Tren Griffin+ Your Authors @trengriffin I work for Microsoft. Previously I was a partner at Eagle River, a private equity firm established by Craig McCaw. I am on the board of directors of Kymeta. Aug. 11, 2019 1 min read + Your Authors

I was reading an article in Marijuana Business Daily, as one does, about slotting fees and it made me think again about how Kraft products are now on the bottom shelf of my local supermarkets.

"$5,000-$10,000 a month for prime real estate inside shops" 

"Grocers can make as much as 30% more on private label products than they can selling another brand, according to CB Insights. It's hard to compete with that."

"The Walmart customer is a value customer. They want a bucket of something for $5." 

It seems like Kraft decided to pay less for slotting.

"Goldman Sachs said in 2015 consumer goods companies paid > $200B to retailers in placement fees. That space by the registers where candy bars are is so valuable manufacturers have to pay by the inch." 

25iQuiz: Warren Buffett has said: "The single most important decision in evaluating a business is":

Kraft may not be paying often to get its products on promotional displays at the end of grocery store aisles, but they have made The Oscar Mayer Wienermobile available on Airbnb—with Heinz in the fridge. So they have that going for them, which is nice. 

You can follow @trengriffin.


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