DISTRIBUTION OF BRANDS & PRIVATE LABEL IN THE UK- A Suppliers View -

Simon JonesSherriffs Foods, UK3rd June 2014

NEXT 20 minutes……..

“A view on branded and private label distribution into the UK. Focusing on how both can work together, the varying levels of complexity, requirements of the retailers and some views on how to make it work”

• Not Just Free From – The marketplace is changing• Pricing - Structures and Pressures• Trust - Technical and Sourcing• Supply - Logistics and Distribution

• Sales, Marketing & Distribution company based in the UK• Over 30 years experience as a management team in the Free From

market• A business model which allows access across varying levels and

departments of the UK retailers for brand and private label products

OUR BRAND

PARTNER RETAILER

HAVING A MODEL WHICH BRINGS TOGETHER BRANDS & PRIVATE LABEL ALLOWS A FULL CATEGORY DIALOGUE WITH THE RETAILER

THE ROLE OF BRANDS & PRIVATE LABEL CONTINUE TO WORK TOGETHER ACROSS THE FREE FROM CATEGORY.HOWEVER THERE ARE SOME KEY AREAS THAT SUPPLIERS WILL NEED TO TAKE NOTE AS THE CATEGORY DEVELOPS AND MATURES IN THE UK. RETAILERS ARE TAKING NOTE, AND THIS MEANS THAT TO BE SUCCCESFULL REGARDLESS OF BRAND OR PRIVATE LABEL THERE ARE SOME KEY CONSIDERATIONS

ONE OF THE REASONS………………….

213 229278

308342

385425

469512

561

£ m

illion

61%

46%

20172008

Source: Mintel

UK Retail sales 2008 to 2017 (Forecast)

HOWEVER JUST BY ADDING “FREE FROM” DOESN’T MEAN IT WILL BE SUCCESFUL. THE RETAILER (& CONSUMER) WANTS MORE………

THE BASICS• PRICE

• TASTE • QUALITY• PACKAGING

• *Not just for on Shelf*• COMMUNICATION ON PACK

FREE FROM PLUS +• LOW SUGAR

• LOW FAT• FREE FROM

• DAIRY• SUGAR

• ORGANIC• LESS THAN 5ppm

HAS IRELAND STOLEN A MARCH, AND LEADING THE WAY?STORE WITHIN STORE - FOCUSING ON HEALTH, WELLBEING & DIETARY REQUIREMENTS

THE FIXTURE WILL CHANGE - GO BACK 3 YEARS ON WORLD FOODS AND NOW LOOK……

3 YEARS AGO TESCO TRIALED A WORLD FOODS AISLE IN 50 OF ITS LARGEST STORES

TODAY “WORLD FOODS” HAVE A POSITION IN ALL 500 TESCO EXTRA OVER TWO AISLES

EACH OF THE UK LARGEST RETAILERS HAVE A WORLD FOODS AISLE AND THE CATEGORY CONTINUES TO GROW & EXPAND

THIS WEEK TESCO LAUNCHES ITS HEALTH ZONE A 16 WEEK TRIAL ACROSS 16 BAYS IN 100 OF ITS LARGEST STORES - A SIMILAR STORY TO 3 YEARS AGO????

PRICING – AS THE CONSUMER DIVERSIFIES THE RETAILERS ARE NOT JUST LOOKING AT THEIR OWN CATEGORY

£1.20 per item

£0.90 per item

£2.00 per item

£1.50 per item

As the consumer for Free From continues to expand retailers are not just looking to align the products in their own category but also across more established categories

TRUST – RETAILERS & CONSUMERS REQUIRE TRUST IN THE FREE FROM CATEGORY – FOR OWN LAEL THE DEMAND CONTINUES TO INCREASE BUT NOW BRANDS ALSO HAVE TO FOLLOW…

All Free From brand and private label suppliers now as a minimum have to provide an insight into the validity of the raw material source, manufacturing facility and allergen control process to secure listings within UK retailers. The process for listings lines is not a straight forward one…..BEWARE ITS NOT JUST ABOUT PRICE!

SUPPLY – THE UK SUPPLY NETWORK CAN BE A COMPLICATED PROCESS, PARTICUARLY IN FREE FROM. BE MINDFUL THAT FREE FROM CAN SOMETIMES FOLLOW A DIFFERENT ROUTE TO MAINSTREAM GROCERY

“ Slow Moving Lines”

Maximising space and supply are top priority for the UK retailer. Free From due to its current nature of diversified brands/suppliers usually mean there is a separate distribution warehouse and network that suppliers are “asked” to buy into…

Stage1 Stage 2

Stage 3

Stage 4Stage 5

Inevitably this leads to additional costs at Stage 2 & 3. However it can provide an open and clear view for both the supplier & retailer on Service Levels

FREE FROM PLUS+

GROWING & DEVELOPING CONSUMER BASE

MAINSTREAM FIXTURE FOCUS

PRESSURE ON PRICING

TECHNICAL FOCUS

UNDERSTANDING VALUE CHAIN

TASTE, QUALITY, PACKAGING

FACTOR IN ADDITIONAL COSTS – TECHNICAL, AUDITS, TRANSPORT

Simon Jones+44 1327 815 850sjones@sherriffsfoods.co.uk

THANK YOU….