The Retail Solution… Broker Evolution!

The CPG Broker model has gone through extensive change the last 25 years, moving from small regional positions consistent with the Retailers they called upon to fewer larger brokers dominating the national scene along with regional brokers supporting the few regional retailers left as well as emerging channels that require special support.

The key driver of this change has been changing retailer needs and demands. However, what will allow for growth in the industry and strength for the visionaries is getting ahead of today’s retailer demands and creating a model that leads instead of following demand.

The evolution of the broker industry has gone through four discernable phases, and what is needed now is a fifth phase to provide leadership to suppliers and retailers leading to increased growth and profitability.


  • Suppliers needed to organize 65 or more regional brokers across the country to manage their product portfolio for the U.S.
  • Brokers provided the headquarters selling contact, local retail intelligence and shelf management expertise
  • Brokers and suppliers utilized an industry association to share ideas and develop common practices


  • Visionary brokers saw the potential for creating a national network across the U.S. Some, like ASM and Acosta got ahead of the trend while most followed retailer and supplier consolidations.
  • Scale allowed for better retailer support and a significant upgrade in their ability to attract top talent. It also enabled greater working capital, which secured new technology allowing for faster collection of retail data and faster, more reliable reporting of retail conditions to their supplier clients.
  • Scale continued to grow, capital began to recognize the potential and the broker industry as a whole has flourished despite a recession challenged industry.


  • Limited outside capital along with increased profits and cash generated by industry consolidation led to the creation of an industry dominated by ASM, Acosta and Crossmark with some regional brokers existing primarily due to their relationship with a few strong regional retailers not yet themselves swept up in retailer consolidation.
  • The core value of a broker was and to some extent still is the ownership of retailer relationships, but as smaller brokers are acquired and retailers are consolidated, buying decisions become more centralized and this has challenged the traditional regional broker model.
  • However, new opportunities have developed enabling regional brokers to own relationships with emerging and specialized retail channels. For example, regional brokers have added significant value in the development of suppliers and retailers that focus on products and channels designed to enhance health and wellness or deliver fresh, organic, natural, and prepared meals.
  • The big three have also used their capital and intellectual power to develop an enhanced portfolio of services in key areas like trade promotion evaluation and promotion modeling tools as well as merchandising and marketing programs developed to help specialized retailer implement unique product and service philosophies.

PHASE IV – The Successful Broker of Today

  • Recognition by outside investors that the oligopolistic model had significant return potential resulting in massive capital infusions and some ownership of the Big Three
  • Smart capital flowing to both high return and stability of investment—the CPG industry has always owned that positioning and these big players are the winners


The Broker industry must make a concerted effort to get ahead of supplier and retailer needs. Today manufacturers and retailers alike prefer and appreciate a more proactive as opposed to reactive service response. With this in mind, here are 5 Broker Leadership Opportunities:

  • Establish Innovation Labs for new product development and research—providing added value to retailers for the development of private label and to suppliers large and small for collaborative growth planning
  • Organize a financial services lab to to promote investment in start-up companies with innovative products and services
  • Set up a technology lab to enhance the effectiveness and usage of existing technology used to service retailers and suppliers and also to develop new tools and applications to meet new needs
  • Leverage and fully develop your data mining resources for the industry. Few industries have as much data on consumer habits and brand performance as CPG organizations —take the lead in how to gather, read and use this data to drive growth
  • Own consumer research tools and processes to get out in front of emerging trends in order to develop a series of options that will enable suppliers and retailers to take maximum advantage of the opportunities

In Conclusion…

These ideas cost money, take time and require talent and resources usually dedicated to everyday responsibilities. Such efforts must also be coordinated with retailers and suppliers to be as efficient as possible. There will be overlaps, failures and false starts as is always the case when breaking new ground. Fear of failure and the related start up challenges often times prevents “Phase V” from ever happening and yet this is and will always remain the most essential step towards profitable growth in any enterprise.

Want to Learn More and discuss the opportunities? Call me at… (914) 462-6938

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