UK FMCG Grocery and Category Management
The UK really is a world leader when it comes to Grocery Retailing; we have both some of the largest operations (Tesco is ranked no.3 in the world, source: Planet Retail) and the most advanced (The use of Nectar Card data to profile consumers, through Aimia in conjunction with Sainsbury is becoming more and more sophisticated). Essentially the way that the likes of Tesco, Sainsbury, Asda, Morrisons and other UK chains micro-manage categories and the product ranges which sit within those categories to fit to consumer needs is nothing less than ‘State of the Art.’
Sometimes the consumer need is obvious such as when buying weekly staples for example Milk, Bread, and Butter etc; other times not so – the Supermarket has created that need or exploited a latent desire in the consumer. The supermarkets do not do this alone however, it is done with the aid of their suppliers, although they often lead the process and provide the tools to analyse the shopper, whether it is providing data through the likes of Nielsen or IRI, or through their own tools such as Tesco and Dunnhumby (Clubcard). It has led to the supermarkets increasingly sharing data (at a cost) with suppliers who want to see growth who increasingly invest in that data.
As a result successful FMCG suppliers who work with UK retailers are usually the best at what they do and become experts in understanding their categories; as such they are fantastic breeding grounds for talent and that talent is often sought by other industries outside of Grocery.
Some of the brightest brands in food have started small, become experts in the category, generally changed the way consumers think about the category, grown larger and challenged the more established brands and sometimes become the subject of a take over by a bigger company.
For example Innocent as a brand has revolutionised the way people see chilled and ambient drinks and probably food brands as a whole, employing a different approach to connect with its consumers, using humour and a relaxed and friendly approach to brand marketing (this is even followed through into the workplace, which is set up to encourage its workforce to enjoy and relax in the work environment as well as work). The company is now largely part of the Coca Cola portfolio, but has still managed to retain its individuality, in part due to its founders (the likes of Richard Reed) remaining involved to drive the business forward and maintain Innocent’s brand personality.
Another brand with a big personality that has also performed well (Turnover is +36% YOY) and taken its category by storm, changing the way consumers see the category is that of Ella’s Kitchen, which has been the centre of media attention in recent days after it was announced it had been bought by Hain Celestial, the big American conglomerate. This will open the way for the brand to move into both the American market and other markets around the world.
As discussed one reason for the success of these organisations is due to the people that work in those organisations. One discipline that has become increasingly essential and has been demonstrated in the success of the above companies is Category Management. Category management can be part of either the sales or the marketing function or indeed even a standalone function. Category Managers are at the forefront of retailers’ success in managing categories – they either lead or provide input into Category Reviews, Gap Analysis (what product gaps / opportunities are there in your category ?), Consumer Insight, Strategy, New Product Development, New Listings, EPOS data analysis, Market and Competitor Analysis and others.
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