What do Ontario's grocery retailers want from Ontario's suppliers?
There's good news for Ontario farmers and food processors. Ontario grocery
retailers have said clearly and often that they prefer to buy local product
where it makes sense to do so. Retailers have also publicly committed
to the idea of working with Ontario suppliers to develop value chains.
This is a co-operative approach to bringing food products into stores,
where all profit from the relationship.
This goodwill can provide exceptional suppliers with a hometown advantage.
Yet it is important not to take this lead for granted.
Ontario's farmers and food processors face two main challenges:
- Strong competition from across Canada and around the globe. For instance,
there are Quebec cucumbers and prairie beef. There are strawberries
from California and dried pasta from Italy. That means that the closer
to perfect Ontario products can be, the more likely it is that Ontario's
grocery retailers will continue to sell and stock local.
- Demanding Ontario consumers. Retailers may prefer to buy local, but
they will opt for non-Ontario products if you don't satisfy their customers'
wants and needs.
Top five things Ontario grocery retailers want
If your company wants to build solid relationships with Ontario retailers,
you must provide the following:
Products that grocers can make money selling to consumers at a competitive
price.
Consumers have many choices of where to buy their foods, including traditional
grocers and the growing mass merchandiser outlets. Your product must fit
the image of the store selling the item. It must also allow the retailer
to price the product reasonably against the competition. Store space is
limited, so grocery retailers are looking to earn money from "renting"
you shelf-space. They will not want to provide space to your product unless
it can generate an equal or higher margin than the product you would replace.
Safe and appropriate quality products.
Your product should protect the grocer from liability. You should be
able to demonstrate a safe manufacturing or growing environment. Retailers
also want to be sure they can track and trace back products they buy from
you in case of quality or safety problems.
The highest level of regulatory and quality standards protects retailers
so they don't have to make extra efforts to check out your set-up. Retailers
favour internationally-recognized standards over municipal standards.
At the same time, as long as products are safe for consumers, the highest
quality is not always needed. Your quality should be right for its retail
price.
Product packaging that stands up to the retailing environment.
Retailers must be able to store your product safely - whether in a large
corporate warehouse or a cupboard in the back of a single small store.
Packaging must:
- protect the product from damage
- be easy to handle (e.g., boxes with handles, well sealed)
- be easy to recognize
- provide clearly visible instructions for handling, to make sure that
even part-time and untrained staff can handle it easily.
Once your product is on display in the store, the same principles apply.
Of course, in the past, some products were displayed loose. But today,
in most areas of the store, retailers and consumers now favour some form
of tamper-proof packaging. Your label needs to stay on the package and
must state what is legally required. Retailers prefer you to take responsibility
for removing imperfect products from their stores.
The ability to partner and solve problems.
What does partnership mean to retailers, and what determines a partnership,
beyond price? Working together and understanding each other's needs are
vital to develop an understanding of what retailers are looking for in
all areas.
Your positive approach to all issues is also critical. People like to
do business with people they like. This involves trust - which is based
on believing that your partner has good intent and is operating honestly
within their contracts. Direct discussions improve the relationship, and
then you can handle difficult topics cooperatively.
Smooth inventory management.
Retailers want you to make sure they have enough stock at the store
and in the warehouse to meet consumer demand, without having to carry
excess inventory. Retailers prefer not to deal with multiple small deliveries
or handle lots of paperwork. Where the retailer is highly automated, you
need to match that level of sophistication.
Being a reliable "first stop" - where buyers' expectations
can be met and exceeded - makes it less likely that buyers will look for
someone else to supply them.
Where to learn about retailers' product requirements
Each grocer has lists for:
- its own specific requirements by product
- its own "basics required for all products."
To be an effective, dependable supplier, we recommend two paths to help
you start your research:
Do some general research first. Begin with publicly
available information. Governments, trade associations, industry publications
and stock market annual reports are all useful sources of information.
Then seek out the product-specific best practices of sellers around the
globe. You may at some point need to contact a category manager or buyer
for details on product specifications. Make sure you have done your basic
research before you contact a potential buyer.
Talk to current suppliers and their associations. To
begin academic research or work on a community project, contact people
who already sell to retailers and their trade associations. They can provide
perspective on what retailers need and walk you through samples of typical
paperwork (e.g. electronic purchase orders). Also review reports from
ongoing initiatives in this area, including reports from:
- governments
- non-government organizations
- food industry trade associations.
Focus your efforts by developing a work plan involving these groups.
By following these suggestions, you will be prepared to build relationships
with the many exceptional Ontario retailers who love to sell Ontario
food products.
