The Fight for Shelf Space : Regional Meat Producers Facing Retail Labels

Abstract: Sweden has experienced a surge in retail labels within the food industry the last decade and this increase has meant great changes within the meat industry. Producer brands have been faced with issues of strategy formulation and changing power structures that has affected small-and medium sized companies more than others. The purpose of this thesis is to, from a small- and medium sized producer perspective; investigate the impact the increase in retail label products have on selected producer brand producing companies in the Swedish meat industry and if they constitute a major threat to the producer brands. Furthermore, the thesis addresses issues such as the present structure of the industry and future views of the meat industry. Method A qualitative research method was used in order to investigate the impact of the increase in retail labels. Interviews were conducted with three cured meat producers operating in the region of Småland. Furthermore, a market leading producer and representatives from the market leading retailer was also included in the study to gain a deeper understanding of market conditions. Results The results of the interviews shows an industry that is mature and experiencing slow and sometimes even declining growth where companies are pretty much set in their ways. The fiercest competition, over shelf space, is between producers with similar strategies instead of between producers and retailers. The increase in retail labels has meant a drastically reduced shelf space for producers to compete over. However, the three producers have taken steps in order to secure that the threat from retail labels is kept at a minimum. Nevertheless, new retail labels that will be closer to producer brands in terms of quality and price are coming. These are seen as a greater threat than the existing labels.