The One brand, the European Business Award winning not-for-profit enterprise behind such products as ONE Water and ONE Eggs, is set to diversify away from high street retail as supermarkets come under increasing economic pressure.
Speaking at the RSM annual conference, Duncan Goose, founder and Managing Director of ONE, said that large retailers are cutting the number of brands being displayed on shelves by between 20 and 30 per cent, making it increasingly difficult for brands like One to reach consumers. Duncan Goose was speaking to over 280 delegates from over 70 countries across the RSM network, the sixth largest audit, tax and advisory network globally, at the Landmark hotel in London.
With the economy continuing to bite, many supermarkets are reviewing their categories with a view to reducing branded products in favour of own-label.
According to Goose, who was one of several successful business leaders revealing their insights at the global RSM annual conference, small businesses in the retail sector need to diversify in order to prosper and be thoroughly prepared when dealing with large retailers. ONE, for example, is looking to replicate the success of its brand across other sectors, including utilities and financial services.
Goose said: “The retail sector is hugely challenging at the moment for brands – when you see multi-million pound players like Covent Garden Soup Company and Parazone being dropped from categories by supermarkets, you know change is afoot. Supermarkets want to reduce the number of brands they stock to cut costs, and they are taking advantage of how competitive the marketplace is by ramping up support requirements. For many brands, it makes it very difficult to break even.”
Goose also cautioned against small businesses expanding overseas too quickly, suggesting that they need to get their home market right first before they embark on more risky overseas expansion.
He added: “Funding remains a critical issue with the reality today being that many start-ups are self-funded, which for many directors means re-mortgaging the family home. Whilst there’s talk of capital being available, it’s still highly selective in its application’.
Jean Stephens, CEO of RSM, added: “ONE is a great example of how to build a genuinely global business with cross-border scalability. Landing a large supply contract is often seen as a major coup for an entrepreneurial business, but it can be a mixed blessing. It’s often the case that suppliers agree to demands made by clients or distributors that they later come to regret. Managing risk is one of the key challenges all entrepreneurial businesses must face.”
Founded in 2004, The One Brand has given away over £7.6 million to date, changing the lives of over two million people in Sub-Saharan Africa. Duncan Goose has won the RSM International Entrepreneur of the Year Award (2009) and the Credit Suisse Entrepreneur of the Year Award (2008), among many other accolades.