Kellogg strategy to focus on wholesale price-marked packs

By Rick Pendrous

- Last updated on GMT

Kellogg is moving away from mainly focusing on sales in the major multiples
Kellogg is moving away from mainly focusing on sales in the major multiples

Related tags: Marketing, Retailing

Kellogg UK has big plans to grow its business within channels, such as the wholesale and convenience sectors, where price-marked packs (PMPs) will form a central part of the cereal, biscuit and crisp giant’s strategy, its sales director for speciality channels Nick Dawson has revealed.

“We think, from a Kellogg perspective, the channels business will be the biggest part of our business in the next three years,”​ said Dawson.

“You’ve got to move quickly to evolve your proposition and ensure you are winning in these channels.”

Guaranteeing them value for money

PMPs have become increasingly important for small independent retail outlets and for shoppers, by guaranteeing them value for money and reassurance that they are “not being ripped off” ​by unscrupulous store owners, he said.

“We continue to keep price-marked packs at the front of our thinking, particularly in this environment,”​ said Dawson at a wholesaling summit organised by the IGD grocery think tank in London last month. “Price is absolutely key from a shopper perspective.”

While recognising the inroads made by tertiary wholesale own-label brands, Dawson said shoppers still looked for “power brands”​ they recognised, such as Kellogg’s, which would also drive sales for the stores themselves.

Transforming its business strategy

Since 2006, Kellogg has been transforming its business strategy – moving away from a “big box focus” ​on the UK’s four major multiple retailers, where 80% of its business was concentrated, to one more focused on other sales channels, particularly wholesale, he said.

Sales of UK grocery in wholesale rose 0.3% in 2015 to £30bn, in spite of price deflation in retail.

IGD forecasted it would grow another 1.3% over the next five years, driven primarily by the development of new players in the foodservice market.

Its chief economist James Walton said wholesalers should grasp this new opportunity.

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