April 16, 2008

Some fun and games with vendors - Coca Cola

As you know, we bought the local grocery store last year and have been having a lot of fun running it. Our vendors are wonderful to work with. Coca Cola, up until this year would send out a sales person every other week to check stock, rotate the various items, accept returns and give credit for items that had expired, etc... Sometime in January, they bought another drink business (Vitamin Water) and as part of their cost cutting measures, they dropped their sales staff. Now we have to phone our orders in to some central number. A few weeks ago, our driver (Steve - a great guy) dropped our order off and told us that we had ordered nine cases and they had a ten case minimum. He just happened to have a case of Vitamin Water along in the truck. Unfortunately, we had signed an agreement with Pepsi so that we could carry their Vitamin Water product and we agreed not to carry Coca Cola's version. We got a case of product that we could not sell... Today, he came with the seventeen cases that we had ordered. Three of those cases had pull-dates that were thirty days away from today so we didn't accept them. (Products usually have about five months of shelf life.) We also had a number of cases of expired product but Steve could not take all of them as they count product returns against the number of cases we order so taking all of the expired product would put us below our ten case minimum. So I get the regional manager on the phone this morning and it seems that he has been getting a lot of other calls from small stores and restaurants and he said that he will "look into it". I am going to give him a week to get back to me. The way it works in stores is that Coke or Pepsi will loan us the cooler as long as we keep it stocked with their products. I have a spare cooler and if we do not get satisfaction from Coke, I am having them come out and pull their coolers. The final nail in the coffin is that they raised out prices by about ten percent. A case of a given product is $26 and our regular grocery distributor has the same case of the same product for about $20. A package of 12 cans of soda costs more from them than it costs at a local grocery wholesaler. Individual cans of soda cost about half at Costco as they do from Coke. It is curious that in this area, more and more coffee shops and restaurants are moving to Pepsi products -- wonder why. The Coke management needs to put down their collective crack pipes and get back to business. This is reflected in the stock prices of the two companies. Coke:
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Pepsi:
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Charts sources: Coke, Pepsi Posted by DaveH at April 16, 2008 9:45 PM
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