Striving to get along
Some excellent points about retailer and supplier relationships were brought up at a roundtable discussion held at the Private Label Manufacturer Association’s (PLMA) 2019 Annual Meeting & Leadership Conference held recently in Pebble Beach, Calif.
The roundtable was billed as the “Anniversary Panel,” as the PLMA was celebrating its 40th anniversary at the meeting. It was moderated by food industry consultants Michael Sansolo and Donna George, and included five private label veterans (some retired) who weren’t afraid to discuss some of the industry’s biggest happenings and challenges throughout the years.
One of the challenges discussed was relationships between retailers and suppliers. Of course, some retailers and suppliers will view relationships as golden opportunities to establish long-term (hopefully) deals that will lead to innovative private-branded products.
Regarding relationships, roundtable participant Tom Ewing, director of retail channel businesses for T. Marzetti Co., which provides salad dressings, dips and other products for private brands, said manufacturers believe that retailers need to cooperate more, and retailers believe that manufacturers need to have better prices.
“I don’t think that will ever change,” he added, noting that he understands that competition always forces retailers to keep an eye on their numbers and bottom lines, which is why they have to be concerned about prices.
But Ewing’s takeaway was clear: Even though retailers and manufacturers might be on the opposite side of the fence at times, they need to understand why that might occur.
From an innovation standpoint, roundtable participant James Tomshack, the former senior vice president of sales for Allegan, Mich.-based Perrigo Co., which offers private-branded pharmaceuticals, stressed that manufacturers must play a big role in innovation because they know more about their products than retailers ever will.
“The retailers understand the retail environment and their shoppers,” Tomshack said. “But the manufacturers understand their categories. So the manufacturers bring that [knowledge] to the retailers, and that’s how you move the conversation.”
It’s also imperative that retailers and manufacturers talk about consumer insights, he added. If they don’t, then all they might talk about is price, which is not a good thing.
“[Talk about] consumer insights leads to innovation,” Tomshack stressed.
Roundtable participant Raymond Swain, vice president of corporate procurement at Commerce, Calif.-based Smart & Final, which operates about 300 grocery and foodservice stores in several Western states, said he “wholeheartedly concurs” that retailer and manufacturer discussions need to be a two-way street.
“We put a lot of work into finding out who are customers are, but there has to be collaboration between manufacturers and retailers,” he said, agreeing with Tomshack that, yes, manufacturers know more about their products than retailers do.
Tomshack said that retailers and manufacturers must strive to form distinct relationships.
“You can’t as a retailer or manufacturer treat everyone the same,” he added. “You have to develop partnerships.”