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Letter from America

24th July 2017

Having been to the Summer Fancy Food show in New York in June, I was struck by a statistic that the US Speciality (Fine Food & Drink) market is worth $120bn and enjoys c14% of the total retail market. I can well believe these numbers, particularly as US retailers stock many more brands and products in-store than their UK counterparts – an average 35-40k square foot US supermarket stocks 40,000 skus, approximately double its UK equivalent.

A feature of online retailers worldwide (and US bricks and mortar retailers) is that they offer more products to their consumers than their UK equivalents – only Ocado in the UK carries in excess of 40k skus, while Amazon Fresh already offers in excess of 30k skus having not long started trading in grocery. By virtue of its entry into the UK grocery market, Amazon is clearly setting out to offer unrivalled choice to its consumers as a major point of difference to conventional retailers.

While mainstream UK retailers’ reactive own label strategies are understandable given the success of the discounters, how long can it be before they return to putting consumer choice higher up their list of priorities? Only Morrisons are currently doing this with their Finding Local Solutions strategy, an approach currently benefitting regional UK Speciality producers from Yorkshire, Wales, Scotland, and the remainder of the UK.

Global trends point towards consumers increasingly wanting real products from real people and this is where Speciality producers come into their own. And yes, they are understandably more expensive than mass market equivalents from the Big Brands and Own Label.

However, history shows that consumers generally trade up over time and that this momentum fuels growth – let’s hope that retailers’ faith in consumers’ desire for newness and choice from real producers, as well as value for money, triumphs over their need to focus on range optimisation, reducing overheads, and own label led product strategies.

Fintan O’Leary

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Letter from America

Having been to the Summer Fancy Food show in New York in June, I was struck by a statistic that the US Speciality (Fine Food & Drink) market is worth $120bn and enjoys c14% of the total retail mar...
Read more