Why are grocers still missing the mark with small food brands?
Through a special arrangement, presented here for discussion is an excerpt of a current article from Frozen & Refrigerated Buyer magazine.
Are you merchandising plant-based foods not only to make a profit but to satisfy consumer wants and build loyalty? Terrific. These goals are not mutually exclusive.
Are you really on board or are you buying and merchandising based on habit or with the SWAG (scientific wild-ass guess) method?
Much of what I see is based on both habit and SWAG: Shelf-talkers here and there; little online education; item-price without any romancing of product benefits; prime shelf space dominated by big manufacturers paying the big slotting fees; innovative and trend-leading small brands exiled to the bottom or the top shelf, often with just one facing; few endcaps or secondary displays.
The growth in our industry lately has come from small brands, despite facing huge market disadvantages.
No, the small brands aren’t all angels. But the fact remains that shoppers today — especially the younger consumers shaping our industry’s future — tend to see “Big Food” as a big problem. Justifiably, trust has been gone for a while now and the big guns are flailing to get it back.
Slotting — and quarterly earnings — are still our industry’s worst addictions.
Slotting and demands for marketing funds give large vendors enormous advantage. They also give buyers a familiar comfort zone, helping them meet their numbers. Buyers have to meet numbers, or they’re gone.
As for Wall Street, I’ve long held that the demand for quarterly earnings leads companies to consider the short-term over the long-term. The periodic cuts in ingredient quality, packaging costs, jobs, etc. are what got Big Food into so much trouble in the first place.
Yes, new products fail. Often. Badly. But some retailers are creating a self-fulfilling prophecy by giving short shrift to the upstarts that consumers will buy if they see them on the shelf. We are at the start of a slow, genuine sea change in America’s eating habits that can make you or break you.
Who gets hurt the most by the slow response from retailers? Shoppers. If you’re just giving all this lip service, it may be time to dust off your resume. Just sayin’.
DISCUSSION QUESTIONS: Does the slotting-fee culture in the grocery channel still weigh heavily against smaller brands? Has resolving such allocation barriers become more important as smaller brands appear destined to drive food trends? Any suggestions?