Isolated and cocooned by our island existence (and the excellence of our execution) it is easy to forget how little choice there is in today’s supermarkets. On my recent travels in France and North America, I was struck again by the range and choice of products available on shelves. How, as an industry have we reduced the number of brands available, when customers are eagerly seeking out local, ethical and alternative products to add variety to the weekly shop?
The answer is consolidation. In the branded sector, the number of suppliers has reduced through acquisition, and these in turn have rationalised lines, deleting brands from shelves in a bid for improved efficiencies. But as the attack on brands from own label (outlined in The Grocer last week) confirms this consolidation trend, it must be of concern to brand owners and even retailers that customer choice is at risk. We are now witnessing the next phase of consolidation, this time in fresh, where we have seen major acquisitions and the loss of names such as Grampian. Is it the turn of dairy next?
In The Dairymen supplement in this issue, Joop Kleibeuker predicts that within the next decade there could be as few as five major dairy players. In the world. In an industry that universally admits a need to rationalise due to cost pressures, where does that put the three leading UK dairy processors? It’s almost academic which one, or how many, survive. What matters is the effect it will have on supermarket power, and even more important, customer choice.
In the new world order will global players develop brands providing real innovation and excitement targeted at the UK consumer. Will greater access to UK milk expose consumers to greater price fluctuations in line with world markets? What is certain is that consolidation will happen for good or ill. The question is, will the UK be leading this consolidation and become a global leader, or be seen just as another market?
The answer is consolidation. In the branded sector, the number of suppliers has reduced through acquisition, and these in turn have rationalised lines, deleting brands from shelves in a bid for improved efficiencies. But as the attack on brands from own label (outlined in The Grocer last week) confirms this consolidation trend, it must be of concern to brand owners and even retailers that customer choice is at risk. We are now witnessing the next phase of consolidation, this time in fresh, where we have seen major acquisitions and the loss of names such as Grampian. Is it the turn of dairy next?
In The Dairymen supplement in this issue, Joop Kleibeuker predicts that within the next decade there could be as few as five major dairy players. In the world. In an industry that universally admits a need to rationalise due to cost pressures, where does that put the three leading UK dairy processors? It’s almost academic which one, or how many, survive. What matters is the effect it will have on supermarket power, and even more important, customer choice.
In the new world order will global players develop brands providing real innovation and excitement targeted at the UK consumer. Will greater access to UK milk expose consumers to greater price fluctuations in line with world markets? What is certain is that consolidation will happen for good or ill. The question is, will the UK be leading this consolidation and become a global leader, or be seen just as another market?
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