Consolidation leads to change, opportunity - The Packer

Consolidation leads to change, opportunity

12/19/2013 05:08:00 PM
Don Goodwin

Private equity is showing more interest than ever in fresh produce companies. Much like the perishable forward retailers, new innovative grower-shippers will emerge.

I envision seeing more growth in unique products, stronger branding and marketing programs and more emphasis on effective supply chain efficiencies. Seed breeders are also consolidating at a very rapid pace.

They clearly understand that having a strong base of unique varieties is a winning strategy with the big breeders willing to acquire anyone with strong genetics.

Parallel to the consolidation trend is a sharp reduction in the real world experience of many buyers. Large companies are far more willing to place bright, energetic buyers with no produce experience in key roles to help drive their produce categories.

This is a challenge for sellers but also an opportunity. Sellers must adapt their strategies to gain the confidence of these buyers. Now, more than ever, these retailers need deeply knowledgeable suppliers to help them move their categories forward.

You should be teaching as much as you are selling when interacting with these buyers. Using data is important. Demonstrating a keen understanding of the consumer is critical.

Retail and foodservice consolidation will likely continue as will the delayed but real impact on all areas of the supply chain. Suppliers will be challenged more than ever to provide meaningful value to their customers.

Some companies will look for “strategic alternatives” by seeking to be acquired while others will buy up their competitors.

For those who choose to go it alone, it is critically important that they adapt to the changing marketplace to thrive.

Don Goodwin is the owner of Golden Sun Marketing. Since 2004, Golden Sun Marketing has provided strategy and marketing services to the fresh produce supply chain from seed to retail. He is also an adviser to Verdant Partners, which specializes in mergers and acquisitions in all sectors of agriculture.

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