforce.

2024 Manufacturing Trends - Unpacking AI, Workforce, and Cybersecurity

The world of manufacturing is changing, and Generative AI is one of the many change agents. The 2024 State of Smart Manufacturing Report takes a deep dive into how Generative ...

Better OT Asset Management Increases Uptime

A food and beverage company streamlines and simplifies its OT cybersecurity to increase system reliability and uptime.