Getting your products into a major supermarket such as Tesco or Asda can transform your business. A place on the shelves of a supermarket can see sales soar, boost brand awareness and gain a place in the nation’s weekly shopping baskets.
Securing space on supermarket shelves isn’t for the fainthearted – but neither is it the preserve of established brands with popular products to sell. Don’t let size put you off. Supermarkets often work with small suppliers, initially selling products through a small number of stores to test popularity. If successful, a small brand can go from test to national rollout and transform its fortunes.
However, you’ll need to iron out kinks in your operation before approaching supermarkets. You’ll need production capacity to scale quickly and ensure all relevant health and safety standards are rigorously adhered to.
Benefits of getting a product into a supermarket
- Higher volumes with consistent sales.
- Nationwide reach and distribution for your product.
- Businesses with distribution through supermarkets are attractive to investors.
- Reduced administration by dealing with a single supermarket chains rather than a network of smaller distributors.
Disadvantages of getting a product into a supermarket
- Pricing and margins can be under pressure – supermarket promotions and discounts can impact profits, and you may need to sell at a lower unit price compared to selling directly.
- Lack of diversification – distributing through a few supermarkets can leave you exposed if your product is delisted or you’re not willing to support promotional activity.
- Less control – supermarkets can require new products, incentives and can determine product visibility in store.
How to get your product into a supermarket
There are two main routes into supermarkets – either selling products under your own brand name, or by selling ‘white label’ products where the supermarket sells them as part of its own-brand range. Supermarkets tend to favour white labelling as it reinforces their brand and extends their own product range – but be wary that while this can result in more sales, own-brand products tend to be cheaper and have lower profit margins.
You’ll need to get your product in front of specialist buyers for each supermarket chain. Most supermarkets have a structured route to bring them into contact with new small suppliers. For example, both Sainsbury’s and Tesco require you to complete an application online.
- Tesco – becoming a supplier application
- Sainsbury – becoming a supplier application
- Asda – becoming a supplier application
- Waitrose – becoming a supplier application
Be sure to read all the guidelines provided so you correctly complete the application. Once your application is submitted, leave it a few weeks before following up with an email to ask for an appointment with a buyer.
Tips for getting your product into a supermarket
1. Do your research
Visit different supermarkets and examine their shelves and existing products. Think about how your product would fit in. What kind of customer will be buying your product and will they add value for the retailer – such as by bringing in new customers, increasing product choice or by raising the quality of their offer. Be careful not to replicate existing products or take business from their own-brand products.
2. Set the right price
Product pricing is difficult. Start by calculating the minimum price you’re prepared to sell your product, taking into account manufacturing, storage, shipping and packaging costs as well as overheads such as salaries. You’ll need to determine a profit margin on top, such as 5 per cent, and allow for promotional activity. You price should be higher than your total cost per unit plus profit margin.
3. Meeting with a buyer
Be prepared for your meeting with the supermarket buyer. Understand retail jargon and terms, such as conditions of sale, discounts, credit, shipping and allowances. Know their basic requirements such as health and safety, ethical trading, quality control, manufacturing and distribution standards. For example, Waitrose suppliers must meet the standards of its Small Producers’ Charter.
4. Perfect packaging
You’ll need to show a sample of your product and packaging complete with a barcode. Packaging is very important. Spend time created detailed packaging as you’d expect it to appear on the shelf, rather than a rough mock-up. Ensure branding and essential information such as nutrition, preparation instructions and storage information are correct. Polished packaging can win over a supermarket buyer and show you’re a serious supplier.
5. Production capability
A supermarket will want to know about your business history and the retailers currently selling your product. Support your presentation with details of sales figures and customer feedback or testimonials, both from existing retail partners and end consumers. You’ll need to demonstrate your capability for handling large production runs and your marketing and promotion plans, including in-store demos, point-of-sale displays, advertising and publicity.
6. Be realistic
Don’t over promise when presenting. Be clear on the actual volume you can supply, the unit price you can sell for and your capacity to scale or support promotions. Some supermarkets can put in place penalties for not supplying volume and quality in line with any commercial agreement you make, so take care to get your figures right.
7. Be persistent
Supermarket buyers will be inundated daily by lots of brands. Be persistent but not annoying. Call or send an email to chase applications but avoid hassling the buyer. Alternatively, try sending samples with a note to get the buyer’s attention.