Houston Foods Co: unlocking the profit potential of seasonal novelty merchandise - Food Merchandising

Discount Store News, Feb 20, 1995

Thanks to an especially strong sell-through of novelty food and gift sets, such as popcorn tins, assorted candy-filled containers and unique food items during Christmas of 1994, mass market retailers are gearing up for an even more promising 1995.

Indeed, the fourth quarter has emerged as a phenomenal selling period for novelty snack goods.

Colorful holiday tins full of tasty popcorn and attractive meat and cheese packs are perfect gift ideas, especially for last-minute shoppers. Retailers have enjoyed great success with massive displays built around seasonal events.

No wonder as much as 85% of all gift snack items are moved during the fourth quarter.

The company helping retailers unlock the potential of the business is Houston Foods, the category's leading resource and the only full line supplier in the holiday gift snack food business - a profitable and growing niche market.

"It's a very good business for us," said a buyer for a large regional discounter. "These are items customers don't shop around and compare, they are also perfect for last minute gifts."

Beyond offering gift assortments that represent value to consumers, Houston gives retailers the chance to make profits on the seasonal merchandise. Too often the words seasonal and profits don't go together in the retail vernacular.

"Houston has it down to such a science," explained a buyer with another large discount chain, "they can offer us prices that allow us to make a healthy margin."

Since Houston Foods is vertically-integrated, it is able to manufacture everything - from popping its own popcorn to rolling its own tins. The firm also owns its own production equipment and handles every step from start to finish. This keeps production costs in check and offers retailers the chance to make more money.

Houston also has the ability to be flexible and tailor its product mix to the type of account, a key factor in today's competitive retail arena.

"What's right for our stores isn't right for a discount store, so we know we can have something for impulse customers. Unlike most retailers, our business falls off in the last two weeks before Christmas," said an executive with a crafts chain. "We know they'll offer us a point of differentiation."

A buyer for a major discount store agreed that Houston understands each account's needs. "For us, we want sets we can put on pallets and move huge quantities."

For a retailer where price is the top motivating factor, Houston can create lower price points under $5; for those more upscale, Houston has assortments selling for $10 - $20.

Since Houston can customize its selection, its merchandise can be sold in a wide array of outlets including everything from drug stores and discount stores, to warehouse clubs and home centers.

Merchants also praise Houston Foods for its impressive delivery record. "When they say they'll get it to you, they do. And it is just what you ordered," said one buyer.

Gary Musick, executive vice president for sales and marketing at Houston added, "We really service our accounts. Our service is second to none."

Retailers also praise Houston's business acumen. "They sit down with us and review our sales. They also come in with very organized presentations," said one retailer. Added another source, "They work very closely with us giving us data and recaps on deliveries."

Houston doesn't rest on its laurels, retailers added. "They are always looking for something new," said one decision maker. In fact, Houston is helping retailers duplicate their fourth quarter success with products aimed at other key seasons such as Valentine's Day, Easter and Halloween. Then, too, Houston is assisting retailers who want to enjoy the selling power of novelty snacks on a year-round basis by offering a day in, day out selection of items such as caramel corn in attractive containers.

The company also supports merchants with point-of-sale displays and other tools created to maximize sell-through.

To learn more about how to tap into the profitable novelty foods niche market, contact Shari Romanski at (800)548-5896.