Known as the most innovative industry for much of the commercial world from the 1950’s, consumer goods have got caught napping.
Retailers are cutting their lunch through some classic backwards vertical integration – that is, making the products their suppliers make.
So my question is this, why aren’t the global fast moving consumer goods companies taking on the retailers at their own game? What they should do is simple. Develop a consortium of supermarket suppliers and buy a supermarket chain. The missing link in their marketing mix – distribution control. They need to get back some control at the retail level or the long term picture is one of reduced shelf space, and more retailer erosion of their business. Consumer goods companies need to compete with their retailers in the same way the retailers compete with them.