So what does the future hold…? Sorting the facts from fiction.

As a regular visitor to the PPMA packaging exhibition, I (Keran Turakhia, Hive's New Markets Director) was pleasantly surprised to hear that this year’s keynote speaker was Justin King CBE, CEO of Sainsbury’s plc from 2001 – 2014.

Here at Hive, we have long-held the firm belief that the only way for brands to engage consumers without discounting is via behavioural data and insight. In fact, one of our key reasons for visiting the PPMA is to keep up-to-date with coding and manufacturing technology to help brands collect behavioural data via unique codes on their packs.

So I was intrigued to hear what the future holds from a retailer’s perspective and was delighted when right from the outset, Justin King started talking our language.

"Knowledge from aggregated sources like the press will not give brand and their suppliers the full story… Data and getting access to insight of your end customers and what is really going on will be the key to make the right decisions in the future"

He highlighted five key opportunities for brands and their suppliers in the FMCG market:

  1. Food: 12-13% of the grocery budget will stay and grow... simple macro economics.
  2. Differentiation: Retailers will only survive if they have a "distinct" clear brand proposition.
  3. Values: More important than they have ever been. Business needs to be value driven.
  4. Integrated supply chains and traceability: It is becoming increasingly essential for consumers to trust the product.
  5. Consumer data is key: Sainsbury's Nectar and Tesco's Clubcard has enabled them to stay close to their end customer. All suppliers need to find ways to help brands to access behavioural data insight and really "know their customers".

He explained further:

"Helping brands to collect behavioural data and insight on their consumers can only help them stay close to their consumers.

For example, Sainsbury’s knew that many of their shoppers were older consumers who needed friendly smaller packs of bananas that are fairtrade… and in packs that are easy to open.

Getting access to what really is going on with your customers will be the key to make the right decisions in the future..."

Justin then went on to talk about FIVE MYTHS of the retail landscape.

  1. Death of the supermarket: The grocery market is worth £175 billion. £125 billion of which is spent on our weekly shop - only £50bn in convenience stores. Convenience the most important trend in retail and Justin predicts more growth, but the core retail business is here to stay.

  2. Too much space: This argument is only relevant to ASDA and Tesco and has very little correlation to rest of retail landscape.

  3. Discounters will grow to 25-30% of the market: Thirty years ago, Kwiksave had a 11% share of the market. Now discounters in total still only account for 8% of the market, so discounters have a long way to go. Justin simply does not believe that discounters can get to 25% of the retail market.

    Another key factor in this myth is profit. The discounter cost base is considerably higher in UK than in Germany, hence they have less to play with. Although Aldi announced the fastest growth, their profit has gone down.

    Finally, the UK is crowded. Discounters have too few outlets to dent core landscape. It’s simply a different model.

  4. It’s all about price: Sainsbury’s are constantly proving that this is a complete myth. It's not all about price. Justin King went so far to describe this as "the biggest lie that has been promulgated in the industry".

    The proof that dispels this myth...? Premium price retailers, M&S and Waitrose are growing whilst most of Sainsbury's growth is coming from their Taste The Difference products.

  5. Online shopping will take over the landscape: Online retailing in the UK most advanced in the world with £500 million of shareholder equity being pumped into this market. Ocado are making money at it and currently occupy currently 4-5% of the market.

    Despite this, Justin King stands by his statement that “Online shopping is not going to have dramatic impact on core retail landscape.” He believes that instead if fearing newer sectors like online, traditional retailers should work on improving their business.

In conclusion:

Firstly, my thanks to the PPMA for inviting Justin King along and delivering an entirely insightful session for anyone working in this industry.

So what is the key message I will take away? There’s room for everyone but to survive... and thrive... brands and retailers will need to rely more than ever before on behavioural data and insight.

Know your consumer and help them get to know you.

To find out how Hive can help your brand with shoppers' data, contact 01509 882910 or email