Are suppliers focused on new products to the detriment of older lines, asks Priyanka Jethwa.
Myriad wholesalers have told Better Wholesaling that major FMCG suppliers have become too focused on launching new products, to the detriment of core range availability and sales.
Matthew Moare, operations co-ordinator at Kentish Match Company, says his customers are also feeling the consequences of new products being launched too frequently.
He notes: “Retailers are constantly looking for guidance on where to put stock in their shops. But although suppliers tell us what to advise our customers, they are all fighting for maximum visibility and do not understand that there is not that much room at the till point.”
Paul Lewis, managing director at West-Bromwich-based Lewis Food Wholesalers, says that the problem is often a lack of support from suppliers when they are launching new products; effective tools for raising awareness are often overlooked, too.
He adds: “Sometimes we have to fund sampling ourselves. But it would be useful if suppliers could provide this to help give our customers confidence to buy new launches, especially when it is a ‘different’ flavour being added.”
By contrast, suppliers are convinced that wholesalers have more to gain than lose from regular launches of new products. Susan Nash, trade communications manager at Mondelez International, says that growth in the channel is being driven by brands that are innovating and investing in new products.
Nash emphasises: “Central to unlocking the opportunity in any category is understanding the needs of consumers and meeting clear occasions.”
Trystan Farnworth, commercial director for convenience and impulse at soft drinks supplier Britvic, says manufacturers need to understand that quality trumps quantity when it comes to introducing new products and that there is a limit to how many can be ‘digested’ by the industry at any one time.
He adds: “The important point here is that all quality new products should evolve to become part of a core range anyway, replacing older products that may have become less relevant to consumers due to changing demands. That said, there is still an important role for new products that create short-term excitement.”
KP Snacks’ sales director for convenience Matt Collins stresses that regular launches of new products help to boost wholesalers. He adds: “Plans are rooted in insights, ensuring new products resonate with consumers and customers, growing categories.”
Wholesalers have limited space to work with in-depot, and are operating on slender margins, so what can be done to ameliorate the situation?
Collins says that to increase category sales, wholesalers should remove slow-selling lines and give more space to the fastest-selling lines.
The overriding message is that new products will keep hitting the channel thick and fast. Wholesalers must therefore ensure they capitalise on the buzz these generate and find space for them in their ranges by weeding out lines that are taking up space but not selling quickly or profitably enough.
Ultimately, though, what is important is all stakeholders communicating and working together.