Supply Chain Insight: Working With Retail Partners

Denise Purcell
In the latest State of the Specialty Food Industry research, the Specialty Food Association, working in collaboration with Mintel, interviewed members across the supply chain for their insights and context into today’s market. 

On the topic of working with retailers, specialty food makers report their ideal retailer relationship is more than transactional. It is important for them to work with retailers as allies and partners, communicating and collaborating on pricing, positioning in the store, and new innovations. This partnership benefits retailers as well by helping them to differentiate with new products rather than compete on price alone. 

Also of note, as makers seek out these retail partnerships some are discovering allies in non-traditional channels.  

Here is some of what they had to say:

“It makes sense to first go to those retailers [with whom we are allies] before we go to anyone else, and say, ‘Hey, you took such good care of us and we had such a fantastic partnership, we wanted to give you the first look at what we’re doing.’”
maker, RTD beverage brand

“A traditional retailer that we work with that is the most friendly to small businesses like ours is Hy-Vee. They have so many store-level programs, and they just want you to donate product for local and store events that they already have going on (a gluten-free festival, tailgating events, etc.). They reach out to all small vendors and ask for product that they’ll sample in stores as a part of these larger events. To them, they want to create a better customer experience, and drive loyalty as a result.”
maker, condiment company

“We pay attention to how retailers are utilizing our [suggested retail] price, and whenever we see retailers being outliers on price, we bring it up with our buyer. It’s our way of saying, ‘By the way, this is not going to help velocity.’ I do think that larger conventional stores have higher margin targets. We certainly cannot dictate what price they will charge, but we do have suggestions and comparisons, and they do the same.”
maker, plant-based food brand

“We’re close to starting another big partnership that is surprising to us. They (and their customers) loved the fact that our products were so different from the other condiments they have. It seems like the more non-traditional business is far more profitable for us. In this case, we’re not needing to run promotions or [be concerned with] getting dinged by distributors.”
maker, condiment company

“When we started our wholesale business, we’d go into meetings and the buyers would laugh at us and say, ‘Wait, how expensive is this [product]?’ And they’d say, ‘Well, I can buy [other brands of similar products] for a lot less.’ We’d explain that our product is completely different and it’s not the same experience. It’s not where consumers are going. This was back in 2010-2011. Now we’re seeing this big push with millennials: They are all about grocery shopping every 2-3 days, and it’s all about the impulse buy.
maker, dessert brand

“[Mainstream] grocery is not a place for us to initially launch our brand, though we’ve had some good feedback already, which has been a pleasant surprise. Natural and specialty is where we want to build the brand for the first few years, and maybe go to [mainstream] grocery in a couple of years. Who knows, because we may get a Wegmans, or someone like that on board, but it’s important for us to play to our base.”
maker, RTD beverage brand

SFA members can purchase the 188-page State of the Specialty Food Industry Full Report and 5-Year Category Tracking and Forecasts here at a discounted member price to learn more.
 
Posted by Denise Purcell on Oct 7, 2019 11:30 AM America/New_York