BrainTrust Query: What Retail Chains Need to Know About Small Brands
In my over 30 years in the retail consumer goods
business, I’ve played a part in launching numerous “small brands” that
later became mainstays in the CPG arena. I’ve worked with some pretty big brands
at large companies, such as GSK, Gillette and P&G. But I’ve also specialized
in assisting small CPG companies in their launch of specialty brands such as
ZarBee’s, SmartMouth, AloeSense, Robi-Comb, Australian Dream, Softcup and UltiBrush.
small brands encompass a variety of categories ranging from oral care and cough/cold/allergy
to feminine hygiene, OTC and analgesics. However, I see common criteria necessary
for all to be successful:
Point of differentiation: Every item I touch needs to serve a new purpose.
I work only with category expanders.
Productivity: The true performers manifest the right blend of higher
price points, margins, penny profits and GMROI. I like delivering the most
units and highest dollars per point of distribution.
Energy: Brands I work with are nationally advertised, enjoy huge publicity
campaigns and deploy a highly-skilled intelligent use of the social media.
Destination: Simply put, these brands deliver your most coveted consumer
with the most desirable shopping basket results.
Innovation: The big brands will eventually buy out the innovations
of the small brands but rarely do the big companies invest in the initial groundbreaking.
associates and I have taken on the advent of SKU rationalization and its impact
on small brands directly with retail executives. In the beginning, and then
after the economy weakened, many retailers were approaching SKU rationalization
with a sledge hammer instead of a scalpel. Too many retailers were limiting
product assortment to the same “big brands” to a point where every
chain store looked the same. Discounts were the only points of differentiation.
But then we made progress and retailers started to weed out slow-moving line
extensions of the big brands, replacing them with highly productive and innovative
(I see this as an exhilarating trend — brilliant for retailers,
small manufacturers and consumers! Bring on the profits!)
But let’s be clear:
not all small brands are right for retail distribution. You must pick the right
entrepreneurs with the right products and personalities for success. I work
only with small business people that have the proper funding in place, the
right business plan and the right attitude to listen, learn and grow. And I’m
not afraid to turn away from the ones that don’t meet my criteria.
Discussion Questions: What do you see as the key qualities for a successful small brand? Which retail channels and formats would benefit most from more small brands? Given current retail market dynamics, do you expect it to be easier or harder for small brands to get shelf space in the next few years?