Earlier this month (August 9) Grand Rapids, Michigan based regional big box chain Meijer sent a letter to its “Merchandising Vendor Partners” announcing the end of the more than 20-year-old Daymon Worldwide master broker agreement.
The letter provides a unique insight into the thoughts and strategy of the retailer – they are moving beyond the NBE mimicry and increased margin focus of old school private label – those are now the cost of entry – and now adding four aspirational goals to their vision.
- A focus on innovation and differentiation.
- Increased investment in self-manufacturing.
- Direct sourcing initiatives around the world.
- A passion to dramatically improve our speed to shelf.
Bravo! The addition of these has the potential to evolve their private label portfolio to a true BRAND portfolio. The Next Step is to add three more:
- We will own and manage BRANDS that become significant corporate ASSETS.
- Customers will know and love our BRANDS.
- We will develop a long-term portfolio strategy that assigns roles to our BRANDS. We will WIN!
The text of the letter was as follows:
August 9, 2012
Dear Merchandising Vendor Partners,
Over the last several years, we at Meijer have placed an increasing amount of emphasis on our Own Brand business, and made some significant investments in our Own Brand capabilities.
Our historic vision of Own Brand was twofold:
- Enhance the customer experience by offering national brand equivalent products at great Meijer values…resulting in increased customer loyalty.
- Drive the bottom line performance of the Company with significantly higher profits than we realize on national brand sales.
As we have come to understand our business better, we have expanded our vision to include:
- A focus on innovation and differentiation.
- Increased investment in self-manufacturing.
- Direct sourcing initiatives around the world.
- A passion to dramatically improve our speed to shelf.
Our efforts have led to increased investments in our team, a full scale innovation center, expanded self-manufacturing facilities, and an appetite to accelerate our Own Brand growth and performance.
As part of this evolution, Meijer and Daymon Worldwide have agreed to transition from our current master broker relationship into a more traditional brokerage model. The Meijer-Daymon relationship has been a highly successful, strategic collaboration for more than 20 years, and it is a collaboration that both sides expect will continue for a long time to come, although under a different brokerage model moving ahead. Daymon will also continue to provide Meijer with design and in-store retail services through Daymon’s subsidiary companies. We recognize that it is your business decision whether to continue utilizing Daymon’s brokerage services.
Both Daymon and Meijer are working closely together for a smooth transition to this new model, which will be effective as of December 31, 2012.
As a valued Own Brand supplier, we want to apprise you of the steps that we are taking to ensure an effective transition for our Own Brand business. As part of the transition, we will be doing our due diligence to fully understand our business together, including programs in place, and programs in development. To accomplish this, we will be conducting:
- A full desk review for each buying desk, with the buyer, the planner, the Daymon business manager, our product development team, and our sourcing team. We have built a template to capture and review all programs, advertising, packaging, new development, etc.
- Vendor meetings over the course of the next 90 days to facilitate additional conversation around the growth of our Own Brand business.
- We are instituting a “Vendor Hotline” email address for your use if necessary to contact us with questions: ownbrandquestions@meijer.com.
We will be making a significant investment in the expansion of our Own Brand Team, including adding incremental head count to support core functions such as, category management, sourcing, customer and market analytics, packaging and marketing.
With these additions we will have comprehensive resources to support and grow our Own Brand business more than at any time in our history.
Meijer almost immediately posted almost a dozen jobs in support of the new strategic path.
Own Brand Lead
Job Posting: Aug 13, 2012-Requisition ID 120000416
Associate Own Brand Lead
Job Posting: Aug 14, 2012-Requisition ID 1200004211
Own Brand – Sr. Analytics Manager
Job Posting: Aug 13, 2012-Requisition ID 1200004164
Own Brand – Category Analytics Manager – Food
Job Posting: Aug 13, 2012-Requisition ID 1200004165
Own Brand – Category Analytics Manager – Consumables
Job Posting: Aug 13, 2012-Requisition ID 1200004208
Own Brand Analytics Specialist – Frozen / Dairy / DSD
Job Posting: Aug 13, 2012-Requisition ID 1200004203
Own Brand Analytics Specialist – Perishables
Job Posting: Aug 13, 2012-Requisition ID 1200004204
Own Brand Analytics Specialist – Grocery
Job Posting: Aug 13, 2012-Requisition ID 1200004173
Sourcing Manager – Consumables
Job Posting: Aug 10, 2012-Requisition ID 1200004184
Sourcing Manager – Processed Fruit and Vegetables
Job Posting: Aug 10, 2012-Requisition ID 1200004183
Sourcing Manager – Perishables
Job Posting: Aug 10, 2012-Requisition ID 1200004182
Christopher Durham
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