When Procter & Gamble launched a variant of Pringles for Morrisons late last year it was apparently attempting to tap into the tastes of the northern retailer's consumers. Packs depicted a rural scene of a farmer tilling the land against a backdrop of a red and white Gingham chequered tablecloth, and even bore a Morrisons label to demonstrate the exclusivity of the product. Exotic flavours such as cracked black pepper and buffalo mozzarella were cast aside for ploughman's cheese & tomato, which P&G believed was reflective of the more traditional food positioning of the supermarket. These were Pringles northern-style.
P&G isn't the first supplier to
customise one of its brands for a particular retail channel. But the number of manufacturers that have gone beyond merely adapting their pack sizes for the various retail channels is still few and far between. So who's in the driving seat - the manufacturers or the retailers? And is this sort of customisation likely to become more prevalent or are the risks and the costs for the manufacturer too great?
P&G clearly thinks there's scope to extend customisation beyond Morrisons. It intends to launch flavours and packs into the multiples, each tailored to their typical customers.
Morrisons is clear about the benefits to the retailer. "We ask major suppliers of branded products for exclusive lines or for them to generate packs just for us," says a Morrisons spokeswoman.
"The packs offer a point of difference against a competitor's range, and our customers feel we are offering them something special if they know that it is only available at
Morrisons."
Simon Black, partner at brand design company The Design Bridge, is convinced the strong hand is held by the retailers. "The retailer wins because it becomes more aligned to big brands," he says. "It is about retailer power. In order to give retailer x an advantage you offer them product y."
Northern Foods agrees the benefits to the retailer are significant. It produces exclusive flavours for retailers under its Fox's Biscuits brand. "It is about breadth of offering," says brand manager Francesca Davies. "Consumers don't explicitly link a certain product with a
certain retailer, but by stocking a line that no one else has it gives the perception that the retailer has a wide offering."
Fox's also benefits, she insists. "We often find that if we launch a new cookie into one of the supermarkets it will spark a conversation with a buyer from another retailer. It helps to get a dialogue going between us and retailers."
This is why new variants are increasingly supplier-led, she suggests. "It is becoming a more frequent tactic. Sometimes the buyer has a clear view of what they require but more often than not we come up with the ideas. We consider ourselves the experts and direct the retailers."
Kettle Foods also feels it is the driving force behind new variants, rather than retailers.
It mainly uses the practice for limited-edition ranges, with different flavours for different retailers to create hype.
It developed a crinkle-cut range of crisps for Asda two years ago, for instance. The flavours, including lightly salted, Cheddar cheese & spring onion and salt & vinegar, were deemed to be less challenging for Asda customers than its existing salsa with mesquite offering. Yet there is a real danger that in making a bespoke product based on assumptions about who a retailer's typical customer is, companies risk alienating consumers, says Black.
Playing to stereotypes that Waitrose shoppers want farmers and pheasants on their packs and that Asda shoppers want no-nonsense packaging and beans on toast is a dangerous game.
"If you begin to target a particular retailer you have to make some assumptions about their customers, but it does beg the question as to whether consumers are a homogenous group of people or individuals," says Black. "It could be potentially damaging for a brand.
"Co-branding is one thing, but redesigning the brand and changing its semiotics is another. It undermines the confidence in the brand leader.
"One brand telling a number of different stories presents risks and it will be difficult for consumers to decode the messages. The reason why brands exist is that they have got something different."
Kettle disagrees. "Different retailers do attract slightly different customers, but because our exclusives are limited to just a couple of retailers it's not something we consider during development. It is more about getting the right ingredients to make something a little special."
Brand owners also run the risk of annoying other retailers who don't receive individual products. Morrisons, for example, admits that it doesn't want its competitors to get in on the act. "If we see an exclusive product the first question we would ask is 'why were we not offered it?'," says a spokeswoman.
One way in which a company can work with individual retailers without diluting a brand message or risking the wrath of the retailers is by liaising with a particular retailer on NPD and, in return, giving them exclusivity of the brand for a limited period only.
This was the tactic used for the Something Xtra cereal bar brand, which was developed through a partnership between Tesco and food company Multiple Marketing. Tesco was involved from the development stage where it helped develop the recipes and packaging in exchange for a three-month exclusivity deal.
"The point of difference is that it shows the co-operation that should take place in developing brands," says Eric Bates, sales and marketing manager for Something Xtra.
Although the method has seldom been used in the UK, it has the potential to become common practice, believes Bates. "Before the brand was launched the trade consultation was vital because we could see it from a retailer perspective. If you work together you
can add value to the market. It benefits the brand and the consumer. It is not own label-led but brand-led."
Who really benefits remains up for debate. Morrisons admits there is more risk for the supplier. "It depends on whether they see it as a win for their business," it says. "The development of an exclusive pack can be a long process."
Adrian Collins, MD of design consultancy Ziggurat Brands, adds: "At a consumer level, it lends something new and it may encourage trial. Die-hard loyalists of the brand will give it a go but it is not a destination thing."
However, such co-operation is likely to become more prevalent. "It is testament to the power of retailer brands," says Black.
"It is unique to this country where retailer brands have their own personality and followers. It is not a surprise that this power has found its way up the food chain."n
P&G isn't the first supplier to
customise one of its brands for a particular retail channel. But the number of manufacturers that have gone beyond merely adapting their pack sizes for the various retail channels is still few and far between. So who's in the driving seat - the manufacturers or the retailers? And is this sort of customisation likely to become more prevalent or are the risks and the costs for the manufacturer too great?
P&G clearly thinks there's scope to extend customisation beyond Morrisons. It intends to launch flavours and packs into the multiples, each tailored to their typical customers.
Morrisons is clear about the benefits to the retailer. "We ask major suppliers of branded products for exclusive lines or for them to generate packs just for us," says a Morrisons spokeswoman.
"The packs offer a point of difference against a competitor's range, and our customers feel we are offering them something special if they know that it is only available at
Morrisons."
Simon Black, partner at brand design company The Design Bridge, is convinced the strong hand is held by the retailers. "The retailer wins because it becomes more aligned to big brands," he says. "It is about retailer power. In order to give retailer x an advantage you offer them product y."
Northern Foods agrees the benefits to the retailer are significant. It produces exclusive flavours for retailers under its Fox's Biscuits brand. "It is about breadth of offering," says brand manager Francesca Davies. "Consumers don't explicitly link a certain product with a
certain retailer, but by stocking a line that no one else has it gives the perception that the retailer has a wide offering."
Fox's also benefits, she insists. "We often find that if we launch a new cookie into one of the supermarkets it will spark a conversation with a buyer from another retailer. It helps to get a dialogue going between us and retailers."
This is why new variants are increasingly supplier-led, she suggests. "It is becoming a more frequent tactic. Sometimes the buyer has a clear view of what they require but more often than not we come up with the ideas. We consider ourselves the experts and direct the retailers."
Kettle Foods also feels it is the driving force behind new variants, rather than retailers.
It mainly uses the practice for limited-edition ranges, with different flavours for different retailers to create hype.
It developed a crinkle-cut range of crisps for Asda two years ago, for instance. The flavours, including lightly salted, Cheddar cheese & spring onion and salt & vinegar, were deemed to be less challenging for Asda customers than its existing salsa with mesquite offering. Yet there is a real danger that in making a bespoke product based on assumptions about who a retailer's typical customer is, companies risk alienating consumers, says Black.
Playing to stereotypes that Waitrose shoppers want farmers and pheasants on their packs and that Asda shoppers want no-nonsense packaging and beans on toast is a dangerous game.
"If you begin to target a particular retailer you have to make some assumptions about their customers, but it does beg the question as to whether consumers are a homogenous group of people or individuals," says Black. "It could be potentially damaging for a brand.
"Co-branding is one thing, but redesigning the brand and changing its semiotics is another. It undermines the confidence in the brand leader.
"One brand telling a number of different stories presents risks and it will be difficult for consumers to decode the messages. The reason why brands exist is that they have got something different."
Kettle disagrees. "Different retailers do attract slightly different customers, but because our exclusives are limited to just a couple of retailers it's not something we consider during development. It is more about getting the right ingredients to make something a little special."
Brand owners also run the risk of annoying other retailers who don't receive individual products. Morrisons, for example, admits that it doesn't want its competitors to get in on the act. "If we see an exclusive product the first question we would ask is 'why were we not offered it?'," says a spokeswoman.
One way in which a company can work with individual retailers without diluting a brand message or risking the wrath of the retailers is by liaising with a particular retailer on NPD and, in return, giving them exclusivity of the brand for a limited period only.
This was the tactic used for the Something Xtra cereal bar brand, which was developed through a partnership between Tesco and food company Multiple Marketing. Tesco was involved from the development stage where it helped develop the recipes and packaging in exchange for a three-month exclusivity deal.
"The point of difference is that it shows the co-operation that should take place in developing brands," says Eric Bates, sales and marketing manager for Something Xtra.
Although the method has seldom been used in the UK, it has the potential to become common practice, believes Bates. "Before the brand was launched the trade consultation was vital because we could see it from a retailer perspective. If you work together you
can add value to the market. It benefits the brand and the consumer. It is not own label-led but brand-led."
Who really benefits remains up for debate. Morrisons admits there is more risk for the supplier. "It depends on whether they see it as a win for their business," it says. "The development of an exclusive pack can be a long process."
Adrian Collins, MD of design consultancy Ziggurat Brands, adds: "At a consumer level, it lends something new and it may encourage trial. Die-hard loyalists of the brand will give it a go but it is not a destination thing."
However, such co-operation is likely to become more prevalent. "It is testament to the power of retailer brands," says Black.
"It is unique to this country where retailer brands have their own personality and followers. It is not a surprise that this power has found its way up the food chain."n
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