Left on the shelf
Manufacturers must cut through this complexity and come up with products that attract both supermarket buyers and consumers. This is especially important to those smaller suppliers that lack the backing of nationwide advertising campaigns and huge marketing budgets.
Taking the example of the air care, problem solving and insecticide markets, the lesser known brands or smaller companies are not always able to compete with the TV advertising and media campaigns that the large companies rely on. Instead, smaller players must work hard in other areas to get listed on shelves and, ultimately, to end up in consumers’ shopping baskets. For a smaller player such as Iba, with its Bouchard brand, fighting in the shelf wars is arguably a much harder task than for the Glades and Airwicks of this world.
The battle is on
However it is important not to overlook the role smaller brands such as ours have to play. I would argue that if it were not for smaller suppliers challenging the larger brands then many categories would be quite stagnant. While large brands continually innovate to avoid being displaced from the shelves, smaller companies have to try that little bit harder to get their listings. They cannot rely on sales from heavyweight advertising and promotional campaigns, so they must go the extra mile in other areas to give the consumer reassurance and confidence in their products.
So what does the consumer actually want?
Air care and household is a fairly typical category: competition is intense and space is limited. Under these conditions it is up to the smaller manufacturers to develop products that closely match consumers’ needs, as they don’t have the advantage of prime positions gained by advertising campaigns, nor are they well-established traditional destination products.
Consumers are living increasingly frantic lives and look for easier, quicker and more effective household products. They no longer have the time or inclination to spend hours down the air care aisle contemplating the benefits of each air freshener, which is where price, packaging design and value for money come into play, persuading moves away from old favourites and experimentation with new products. Smaller companies such as Iba are able to penetrate the market by producing functional products that are attractive, design driven and offer both high quality and value for money.
Everyone’s a winner
Some say too much choice for the consumer is confusing and frustrating, but it can work in their favour. Yes, smaller companies struggle to compete with the advertising spends of larger brands — but savvy consumers understand that they themselves ultimately pay for these promotional costs. They therefore become open to purchasing other brands, and appreciate the value for money they can offer. As producers become more efficient in order to compete, they can drive prices down. Consumers gain a wider choice of more innovative and attractive products — and at lower costs.
Paid for space
The competition for shelf space is having a favourable effect for all those involved, including the smaller suppliers. However, the impending introduction of shelf space fees for suppliers to get their position may threaten this — and could change the face of the aisles forever. The notion of brand producers being obliged to pay the retailer for the right to gain access to shelf space and even specifying aisle location — would have a crushing effect on the future of smaller brands.
As concentration in the supermarket sector increases, it is more likely that retailers will choose to go down the road of high shelf fees. This will have an adverse effect on the market as it will exclude smaller names in favour of the brands that can afford to have a presence. It will have a negative effect on the industry as a whole with product choice reduced, and discourage innovation and product development.
Smaller suppliers have a major part to play in developing most categories. They are driven to produce top quality, meaningful npd and are extremely well placed to continue seeking the ‘ultimate’ product. Let’s hope they can continue to do so.