Innovate and differentiate: Transforming private brands with strategic sourcing

A study by FMI, The Food Industry Association, found that 97% of retailers are rethinking private brand assortments and supplier strategies as a result of experiences during the recent pandemic.

A great opportunity for private brands, which are becoming more and more relevant as growing consumer demand for solutions instead of individual products. This opportunity means retail brands are being met with new challenges as they aim to meet these ever-changing consumer needs. Requiring retailers to source innovation, as opposed to just sourcing products.

In addition to identifying new product sources, the path to success lies in strategic collaboration with suppliers. Not only to deliver new products, but to deliver the brand development also required whether it be sustainability, free-from, format or packaging.

Strategic collaboration requires a different mindset between retailers and their private brand supplier partners. As well as the processes and capabilities that allow them to work more closely to identify consumer demand and react to it accordingly. It's all about jointly focusing on innovation; a joint focus on the end consumer.

The same FMI survey found that 69% of retailers may increase the number of suppliers in order to diversify supply.


There are a few key approaches that retailers can apply to find new sources of supply.

        1. Develop the reputation of your brand and sell it to suppliers
          Why should suppliers choose your brand? Sell yourself through the eyes of your consumers.

        2. Share your brand goals with suppliers
          Suppliers can help you work towards goals and can proactively articulate how they can help you actually achieve them.

        3. Enhance the capabilities of suppliers
          Make it easier for suppliers to self-assess their capabilities and strategies in an approach that will allow your team to identify the most relevant suppliers for different needs.

You may find that some suppliers fall short of current retail needs. But don’t overlook them, by supporting them and enhancing their capabilities they could be your next superstar supplier.


The S4RB Affinity™ Platform’s Supplier Academy module is an example of how retailers can enhance the specific capabilities required by their private brand strategy for potential and existing suppliers.

A case example of a successful Supplier Academy is from Woolworths Australia.

In Australia there is huge competition between the large retail grocers, Woolworths saw it as a strategic part of their operations to make sure that they built supplier perception within their supply base. To do this, they worked with S4RB to create a Supplier Academy, named The Food Co Supplier Academy.

The Academy implemented to assess potential suppliers and build up capabilities with suppliers that just fell short. With a major focus on how to help suppliers, Woolworths were conscious to ask, “what tools can we give our suppliers?” in turn they were able to share information around their customer personas. Not only that but also share very detailed information of what they were trying to achieve in the marketplace. Of which really helps equip suppliers with what they should be bringing forward, such as ideas and solutions to support the retailer.

When thinking about these developments, the key angle is “What are we trying to achieve together? What do we need to deliver for our customers?”.

Over the past few years Woolworths have performed extremely well within the Australian grocery market. A large part due to their approach to supplier engagement and making it easier for those suppliers to do business with them through this additional support and focus on supplier engagement.


How do you ensure you get the right results from your supplier engagement that aids sourcing suppliers? Especially through a Supplier Academy? Here are a few best practices:

- Content

It's easy to stick to one type of content, but don’t just stick to one. Videos, for example, or a good platform for livening up communications.

- Critically evaluate your communication language

Is the message you're sending clear? And avoided that internal jargon, the jargon that you may understand, but certainly your suppliers aren't going to.

- Appropriately apply gamification

Make it fun! Appeal to human intrinsic motivators. Such as awarding badges for those who complete a course or anonymously benchmarking against their peers. This type of approach makes user experience more exciting, certainly more engaging.

- Don't assume the job is done when the courses are created and completed by suppliers

It's important to collect feedback, to evaluate and enhance the next round of courses.



Strategic sourcing is only one part of driving your transformation and change strategy. Find out more by watching the recording of our recent webinar “Private Brands: 5 ways to Drive Transformation in 2021”.


Team S4RB

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