Sell-in is not demand

Ramadan is expected around the start of March, which means that for a food or household brand the month begins in February, in a warehouse.

Distributors load. They take three months of a fast-moving line in one order, because the month ahead will move it and the terms are better now than in March. Vans go out full. The depot empties into the market. February closes as the strongest month the order book has had in a year.

On the report that lands in the first week of March, all of that is a line going up.

Nobody has eaten anything. The stock has crossed from one shelf to another, out of the company's warehouse into the distributor's and out into the small shops, where it sits waiting for a household to decide. What has been sold so far is the expectation that the month will be good.

The loading is normal and necessary. The shelf has to be full before the first night. What I have watched go wrong is what the spike then gets used to justify. A February like that reads as proof the Ramadan plan is working, and the decisions taken on it are real: how much weight goes behind the film, whether the second production run is committed, whether the trade spend is topped up. Every one is taken before a consumer has bought anything.

Then the month itself decides. If the household pulls the stock through, February was a forecast that came true. If it does not, the goods are already out in the market, the brand is competing with its own loaded shelf, and April is spent explaining a creative problem it never had.

So the month before Ramadan is the busiest month and the emptiest month at once. Which of the two you are in depends on which side of the shelf you count from, and most plans count from the wrong side.