How Independents & Wholesalers Can Ensure a Fair Share of Consumer (FSI) Promotion Dollars?

By Andrew “Dewey” Rumpelt, July 27, 2016

The purpose of this article is to provide Independent Grocers and Wholesalers a perspective on the shifts and trends on coupons delivered in Free Standing Inserts (FSI) along with some ideas on how to tap into consumer promotion funds that may be available to help remain competitive in today’s marketplace.

It's no secret that manufacturers focus a lot of attention on major retailers, but Independent Grocers make up an estimated 25% of all supermarket revenues and are a cornerstone and social hub of many communities and towns. Many independents simply do not have the types of resources or portfolio of programs (i.e. digital) that many large chains have to offer manufacturers as an alternative to FSI’s or Co-Op vehicles. Manufacturers also participate in 3rd party store vehicles (i.e. Smart Source Coupon Machines), and are most likely under-represented with the Wholesalers and Independent Grocer that they serve.

According to the recent 2015 CPG industry report on Free Standing Inserts (FSI's) published annually by Marx Promotion Intelligence, a division of Kantar Media, the FSI industry experienced significant shifts among major segments. In order to make the analysis more relatable, the Marx FSI data was converted to dollars, something we can all relate to. FSI’s account for 9 out of 10 coupons distributed, and is still considered one of the most efficient consumer promotion vehicles by manufacturers. Download the full report from the Marx website here: Marx 2015 FSI Annual Trend Report

In 2015, CPG manufacturers spent $2.5 billion dollars on FSI coupons, resulting in a -10% decline. Most major segments were down double digits with the exception of Dry Grocery, which was +1% due to higher coupon values. Significant declines were seen in Cereals -22%, Frozen -20%, Household -24%, and SS Beverages -34%.

FSI Coupon Dollar Spend

Segment $ (mm's) % Change
Cereals $22.4 -22%
Dry Grocery $716.4 1%
Frozen $89.1 -20%
Health Care $592.7 -4%
Household Prods $154.6 -24%
Other $63.7 -13%
Personal Care $666.8 -14%
Refrigerated Foods $109.6 -10%
SS Beverages $132.9 -34%
Total Change $2,548.1 -10%
Sources: Marx, Kantar Media 2015 FSI Trends. Dollar spends include estimate redemption rates for non-food and food segments and estimated FSI insertion cost. Redemption spends calculated by number coupons times an estimated redemption rate. Insertion cost assumes that the total cost of an FSI is comprised of 60% redemption and 40% insertion costs, on average.


The Marx study also breaks out FSI Retail Co-Op vehicles. These are programs set up by shopper marketing teams and retailers to advertise a sale price point, and usually run on an adjacent page to a coupon offer within the FSI insert. This past year a sharp decline in the use of Retail Co-Op programs, down an average of -25% in pages, and down -22% in the number of retail banners running Co-Op FSI’s.

FSI Retail Co-Op % Changes

Pages # Retail Banners # Mfrs
-25% -22% -8%
Source: Marx, Kantar Media 2015 FSI Trends, FSI Retail Co-Op data is actual.


A discussion with a former senior executive with an FSI company, produced the following ideas for Wholesalers and Independent Grocers to consider:

  1. Even though FSI Co-Op pages are down, this vehicle remains a solid program for groups of Independents that want to support it.
  2. Independents should ensure they know what manufacturer FSI’s are being run the week prior to the drop date to avoid out of stocks. O.O.S.’s cost the grocer significant revenue in lost sales and aggravates the customer who may shop elsewhere to find the product.
  3. Independents should consult with manufacturers to analyze their FSI coupon redemptions and measure against other programs being offered by the manufacturer.
  4. Independents may benefit from conducting monthly audits of retail competitors to see what brands are running in-store programs (i.e. SSCM, Shelf Talk). Then contact those suppliers and ask for alternative options for those monies to be spent with your shopper.

Unlike major chains, however, Independent Grocers and Wholesalers don’t have the resources like a fully staffed office of manufacturer category managers, or shopper marketers but in many cases their wholesaler/distributor will act as their agent. The first step is to contact the Shopper Marketing divisions of News America and Valassis (both distributors of FSI vehicles), and ask them for assistance. Ask them to help you understand what programs are being run in your marketing area that you are missing out on, and ways that they can help bridge those opportunities with manufacturers. And, most importantly, these programs/funds should be incremental to any existing programs you may have in place.

Suggested Next Steps:

  • If you don’t have contact information for either supplier or 3rd Parties, contact your Wholesaler for that information. If you are a single store, or small group, it’s best to work with your Wholesaler.
  • Retail Co-Op Programs: Explore which competitors of yours are supporting FSI coupon programs with their own FSI Retail Co-Op programs and consider supporting categories or brands that make sense for your business.
  • In-store Coupons and In-store Shelf-Talk type programs: Ask for a comparison of your programs vs. your retail competitive set to identify what programs you are missing out on. Discuss alternative programs that you can run and execute.

Typically funding for these programs comes out of a consumer promotion budget. However, by doing some basic analyses, and asking for some assistance from News America and Valassis, you may be able to get incremental funds (consumer or trade dollars) to replace consumer monies, especially if you do not have a wide portfolio of consumer programs to offer the manufacturer.

Digital coupons will be next insight article and provide an overview on size of market and trends.

About the Author Andy "Dewey" Rumpelt:

Andy "Dewey" Rumpelt has spent 25 years in CPG and is considered an expert on trade, consumer and media insights. Andy started his career at American Home Foods in field sales progressing to brand management on many brands in which trade promotion was a crucial aspect of marketing activities. Andy also worked for ACNielsen. Most recently Andy was Vice President at Kantar Media/Marx, where he provided key insights on consumer FSI, digital, and advertising insights for some of the largest CPG companies in the country. Andy is currently the owner of PRICE-TRAK.

About PRICE-TRAK, National Promotion Reports, LLC (formerly Leemis):

PRICE-TRAK provides specialized competitive cost and trade reports, and monitors 150 standard warehouse categories. PRICE-TRAK provides easy to use syndicated reports to monitor price changes and trade allowances. PRICE-TRAK also supports grocery wholesalers to assist with pricing and promotional allowance understanding to help ensure grocery wholesalers have the tools necessary to remain a viable channel.

Andrew "Dewey" Rumpelt
518-599-0526 office
518-275-5464 cell