Michael Adams Green Mountain Mustard and Gredio

Michael Adams, Owner
Green Mountain Mustard & Gredio

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switch your food product's case-pack

The Pros & Cons of Switching Your Case-Pack Size

I’m knee deep in a decision to switch my case-pack from 12 jars to 6 jars. And like I’ve done before, I’m going to write my thoughts down on “paper” and let you know what I decide to do in a follow-up post.

When you start your food business, you’re pretty much focused on getting something in the jar or box and slapping a label on it. You want your minimum viable food product on the shelf. You’ll refine the look later and get your food product cost down, too.

But, when you start to experience growth, decisions have a lot more weight. They affect a larger part of your business and reversing them could cost you thousands of dollars. For example, you may be considering rebranding your food product, or using a co-packer – both of which are HUGE decision.

Another decision, while not as glamorous, is deciding on your case-pack size.

What is a case-pack?

Case-pack is the number of units you put in a box for sale to a distributor or a retailer. For example, many value-added products like mustard, jelly, and bbq sauce, come in a case-pack of 12. Larger bottles like salad dressing or even hot sauce, come in a case-pack of 6. And then you’ve got small packs, like 4 oz glass jars, that come 24 to a case.

It’s all over the board — and mainly depends on what’s available from your supplier.

Why does case-pack matter?

It’s all about shelf-space at your retailers, but it’s also a financial decision that impacts you, the manufacturer, and everyone else is in the distribution channel because your pricing gets passed all the way down to the end-consumer.

There are a lot of reasons case-pack is a big decision. Below, I’ll explain the pros and cons of switching my mustards from a 12-pack to a 6-pack. Hopefully you find this helpful for your own food business.

The pros of changing your case pack:

1. More inventory turns

If your product sits on the shelf collecting dust for months, well, it’s simply not moving. Get stuck in that situation (of which I’ll write about next month) and you’ve got a bigger problem on your hands. With small case packs, you’ll “move more cases” and increase the performance of your product across the category. With that being said, the more manufacturers who move to smaller case-packs, the more this “pro” becomes a moot point.

2. Happy retail buyers

Buyers LOVE smaller case-packs. They are able to better manage their inventory, order what they need, and fit it all on the shelf – with limited back-stock (which takes up less space. And we all know you’ve got to keep those retailer buyers happy, right? This and #4 on the pros list, to me, are two BIG reasons to decrease case-size.

3. More SKUs on the shelf

With a smaller case pack, retailers can order more SKUs because they won’t be stuck with 12 of each of them. This means you get more shelf space (yes, please) and a better selection for your retail customers. Plus, if you launch a new flavor, it’s a lot easier for buyers to bring it in when they have to get 6 of them just to try it out.

4. No split-case costs

This is one of those hidden costs if you deal with a larger distributor – split-case costs. Let’s say you package a case-pack of 12 jars and send it off to a larger distributor. Then, a retailer orders half a case. All of a sudden, your distributor has to split the case of 12 you just sent them. (In some cases they literally have a machine that splits the case). This costs the distributor money – and it gets charged back to you at the rate of $0.30-$0.50/case. Yep – It’d be great not to pay those. Ever.

The cons of changing your case pack:

1. Increased product cost

Changing your case-pack costs money (see #3 on the cons list). Especially if your glass already comes in a box with cardboard protectors. Sure, it’s included in your total cost, but it’s nice to have the glass nicely packed away.

So, how much of an increase are we talking?

I have been in touch with corrugated box companies looking at quantities near 5,000 and 10,000 boxes. I figure if I’m using roughly a pallet of glass a month (roughly 400 twelve-pack cases) that’s  800 boxes a month to pack in a 6-pack. That means yearly demand of 9,600 boxes (which gets rounded up to 10,000 for a bulk rate). Plus, the divider to protect the jars during shipping.

When all said and done, it’ll be roughly $0.75 a box (keep in mind, I get boxes for FREE now).

When spread over just 6 jars, a case-pack of 6 jars of mustard would increase roughly $0.13/jar — a large increase in our overall price per unit to retailers and distributors.

That leaves one big question: Will retailers pay extra for the convenience of a case-pack of 6 jars? It’s something I’m hoping to find out with a couple of our direct accounts over the next few weeks.

2. More storage space required

Remember those 10,000 boxes I mentioned? Where the heck am I going to put 10,000 boxes? That requires storage space far beyond my basement (my parent’s basement, I should say!).

3. Capital investment for the switch

10,000 boxes isn’t cheap. At $0.75 a piece, that’s $7,500 I don’t have (or I’d rather put towards marketing activities). To switch to a 6-pack would require a capital investment. I’ve looked at ordering a lesser quantity, but it’s not cost effective and would increase my unit cost more.

I still haven’t made a decision. What I may do is get a smaller quantity of 6-pack boxes and split them myself if I need to. With that being said, I’ve also split my own cases – two flavors in one 12-jar case – and my direct accounts have been fine with that. But, as we grow, I need to think about what my customer wants and if it’s cost-effective for me to make the change.

If you’ve changed your company’s case-pack size let me know how you came to a decision – I’d love to know!

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11 Comments on this post

  1. AUTHORPam Gram

    on May 2, 2014 at 4:35 am - Reply

    This is my opinion only! I am a small caterer. I LOVE Stonewall Kitchen products. I buy by the case and their case size is 6 jars. I also by oriental products from a company in Colorado call East West Products. They specialize in different Asian sauces. They also sell in 6 bottle cases. They will actually let you mix two different products to meet their case size of 6 bottles! The benefit of companies such as these selling in 6 bottle/jar cases is that they afford a small cater (and smaller markets and specialty stores) to buy your product without having so much inventory on hand that can’t be sold before expiration dates come due. This also affords smaller specialty markets, farmer market retail sellers, larger markets with limited shelf space, and smaller caterers to purchase, try, and incorporate you product(s) into their uses without a large commitment of shelf space or money. Your increase of 13 cents a jar is worth it to us smaller consumers/resellers Knowing that when we order a case, we won’t be wasting product in the end is worth the slight increase in price. Personally speaking as a caterer, I WISH meat prices each time I buy had only increased by 13 cents. However, since January, I have seen beef jump from $4.79/lb. to $7.99/lb. for cheap cuts of beef like Tri-Tip and Brisket. My gosh, take a look at ground beef which used to be around $2 something a pound now at $5 something a pound. I am fairly confident in saying a 13 cent per jar (for a quality product) increase won’t be noticed compared to gas, beef, cheese, diary, bread, and etc. prices.

    • AUTHORmichael

      on May 3, 2014 at 12:15 am - Reply

      Hey Pam — definitely appreciate your comments on this! We’re seriously looking into a 6-pack because it will benefit a lot of retailers (and distributors). You make a great point about the cost of other things going up – guess 13 cents really isn’t that much!

  2. AUTHORTerry Wakefield

    on May 6, 2014 at 6:26 pm - Reply

    A smaller pack size can increase sales if your product is not getting on the shelf because the retailer’s cost for a larger case is too much or because the retailer has very restricted storage space to put product which won’t fit on the shelf. However, a smaller pack size can also reduce sales if the product sells through and does get re-ordered until the shelf is empty (empty shelf space often gets consumed by other products).. Therefore, if you go to a smaller pack size, build something into the display of your product that reminds the retailer to re-order before the last few units are sold.

    • AUTHORmichael

      on May 7, 2014 at 10:41 am - Reply

      Very good point about the quick sell-through, Terry – thanks for pointing that out. Great tip to build something into the display that prompts the retailer to re-order.

  3. AUTHORSweetwater Spice Co.

    on May 6, 2014 at 10:18 pm - Reply

    I think for companies exploring Grocery shelves, 6 is basically a given to avoid split case costs and to increase store count, as you mentioned.

    One way to help the transition is to find a bottle supplier that sells the bottles in 6 unit reshippers. This is not possible for every style bottle, but look around.

    Another option is to move to a 9 pack. A 9 pack? Yes – a 9 pack will be a square box, not rectangular, so there are no die costs in creating the box. In many chains (though not all) 9 will fit on a shelf so this is a good middle ground.

    • AUTHORmichael

      on May 7, 2014 at 10:43 am - Reply

      Hey Scott – thanks for the comment. I’ve been looking for a 6-unit re-shipper but haven’t found one yet. I’m considering finding a glass supplier that doesn’t ship in boxes (reduces weight and price) and packaging them myself into the 6-pack box we order.

      And an interesting point about the 9-pack. I’ve always liked squares better than rectangles, anyway :p

      • AUTHORSweetwater Spice Co.

        on May 7, 2014 at 6:22 pm - Reply

        Just make sure either you or your co-packer can depalettize the bulk glass. I used it for awhile and my co-packer didn’t have a depalletizer resulting in a significant amount of breakage during production runs and it’s difficult to rewrap and store the loose bottles.

  4. AUTHORShelvia

    on May 7, 2014 at 12:04 pm - Reply

    Hello Michael,
    We at Edible Software, a provider of inventory control, traceability and full management accounting systems, love your blog. Could we reblog “The Pros and Cons of Switching Your Casepack”?

    Sincerely,
    Shelvia Smith

    • AUTHORmichael

      on May 7, 2014 at 9:19 pm - Reply

      Hi Shelvia,

      Sure, you can share my article — just make sure to give me a backlink back to gredio.com — thanks!

  5. AUTHORDebra Hart

    on May 7, 2014 at 7:46 pm - Reply

    I’ve tested using plastic and was able to mix cases with other products into certain size boxes easier.

    • AUTHORmichael

      on May 7, 2014 at 9:18 pm - Reply

      Hi Debra — good point – I could definitely mix cases with different products – thanks for the idea!

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