Harrogate felt quieter this year, and the conversations on the floor pointed to why: a shift from Chinese OEM to ODM is letting factories design and launch their own products, squeezing smaller brands out of categories they used to own. The BPIA award going to an already well-established brand raised a harder question about how much genuine innovation the sector still has room for. Reasons for optimism were there too, in the people still building and the products still worth noticing.
A quieter floor
Before the show, we set out what we'd be watching for this year. Here's what we actuallyfound.
Having not attended Harrogate Nursery Fair for a few years, the change was the first thingthat struck us. The show felt noticeably quieter than in previous visits.
The economics help explain it. The cost of a stand and the time away from the businessare both significant, so exhibitors are thinking harder before committing to three daysaway from their desks. It is also simply easier to stay in touch with buyers, retailers anddistributors in other ways and at other times of year, which takes some of the urgency outof being there in person. The show still matters, but the incentive to attend is not quitewhat it was.
The real winners
Most of the conversations we had kept returning to China. One comment summed it upwell: "they are the real winners of the show."
Products have been manufactured in China for decades, but what has changed is thescale of ODM, original design manufacture. Factories are no longer just building to abrand's specification, they are designing and launching their own products directly. Thatis a different proposition to the OEM (original equipment manufacture) relationship mostUK brands grew up with, and it is squeezing smaller firms out of categories where afactory can now out-design, out-supply and out-price them.
The pattern is familiar and getting harder to avoid. An innovative product sells well for acouple of years, gets noticed, and is eventually replicated by a factory in the Far East withthe supply chain, scale and manufacturing cost base to undercut the original. This hasbeen visible for a while in categories like baby food preparation and expressing, and it is agenuinely difficult position for a smaller firm to compete from. It makes the case forstrong product design and a defensible point of difference more pressing, not less.
Who's actually buying
Grandparents have typically bought the big-ticket items for their grandchildren at shows,pushchairs and cots in particular, and there has been a noticeable shift in who is on theother side of the till. By all accounts that trend is strengthening, as young families'finances and the cost of living limit what new parents can spend themselves.
A question raised by the BPIA award
The BPIA award for innovative products went this year to Hegen, a baby bottle brandselling worldwide since 2014. In previous years the award has tended to go to newerproducts, including ones D2M clients have had a hand in developing.
It made us pause. Is the award simply going to the strongest entrant in a thin field, or issomething structural making it harder for genuinely new products to compete forrecognition at all? Either reading points to the same underlying pressure describedabove: economic conditions and the ODM shift are making it harder for new productdevelopment to get off the ground in this sector, which is exactly the kind of challengethat should sharpen a sector's focus on innovation, not dampen it.
Still worth being on the floor
None of this took the enjoyment out of being there. Scandinavian design felt like the starof the show once again, and Done By Deer in particular stood out, with fun, cute productsthat are clearly loved by children and parents alike!
It was also genuinely good to catch up with old and potential clients, distributors and theentrepreneurial people still building exciting businesses and brands, despite everythingabove. We look forward to working with several existing clients in this sector over thecoming year and beyond, and to continuing to champion innovation in a vital sector.
