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Competitive Chess with Cheese

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There’s a savage war going on at your local deli counter. Shelf space at America’s deli counters is the newest casualty of a cutthroat retail brand battle in today’s supermarkets.

Deeply entrenched and beloved brands like Boar’s Head and Land O’Lakes are silently duking it out in a fight over who reigns supreme in the deli section. The result to the winner is likely to be increased revenue; for the shopper this is a race to the bottom, and we should anticipate less choice and increased prices.

I recently went to the grocery store and had the pleasure of observing the carnage firsthand. I was going about my usual grocery-buying business and went up to my friendly neighborhood deli server at the Star Market on Beacon Street to buy my usual pound of American cheese. I discovered to my dismay that Land O’Lakes was no longer being sold there at all. In fact, all the deli servers were wearing Boar’s Head hats and all the advertisements at the deli were for Boar’s Head products. After over twenty years of Land O’Lakes cheese loyalty, the deli’s removal of Land O’Lakes was quite a surprise.

Upon further inquiry, it became clear that my particular Brookline Star Market had ceded the entirety of the shelf space at my grocery store’s deli exclusively to Land O’Lakes’ competitor, Boar’s Head. Resigned to my fate, and unwilling to go an extra two miles to a different grocer just for cheese, I decided to try Boar’s Head American cheese. Despite my previous devotion, I was promptly converted into a Boar’s Head customer, destined to buy my usual pound of American cheese from the Boar’s Head brand going forward.

I investigated further and discovered that Boar’s Head has recently acquired all the shelf space in the delis of at least three Boston supermarkets. In addition to the Brookline Star Market, Chestnut Hill Star Market has already stopped carrying Land O’Lakes deli products and Star Market at Fenway will stop carrying Land O’Lakes deli products as of April 22, 2017, all in favor of Boar’s Head.

As a consumer, I am disappointed. The reduction in choice does not sit well. Consumers are pushed to try out the Boar’s Head branded cheese, switch to a private label, go without fresh deli cheese, or find a different supermarket from which to buy Land O’Lakes.

What if we don't change at all...

However, as a strategic management consultant, I am impressed. Boar’s Head’s ingenious strategy is a clear, decisive competitive move against Land O’Lakes. As we advise clients, Boar’s Head has identified its primary competitor, determined how it can advance its strategic goals via-a-vis that competitor, and instituted a proactive market change. In return Boar’s Head will enjoy increased market share in the brand-loyal deli space, and the resultant increased revenues. Boar’s Head’s competitive retail strategy is a perfect example of how brands aggressively and proactively battle.

There are large implications of this kind of direct competitive brand war.  Primarily, it’s the consumer who loses. While retailers are enjoying whatever perks and profits reaped from selling promotion and shelf space to brands, consumers suffer from less choice and limited options. Less choice leads to higher prices as controlling brands leverage their newfound market freedom. Private label products may embrace the transition to gain market share, but will not be large enough to direct change to benefit the consumer. The end score: controlling brands, one; private label, one-half; consumers, nil.

Staying ahead of a competitor’s strategy, including the innovative approaches competitors may take to win in the marketplace, is integral to a company’s success. And time is a driving factor: twenty years of doing the same thing is not a recipe for success, in fact it’s quite the opposite. The deli counter was ripe for disruption.

Had Land O’Lakes better controlled the distribution channel, it could have forestalled or at least diminished Boar’s Head’s competitive strike. When the distribution of your product rests in a sales channel outside of your control, it’s crucial to maintain a mutually beneficial relationship with that channel. Even beloved branded staples like Land O’Lakes American cheese aren’t immune to innovative competitive tactics.

How does your competitive strategy measure up to other companies?

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