Fillo-sophically speaking Featured

7:00pm EDT February 26, 2006
It’s one thing to ask for customer feedback. It’s another thing altogether to implement those suggestions.

But Athens Foods Inc.’s chairman Eric Moscahlaidis takes that feedback seriously, using it to help expand his company’s tasty offerings.

The 175-employee Cleveland manufacturing company has had double-digit sales growth in the last three years and has introduced pre-layered fillo dough and flavored fillo shells for chefs, and frozen pastries and appetizers for home cooks.

“It’s only half the battle to get the product on the shelf,” Moscahlaidis says. “Then you have to support it to generate pull off the shelf.”

Smart Business spoke with Moscahlaidis about how he uses customer feedback to grow his product line.

How much influence do consumers have in growing your brand?
We have a Web site that receives over 54,000 hits a month. We read every e-mail from our consumer base and carefully consider what it is that they tell us.

We conduct focus groups with consumers regularly and base some of our packaging or product design decisions directly on what the consumers tell us.

We learned that many consumers weren’t using the entire roll of fillo dough in one use. As a result, we created two 8-ounce rolls instead of one 16-ounce roll. (It allows) consumers to only use half of the box, without exposing the other roll to any oxygen. The response has been excellent.

How else do you get that input?
We hired a market research firm that has put focus groups together.

We try to do our homework before we launch any new product with regard to packaging, product appearance, taste, nutritional content and price point.

We’re always looking at new products. Right now is a very exciting time because in the fourth quarter of 2005, we launched three new hors d’oeuvres. We had limited placements in supermarket chains. They performed extremely well, so we are going to be expanding those three items to additional supermarket chains, and in the meantime, we’re preparing the next filling flavors.

How do you determine which chains to approach about selling your products?
We’re going to approach everybody. That doesn’t mean all of them will approve it, or that we’ll come to an agreement.

The entry costs of a new product into supermarket chains are very substantial in terms of the slotting allowances that you have to pay to get your product on the shelf. In addition, there are introductory allowances, quarterly promotions and advertising support. It’s the most costly part of any product launch.

(We choose chains based on cost) and also whether we feel the product is applicable to the particular market. If we don’t think it will do very well in North Dakota but we think it’ll do very well in Dallas, we’ll approach that market first.

We selectively choose the markets that we roll out in. It isn’t a simultaneous national rollout because it’s extremely expensive to do that.

It literally costs millions of dollars to launch a new product. You need to do demonstrations. You need to advertise the product in the supermarket circular, via a coupon insert in the local newspapers and/or some radio-TV advertising.

What is your biggest growth challenge, and how do you manage it?
Our biggest challenge is retail distribution. We put out only quality products that have a demand. Then we try to work with the retailers to put together a palatable program and roll out in stages as opposed to nationally. These are all means by which we can reduce the overall impact of rolling out a new product.

Before we’ll roll anything out, we’ll pick one or two test markets and put out the product. If we need to tweak it, then we’ll do so before we actually roll it out to a number of markets.

Your average (store) buyer sees over 100 new products a week, of which a handful get authorized. A small amount actually gets on the shelf, and then only a few of those survive, so it is very difficult to launch a new product in the retail trade.

HOW TO REACH: Athens Foods Inc., (800) 837-5683 or www.athens.com