The existential question facing medium-sized brands
The growing concentration of retailers has changed the dynamics between multiples and food suppliers. In a market where private label continues to grow alongside A-brands, medium-sized producers are increasingly being squeezed. Should they survive as medium-sized brands or focus on private label? Are they ultimately doomed, or is there still a future for them?
Private label products have gained substantial ground across all markets. This is not a new phenomenon, as own brands have been a core element of retail strategies for many years. However, the internationalisation of retail — with fascias operating in multiple countries and acquisitions leading to higher levels of concentration — has created larger volumes, higher service requirements, and a stronger negotiating position for retailers. This pressure can marginalise smaller producers, who often struggle to achieve the economies of scale needed to compete effectively. As retailers continue to consolidate their supply chains, the need for reliable, cost-effective suppliers becomes ever more critical. To remain relevant, medium-sized producers must build scale. Developing international supply partnerships therefore becomes essential, with mergers and acquisitions often the natural outcome.
For every SKU, the question is straightforward: does this product deserve its shelf space? Medium-sized brands frequently face the classic “stuck in the middle” problem — neither cheap enough to compete with private label nor distinctive enough to challenge A-brands. They may be overly reliant on retail distribution, with limited direct consumer pull, or lack the resources to outspend A-brands on marketing and trade terms. As a result, medium-sized brands can only survive if they clearly add value to the category. They must differentiate and actively contribute to category growth.
Our advice is clear: become a specialist brand. Claim and own a niche (for example, gluten-free products or premium crisps) and ensure the brand is genuinely meaningful. Bring shopper insights, propose exclusive launches, and even consider producing selected private label products without undermining the core brand. In doing so, the brand contributes to storytelling and category development for the retailer, helping to trade shoppers up from private label. The focus shifts from defensively protecting shelf space to actively building the category. The expertise a brand brings strengthens the trade relationship through credibility. Becoming a partner rather than simply a supplier offers longer-term protection.
Ultimately, success depends on relevance to the multiples. This is what challenger brands demonstrate every day: the ability to be distinctive and innovative. Their success is often recognised by leading brands, which acquire them before they even reach medium-sized scale. Perhaps some medium-sized brands should reflect on those earlier days, when they themselves were the exciting challengers — and return to those roots.
What Is The Alternative For Medium-Sized Brands?
What is the alternative? Delisting by multiples and the resulting loss of distribution, reducing the market position to a local one, acquisition by an A-brand, or gradual disappearance driven by margin erosion. In a consolidating market, a clear strategic choice is essential to protect long-term market position.
Philip Horemans
Managing Director, Green Seed Belgium
To get in touch with our Belgium team