Supply chain · 23 November 2017

Selling to Ocado: An online retailer ready to promote new brands

In contrast to regular supermarkets,  Ocado has no chain of stores and delivers all produce from its warehouses.
In contrast to regular supermarkets, Ocado has no chain of stores and delivers all produce from its warehouses.
For young food brands looking to gain national distribution, Ocado’s customer base and commitment to new trends makes it an essential partner. Business Advice’s supply chain series returns to help food entrepreneurs understand what it takes to start selling to Ocado.

Since 2000, the online partner of Waitrose has been proving that a supermarket need not commit to the bricks and mortar model, and that an online store can build and maintain a reputation as a trusted source of high quality produce. As Business Advice finds out, its forward-thinking is reflected through its product offering as well as logistics and marketing.?

After not gaining much traction initially with an Ocado buyer, Abakus Foods founder Helen Wang worked hard to improve the packaging and to spread the word about the benefits of jujube fruit the superfood berry from the Far East which makes Abakus Foods an ideal proposition for a retailer like Ocado.

Abakus Foods founder Helen Wang
Abakus Foods founder Helen Wang
Wang was then showcasing the business at the Natural & Organic trade show when a buyer came to her stand unexpectedly. At that point, we were much better prepared and well positioned to supply them, she explained.

Having impressed at the show, the Wang was invited to attend one of Ocado’s Meet the Buyer events?? a meeting of buyers and potential suppliers at Ocado’s offices. On the day, brands are given presentations on things like in-store merchandising and logistics, and handed general advice on doing business with Ocado.

But the supplier days arent just an informative day out. After the demonstrations, the entrepreneurs are invited to sit down one-on-one with the relevant category buyer to discuss a potential listing.

I was really nervous going into the meeting, Wang admitted, But the buyer was supportive and it was a friendly conversation. She was great and helped me through the listing process.

Ocado in numbers

  • Over 50, 000 SKUs
  • 94.9 per cent of orders delivered on time
  • Increased active customers by 20 per cent in 2016
  • One per cent of retail revenue spent on marketing
  • 13.1 per cent year-on-year retail revenue growth (August 2017)
Meet the buyer events and trade shows like Natural & Organichave become useful ways for small brands to establish a presence in the health food industry and meet its key players, and Wang advised other smaller brands to embrace long-term thinking.

my advice would be that a no? is temporary and means not right now. One should work on improving the product in the meantime so you are ready when your time comes.

Find out how other food brands with a healthy outlook have succeeded in reaching in national retailers:

For some promising young brands, Ocado has taken a more direct approach. Olivia Wollenberg was contacted for a listing opportunity after a buyer had seen her Livia’s Kitchen brand in Selfridges. When it came to negotiations, the buyer was more concerned about product, brand and vision than the numbers.

this is something which is incredibly important for a small business like I was at that time, Wollenberg explained.

LiviasKitchen founder Olivia Wollenberg
Livia’s Kitchen founder Olivia Wollenberg
when you are starting up, you really don’t have that many numbers to go off, and it is much more about someone believing in your dream and your goals for the business. Buyers have to understand that, and the Ocado buyer I first met really did, so I was very lucky.

Having been selling to Ocado for over two years now, Wollenberg noted a general shift in thinking within retail, as buying teams turn their attentions to emerging trends. She found that Ocado was leading the way in this sense.

they are incredibly excited about new brands and really want to get behind and support them, she said. The buyers seem to have great insights into what new trends will be, which will work well, and which won’t.

In terms of logistics, Wollenberg said it was important to Ocado for its suppliers to work with a reliable wholesaler or consolidator which can guarantee products are delivered on time. Make sure you are having conversations with these companies before any meetings with Ocado, she added.

also, make sure that you factor in a promotional and marketing budget, as this is hugely important for Ocado and can be a deal breaker. Online retailers have different marketing strategies to in-store supermarkets, so make sure to understand the different options before your meeting so you can understand from the buyer what will work best.

We found out how the online model at AmazonFresh has benefitted its small suppliers

With more established brands able to bring buyers to them, the majority of wannabe suppliers are competing in a busy environment to even get one foot in the door.

When he launched pork crackling brand Snaffling Pig, founder Nick Colemanidentified Ocado as top of our list to win, recognising the ideal platform for small food brands to gain national distribution. He decided to take a creative approach.


 
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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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