Retailers Morphing into CPG Players?

I've been describing for some time the danger to 'old school' CPG manufacturers of the ravenous retailer appetite for private label growth. In fact, for some grocery categories it's getting harder and harder for shoppers to find anything new and interesting - unless it's private label.

Ouch, that must hurt when the subject comes up in executive meetings at national brands and big name CPG companies.

And now we see retailers rubbing salt in the wounds, or maybe showing mercy by driving a stake through the CPG players' hearts. Strategy advisors to these retailers have encouraged them to take the last step and actually become "integrated CPG manufacturer-retailer" powerhouses.

Translation: forget independent manufacturers and brand developers - we can do it all ourselves!

That's certainly very big news, and only the tip of the iceberg froim what I'm hearing.

And check out this striking news from a recent New York Times article by Rob Walker:

..."Safeway has initiated the Better Living Brands Alliance, with the highly
unusual goal of selling these two store-brand lines in places other than the chain that created them — school cafeterias, foreign markets and, ultimately, other U.S. grocers. In the judgment of the trade publication Refrigerated and Frozen Foods Retailer, which recently named Safeway as its retailer of the year, the experiment is “breaking the mold on what we all thought we knew about private label.”

These strategic moves are bound to restructure consumer markets in ways we have not seen before. And it won't be confined to just the grocery sector. Keep your eyes out for similar developments in other markets- especially Home Centers and Consumer Electronics.