Provenance drives profit – so stock Scottish!

Scottish products

As local retailers understood long before supermarkets and discounters, Scottish consumers can be very loyal to Scottish brands and will often pay a premium to get their hands on them.


The trendy modern marketing term for it is ‘provenance’, but generations of Scottish local retailers have long known that Scottish consumers can be very, very loyal to homegrown brands and products and have long capitalised on that demand by stocking local, regional and Scottish lines in their stores.

The major multiples and discounters have since caught on to the phenomenon and have attempted to cash in by plastering Saltires across the store and allowing store managers in Scotland a little latitude when it comes to sourcing Scottish lines, but at best these tend to be token gestures. And we’ve all seen the unintended consequences of central buying: the England strips hanging disconsolately for sale in Sainsbury’s in Glasgow come World Cup time, for instance.

Local sourcing remains a real challenge for the multiples so it’s an area where local retailers can still drive significant sales and gain a real competitive advantage, particularly when it comes to sourcing at a true local level. Using the local butcher for meat products for example, or the local baker for bread, rolls and pastries.

But even when it comes to regional or national products there is still a lot to be said for not only stocking Scottish brands but making a fuss over them in-store with POS, in-store theatre and even dedicated fixtures or bays.

Edinburgh Premier retailer Linda Williams has recently created a Scottish aisle-end in her store and says it has gone down a storm with her customers: “We always knew that our shoppers like Scottish products, especially the big brands like Barr’s, Tunnock’s, Highland Spring, Tennent’s and Hamlyn’s so we decided to create a dedicated fixture and we’ve had so many positive comments, it’s been amazing.”

All it takes is a little effort and thought, and extra sales and profits are there for the taking.

Merchandising Scottish products

AG Barr offers the following merchandising advice when siting Scottish brands:

  • Retailers need to ensure that their range is tailored to local tastes, so they should talk to their customers to find out what they want, stocking the top-performing brands in each category.
  • Soft Drinks is one of the most profitable categories in your store, so ensure that your soft drinks fixture is highly visible, well presented and located in a high football area between the door and the till.
  • Effective ranging, space allocation and stock availability are the most important elements to get right.
  • Make it easy for customers to find what they want by grouping categories and brands within them together. Then identify your best performing brands in each category and stock these at eye level with adequate facings to ‘signpost’ segments.
  • Restock regularly; if a product is selling out regularly increase the number of facings. Empty shelves equate to lost sales, so we’d advise reviewing your range and space allocation often, based on your own sales data and local knowledge.

Provenance pays

“Provenance is a key reason why consumers choose to purchase a product, with people looking for a brand they can connect with and product that they trust to be high quality, good for them and tastes great,” says Carol Saunders, Head of Customer Marketing at Highland Spring Group.

The Highland Spring brand is, of course, the leading producer of natural source water in the UK, a testament to the demand for Scottish product amongst consumers, both in and out of the home.

Scotland is renowned the world over for the quality of its natural larder and Highland Spring is a good example of why that has become the case. It is bottled at source from a privately-owned 2,000 hectare catchment area in the Ochil Hills in Perthshire. No farming of any sort is permitted in the catchment site to ensure the water is as pure as it can be, with nothing but nature touching it; Highland Spring has been accredited with organic status by the Soil Association since 2001.

Saunders explains: “It has been seen that consumer interest in provenance continues to be an important selling point in Bottled Water, with the UK industry pointing to a long tradition of quality brands [Zenith Bottled Water Report, 2017]. This is why the brand’s Scottish roots play such a key role in all Highland Spring communications. This has helped it to become the number one UK-produced bottled water brand with consumers looking for a quality, pure and local product [Zenith International Bottled Water Report, 2017].”

Importantly, Saunders also points out that “many consumers also wish to support local brands in order to champion Scottish business” and that’s a message that shouldn’t be lost. The Scots are a patriotic bunch and their love of brands like Irn-Bru and Tennent’s is legendary.

The Irn-Bru effect

Adrian Troy, Marketing Director at AG Barr, agrees that provenance is key: “Provenance and product benefits are increasingly important to consumers, particularly in relation to water. People are not only looking for water brands they know and trust, they are increasingly conscious about the source of the water which reinforces the provenance message.”

Barr’s own Strathmore Scottish Spring Water brand is a good example, currently growing at 28% [IRI, Aug 2017]. Redesigned last year, the new packs across the brand’s 330ml, 750ml and 1 litre Still and Sparkling glass variants feature a contemporary design and an improved premium feel.

And while Strathmore may be flying, it’s Barr’s carbonate range that is the one that made the name famous.

Troy explains: “Scotland’s £845m [IRI, Aug 2017] Soft Drinks category continues to be one of the most profitable categories for convenience retailers, growing at 3% year on year. Two sub-categories are driving the growth – Water (+7%) and Flavoured Carbonates (+4%) – with AG Barr brands playing a key role in offering choice, quality and innovation.”

Leading the way is the one and only Irn-Bru, the number one Scottish grocery brand [Kantar, May 2016], which accounts for almost 60% of flavoured carbonates in convenience and is currently growing strongly at 6% [IRI, Aug 2017].

Troy advises retailers to cash in on the brand’s Scottish heritage by merchandising all three variants of the brand – Original, Sugar Free and Xtra – prominently to attract shoppers to the fixture as all the data suggests that shoppers will continue to look for a choice of regular, low and zero sugar products.

Irn-Bru Sugar-Free is Scotland’s leading low calorie flavoured carbonate while Irn-Bru Xtra already accounts for 10% of regular sales [IRI, Aug 2017], showing there is still a massive sales opportunity for retailers.

The company is backing the brand with a £5m brand investment throughout 2017 across a number of platforms, including national TV advertising, digital and social media.

As well as continued activation of its partnership with the Scottish Challenge Cup and The Football League, Irn-Bru is strengthening its association with grass roots football by teaming up with Sky Sports’ flagship Saturday football programme, Soccer AM.

“The marketing support will reinforce Irn-Bru’s position as the brand one in every two Scots drinks most often, with research confirming that Irn-Bru makes 89% of Scots feel proud to be Scottish [LVQ Ad Tracking Research],” says Troy.

Meanwhile, the Barr Family range is Scotland’s most popular range of flavours [IRI, Aug 2017], and offers unique flavours that deliver on quality, taste and value with a true Scottish character. The Barr brand also has an important role to play on the soft drinks fixture, currently accounting for 15% of Other Flavoured Carbonate sales and growing at 4% [IRI, Aug 2017].

Merchandising Scottish water

Within the Bottled Water category, Highland Spring offers the following key merchandising advice:

  • Position key bottled water lines (including both still and sparkling products) in the chiller.
  • Avoid single facings to help maintain availability.
  • Ensure bottled water is always visible and always available, especially at busy times such as the morning and lunchtime rush. Restocking at these times will help too.
  • If offering a meal deal, ensure still and sparkling bottled water options are included in the range of soft drinks to make the most of the opportunity with health-conscious consumers.
  • Stock large single bottles and a small range of multipacks for drink-later occasions in any ambient soft drink space.
  • Ensure recognised and trusted brands are visible to make the most of customer loyalty.

Evolving market

Scottish brands are also benefitting from the huge growth in farmers’ markets and gourmet food vans in recent years, which is convincing evidence that consumers like to know where their food comes from.

Alan Meikle, Managing Director at Hamlyns of Scotland, says: “We know that consumers like local, regional and nationally sourced products. At Hamlyns of Scotland, we have always promoted the fact that we’re the only major brand of Scottish Porridge Oats and Oatmeal that can claim to be 100% Scottish from field to mill to finished product.

“We work closely with a network of Scottish farmers, many of whom have supplied us for several generations. We believe it’s important to shout about this in our marketing, and we’ve just added a new section to our website focusing on one of our farmer suppliers, so our customers have a full understanding of where our oats come from.”

Over the winter months, Hamlyn’s is focusing its consumer advertising spend on publications with a strong Scottish flavour including The Herald, the Scots Magazine, the Historic Scotland magazine and the new Loganair inflight magazine FlightLOG, to make sure that Hamlyns immediately comes to mind when consumers are making purchasing decisions.

Merchandise wisely

Meikle highlights to local retailers that it’s critically important how they merchandise Scottish brands in-store if they wish to maximise sales and profits.

“The multiple retailers have been really clever at merchandising Scottish products over the past few years, with eye-catching displays of a wide variety of products, not just to increase sales, but also to show how their support for the Scottish economy through local suppliers,” he comments.

“While space restrictions make it difficult for smaller stores to do something on that scale, it’s definitely worth having occasional Scottish displays around key dates like Burns Night and St Andrew’s Day. For the rest of the year Scottish products can be highlighted with Scottish Saltire-branded shelf tickets. Where retailers have space, engaging suppliers like ourselves in sampling activities can really help to encourage trial and purchase of Scottish products.”

Remember however that there are regional differences even within Scotland. Hamlyns Scottish Oatmeal may be Scotland’s best-selling oatmeal by far, and Hamlyns Scottish Porridge Oats may be one of the fastest growing brands in the competitive hot cereals market, but regional differences make choosing the right range for your store an important task.

Meikle explains: “Oatmeal sales are particularly strong north of Perth, where a high number of consumers use oatmeal to make porridge, whereas in central and southern Scotland porridge oats are much more popular for porridge making, so space should be planned accordingly.”

The Woodlands Local experience

At our own Woodlands Local store where we stock an extensive range of sausages, steak pies, mince rounds, haggis, black pudding and macaroni cheese from the local butcher, Patrick’s, we ran a trial once to offer our customers cheaper big brand alternatives. The logic was clearly that customers would accept a perceived drop in quality for savings as high as 50% on some lines. The result? The trial only lasted a couple of months because our shoppers showed themselves more than happy to pay an extra £1 for some Patrick’s sausages. That taught us a valuable lesson about the difference between value and price.

Tourist dollars and yen

It’s also worth bearing in mind that it’s not just Scots who have an affinity with Scottish brands. Highland Spring’s Carol Saunders says: “There is also an opportunity with consumers visiting Scotland. When coming to Scotland, visitors like to see local brands, so for outlets that attract high numbers of tourists, stocking local brands is key. Research from VisitScotland’s Visitor Survey (2015) saw that visitors to Scotland, particularly international ones, showed a strong desire to find out about the provenance of food and drink products; local food and drink is a fundamental element of the travel experience.”

To make the most of the Scottish brand opportunity, Saunders advises retailers to ensure that local products are always given prominent positioning to highlight this offering to customers, and some retailers may choose to have a specific area dedicated to local produce.

However, with a convenience product like water, it is important that these local products are also stocked within the soft drinks chiller to ensure customers can quickly and easily find what they are looking for.

Keeping the range tight is important too, particularly in categories like water where there is a high proliferation of brands, including those from secondary and tertiary players. This has sometimes seen retailers choose these over the leading must-stock brands which can result in category devaluation. Retailers are recommended to stock top-selling brands which consumers know and trust.