2Bits: The Snatch Up of Local and Regional Branded…
Jack be nimble. Jack be quick.
Global food giants buying local brands is no gimmick!
One trend you’ll want to watch this year is the big bucks big food companies are paying for smaller food brands. These multi-million and billion dollar deals impact small farmers and manufactures of local and regional branded food products. What is the driving force behind this trend? Consumer interest in health-focused brands.
In the last 12 months, Conagra Brands Inc. bought Angie’s BOOMCHICKAPOP flavored popcorn. Mars Inc. secured a minority investment in KIND bars. Campbell Soup Co. bought Bolthouse refrigerated juices and Plum Organics baby food. Unilever bought Sir Kensington—known for its organic mayonnaise, mustard, and ketchup products.
Why is big buying small?
Small brands have quicker innovation cycles. New trendy products or flavors are launched rapidly for less cost. Marketing processes are simpler. Small brands have a strong local and regional following. Smaller companies often have patience to grow market share. Typically, consumers view the products as healthier.
How are small farmers and manufactures impacted?
Big food companies own supermarket shelf space. Shelf space ownership allows for product placement priority. Supermarkets also charge for product sampling opportunities, which big food companies may already have included in their agreements. It may be cost prohibitive for brands owned by local and regional farmers and manufacturers to obtain optimum product placement and hold in-store sampling. This decreases marketing options at physical or brick and mortar locations.
Will this trend lower product quality?
Continued high quality products after a buyout depends on the company or brand being purchased, and the company buying it. Sir Kensington has pledged to maintain their company culture, as well as their high product production standards. The Amazon’s purchase of Whole Foods is a different story. Recent comments suggest the quality of in-store produce has been negatively impacted. A decreased interest in purchasing from local and regional producers and suppliers has also been publicized.
What can you do?
If you’re a farmer: Engage with an online marketplace to expand your market options and sales channels. Once you’ve joined an online marketplace, work hard to be responsive to online customer communications. Learn how to use the marketplace effectively. The time spent doing this will be critical to your future sustainability.
If you’re a buyer: Stay updated on who is purchasing the smaller brands you care about. Learn about the integrity of the company that is buying your favorite brands. Are they worthy of your loyalty? Seek out farmers and manufacturers that are still locally and regionally-owned. Continue to support the grocery stores that still give shelf space to them.
Join an online marketplace to easily connect with local and regional farmers and manufacturers. Farmers need to be online and need your support to do so.
Create an account on 2BuyAg today to buy directly from local farmers or sell directly to buyers that want your locally produced foods.