A new report on own-label growth in Europe has demonstrated the increasingly high priority multiples are placing on their own-label brands as a source of higher margins. Tesco and Sainsbury’s recently claimed their own-label ranges were bolstering performance, while the SymphonyIRI report shows that in Europe own-label products now have a 35.6% value share of the fmcg market.

This presents an even greater challenge for independent fmcg suppliers, too many of which simply don’t have an effective retailer strategy in place. Instead of expecting retailers to change the way they work, suppliers need to share insight at operational and strategic levels with major retailers if they are to succeed.

Suppliers must understand it their responsibility to help grow categories, increase margins and help the retailer deliver on its KPIs. On one level, this means delivering routine category management tasks that are the bedrock of the retailer relationship: crunching the numbers, completing the analyses, building the reports, undertaking the range reviews and using the insights from the data to show how to grow the category for the benefit of both themselves and the retailer, and how best to channel their investment.

Simply supplying great products may no longer be enough. From our regular conversations with retailers and their buyers, we know that there is frustration that, when it comes to trying to get products listed, suppliers are often missing solid category-based rationales.

They often don’t know how to extract the best insights from their data, or turn it into a compelling story that resonates with the buyer. Many don’t have or don’t bring in the kind of expertise they need to create an effective retailer relationship.

Suppliers need to add value to range and category reviews and show they understand category development and shopper marketing. This means developing effective channel strategies and shopper campaigns, building joint business plans, creating mutually beneficial trade investment plans - and ultimately moving from tactical to strategically significant relationships.

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