By / Koen de Jong, Managing Direct or at Internati onal Private La bel Consult (IPLC)

I once met with a manufacturer who shared with me how pleased he was to have successfully renegotiated his contract of supply at a major retailer. The product in question was private label pasta sauce. Unfortunately, to respond to the price target as set by his client he had slightly modified the recipe of the product to make it cheaper. As this was done in all openness and in collaboration with the retailer there were no hidden agendas.

I was reminded of this encounter as I recently visited a private label trade show where I met with a Sales Manager of an Italian pasta sauce manufacturer. The man was full of passion about his products produced in Calabria, the south of Italy. He proudly elaborated on how the geographic location and the close connection between the production plant and local farmers give to this family run business the opportunity to carefully select sun ripened vegetables, harvested at the peak of flavor. Using the most natural and fresh ingredients are the first step towards tasty recipes rich in flavor and nutritional properties he explained.

Raw materials processed in small batches result in products according to Italian tradition, without using preservatives and colorings. It will not surprise you that most of his products ended up in the market as premium private label products all over the world at prices superior to the local national brand in most of the cases.

Being a food lover myself (in fact I would never buy pasta sauce, I rather make it myself), I really enjoyed talking with this man, fueled by passion about his products. I shared with him the anecdote as described above and asked how he would respond if this would be the only option to keep a private label contract. His answer will not surprise you: he would never do such a thing.

As he sensed my fascination he went on by explaining that he was always very open about this topic with his retail clients up front. If vegetables of the required quality would not be available, his company just would not produce. As a result there could be limited availability to supply. However, we went on, his clients understood and accepted. One retailer in the United Kingdom even educates its shoppers almost proudly with small panels on-shelf stating ’unfortunately we are temporarily out of stock as our supplier has limited availability of quality ingredients’.

Those readers who read my columns on a regular base will understand why I believe this is the way forward for private label.