Source dependent, the largest 25 food companies have lost somewhere between 18 to 22 billion dollars in market share since 2009 to smaller entrepreneurial food and beverage companies.
Simultaneously, brick and mortar retailers are struggling, and much is being written and discussed on the future of retail and the coming tsunami of the online giants.
Oddly, the vast majority of retailers make it difficult for these upstart brands that are reshaping the industry to find their way, affordably, to their shelves. It’s silly and a missed opportunity. By making it difficult and expensive to transact business, brick and mortar retailers are forcing entrepreneurial brands to find other channels and they are doing so in droves. Not only e-commerce, but alternative channels such as in-plant feeders, airport concessionaires, food service, and more.
While consumers are spending more and more of their dollars on emerging brands, retailers continue to erect barriers that limit entry to those same brands. That only results in a further erosion of an already shrinking customer base. It’s a bad business model.
Entrepreneurial brands can help retailers as much if not more than retailers can help them. Together, they should be searching for a more symbiotic relationship. I don’t think the solution is all that difficult.
What would I do? I am glad you asked. If I were a retailer, I’d knock down every barrier preventing a startup brand from being featured on my shelves. I’d create destination sections within dry grocery, perishables, and on the perimeter that features emerging brands. I’d create special shelf tags for those that are in integrated sets. There would be promotional vehicles built specifically for early-stage brands that offer affordable and accessible options. I’d connect our digital team and leverage what they likely do better than us, communicate in an authentic and social way. I’d provide data to help them learn and pivot. They’d be viewed as partners.
To me, this all makes sense. Why, when retailers are fighting for customers and for a place in the market, would they not figure out how to be a part of this movement that is being led by the innovative and disruptive brands? People eat stories and retailers can play a big role in the sharing of those stories. Yes, it necessitates a change in current business practices and philosophies. But not doing so, will likely lead them down the same path as taxis, newspapers, and payphones.
If you are a retailer who is reading this article, treat this an open letter, an invitation. I would welcome the chance to collaborate and help define a strategy that would allow you to capitalize on the changing dynamics in the market. I am certain I could also recruit many young brands that would be willing to be a part of that conversation.
If you are a founder of a brand, bring this idea forward. Paint a picture of how you can help the retailer and what the retailer can do to make it easier for you to do just that. At the end of the day, all of us are after the same thing, a share of the consumer’s stomach.