Local suppliers: meeting the challenge
Spencer products which have a real point of difference compared to
their rivals - but the trick is not to overextend production and
diminish the very elements which make this difference, claims
Datamonitor.
UK retailer Marks & Spencer is looking to smaller, local producers for drinks that offer a point of difference from the range of beers available elsewhere, but according to market analysts Datamonitor, it will have to work closely with smaller producers to not overstretch their capacities and damage the integrity of their products.
M&S is in talks with regional beer suppliers to see if they can offer something special and unique to boost the retailer's range. Sales of specialty and gourmet foods are booming as consumers become increasingly adventurous with their food and drink tastes. They are demanding greater quality, taste, variety and authenticity, and local beers could be the answer, according to Datamonitor.
The European market for high quality, regional specialty and gourmet food and drinks was worth €33.8 billon in 2001, the market analysts claim. Over the next five years, this market is predicted to grow at a CAGR of 4.5 per cent, and M&S is clearly keen to tap into this market at a time of growth.
However, offering consumers specialist food and drinks from small suppliers has been problematic for multiples in the past. Small-scale suppliers have accused large retailers of overextending them, forcing them to sacrifice product integrity for more efficiency. The UK Guild of Fine Food Retailers says that many producers will not trade with the major retailers.
M&S may do well to learn from rival supermarket Waitrose, according to Datamonitor. Waitrose has launched a Small Producers Charter setting out its approach to the supply chain to particularly benefit small scale and regional producers. In an effort to win the trust of smaller producers, Waitrose is keen to remain flexible in its local sourcing policies. The company allows suppliers to supply as many of its retail locations as they can manage. In addition, the retailer provides non-committal advice to show its support for small producers.
Creating openness and trust with smaller producers is an important step in securing the range and quality of goods that consumers are demanding today. In addition, retailers can present a friendly face to customers as a supporter of small scale, local businesses - an important area for the increasingly discerning consumer.
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