Nestlé’s Amazon distribution model

Photo: Marcia Zoet Bloomberg
Nestlé is planning to sail a supermarket barge down two Amazon River tributaries, namely Pará and Xingu rivers in Brazil. Nestlé wants to compete with Unilever in Brazil and aims to reach customers isolated from branded goods. Consumer goods companies are increasingly focusing on the one billion people in emerging markets estimated [...]

The informal market

Robert Neuwirth writes about the informal economy in Lagos, Nigeria, and its importance to the local economy. Local governments mostly view these informal markets in a negative way, even though they contribute significantly to the economy.
Some interesting points:
The demand for economic activities takes over everything as bridges are transformed into informal markets. The informal sector [...]

Key distribution issues in emerging markets – Updated

Channel strategy – companies must map out a clear channel strategy and identify which channel the selected distributor will service. A poorly defined channel strategy can severely damage any distributor roll-out. It is critical that companies understand how channels function and operate. One size does not fit all.
Selection criteria – companies need to understand the [...]

Within arms’ reach of the retailer and consumer

In a competitive environment, Consumer Packaged Goods (CPG) companies are increasingly forced to get within arms’ reach of the retailer and consumer. CPG companies that have a Route-to-Market strategy that includes a direct focus on mom-and-pop stores are the most successful in reaching the “base of the pyramid”.
The buy-in-bulk mentality is unlikely to have a [...]

Two-tier distribution in emerging markets – telecom and electronics

What is a two-tier distributor? They buy from manufacturers and sell to resellers.
What are their competitive advantages? Two-tier distributors can expand the retail footprint in emerging markets. They normally sell a diverse range of brands and control a large percentage of the local distribution in the telecom and the computer industry. Two-tier distributors understand local [...]

Guinea distribution

Guinea Conakry has seen better days. Political instability and an uncertain economic outlook have not helped consumer confidence in this West African country. I have spent the last two weeks assessing a FMCG company’s distribution capability. The data tell an interesting story.

Wholesalers – like most of markets in Africa, FMCG companies rely heavily on wholesalers [...]

Emerging mobility

Wherever you go in emerging markets, there seem to be an affordable way of getting your goods around. In Dar Es Salaam and Nairobi you have the two wheel push cart (Mikokoteni) and in Accra a more modern four wheel version.
 
South East Asia prefers the three wheel motor-cart version, known for its high noise [...]

Emerging market partner selection and management

Southern Africa has been consuming our time of late, and I we have been missing in action. We recently conducted a supply assessment and pilot roll-out for a media company in Zambia. Our workstream focused primarily on the Go-to-Market strategy and partner selection.
The following key issues were identified during the assessment:
Select the right partners. Ensure [...]

Learnings from Unilever Indonesia

I recently read an article about the success of Unilever Indonesia, one of Asia’s top consumer goods companies. Please find below a summary of the key learning:
Distribution network strength – covering more than 600,000 outlets, their distribution network is a key competitive strength and a barrier for entry.
Growth in modern trade- accelerated growth in the [...]

Distribution woes

I recently ran a number of workshops for a beverage company in Bangkok, Johannesburg and Dar es Salaam. One central theme kept popping up. Distributors.
Furthermore two questions were continuously asked:
How to manage distributors in emerging markets?
How to keep control of the outlet base?
The following key issues were highlighted:
Distributor selection criteria. Operations do not spent sufficient [...]

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