What is retail & merchandising for F&B Brands?

In a nutshell, retail strategy is the complete marketing plan bringing a product to market and reach consumers. Merchandising relates to market segmentation and placement of products within a retail environment, with the intention of influencing consumers to make a purchase or undertake positive interactions with the brand.

For food brands, this involves producing new product lineups and pushing them out into retail platforms. For instance, this can be the creation of an entire lineup of sauces or premix for the sale in supermarkets or retail locations. In today’s context, food and beverage products can be delivered omnichannel approaches, enabling end-consumer transactions to be carried out in both brick-and-mortar (offline) and e-commerce (online) settings.

So why should food brands go into retail and merchandising?

Here are 3 good reasons.

1. Revenue

Mature F&B brands ought to understand their products and market demand well. By taking apart the business for analysis, business owners can stumble upon surprising reasons why customers prefer their products. With this knowledge, owners will then be able to create product lineups that directly serves the customers’ needs and wants.

Take for instance the case of traditional Nanyang coffeehouses. Some prefer more traditional concepts like that of Ya Kun, while others favour modern options like Toast Box. Either ways, both concepts have undertake a retail approach in pushing out merchandise of their popular items like coffee and kaya. When implemented well, this brings in additional revenue without overstretching existing business operations.

 

2. Leverage upon existing productivity capacity

Mature food brands are expected to have already mastered the recipes and flavours of their signature items, and thus need only apply this expertise to a new production setting while maintaining quality and efficiency. In addition, they would have already locked in the suppliers and networks crucial to their business operations. This makes it a much easier route than having to create a retail product concept from scratch.

Need a clearer picture? Just think international casual dining restaurant, Nandos, who has a global footprint of more than 1000 outlets. Nandos’ renown flame grilled peri-peri chicken comes with a variety of hot sauces for patrons to pair with. Over time, Nandos introduced the same bottled form of its pairing sauces to major supermarkets. Think about it: Nandos, famous for its peri-peri chicken chose to retail its delicious hot sauces. The same goes for T.G.I. Fridays’ delicious potato skin crisps appearing beside your favourites in the snack aisle. We are definitely onto something here.

 

3. Brand strength, aisle space, and market gaps

Having invested time and resources to build up brand equity, customers recognise the brand for the standards, quality, and tastes it stands for. That’s why when popular food brands enter this domain, they have an easier time to market their products. Furthermore, brands with a large number of physical outlets will be able to push products to their immediate customers via existing shop fronts without having to hustle for aisle space in major supermarkets or other retailers.

Also consider the case of Prima Taste. Singapore is known to be a food haven for locals and tourists. Yet, local Singaporean hawker delicacies can be incredibly hard to whip up without a mastery of the essential seasoning and ingredients. This identified a market gap for Prima Taste, who undertook extensive research and development to create easy-to-use meal sauce kits for local hawker food. This has enabled homemakers and even overseas consumers to easily recreate a delicious Singaporean dining experience in the comfort of one’s home. Through the years, Prima Taste’s product line gotten increasingly prominent on the Asian aisles of groceries overseas.