Rob’s review:
WAITROSE now effectively owns the Duchy Brand. What does this mean to retail market across the UK?

Is this a first for a national supermarkets to buy a food business?

The answer is NO, but the implications are complicated.

All of the nationals retailers, such as, Co-op, ASDA, MORRISONS have some sort of their own production. It maybe under a different business name, but it is still owned by the parent company.

So, what’s the big deal?

Well, fantastic as they are, WAITROSE will ultimately take 100% exclusivity over this range.

Duchy Originals has championed the skills of artisan production. Now, this will (eventually) become solely sold by one multiple retailer.

The lesson is to the independents is that they need to take control of their own food brands.

They need to own the whole sale (not ‘wholesale’) from production to consumer in as many products as possible. Building differential and exclusivity is critical to long term survival.

Making their own products is one way to achieve this.

One word of warning – if you want to charge 50% more for a product, it needs to be 100% better.

If you want to charge 100% more it needs to be 200% better! And so it goes on…

Good luck to Duchy Originals, they have achieve a great deal to rekindle the spirit of artisan production, as have WAITROSE, lets hope this marriage is good for the health of the market place?

This are Rob’s opinion, please read the full article below:

Duchy Originals, the line of organic food created by Prince Charles which has struggled during the recession, has signed a licensing deal with Waitrose which will guarantee its future.

The high-end supermarket chain has agreed to pay a royalty on sales to become Duchy’s sole manufacturer and distributor. From October 1st it will become the only supermarket to stock the brand.

The deal is the first licensing agreement of its kind signed by Waitrose, which said it would invest millions in marketing and producing new products for the brand, taking its complete line to 500 items.

Prince Charles will maintain an advisory role, chairing a steering committee which will approve all future Duchy products. But the rest of its workforce will move from its current base in Twickenham to Waitrose’ headquarters in Bracknell.

Andrew Baker, chief executive of Duchy Originals, called the move “hugely important”.

The company, which sells products from biscuits to wine and donates all its profits to charity, has seen profits tumble as the organic market has suffered during the economic downturn. It has not made a charitable donation since 2007.

Mr Baker, who will remain in his role, said: “Two years ago we had no resources. We had very severely depressed margins because of rising costs.” He added: “The company has never been able to build up reserves for investing in future growth.”

Waitrose launched Waitrose Essentials recently as a cheaper own-label brand. Mark Price, managing director, said Duchy Originals would now form the “top tier” of products above that.

He also said the amount made in charitable donations would rise considerably as a result of the move.

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By Kiran Stacey