Processors are increasingly using excess stock management firms as an integral part of their sales strategy in a cash-conscious consumer market, according to specialist distributor, Rowan International.
Alan Saywell, chief executive at the company, based in Basildon, Essex, said it achieved a 21% rise in sales to £40.6M in 2008, compared to two years ago.
Saywell added that this value growth was all achieved through discounted sales, which would have equated to up to three times the figure given at standard prices.
Much of the growth had come from branded suppliers looking to boost sales volumes and win new customers by selling food and drink to independent discounters. The sector consists of thousands of small to medium-sized stores throughout Europe.
Saywell said branded processors with a surfeit of stock sometimes avoided high profile discounters, such as Aldi, Lidl or Netto, or big promotions because they could harm their brand image. Some firms even targeted this market with tailor-made products.
Some excess stock management business came from firms entering administration, looking to offload surplus products, while some came from processors nervous about underestimating orders in the current climate, said Saywell. “No one wants to run out, because they don’t want to miss out on a potential sale and retailers tend to penalise the manufacturer if it runs out of stock.”
For others selling surplus stock was a convenient way to boost year-end figures, he said.