Nine Years and Counting
10th July 2019
I am always pleased when the calendar turns to July. Not just because of the good weather and long evenings, but for us it signals the conclusion of another year of business. I started HRA at our family table in 2011, so at the end of this year we will enter our tenth year of business which is pretty humbling in itself.
We are hiring for a new team member – our 8th colleague – at the moment and of course many of the questions from candidates are around the state of Food and Drink industry at the moment.
It’s hard to describe the mood of our clients out there in Grocery – of course there are the usual preoccupations with pricing, service level, value and volume sales. These are the ‘bread and butter’ drivers of FMCG performance so crucial to get right, but sitting above those concerns seems to me an unprecedented number of strategic challenges facing clients.
Retailer concerns around reducing plastic that took up a lot of our clients bandwidth last year have morphed into a wider retail interest in sustainability – reducing the length of supply chains, increasing the security of supply, demonstrating recyclability credentials etc. Retailers are generally showing significant interest in areas of suppliers business models that when previously referenced in update presentations would have been skated over with a nod or a cursory comment from the buyer. Now buyers and technical managers want to drill into all the nuances and details. All of this is of course good news in the long run, however uncomfortable this scrutiny is in the short term.
Getting to the right answer for sustainability feels like something that we are going to be grappling with for years. For instance, in the juice/smoothie world the design language of the category is clear PET, to show off the vibrant, attractive colours of the product. Yet science tells us that clear PET offers next to no protection against sunlight or retail light, so vitamins A, B2 and D in the product reduce (denature) rapidly. The answer would be a light protected sleeve, rPET or HDPE bottle – but which of the smoothie players are going to be first to face up to both the recycling and the light protection challenge…and break ranks by moving away from clear PET?
On the national stage, when you clear away the smoke and mirrors from the current race to be Prime Minister, the same choices facing the country remain. My reading of the politics is that with the British parliament essentially jammed, only a general election or a second Brexit referendum offer a path forward. But how and when we get there at the moment is largely guesswork.
However this all plays out there will still be plenty of be room for ambitious challenger brands, market leaders, exporters and importers to shake up Grocery categories in new ways – and that at least makes me smile.
Enjoy the holidays !
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