Jun 1, 2015

By: Doug Baker, Vice President, Private Brands, Food Marketing Institute
Collaborate

The days of private brands being relegated as a fast follower have come to an end. There are many factors that attribute to this evolution of consumer awareness and acceptance. You can look back to the economic recession as a key motivating factor for private brand growth and consumer acceptance. But today’s consumers are much more educated about private brands and some private brands have built a sort of cult-like following.

If everything is so great for private brands, why all the focus and need to build better business planning processes? As consumer awareness grows so does demand, especially for products that meet consumer needs whether they are for function, flavor, social, or convenience. Consumers are looking for those brands that meet the individual needs or desires they each have. For private brands to continue to effectively compete, it will take a more collaborative approach to business planning including all key stakeholders in the equation.

FMI with facilitation by The Partnering Group (TPG) conducted research on the current state of collaborative business planning between retailers and wholesalers and their manufacturing partners. This first phase of the research focused on retail grocers and wholesale distributors who owned or distributed private brands and will be showcased at FMI Connect. For TPG's Peter Leach, managing director, and Bob Baxley, partner, three conclusions emerged which substantiated the need for more discussion:

  • First, the biggest single barrier to collaboration is not a desire to do so. Instead, it’s having an agreed and easy-to-follow approach that all constituents could pilot and implement.
  • Second, to better engage private band manufacturers, retailers should provide a clear corporate strategy for private brands to their manufacturing community. When possible a longer term approach to business commitments should be employed.
  • Third, suppliers who invest in insights and innovation can best position themselves as the “go-to” manufacturing partner. Be the expert of the category and bring that expertise to the customer.

The private brand industry is at an inflection point. It is imperative that we continue to evolve how we do business as owners and partners. We’re looking forward to sharing more information on this topic and more at the upcoming Private Brand Summit Education Sessions  at FMI Connect. Check at all the private band sessions and more at www.fmiconnect.net.