Producer wants short route to consumer

ABN AMRO's consumer survey shows that three in ten consumers are willing to order food directly from producers. No less than half of the consumers consider doing so if these foods are cheaper or if they are special products that are not available in the supermarket. Producers can use their own webshops to gather better information about consumers' buying behaviour, which they can only get to a limited extent through supermarkets. 

Consumers more often online

According to ABN AMRO, online direct-to-consumer sales amounted to 'only' EUR 80 million in 2018. This is a fraction of the 1.48 billion euros we spend online on food, according to FSIN. This channel does pave the way for direct interaction with the consumer. Information on buying behaviour provides insights that allow suppliers to improve their products, test new products and encourage repeat purchases. It also allows the supplier to decide for himself which products to sell and at what price. Larger producers want to use savings programmes to attract customers and learn from them. Smaller producers have limited space in the supermarket shelves, which makes D2C very interesting for them. However, it appears that only 5 percent of consumers want to receive products via a subscription, something that gives producers a more stable and predictable turnover. Consumers also don't want to see different suppliers at the door. 

Supermarkets seek strategic cooperation with producers

ABN AMRO expects producers to explore D2C more and more. Nevertheless, the (international) supermarket still appears to be the most important sales channel. Setting up a successful direct-to-consumer model is a major challenge. In particular, logistics costs are a major cost item. This makes it difficult for producers to fulfil the consumer's wishes: Delivering cheaper than supermarkets. Change can come from producers joining forces and setting up a successful platform that bundles producers' ranges and connects them to the consumer. The first initiatives to this end have a very variable success rate. An alternative is to invest in a long-term strategic partnership with supermarkets. ABN AMRO expects more and more closed chains to emerge in which supermarkets, producers and farmers work more closely together and develop distinctive products.

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