Why is the relationship between manufacturers and retail chains weakening?
- May 11
- 6 min read
There's a conversation that's repeated in the hallways of almost every consumer goods event in Latin America. The sales director of a manufacturer comments, almost in a whisper, that the relationship with their key accounts isn't what it used to be. That negotiations are more difficult, that the chain's buyer changed six months ago and they have to start all over again, that the Joint Business Plan they signed in January is now gathering dust. That the strategic discussions they used to have with the category director have turned into negotiations over terms with the purchasing department.
On the other side of the table, the chain's commercial director has a different version: that manufacturers arrive with generic presentations that do not understand their format or their shopper, that they promise execution and do not deliver, and that when the KAM changes, the account starts from scratch also from the manufacturer's side.
Two versions of the same problem. And in between, a business relationship that has become increasingly fluid, transactional, and fragile. The premise that leads us to write this article is that this deterioration does not appear to be an accident, but rather a symptom of a much deeper sociological, psychological, and economic transformation that has permeated absolutely every layer of human interaction.
The Root of the Deterioration of the Relationship Between Manufacturers and Retail Chains: The Bauman Effect
To understand why the commercial relationship between manufacturers and retail chains has become so fragile and transactional in many cases, we must turn to the acclaimed sociologist Zygmunt Bauman and his concept of Liquid Modernity . Bauman posited that society has transitioned from a "solid" phase—where institutions, jobs, marriages, and values were designed to endure and provide stable refuges—to a "liquid" phase, characterized by volatility and immediacy. In this liquid environment, uncertainty is the norm, and nothing maintains a stable form.
The "leadership turnover" that plagues the Latin American corporate scene is exactly the corporate reflection of what Bauman calls the atomization of society : the destruction of the common ground that pushes individuals to seek strictly individualistic progress and survival, knowing that they can be replaced at any time.
This market logic has infected the most private sphere. Psychological studies indicate that extreme individualism and the avoidance of commitment have created a Liquid Love , where romantic and family relationships are governed by the laws of consumption: they are used, squeezed dry, and discarded when they cease to generate immediate satisfaction without requiring effort.
If contemporary human beings are losing the ability to maintain long-term relationships in their own homes, it is natural that the labor and commercial fabric is crumbling.
According to Gallup, disengagement and active turnover cost the global economy approximately $8.8 trillion in lost productivity. Employees know that the company owes them no loyalty, and vice versa; their commitment lasts only as long as it suits them to jump to the next position—the 18 to 30 months that characterize today's careers.
AI and the dehumanization of treatment
In this already fragile scenario, Artificial Intelligence (AI) has entered as an ambiguous force with the potential to redefine —or further dehumanize— the commercial relationship.
The Promise of Efficiency: AI offers undeniable advantages. It can predict demand with unprecedented accuracy, automate complex orders, optimize assortments, and manage dynamic pricing. This, in theory, should free Key Account Managers and Buyers from operational tasks so they can focus on strategy.
The Dehumanizing Risk: The real danger arises when AI becomes a new "data wall" that shields negotiators from empathy. Negotiations based purely on algorithms risk becoming soulless. AI can predict which promotional tactics will maximize profit margins, but it cannot measure the long-term cost of eroding trust. Phrases like "Sorry, the algorithm says no" can close doors that human interaction used to open. The risk is that executives will become mere "executors of AI outputs," eroding the criticality of human judgment and empathy. Companies that blindly rely on algorithms to manage complex interactions will be sowing the seeds of their own human obsolescence.
Is loyalty gone? Or has loyalty changed form?
Loyalty in business relationships was never sentimental. There was mutual interest. Two parties that needed each other to achieve goals they couldn't achieve alone.
Even today, when that interdependence exists, loyalty emerges naturally because the exit costs are high for both parties.
What has changed is that this interdependence has weakened in many markets. Retail chains have more supplier options. Manufacturers have more sales channels. Sell-out can be generated in multiple ways that didn't exist before, such as e-commerce, dark stores, and a strengthened traditional channel. The mutual dependence that was once structural has become optional.
In that context, loyalty didn't disappear. It became conditional. And what sustains it is no longer a shared history or a personal relationship, but the value that each party generates for the other in the present.
The problem of private labeling as a symptom
One statistic perfectly illustrates the shift that has occurred in the manufacturer-retailer relationship. Private label brands in discount stores have grown by two percentage points in the last five years, averaging 25.9% across the region. In Colombia and Ecuador, private label brands have become dominant in all categories within discount chains. This shift increases retailers' bargaining power with suppliers and improves profit margins.
This isn't just a market trend. It's a sign of where retailers have focused their strategic energy in recent years. Building their own brand means building independence from the manufacturer. It means developing an asset that doesn't depend on a relationship with any specific supplier.
For the manufacturer, that should be a red flag. The chain that has been investing in its own brand for five years doesn't need the same strategic relationship with manufacturers as the chain that relies exclusively on supplier brands to build its value proposition. The bargaining power has changed—and with it, the nature of the relationship.
Recommendations: Institutionalizing Trust in a Liquid World
In thirty years working with manufacturers and retailers in Latin America, we've seen relationships that have withstood executive changes, economic crises, and margin pressures. And they all have something in common that has nothing to do with the personalities of the key players or how long they've been working together. Some recommendations that emerge from this analysis:
The first step is to formalize the relationship before the key executive leaves. This means documenting the agreements, commitments, outcomes, and shared strategy in a way that will withstand any personnel changes. A well-constructed Joint Business Plan (JBP) isn't a document presented once a year—it's the operational contract for the relationship.
The second point is to elevate the level of the interlocutor in the supply chain. Many relationships that should be strategic still occur at the buyer and key account manager level when they should involve the category director, the manufacturer's sales director, the finance director, and even the CEO in some cases. The turnover problem is amplified when the relationship lacks sufficient organizational height to withstand the change of a mid-level executive.
The third is measuring the right things. The manufacturer-retailer relationship is measured almost exclusively in sell-in—how much the manufacturer sold to the retailer. That doesn't capture the value of the relationship. The metric that matters is sell-out: how much the retailer sold to the consumer. When both sides sit down to review sell-out together, the conversation shifts from who's beating the other to how they're growing the category together.
Fourth, the relational process must be institutionalized. In a "liquid" society where people no longer have the incentives to sustain loyalty organically, trust must be encased in the system itself . If the world pushes people to flow and rotate, business organizations must build "solid containers" (processes, shared metrics) that can withstand the inevitable change of individuals.
The 2026 Challenge
Organizational philosophies must shift from individualism to harmonious collaboration with the ecosystem. That is precisely what is at stake in the manufacturer-retailer relationship in Latin America today.
The 2026 market demands collaboration at a time when organizational structures, career models, and incentive systems are pushing in the opposite direction.
Fluid relationships are comfortable when the market grows for everyone. When the market shifts for one of the parties, the fluidity of the relationship becomes vulnerability. The challenge lies in optimizing processes, without losing sight of the fact that trust, empathy, and human creativity are the only assets capable of building resilient and lasting business relationships in a fluid era.
Does your company have institutional relationships with its key accounts, or does it rely on individuals?
If you want to assess the quality of your key business relationships, the first step is a 30-minute conversation.
Sources consulted
Retail Professionals. "2025: The year that started the retail transformation." Retail Professionals, December 2025. profesionalesretail.com
The New Retail News. "Consumer Goods Industry Trends in 2026." TNR News, February 2026. tnrnews.es
KAIZEN Institute. "Global Retail Trends in 2026." KAIZEN, November 2025. kaizen.com
McKinsey & Company. "State of Food Retail in Latin America." McKinsey, November 2024. mckinsey.com
Expansión MX. "Consumer giants make adjustments: changes at Walmart, FEMSA, and Bimbo." Expansión, December 2025. expansion.mx
Zygmunt Bauman (Liquid Modernity),
WTW (Willis Towers Watson),
Gallup (Economic Cost of Disengagement),
Comments