The Key to Success as a Private Label Food Supplier

I've been involved with food retailers (AKA supermarkets) most of my working life - either as an employee, consulting for them or consulting for their suppliers. So you might say I have experience working on both sides of the fence. And when I say working, I'm talking about the development and quality assurance of private label products.

Building and nurturing trust is so essential to the health and longevity of the relationship between multiple retailers and their private label manufacturing partners. Yet it's so fragile! ??

If you are a supplier of supermarket private label products, then you are a custodian of that supermarket’s private label brand. All supermarkets have a plethora of technical standards, both horizontal ones ?? (those which apply to almost all suppliers) and vertical ones ?? (those that are very specific to a particular product category). Suppliers are granted access to these, typically via an internet portal, and are expected to know which ones apply to their products and operations, ensure that they are compliant with the requirements of these standards and audit or police themselves against them in order to monitor their degree of compliance.

Too many times, however, I visit companies who have gotten complacent and lost sight ?? of their obligations to their private label customers. I’m paraphrasing but they take the view that “we’ve been a supplier to ABC Supermarket for X years and they’ve never taken issue with how we run things”. Then one day ABC Supermarket decides to come and audit their operations (they may well turn up unannounced, this is becoming increasingly common practice nowadays) and they proceed to uncover a multitude of issues, resulting in loss of face for the supplier and possibly even suspension of approval / discontinuation of supply with the attendant loss of revenue.

In such cases it isn't uncommon for relationships which have been mutually satisfactory for years to go sour in a matter of weeks or months as trust takes time to build but no time at all to destroy.

The issues raised are generally things that the supplier isn’t consciously aware that they are doing incorrectly. They have simply become complacent and lost sight of the customer’s expectations and standards.

In my experience these kinds of situations are commonplace but are at the same time entirely avoidable. If the supplier had:

1. made sure they understood which of their customer' standards applied to their operations

2. conducted a gap analysis of their operations against these requirements

3. taken steps ??♂? to address any areas of non-compliance and then

4. reviewed their gap analyses periodically (say, once per quarter)

...then they could have avoided this embarrassing ?? situation and the erosion of trust that comes with it.

If losing sight of your customer's standards and expectations is a sure-fire way to erode trust, then lying to them or trying to cover up your mistakes is toxic! ?? I speak from bitter experience: to my eternal shame, early in my career I lied to a customer during an audit and falsified a document. Not only that but I didn't do it very convincingly and my deception was seen through. I actually don't remember what impact my actions had on my company's relationship with the customer but I do know that, as soon as I'd done it, I wished that I hadn't and resolved to be 100% honest and transparent in my dealings with clients henceforth. I've never gone back on this pledge.

Obviously many other factors contribute to maintaining great customer relations such as keen and transparent pricing and excellence in supply but fewer things are surer to set a supplier on the path to becoming an ex- supermarket private label supplier than losing sight of the their customer's technical standards and thereby losing their trust.