Tesco, Fake Farms And Volkswagen…
Tesco’s Defence In an interview with The Grocer, Tesco’s UK and Ireland CEO Matt Davies said the new brands have flowed from customer insight and an aim to serve the shoppers better. He went on to say, “We have taken the opportunity to review the specification, formulation and value equation.” so its a sure fire bet that they will have researched the names of the ‘farms’ to death in qualitative groups. So now, for example, Tesco sells smaller apples and takes the entire lettuce crop (rather than just part of it), promoting efficiencies in the supply chain in exchange for a lower price point. we can all agree that taking on more crops to reduce wastage is only a good idea but might it also raise the quality threshold at the entry level ‘good’ tier.
Disingenuous or Genius? On the other hand, leading customers into thinking they are supporting local farmers could understandably be thought of as disingenuous. Whilst perhaps questionable, generating a higher margin by buying up ‘inferior’ products and selling them on with a farm provenance premium is likely to be an economically successful decision. It’s all about margin and volume. Apart from one factor. With reputation management more important than ever, has Tesco committed a gaffe of Volkswagen-esque proportions?
Consumer Trust Key Will consumers be flocking to buy the ‘Farm’ and own label brands? We don’t see why not if the price and the quality is right. Will they boycott Tesco in favour of more apparently trustworthy supermarket brands? Unlikely, but only time (and Tesco’s share price) will tell. I’m sure you’ll agree, there have been some really interesting new launches this year and we are certainly looking forward to seeing what other NPD 2016 brings. If you’ve a new, innovative challenger brand product and are looking for help with launching your range or would just like to discuss this growing market, then call us on 01803 203387 or email at Hamish@hra-global.com
