Fresh produce suppliers will go out of business if they do not gear up for category management, Professor David Hughes of Imperial College, London and a director of recruitment firm Merston Peters has warned. Specialist training or recruitment from outside the industry are going to be vital for survival.

Professor Hughes said that technical excellence, delivery of good customer service and competitiveness on price are no longer enough. 'Retailers increasingly want to deal with suppliers who have a strategic view of the fresh food business and who are innovative, not just in terms of new product development, but in demand chain management, finance and marketing,' he said.

Exclusivity and ideas to drive the category forward will be top of retailers' wish lists. This could mean retailers becoming sole suppliers of certain lines and even varieties that are particularly appropriate to them. For example, stores with different customer profiles such as Asda and Waitrose could have exclusive products from the same supplier without either feeling they are competing directly.

This innovation is the real challenge that is likely to set suppliers apart. 'We need to be realistic,' said Hughes. 'The necessary skills are not ones that the fresh produce industry has falling from the trees and we will have to train up existing people or deliberately poach people from fast-moving-consumer-goods areas who can think creatively and have experience of new-world marketing.' Category management is not just being pressured into buy-one-get-one-free offers, but thinking about adding value to the offer so that suppliers as well as retailers benefit from added value, this could include how-to-use information or in-store tastings.

'Twenty-first century thinking is about understanding the fresh-food shopper and generating consumer enthusiasm to buy more products of higher value,' said Prof Hughes. 'Great retailers need great suppliers and that is where the real opportunities now lie.'

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