I had the opportunity to attend the 2019 FMI Private Brands DC Summit in September.There’s nothing better than connecting face-to-face with industry executives, thought leaders, and regulatory experts to meet, network, share ideas and examine issues/opportunities as they relate to private brands.
This year’s summit agenda did not disappoint. There were numerous insightful presentations, interactive sessions, briefings, and panel discussions providing attendees with current and reliant information. What I particularly like about the FMI Private Brands event is the unique opportunity for collaboration and engagement between retailer trading partners, suppliers, industry support experts, and regulatory representatives. What a great forum to share and gain best practices related to current and emerging private brands issues.
The overarching message from the speakers and individuals in attendance: Private brand continues to be a winner with consumers (all ages and segments) and is a key strategic growth driver for retailers. Retailers who remain nimble, listen to their customers and develop strong partnerships with manufacturers will have the best opportunity to develop brands and products their consumers will want/love and be a pillar for profitability and growth.
Here are my key takeaways from this year’s summit:
The power of private brands – Private label as a brand
Retailer private brands are changing the game. The main difference today is private brands are now seen as brands by consumers and are huge revenue and profit drivers for retailers and less as ‘me too’ products.
The premium assortment of products in the retailer-branded portfolio continues to expand, upgrades to the core portfolio of products (quality and packaging updates) remain a top priority, and consumer driven insights are required to make the right innovation moves.
Private label can be a very strong competitor against national brands, and tricky to play against. Building your private brand is definitely a process. Successful private brands should align their strategy with the overarching retail strategy. This includes aligning innovation with consumer needs and wants - understanding that the various consumer segments are not equal, focusing on finding the right source of supply to fit your needs, and to build collaborative partnerships to enable suppliers and retailers to partner for profit and provide shoppers and consumers with a more innovative offering.
The power of private brands – Key trends and opportunities for growth
Retailers in general are committed to adding innovation to their private brand portfolios over the coming year. This will include better-for-you and free-from items, sustainable products, and foods that help boost enjoyment.
Moreover, there will be a bigger focus on transparency for products and brands, including with sourcing, ingredients, and telling the stories of brands and products. For example, on the premium side retailers are innovating in ways that lead the industry, rather than merely copying national brands. This includes new directions in artisanal and locally produced products. On the better-for-you end, retailers are spotlighting clean label, plant-based diets, and removal of chemicals.
The power of private brands – The importance of supplier collaboration
Building brands is hard work. It takes an army to achieve great results, and suppliers can make the difference. Working as one team with partners to increase engagement and challenging them to innovate will result in better products and more satisfied customers.
Retailers must find the right suppliers to fit their needs. Better collaboration protects the sources of supply and ensures that retailers have an ongoing flow of innovative products. There is also increased need for improved communication as the industry increasingly focuses on private brands as opposed to just private label.
A new S4RB-FMI research report clearly shows that attitudes towards supplier relationships have shifted considerably and a lack of consistency in what is meant by ‘engagement’. The need for better communications and true collaboration will only increase with the continued move from private label to private brand and the need to deliver winning products.
The results within this report also showed that 80% of retailers surveyed are still committed to improving and there will be an ongoing need to continue to move forward.
There are a number of opportunities to improve supplier-retailer collaboration which include forming longer-term retailer-supplier relationships and having leaders demonstrate that the commitment starts at the top. It’s also important to have clear retailer brand strategies, increased sharing of information, and more established processes for engagement. In our research report, the perception gap of performance between retailers and manufacturers was greatest for transparency and information sharing.
Thank you to Doug Baker and the entire FMI team for putting on another great and successful summit.
S4RB ran a series of questions relating to retailer-supplier engagement in FMI’s annual From The Industry Report. The findings of this survey are published in our report: The State of Retailer and Supplier Engagement in 2019.