August 16, 2023 Industry news
For most product-based startups, seeing your products sitting on the shelves of the country’s leading retailers is the ultimate goal; the dream to aspire to, the moment you realise you have finally made it.
Securing a retail listing is a major milestone on the journey of any food and drink business. It is one of the greatest endorsements a brand and get and can bring huge opportunities for growth. With a great product and the right approach, making it onto the shelf can dramatically boost brand awareness and see your sales and profits soar.
Getting there however can be a tough slog and may feel overwhelming at first. Approaching buyers, convincing them that your product is commercially viable and building a relationship can be a tricky process, especially for challenger brands that lack the experience and resources of the larger suppliers they are competing against.
Many retailers understand this and are keen to ensure they give challenger brands a chance to shine. These brands bring innovation and disrupt the market, allowing retailers to surprise and delight their consumers with new products and experiences. That is why a number of the UK’s leading supermarkets have launched incubator and accelerator programmes to help them succeed.
Buyer insights
To find out more, we recently attended an insightful panel discussion featuring Tom Forsythe, head of future brands at Sainsbury’s.
If their products prove to be a hit, brands can also receive support with scaling into other retailers so it can be a really important launch pad on their journey.
The cost of living
With high inflation and the cost-of-living crisis impacting consumer habits and behaviours, Tom says that cost and pricing have never been more relevant. What this means from a challenger brand context is that value, or the perception of value, is becoming increasingly important and is now top of mind for both buyers and consumers alike.
By default, challenger brands will trade up. They tend to produce premium products so need to drive up their average sale price (ASP). Tom says that this can actually be a good thing because, from a buyer’s perspective, having trade up brands is essential for balancing the books. They need to bring in products at the top end of the value equation to fund price investment and remain value competitive.
He believes that in some ways, the cost-of-living crisis actually represents and opportunity for challenger brands. When you think about share of wallet, many people are eating out far less. As a result, a greater share is being spent in supermarkets by consumers looking for something special in the way of an indulgent substitute that can fill that gap at home.
Defining value
Tom encouraged challenger brands not to think of value purely in terms of price. While there are lots of like-for-like products that can be compared across lots of different retailers, innovative products from challenger brands often cannot be compared. A unique or unusual proposition can surprise, delight and inspire consumers who are used to seeing the same Unilever, Kraft Heinz or Mondelez products in practically every store they enter.
What is the programme looking for and what does it offer?
Tom and his team want to find brands that can serve a particular purpose within their fixtures. Sainsbury’s usually ask brands to sign a twelve-month agreement that precludes them from selling with other major retailers but, in return, they get a really compelling package of support to help them drive cut through on-shelf and at the point of sale.
Everyone who joins the future brands programme benefits from an internal growth partner; an account manager that sits with the Future Brands team. These partners work directly with each brand, are responsible for managing their interactions with buyers and will help them develop a growth plan.
The programme also provides support in secondary spaces, whether that be through marketing, in store sampling, offers or promotions. Online is a very different challenge and the Future Brands is currently heavily focused on in-store formats.
How can brands get noticed by the future brands team?
According to Tom, his team are always looking for brands that are doing something different. They want to see product lines that demonstrate innovation, particularly any innovation related to diversity and inclusion, health or sustainability.
He says that brand identity and product innovation are at the very heart of the programme. When hearing from prospective new suppliers, his team want to understand how and why they would bring something new to Sainsbury’s customers.
Communicating that point of difference is essential. The key term the team use internally is ‘incrementality.’ Buyers need to identify what is going to be incremental to their customers as well as the store’s profit and loss. To do this they will typically assess a supplier’s…
Top tips for dealing with buyers
Tom concluded by sharing some essential tips for any brands looking to join the programme:
- Remember that getting listed is the ‘easy’ bit: up until that point you don’t really have anything to lose. Make sure you go in with a plan and are ready to do everything you can to convert customers and drive sales. A robust plan for driving sales is not only important for driving growth, it will also help you convince buyers that your products can deliver commercially.
- Tailor your approach: different retailers will be looking for different things so tailor your approach accordingly. Equally, once you get on to the shelf, you will need to make sure you are appealing to the demographic or audience you want to target. Go in with a plan for how you are going to activate once in store. Online will be very different so make sure you think about that too.
- Patience is a virtue: the challenger brand mentality requires you to always push for results. Retailers tend to move much slower and cannot always keep up with brands’ hunger for success. Engage with your buyer and hear them out. If they say now is not the right time, come back in six months. Listen to them. Don’t be too demanding and recognise there are limits on how quickly retailers can move. Focus on building a healthy, happy relationship.
Stay hungry
Tom’s final point was that while patience is important, emerging brands should never lose their challenger mentality.