The major brands appear to be less willing to innovate in view of high costs and a significant risk of failure. The Supplying industry (packaging, raw materials and ingredients) is aware of this trend finding it increasingly difficult to bring innovation to the market through brand manufacturers.
Suppliers are challenged by their retail buyers to support them in order to differentiate themselves from the competition. Private label plays a strategic role in this process because packaging, formulation, price and assortment can be tailored to the wishes of the retailer. In order to assist both Private Label producers and Retailers in the innovation process, the supplying industry is looking for opportunities to get in direct contact. However, it is difficult to find the right strategy for this because it is not always clear who the contact should be, how their organization is structured and how decisions are made within it. It is essential to learn the right approach from an entity that is well versed in this area which is a potential minefield of the inexperienced.
The supply side of private label is not very transparent because the name of the producer is usually omitted from the packaging. However, the spectacular growth of the private label market has not escaped the attention of the Supply Industry. Retailers have almost entirely taken over the initiative with their innovative private labels, especially at the higher end of the market. The retailer as owner of the brand, sets the parameters for supply, changing the market in which the Supplying industry operates. IPLC provides clarity on the process based upon extensive knowledge and experience and can determine the type of expertise required in the Private Label supply chain. This enables the Supplying industry to determine its strategy and to optimise cooperation with all contacts involved.
The business model of a private label producer differs fundamentally from that of a brand producer. There is no communication with consumers and all effort is focussed on building and maintaining long-term relationships with their retail customers. As a result, these relationships are often close partnerships, something the Supplying industry must be alert to. IPLC offers support to ensure successful cooperation with both parties, minimising potential conflict.
