Continuing our regular supply chain series, Business Advice hears from two smaller suppliers about their experiences selling to Co-op to find out what fellow entrepreneurs should know before approaching the retailer.
The food arm of Co-op Group has made more explicit pledges to the nation’s local suppliers than any other major UK grocer. In November 2016, Co-op published a small business charter with a promise to double its headcount of local producers that supply its stores. The “Backing British” charter set out five principles the retailer claimed would change the way it sources produce by “fostering closer relationships and support” for local suppliers.
When announcing the plan to bring in 1,200 independent suppliers by the end of 2017, Co-op retail chief executive, Steve Murrells said the store remained committed to giving “great British food pride of place on our shelves”. In January 2018, the retailer also announced plans to invest over £160m into 100 new outlets across the UK, giving more business owners opportunities to supply their local store.
Despite these efforts, the store’s record isn’t completely clean. In March 2018 Co-op was ordered by the Groceries Code Adjudicator (GCA) to repay £500,000 to 110 suppliers initially taken for so-called “benchmarking” fees – charges initially levied for pricing assessments.
Nonetheless, the experiences of Snaffling Pig and Nim’s Fruit Crisps have demonstrated that doors are open for smaller brands across the UK. We spoke to the founders behind both brands to find out how they gained the listing and what potential suppliers need to know.
“Getting a listing with your local Co-op is a great stepping stone to the larger retailers”
Nimisha Raja’s Co-op journey began with a listing of her brand of air-dried fruit and vegetable crisps in 60 Kent branches. Popularity among its shoppers saw the listing expand into a further 70 stores across the Midlands. According to Raja, her initial introduction to Co-op’s buying team was a great example of how working with a local trade organisation can open doors with larger retailers.
“Co-op was searching for locally made produce and we were introduced to them by Produced in Kent, who had got to know us and our desire to try to source as many local ingredients as possible for use in Nim’s Fruit Crisps,” Raja told Business Advice.
As an organisation, Produced in Kent offers business support to local business owners and aims to provide smaller companies with sales and growth opportunities.
• Double the amount of local suppliers
• Break down barriers to trading by sharing technical expertise and practical support
• Avoid expensive and duplicate audits
• Not seek exclusivity to help small businesses to grow
• Build long-term relationships with suppliers and growers
Following her success in Co-op’s local branches, Raja recently signed an agreement with Tesco to stock her brand in over 1,500 stores nationwide.
She added: “Getting a listing with your local Co-op is a great stepping stone to the larger retailers, which is crucial if you have no prior experience of supplying in large volumes. The process of getting listed is also a little simpler.”
While a local organisation provided a gateway to Raja’s Co-op listing, new brands are still able to start a relationship with a retailer by taking a direct approach.
From the moment Nick Coleman and Udhi Silva founded pork crackling brand Snaffling Pig in 2015, they had identified Co-op as their key target retailer. After careful brand building, product development and steady expansion, the team tapped into several avenues to get the meeting they desired.
“A combination of LinkedIn, targeted emails and attending the right trade shows meant we were fortunate enough to have the right conversation with the right buyer when we were ready,” Coleman told us.
One foot in the door
Something Business Advice discovered in previous instalments of our selling to big business series is that impressing a retail buyer with a unique and interesting product doesn’t count for much unless there is sales clout behind it. Both of our suppliers agreed that solid figures and projections were crucial in gaining a listing.
“As well as tasting our products, we had to present the buyer with commercials for the products and market research as to why our products are suitable for your typical Co-op customer,” Raja said.
“It was really important to create a great presentation that highlights what the trends are in your sector and how your product fits in with their consumer base. Ultimately though, it does come down to the buyer actually liking what you have to sell. More than 15 store managers were invited to try our great tasting and healthy fruit crisps.”
Proving that Co-op’s customers would take to Snaffling Pig was equally vital to Coleman, who also explained why a brand outselling its competition in the market would help sway the buying team.
“Like any retail outlet, there’s only so much shelf space available,” he said. “Buyers are under constant pressure to ensure the brands they stock offer their customers what they need, whilst still maximising the return for the space they occupy.
“In the majority of cases, gaining a listing in a store means the buyer will have de-listed an existing line. This means that at the very least the new brand will need a rate of sale (ROS) greater than that of the one it’s replacing. To be able to prove this higher ROS will always put you in a stronger position and help the buyer create a more informed choice ahead of the launch. But there’s still a degree of risk – and pressure.”
The initial arrangement has seen Snaffling Pig listed locally across three counties. After 12 months, SP hopes the business will be able to provide Co-op with a strong case to expand the listing on a national scale.
Once stocked, both Coleman and Raja found that Co-op’s ethics and values were also reflected in its relationship with suppliers.
“They not only support local businesses, but are mindful that a listing with them could mean a bit of a learning curve and they were very supportive,” Raja noted. “Even though the buyer who originally dealt with me has moved to a different department, she will still email me or message via social media to see how things are going.”
Co-op’s enthusiasm for independent brands and producers has set it apart from other national supermarkets, but maintaining an extensive local network has seen the retailer take a slightly different approach. Coleman explained the logistical differences between Co-op’s supply chain and that of rival stores.
Final secrets for selling to Co-op
For Coleman, knowing your own business inside out and bringing a powerful brand plan to the negotiating table were the essential starting points for a smaller brand targeting Co-op.
“This gives the buyer total confidence your product is worth backing,” he added. “You can beef this up with case studies which highlight strong ROS and a brand their customers will love engaging with.”
On the other hand, Raja urged other brands to do their homework on Co-op. “Co-op stores are smaller than some of the other retailers and possibly more price-sensitive,” she explained. “As with all retailers, ensure that you have the correct accreditations – BRC/SALSA or equivalent. Remember that this is a commercial venture and you will need to convince them that they will make money from selling your products.”
Want to learn more about getting your products stocked with other major UK retailers? Go back and read some other features in our “Selling to big business” supply chain series.
- Whole Foods
- Holland & Barrett
- Planet Organic
- John Lewis
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