Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
Conventional wisdom holds that second-tier manufacturers won't survive the ongoing tsunami of industry consolidation. Of course, that's been the conventional wisdom for 10, 20 and — in some cases — 30 years. And yet many of the firms perennially found on capitalism's endangered species list have managed to, at least so far, defy the laws of commercial Darwinism.
So, what should second-tier firms do?
The Four Choices
There really are only four choices: get larger; get smaller; stay the current course and hope for the best; or fold.
Let's look at them in order.
Are there things second-tier companies can do short of a commercial "Hail Mary," such as developing a wonder product or securing the rights to the next big thing? The answer is a guarded, "Yes."
All second-tier firms should do as much internal housekeeping as possible before they do anything else. Underperforming SKUs should be pruned, as should underperforming human assets.
Once that's done second-tier manufacturers would be well advised to see what unserved, or underserved, niches exist inside their current and emerging markets. These niches could be based around price, size, variety or other characteristics. By focusing on areas larger manufacturers haven't pursued, some second-tiers might discover a second — or even third — wind. Of course, then again, there may be a reason why nobody is trying to fill that niche that looks so inviting.
Has it become more or less challenging for second-tier brands to gain space on grocery shelves in the current decade than in the past decade?