retail news in context, analysis with attitude

Nielsen is out with a study saying that while Q1 retail sales in the US were down close to $3 billion "due to a shift in Easter timing and changing consumer preferences, growth is not completely elusive. In fact, some food and beverage manufacturers are finding pockets of growth, most notably small manufacturers."

The report says that "looking back five years ago, the largest food and beverage manufacturers accounted for one-third of dollar sales. Today, they account for 31%, while smaller manufacturers (those with at least $100,000 in annual sales) have gained two percentage points of market share, equal to about $2 billion. Today, the smallest manufacturers, nearly 16,000 companies, account for 19% of dollar sales and are driving more than half of the growth (53%).

The reason? Nielsen's analysis "showed that smaller companies are putting a great emphasis on health and wellness to meet consumer demand for transparency, while also selling products at premium price points. As a result, retailers are making room for them on shelves."

And, most importantly, customers are responding.

"As consumers continue to demand products with clean labels, they’re willing to pay the price, regardless of promotions," Nielsen writes. "As smaller manufacturers capitalize on this trend, retailers have opened up shelf space to cater to their offerings—and meet consumer demand."
KC's View:
But ... this also means that large, middle and private-label players have an opportunity for growth - if they are willing and nimble enough to embrace the trends that are driving growth for smaller companies.