“We are a small company with big ideas for growth in the UK – how can we be successful? The good news is, it is usually easier to innovate and change direction if you are a smaller progressive company – innovation and differentiation will always be the key to success.”
This is according to David Potts, an FMCG (fast movement consumer good) specialist based in the UK, who spoke at today’s Bord Bia UK agri-business event on how to achieve breakthrough and increase sales and distribution in the UK retail food market.
Courtesy of his presentation, Potts outlined key advice for Irish agri-food business.
“Smaller businesses are like speedboats – they can change direction quickly. Big manufacturers and retailers recognise the benefits of this type of business and we have seen tankers, like Coke and Cadbury acquiring speedboats (Innocent and Green & Blacks) as part of their innovation and growth strategies.”
According to the agri-food specialist, UK retailers are looking to add value to developed categories. He referred to innovative brands that have driven growth – Innocent, Jordans, Green & Black’s Dorest Cereals, Kettle Chips – by building on common trends. These trends include naturalness, better ingredients, modern technology, delivering better taste with strong personality and brand experience.
“Their success was due to their clear point of difference – in packaging (stands out), product (quality), and price (which in these cases is higher),” he said.
“The most compelling reason for a retailer to list you, is if you have something different and innovative but before you commit to the UK market, you need to understand it and how it works,” he added.
Also key is for small agri-businesses to understand the dynamics of engagement of the UK market.
Potts outlined key questions:
“Is your business fully committed to supplying the UK? Do you have the expertise/people/systems? Is the factory capable of supplying the customer? Do you have enough capacity? Is the supply chain set up to meet the demands – warehouse/ logistics/system/forecasting/technology/production planning/technical recall? Is there an understanding of the service levels required? How will customer service levels be monitored? How will any issues be communicated to the customer?”
He also stressed that understanding the market a business is entering is key.
“If you’ve answered yes to all the questions, which retailer should you approach? Which retailer is best suited to you and your products?
“Please give this careful consideration. Your business maybe more suited to convenience and independents. It is not always about the big four,” he said.
The agri-food consultant outlined the 2013 UK retail trade stats from Nielsen – Tesco with 26.2 per cent of share, Sainsbury’s 16.4 per cent, Asda 15.4 per cent; Morrisons 11.9 per cent. The Co-operative Food 5.4 per cent. Waitrose 5.1 per cent, Aldi 4.4 per cent, Marks & Spencers 3.9 per cent, Lidl 3.4 per cent and Iceland 2.5 per cent.
In addition, he cautioned, before you decide who you want to work with, it is vital to see where the retail market is expected to be over the next few years. Convenience, online and discount is set to grow the fastest, according research, Potts said.
He explained: “These three channels will be the clear out-performers over the next five years, being closely aligned with shoppers’ increasing desire for convenience and value. Together they will account for over £3 sterling in every £4 sterling of the cash growth in the market to 2018.”
Potts also offered advice for communicating with a retail buyer.
“A typical buyer could be buying a 1,000 different lines (sometimes across several categories). They expect you to be the expert. You have to know your particular category, better than they do.
He continued: “In the meeting, they need to know what’s in it for them quickly – engage them immediately. Keep your presentation simple but impactful. Buyers are time poor.
“Six weeks later and you have a listing, take a moment to celebrate, then down to business – how to maintain the listing and importantly, grow the business.”