How new products make it onto supermarket or drugstore shelves

From the idea to the shelf

“It’s significantly easier than it was ten years ago. The market has changed massively,” he says. You used to be like Start-up desperate Handelbut there is now a lot of interest in it. Consumers have become more open to new products – due to TV formats such as “2 minutes 2 million” or social media. Currently, new products are having a harder time scoring points. “Multiple crises lead to consumers becoming extremely price-fixated.” Products from start-ups or young developers would usually not be in the entry-level price segment. “It’s more on-top spending and not the classic way to cover needs,” says Kuntke.

Where do you have the best chance of getting a place? “If you look for product ranges where there aren’t that many and, in the best case scenario, you have found a solution to a problem that customers didn’t even know they had.” The Austrian confectionery producer Neoh would be a “nice example,” says Kuntke. He developed sugar-free sweets that are said to have no effect on blood sugar levels. Today Neoh covers large areas in the dry and also in the very limited refrigerated and frozen shelves. Few succeed.

“There are many people who have a funny idea and then look: where is the easiest way to do it?” In the food sector, producers would be most willing. “Everything is bottled,” reports Kuntke. It is not uncommon for him to be presented with the same product “five times a week, just in different packaging.” Whether it is a “good take-away product” is also crucial for its placement on the shelf. “If a new product needs a lot of explanation, stationary retail is not the right place,” says the expert. Even the best ideas usually still need to be refined. “Start-ups are good at their product, but they are not professionals in retail. Things often fail because of the packaging. “Two weeks ago I had a start-up with me and the packaging was more expensive than the contents,” says Kuntke.

Once a product is finished, all legal requirements are met and certificates are available, things can happen quickly. “Theoretically we are able to have it on the market in four weeks.” But for how long?

Getting started in Austria or Germany?

Rewe usually gives a new product six months to establish itself. Afterwards you have a good feeling as to whether a product works or not. There is no general number of units that a producer must deliver in order to be sold in brick-and-mortar stores. For cans for food retailers, the minimum production quantity is typically 40,000 to 60,000 pieces. But there are also farms that test their products in just two stores. After all, producers have to bear high costs: “They have to manage the production of primary goods themselves, no bank can finance that.”

In Austria there is at least one venture capital fund that supports this phase. “In Germany it’s even more dramatic.” In general, Kuntke would recommend start-ups to try their luck in Austria first instead of with its big neighbor.

“The difficulty is explained by the distribution model.” Austrian trade would be structured very centrally. This means: There is a headquarters and a few independent merchants. In Germany it is the other way around: less than half would be centrally controlled. A large field sales force is needed “to cover the entire area,” says Kuntke. “That’s why many start-ups that want to enter German retail without knowledge fail.” And there is another advantage to starting in Austria: the Austrians only trust the Germans to a limited extent when it comes to product experience. But the German really appreciates it when the Austrian finds a product to be good.