Our aim is to not be like our competitors. After all,
differentiation is an important competitive advantage
and at Olfactive, we pride ourselves on taking a different
approach to the OTC and nutritional private label manufacturing
business.
It sounds fairly simple and is a natural motivation,
but consider the degree to which the nutraceutical/OTC
private label, contract and control brand manufacturing
business has been commoditized. This is an extremely competitive
environment. Private label has become a significant volume
and profit driver for retailers and has shaped the dynamic
of the retailer/manufacturer relationship.
Due to the success of private label, the retailer has
naturally evolved into a more dominant position in relation
to the manufacturer. This naturally encourages the retailer
to press for a more competitive advantage, oftentimes
limiting the focus to price on the false belief that price
is the primary competitive advantage. We believe this
to be short sighted. The dominance in pricing pressures
marginalizes the value of the manufacturer to a very narrow
one-dimensional "price only" contributor. There is significant
vulnerability in being an overly dependent, one-dimensional
trading partner and this type of trading relationship
is limiting, ineffectual, and unproductive.
We believe that being a price only partner suppresses
creativity in developing any kind of added value. We believe
retailers have pushed manufacturers to the thin edge of
the wedge and that this has finally created a tipping
point. We believe this to be yesterday's approach.
Today's marketplace is a challenging environment to capture
meaningful market space. The evolution of the marketplace
is now a hyper-intense, competitive landscape with multiple
partners all fighting vigorously to get a piece of the
same pie. As in any evolution, new adaptive solutions
begin to form. To be successful in today's landscape,
companies will have to become better market opportunists.
Our view to be successful is to offer our trading partners
superior private label solutions. Our position is not
be a generalist manufacturer like our competitors. Our
goal is to take leadership in certain key product classes.
For example, we are currently Canada's largest producer
in the psyllium fibre product class. Our research shows
that the market trajectory in the next 15 years for the
consumption of this product class will be very strong.
This will be a product class growth area and we believe
retailers are not fully exploiting the market space potential.
Retailers should embrace the idea that we are mutually
invested in consumer trust - the true currency in the
healthcare industry. We believe strongly that the manufacturer
can be a larger opportunity contributor in advancing retailers
and health companies with their private label, contract
and control brands. To be successful in the future is
to fully leverage our trading partners competencies, not
marginalize them. This will always produce more superior,
consumer relevant healthcare solutions.
