A Lament for Little Food : Consolidation of Industry Giants Pushes Young Enterprises Off the Shelf

Merger mania is emerging throughout the food chain, and the repercussions are being felt even as far away as here in tranquil Nova Scotia. As Grand Metropolitan looks hungrily at Pillsbury, and Kraft is gobbled up by Philip Morris, suppliers here are beginning to wonder how the new oligopolies emerging in the food industry are going to affect the smaller players in the marketplace.

Nobody is underestimating the control the giants will have over retail shelf space. The Goliaths will demand and get more and more of the prime footage that is already in painfully short supply, while the Davids of the food world will necessarily be pushed to the less desirable positions or dropped altogether.

It is not hard to predict that the shelf space squeeze will affect new enterprises and small companies the most, and the battle will get even tougher with the consolidation of the big manufacturers. The signs of the times are getting harder to ignore, including the case of a fisherman I know who decided to market his grandmother’s recipe for pickled herring. He was one of the few to get into a chain’s stores, but his luck soon ran out. When he was unable to come up with enough money to buy shelf space for his products, the grocery chain’s head office decided to make up the difference by marking up his herring to the point at which nobody could afford to buy it.

Life can be hard indeed for small independent firms, and I have had my share of problems getting my own dairy products onto the shelves. After long months of experimentation, I finally came up with a yogurt that even yogurt haters loved. I was sure that once it was in the stores I would be able to stand back and watch hundreds of happy customers faint in ecstasy at the first taste of my product.

To my dismay, I discovered that the only individuals in the world who are completely impervious to ecstasy of any kind (especially the gourmet variety) are the head buyers of your average supermarket chain. Specimens from this category of humanity tend to be far more interested in their bottom lines than in their taste buds, and they cannot be trusted to salivate except when discussing manufacturers’ high rebates and deep discounts.

Those of us who are too small or too new to offer the buyers such tasty morsels find ourselves all too often cooling our heels in outer chambers, our sample cases bursting with mouth-watering delicacies, while salesmen from well-endowed and prestigious corporations are welcomed with open arms into the inner sanctum where all the final deals are struck.

What to do? Should the small “boutique” food manufacturers try to imitate their powerful brethren and put out rubber cheese, artificial syrups and phosphorescent cupcakes in order to cut the cost of real ingredients?

I was once given just such advice by a beetle-browed head-office buyer who told me that I could never get into his chain unless I coughed up a suitable “inside program.” When I protested that his program wouldn’t work for me, he suggested I do what all my competitors do--cut costs by lowering the quality of the product. With the money saved, he said, I could buy several feet of shelf space in the stores, and if I didn’t like that idea, I could raise the price of my yogurt and use the customers’ money to buy my way into the chain.

I could see right away that none of it made any sense. If I lowered the quality of my yogurt, I could never hope to compete against the corporations that were already luring their customers with two-for-one sales and cents-off coupons. And as for raising the price of my product, I had already learned that lesson from my friend the herring pickler. I left the buyer’s office that day feeling dejected and resentful that the excellence of my product counted for so little in the eyes of the decision-makers.

So I did what thousands of small entrepreneurs have done to force an entry into a market geared to megabucks--I started at the bottom. The health food stores and delicatessens and specialty stores were delighted to get an outstanding product that was genuinely distinguishable from the commercial varieties, and little by little the consumer demand began to build.

But getting into the chains is not necessarily the panacea for every possible woe. Being weak and vulnerable has always had its drawbacks. Small companies are likely to find that their competitors are eternally poised on the edge of their shelf space, ready to pounce on their territory the moment their backs are turned. They may also discover that store personnel often fail to put their products on the shelves, and there are often rotation problems, cooler breakdowns, delivery tie-ups, and Napoleonic dairy case boys to contend with. It is a given that receivers are always on break, tractor-trailers belonging to competitors take forever to unload and their products always end up on the eye-level shelf.

But take heart, small players. You may be the very ones to survive the pressure of the days ahead when the market becomes more and more dominated by the giants. Satisfied customers have a way of rooting out the products they love, even if they happen to be hidden on the top or the bottom shelves. Shoppers will look high and low for quality, so excellence should be the clarion call for those Davids who wish to remain in the fight.

The me-too copy-cat companies may be the ones to suffer most in the coming pinch. If you can’t be the biggest, then you had better be the best, for there simply won’t be enough shelf space for anything in between. From where we stand here in Nova Scotia, it looks as though the market may well be carved up between Kraft Foods and food crafts. I, for one, will welcome more creative artistry in the industry.