Insights to Accelerate International Expansion
Export Strategy Guide
Our Mission: Help Manufacturers “Spend time Selling to Distributors versus Searching for Distributors”
Strategy 2025 begins with the
simple question of “Where do
you want your business to be
by the end of 2025?” This action
plan should reflect aspirational
goals combined with a realistic
road map. Our Export Strategy
Guide reflects insights and
processes from some of our
industries leading brand
manufacturers from Europe
and the Americas.
Strategy is not a once a year
event. All business development
activities should ultimately
sync with your strategy. The
first step is to review your existing
strategy document. How are you
doing? Based upon 2021 results, are
there adjustments in tactics required?
Export Solutions’ goal is to make life a
little easier for Export Mangers. Our
Export Express newsletter, distributor
database, and other publications
provide a forum for sharing “Best in
Class” learning. The industry can no
longer rely on traditional techniques
for building international businesses.
Increased competition, demanding
global retailers and the emergence of
the internet shopping channel make
dependency on current markets a risky
bet. The future is dependent on our
ability to source new consumers from
outside our home base. This Export
Strategy Guide will stimulate ideas
and discussion for formulating your
strategy to achieve your 2025 business
goals. Export Solutions can help!
Greg’s Guidance: Export Strategy 2025
3 What are your Lessons Learned?
3 What are your Core Competencies?
3 Which countries offer exceptional growth for your category?
3 How much is your company willing to invest?
Marketing, People, Promotion
3 What will our organization need to do differently?
3 What are realistic measures and benchmarks?
In This Issue
Sell to 96 Countries
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96 countries. Our database features
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Page 2
Tactical Exports vs. International
Brand Building
Page 9
Plan to Thrive in 2025
Page 17
A New Export Road Map
Page 33
New Country Expansion Prioritization
Page 37
What is Your Perfect Store?
Page 45
USA: Bigger than BRIC?
Page 59
Distributor Types:
Different Experts for Different Situations
Page 68
10 C’s – Cooperation Model
Export Strategy – 2025 Business Destination
2
Tactical Exports vs. International Brand Building
What are your realistic aspirations for a country? There is a big difference between tactical exports
and strategic brand building. Companies can win in smaller countries with an “export only” strategy.
Brand building requires a financial commitment. Either option works. Companies need to align market
ambitions with their investment plans.
Export Brand Building
Market Research None Local consumption habits
Product portfolio Best sellers from home market Tailored to country/region
Packaging Standard packs stickered Native language
Factory Corporate headquarter based Offshore
Marketing Investment
Trade marketing only (10 percent of sales?) TV, 360 marketing 20-30 percent of sales
Retail Pricing Premium to super premium Equal to competitors
Route to Market Distributor Direct team or distributor
Oversight Periodic visits Dedicated country manager
Market Share Ambitions Niche Player
Complexity Low High
Export Countries Brand Building Countries
Middle East USA
Caribbean Western Europe
Malta, Cyprus, Portugal Mexico
Central America China
Hong Kong, Singapore Japan
Taiwan India
Nordics Russia
Baltics Turkey
Chile, Peru, Ecuador Brasil
3
Segmentation Factors
Segmentation analytics will vary by company. Absolute
population is just one factor warranting consideration. Other
criteria include size of the category, proximity to your producing
plant, as well as per capita spending power. For example, most
USA based exporters sell far more to Puerto Rico, an island with
3.3 million people, than they do to China or Brasil. As a result,
some USA brand owners place a strategic focus on the Caribbean
Basin countries adjacent to the USA and process only occasional
opportunistic shipments to complex countries such as China.
Mix of Countries
Most companies can dedicate focus on a strategic launch into
only one or two “strategic” countries at a time. It’s appropriate
to create a growth plan aimed at a mix of Strategic, Priority, and
Opportunistic countries.
Market Share Expectations
Your export road map should also be adjusted based upon your
market share expectations for a select market. Generally, there
are three scenarios for a brand to pursue.
Leader: Brand investment and innovation to become
#1 in the category.
Player: Brand plans to compete effectively, obtaining a market
share of 5%-20%.
Participant: Niche. Brand objective is incremental shipments
with little/no investment.
Lessons Learned
Calibrate expectations to investments in brand support and
management oversight. Everyone wants to be a category leader
or player. To achieve this lofty status, you need to conduct local
market research, innovate, maintain competitive pricing, invest
in marketing, and align with a strong sales team just as you do in
your home market. Projects fail as certain brands want category
leadership but invest only to “niche” levels.
Strategic segmentation of export opportunities is “Job One” for export managers. Export Solutions divides countries into three gr
oups:
Strategic, Priority, and Opportunistic. This approach filters countries by “size of the prize” and investments required to win. The basic
rationale is that a company should allocate different resources to develop a large country like Brasil, compared to a medium size
country like Belgium versus the Bahamas or Bermuda. Too frequently, we see companies handcuff all markets to one export program,
with common strategy, pricing, and investment models for all countries.
Country Segmentation – One Size Does Not Fit All
Country Segmentation
Country Profile Investment Required Business Model Examples
Strategic
(Focus)
Large Country
(pop. 50mm +)
High GDP
High Category BDI
Global Retailers
High Complexity
Significant Investment
in Brand support.
Market Research
Management Visibility
Local Office or
Distributor or
Joint Venture
Mexico
China
Brasil
Turkey
USA
Priority
(Manage)
Mid size Country
(pop. 10 mm+)
High GDP
High Category BDI
Mid Complexity
Moderate investment
in brand support.
Managed by Export
Manager
Distributor
Chile
Australia
Canada
S. Korea/Thailand
South Africa
Spain
Saudi Arabia
Japan
Opportunistic
(Profit)
Profitable
Opportunities.
Low GDP Countries
Low Complexity
Minimal/no investment
in brand support
Distributor or
Direct to Retailer
Caribbean
Central America
Middle East
Africa
4
Export Strategy Road Map
Export strategy is frequently mistaken
as a race to plant flags in as many
countries as possible. Top management
spends too much time reading economic
reports pushing the export department
in the uncertain direction of BRIC
countries while ignoring opportunities
on their doorstep. Exhibitors at Anuga
or ISM act as traders at a Turkish Bazaar
negotiating over terms and conditions
without focus on requirements for “brand
building.” The reality is that export
development is about creating a
sustainable, long term strategy that
can deliver consistent results.
Map to Future
A good strategic plan should be visionary,
conceptual, directional, and compatible
with the company’s overall business goals
for a 3-5 year period. This contrasts with
your annual business plan which
represents a short term operational plan
focused on measurable tactics. A viable
long term strategy identifies megatrends,
addresses important challenges, and
creates new sources of advantage.
Strategy requires making business
choices, including tough decisions on
which countries to enter, the right brands
to support, and where to allocate
company resources.
Lessons Learned
The first step is to conduct a “Lessons
Learned” analysis. This fact based study
should detail current metrics by country.
Evaluate sales per capita, market share,
profit margin, and three year sales history.
Results should be segmented by country
size and distance from your producing
facility as well as “route to market”
model. Export Solutions recommends
a second stage “20/20” analysis where
you look at all market metrics and you
separate the “Top 20%” performers
versus the “Bottom 20%” performers.
What are common characteristics in
the countries where you are winning?
Are there similarities in markets where
your company is “under- performing?”
A solid Lessons Learned analysis guides
our strategic choices for your new
export strategy.
Core Competencies
What does your company do well? Which
product categories, services, or regions do
you outperform your competitors and
drive category value? What factors
distinguish your company from other
category performers? Your strategy
should sync with segments where you
maintain a sustainable advantage.
Investment
Export strategies can be doomed from
the start when lofty business ambitions
are not matched by realistic investment
levels to meet desired objectives.
Investment comes in many forms:
research, marketing, trade promotion
and most importantly, human resources
dedicated to a project.
Strategy – OGSM
One approach that encompasses both the
strategic and operational aspects of the
business is “OGSM.” OGSM stands for
the process of developing a document
outlining “Objectives, Goals, Strategies,
& Measures.” This “plan on a page”
provides a clear and concise guide to
your expectations. OGSM serves as a vital
link between long term strategy and short
term business demands.
Focus
Successful international development
strategies reflect a focus on a narrow
band of countries and activities. Industry
leaders such as P & G, Nestle, and Barilla
typically dedicate substantial resources
to the ten countries that account for 60%
of their business. This approach must
cultivate a mix of established markets
with “new frontier” markets which offer
exceptional potential. This does not
advocate ignoring smaller markets and
opportunities. It signals a message that
not all markets should be treated alike
with similar programs and resource
allocation. I remember a client whose
Latin America business had been
stagnant. My analysis revealed that his
area manager devoted his time to
customers in Central America and
Caribbean with minimum energy
dedicated to Mexico, a market with
135 million people, but tough to
penetrate. The new strategy committed
to exponential growth in Mexico, with
the manager spending 50% of his time
in Mexico. End result was Mexico
business doubling!
Export Solutions Can Help!
Export Solutions has participated in
more than 400 international development
projects on five continents. We frequently
provide guidance for export strategy
development as well as validating
proposed plans. Our export strategy
templates can be rapidly adapted to fit
brands for any supermarket category.
Customer feedback suggests that Export
Solutions strategy insights can save you
time, money, and “wasted” effort. Contact
Greg Seminara at (001) 404-255-8387 or
5
A big difference exists in export strategy for SMCG (Slow Moving Consumer Goods) and companies committed
to FMCG Brand Building (Fast Moving Consumer Goods). Either model is okay. Many companies are en route
between SMCG and FMCG. Alignment between aspiration, investment, and perspiration drives realistic outcomes.
Export Journey: SMCG to FMCG
SMCG FMCG
Aspirations Niche Participant Mass/Leader
Consumer
Homesick Upscale Local
Research
None Nielsen Consumer
Portfolio
Best sellers from
home market
Best sellers from
home market
Tailored to region
or country
Packaging
Standard packs stickered Multilingual
Local language label
and pack size
Factory
Corporate HQ Corporate HQ Offshore
Pricing
Super Premium Premium Competitive
Marketing
None Sampling, Digital
360 Plans
TV, Digital
Trade Spend
None 10-20% Discount
Ad, Display
20-30% Discount
Route to Market
Niche distributor Mid -size distributor
Mass distributor or
subsidiary
Country Focus
Adjacent
Homesick Expats
Mid-size countries
plus USA
All countries
USA, China, Brasil
Channels
E-Commerce
Homesick Expats
Supermarket
E-Commerce
All channels
Oversight
1 visit/year from HQ Regional manager Dedicated country manager
Complexity
Low Moderate High
6
Export Strategy Road Map Template
What are your business ambitions for the time period?
What factors have contributed to export success?
What situations have led to export disappointments?
What countries represent your top 20% performers? Why?
What countries represent your bottom 20% performers? Why?
What is your competitive advantage?
Why is your brand unique versus international competitors?
What are the biggest export opportunities for your company?
What represent high percentage, profitable opportunities?
What is your investment model? Marketing, Promotion, People.
What alternatives are available?
One page plan defining Objectives, Goals, Strategy, Measures
What activities are required to achieve desired results?
What are realistic measures and benchmarks?
Countries Brands Partners
Strategic Priority Opportunistic
Mission
Lessons Learned
20/20 Analysis
Core Competencies
Big Opportunities
Low Hanging Fruit
Investment
Strategic Options
Strategic Plan
Tactics
Measures
Markets
Strategy questions? Contact Greg Seminara at Export Solutions (001)-404-255-8387
7
Introducing
America’s Favorite Brands
Executive Board
Export Solutions Smucker’s Tabasco
Greg Seminara, CEO Danny Berrios, President Megan Lopez, Vice-President
General Mills Sun-Maid
Eric Saint-Marc Carsten Tietjen
Advisory Board
Bazooka Candy Blue Diamond Bob’s Red Mill
Santiago Ricaurte Dale Tipple Jan Chernus
Bush Beans Campbells Church & Dwight
Dave Bauman Julio Gomez Arun Hiranandani
Ferarra Candy Heartland Idahoan
Daniel Michelena Tom Theobald Ryan Ellis
Johnsonville Sausage Kao USA Keurig Dr. Pepper
Cory Bouck Julie Toole Billy Menendez
Mizkan Reynolds Welch’s
Noel David Chris Corey Marc Rosen
19 Companies | 200+ Top Brands | $80 Billion Combined
View our activities for export managers – www.usafoodexport.com
8
‘Tis the season for business reviews. Most
of us will dust off last year’s presentation,
update the charts, and supply conservative
estimates on why this year’s 10% export
shipment increase won’t be repeated. Impress
your executive team with some hot new
charts and Lessons Learned analysis for your
business review document. Leadership tends
to display laser focus on “just the numbers.”
Tremendous business intelligence can be
gained through a structured review of Lessons Learned: what’s working,
what’s not, and what needs to change.
Listed below are a few hot button topics to include in this year’s review.
1. Business transition from Established markets to “ New Frontiers.”
Export Solutions segments markets into three groups: Established Countries (mature),
Developing (Growing Countries, low per capita sales) and New Frontiers (new/future
markets). How does your business split by these three groups? What are the trends?
This is a key measure for multinationals.
2. BRIC Performance
Shipments alone do not tell the whole story. Look at per capita consumption, percent
distribution penetration, market share, and geographic reach. Extend approach to other
high potential countries such as Indonesia, Mexico, and Saudi Arabia.
3. Global Retailers
Walmart, Carrefour, Amazon, Auchan, Casino and Costco exhibit strong growth trends
outside their home markets. Compare your progress with global retailers versus the
balance of the markets. What retailers and countries are leading the way? Why? What’s
working? Sales through local distributors or direct shipments?
4. Shipments versus GDP
An important metric is shipment performance compared to a countries GDP benchmark.
Flat shipment levels in struggling countries such as Italy, Spain, or Portugal may reflect
better organizational results than a 5-10% increase in booming areas such as China or India.
5. 20/20 Analysis
Markets tend to be judged by the same standards. Look at countries ranked in your
top 20% in shipment performance. What are the common threads and Lessons Learned?
Are leaders all in the same region, distributor sold, high investment, or have more
competitive pricing? Similarly, do the bottom 20% of your markets experience common
characteristics? Remember, there is no shame in admitting “problem” markets. All
brands feature a regional mix of high achievers and low performing markets. Consistent
under performers limit our ability to meet and exceed our own personal objectives.
6. Pricing, Promotion, and Proximity
Brand results are directly proportional to your fundamental investments in competitive
pricing and brand building. Can you cluster markets based upon price gaps versus local
competition? Is there a correlation between high spend markets and results? Is promotion
paying out? Some of our industries’ greatest international success stories result when the
brand moves to local manufacture through their own plant, joint venture, or contract packer.
Involve your distributors in the process. Normally, a one-two page template requesting
feedback will reveal critical, market based insights. Create a culture of sharing positive
success stories. All sales forces are competitive and want to be identified as the source of
the next great idea.
www.exportsolutions.com
Greg Seminara
404-255-8387
“Spend Time Selling to Distributors versus Searching for Distributors”
Lessons Learned
Strategic Services
Contact Us for
Export Solutions
1. Identify Best in Class
Distributors: 96 Countries
2. Best Practices
Export Strategy
3. Distributor Management
Workshops
4. Export 101:
Let’s Get Started
5. New Market
Prioritization
and Launch Plan
6. Personal Distributor
Introductions:
96 Countries
7. Walmart International
8. Distributor Contracts,
Margins, and Fees
9. Meeting Speaker
10. International
Strategy Expert
Strategic Services
Contact Us for
Export Solutions
1. Identify Best in Class
Distributors: 96 Countries
2. Best Practices
Export Strategy
3. Distributor Management
Workshops
4. Export 101:
Let’s Get Started
5. New Market
Prioritization
and Launch Plan
6. Personal Distributor
Introductions:
96 Countries
7. Walmart International
8. Distributor Contracts,
Margins, and Fees
9. Meeting Speaker
10. International
Strategy Expert
9
How big will your international business be in 2025?
A successful global strategy reflects a realistic mix of
aspiration and investment. The road to 2025 contains speed
bumps, with a probablity of recessions, currency fluctuations,
and a precipitous decline in sales through conventional
supermarkets. The good news remains that more of the
world’s 8 billion consumers will live better and eat healthier.
This will stimulate demand for the added value food,
beverage and personal care brands we produce. One fact
remains indisputable: international development will
dominate as the primary growth engine for all mid- to
large-sized consumer focused companies.
E-Commerce Disruption
How large will e-commerce become? Can you envision a
world where e-commerce accounts for twenty percent of sales
and that Amazon appears as your top customer? How will
you restructure your business to optimize sales through
online retailers? A logical first step is to select an e-commerce
channel champion and treat Amazon as a major global key
account like Walmart or Carrefour. Another initiative involves
rethinking your packaging strategy to supply selling units
that are “post friendly” and can be mailed cost effectively.
Companies will hire armies of data analysts to research online
purchasing habits and apply the insights to products sold
through brick & mortar. No physical space limitations appear
in cyberspace, encouraging brands to expand their product
portfolio and test options without the physical handcuffs
of shelf space and listing fees. Hire young people to lead
the cultural shift from marketing through supermarket
showrooms to menu based marketing choices from Amazon.
China Syndrome
The food industry spent the last ten years chasing futile
BRIC dreams in China and India. The expensive conclusion
indicates that it is difficult to convince Asian consumers to
change their meal habits to incorporate western staples like
breakfast cereal and pasta. The reality reveals that Asians
achieved better success at exporting their Chinese, Thai,
Japanese, Indian, and Korean food to us than we have in
converting them. Credit confectionery and snack, personal
care, and Starbucks as rare examples of western categories
achieving success. Asia will account for sixty percent of the
world’s mouths in 2025, including 2.8 billion people in China
and India. The Asian solution is to adapt our product recipes
to meet Asian taste profiles or to acquire Asian companies
as a platform to build critical mass.
Established, Developing, Pioneer
A critical decision revolves around resource allocation
between three market clusters.
Established markets represent the historical base business,
accounting for the bulk of sales and “paying the light bills.”
In these countries growth rates exceeding five percent are
challenging without buying market share in flat categories.
Developing countries are attractive green sprouts where you
have planted seeds of presence and are beginning to gain
traction. These countries may offer the largest potential
source of new revenue. However, brand owners must
acknowledge the initial progress and transition your route
to market model and thinking from “niche exports” to mass
market player to optimize results.
continued on next page
Plan to Thrive in 2025
10
Pioneer countries emerge as large markets like the USA
(for Europeans), China, or Brasil where your company claims
sales, but fails to register meaningful market share. Success
in pioneer countries requires significant investment to build
your brand “The Right Way” (see page 24 chart).
Boots on the Ground
How many members of your export team are based outside
your home country? In the 2000’s, exporters managed from
headquarters, with roving missionaries swooping in for a
distributor meet and greet, store check, collect your frequent
flier miles, and off to the next stop. In the 2010’s, producers
established regional hubs in comfortable expat locations
such as Dubai, Singapore, and Miami for Latin America.
Today, success in important countries like Mexico, Saudi
Arabia, and Indonesia will be directly proportional to the
size of your market based team. Best in class distributor’s
energy is focused against brands with local management
oversight, leaving little bandwith for companies that show
up once a year.
Digital Distributor
Winning distributors will invest to create deep capabilities
serving e-commerce customers and facilitate the transition to
digital marketing. Owners will need to source new logistics
solutions for e-commerce and redefine the brand manager
role to pursue excellence in deploying social media strategies.
If they cannot adapt, old school distributors may retain
responsibility for the shrinking supermarket channel, while
a new modern breed of distributors handles the high growth,
e-commerce business.
ESG Strategy
New consumers will support brands with a well articulated
Environmental, Social, and Governance (ESG) strategy.
Walmart recently shared a ninety four page update on their
scorecard progress. Unilever reported that their purpose led,
sustainable living brands were growing 69% faster than the
rest of the business and delivering 75% of company growth.
“Better for you, better for the environment” brands will enjoy
bright prospects for international expansion. New data
transparency tools will allow consumers to compare labels
and ingredients instantly online or in-store.
Private Label vs. Personal Label
European and Northern American retailers boosted profit
margins while sacrificing sales per unit through aggressive
private label expansion strategies. For many reasons, private
label development remains low in new markets of Asia,
Middle East, Africa, and Latin America. The explosion of
e-commerce presents further challenges to private label,
as consumers will appreciate a broader selection of
competitively priced brands to choose from. A new
initiative could be the development of “Personal Label”
products where a consumer may enjoy more options in
adapting a product to meet their individual specifications.
Road Ahead
What changes will you make to your 2025 road map?
Smart exporters source clues from global trends and apply
to their planning model. Looking for strategies to thrive in
2025? Export Solutions can help!
continued from previous page
Plan to Thrive in 2025
5 Critical Questions to Thrive in 2025
1. Are we willing to pursue international acquisitions?
2. Would your company consider overseas contract packing (versus export)?
3. Can we test a high spend investment plan (“The Right Way”) in a strategic country?
4. Would your company invest aggressively in offshore head count in advance of sales?
5. Europeans: can we develop the USA market implementing the USA playbook?
USA factory, broker network, competitive pricing, USA team, channel strategy,
30-50% trade promotions?
Need a hand? Visit www.exportsolutions.com.
2025 is three short years away. The world
will add another billion citizens, with
over 80% of them born in Asia and Africa.
Consumer marketers will likely focus on
the “next billion” consumers, a group of
one billion middle class citizens living in
developing nations. Everywhere people
will eat healthier and live better with
more access to the brands we produce.
Technology will revolutionize our
business, with tools that are waiting
to be invented tomorrow. It is easy to
foresee a future which includes more
online purchases, home delivery, product
info sharing, and brand personalization.
As the countdown to 2025 begins, now is
a good time to evaluate our strategies and
brainstorm about the road ahead.
Asia Pivot
Asia will contain almost 2/3 of the
world’s population and “mouths.” Global
GDP will shift, with Asia’s share surging
towards 40%, equivalent to the USA and
Western Europe combined. A key
industry challenge will be the number of
marketers willing to invest to build new
eating habits with Asian consumers.
Currently, there are success stories with
Coca Cola and Starbucks leading the way
in the beverage category. There is also
strong acceptance of European and USA
confectionery and snack products. Other
categories are undeveloped, with
companies choosing a path of
opportunistic exports versus required
investments in market research, adapted
products, and local factories. Asia will
evolve from just another export region
to the key to future growth and profits.
India & China: Dynamic Duo?
Tough to underestimate the 2025
importance of two countries that may
total almost 3 billion people. It’s doubtful
that India will leapfrog China as an
economic power. However, their
population gap will narrow significantly,
with the stage set for India to emerge
as the world’s most populous country
by 2035. China will be viewed as an
established market, with more national
brands, retailers, and commercial
structure. India is the world’s great
enigma. Will it finally break free from
its protectionist handcuffs and emerge as
the ultimate growth market? Or remain
glued to its current path of country
development in their own independent
manner? A broader question could relate
to a China-India alliance that could shift
dominance of global economic policy
from the West to the East.
Meet the VIP’s
Vietnam, Indonesia, and Philippines
represent high growth countries with
population exceeding half a billion people
by 2025. This decade will likely see these
southeast Asian “tigers” graduate from
emerging market status to more
significant sources of growth. Malaysia
also fits in this cluster, with a projected
population increase to 42 million. I like
Myanmar as a new market. 57 million
people, low cost of entry, and very early
in the development cycle.
Middle East: All About the Oil
2025 population will exceed 500 million
in the region, with population growth
maintaining its positive upward
trajectory. Egypt’s population will
approach 110 million and Iran’s may
surpass 90 million. Stability in Iraq would
result in an important new market with a
population increase from 35 million today
to 46 million. As always, countries with
oil like Saudi Arabia and GCC nations
will surpass countries without the
mineral resources. A big question is
the evolution of alternate supplies and
sources of energy. Current oil pricing
levels are creating short term problems.
Longer term, higher prices are required
to sustain development.
What About Africa?
Will Africa’s fragmented market of one
billion citizens be “too big to ignore?”
Will the next 10 years represent the era
when global marketers finally aim their
budgets at the last frontier? Partially.
I think that multinationals and forward
thinking Chinese and Brazilian
companies have identified Africa as a
high priority region. Companies with
long term horizons will find rewards in
Africa. My guess is that some exporters
will discover Africa, but businesses will
remain in their infancy by 2025.
USA: Discover the Americas
The world’s number 2 economy will be
a vibrant force in 2025, with population
growth of 24 million to 344 million
people. The USA’s Latino population
The World in 2025
continued on next page
11
12
The World in 2025
will exceed 70 million people, 20% of
the population. Mexico and Brazil will
remain giants, validating the need
to commit to serious plans for these
countries. Other Latin American countries
such as Colombia, Chile, Peru, Ecuador,
and Central America are all expected to
enjoy positive momentum. These markets
are especially attractive for Made in the
USA and brands from Spain.
Europe = Flat
Experts predict that European population
will be flat, with ambitious targets
stretching to 1% growth over the ten year
period. Importantly, existing population
is aging, with marketers forced to grapple
with consequences of dealing with a
consumer base at retirement age.
European brands are viewed as high
quality and desirable by increasingly
affluent consumers in developing
markets. Successful European companies
will be those that can shift balance of their
business dependency from the declining
“continent” to new Asian markets.
Pakistan, Bangladesh, Nigeria, Congo,
and Iran
These countries are not for novice
exporters. For most companies, allocation
of resources to accomplish more in China,
USA, Mexico, and Brazil is a better
decision than rushing to plant small flags
in these risky countries. On the other
hand, multinationals with deep pockets
and long term horizons should consider
these markets. Send a company
missionary, hire a local team, expect the
worst and appear pleasantly surprised
when it works out.
21st Century Distributors
Outsourcing will continue as a preferred
route to market option for international
manufacturers. At the end of the day,
companies want to own the brand equity
and are content to outsource distribution
and in some cases production. This allows
them to focus on investments in brand
building versus infrastructure,
particularly in new markets.
Successful distributors will emerge as
category/sector experts versus generalists
involved in many aisles. Distributors
must expand their added value services,
leveraging their unique ability to serve as
custodians of your brand from port of
entry to supermarket shelf. Challenge
your distributors to refine their models to
accommodate exponential growth in the
online retail channel. Today’s distributor
model may be extinct. However, the 2025
distributor service organization can thrive
as an outsourcing solution.
2025 Strategy – Export Solutions
In 2021, I completed projects in 25
countries across five continents. This
provides a unique, “close to supermarket
shelf” perspective on international
development. In addition, each year, we
choose to work with 1-2 strong European
companies on taking their USA business
to the next level. Looking to create your
2025 international development strategy?
Export Solutions can help! Contact Greg
Seminara in Atlanta, Georgia.
continued from previous page
10 Growing Countries
Country
2022
Population
2025
Population
Increase
Brazil 215 230 +15
China 1,448 1,468 +20
Ethiopia 115 125 +10
India 1,402 1,450 +48
Indonesia 278 292 +14
Mexico 135 145 +10
Nigeria 214 230 +24
Pakistan 227 240 +13
Philippines 112 120 +8
USA 333 344 +11
5 Countries: Flat/Declining Population
Country
2022
Population
2025
Population
Decrease
Germany 84 84 0
Italy 60 60 0
Japan 125 123 -2
Russia 146 144 -2
Ukraine 44 41 -3
Successful export managers can be
compared to roulette experts. You need
to spread your bets around many
countries in order to achieve your
sales budget. Winning reflects luck
in the countries where you place big
investments and avoiding high risk
regions. Export Solutions has recently
completed projects in 31 countries across
5 continents: China, Philippines, Brasil,
Mexico, UK, Russia, and of course,
the USA. There’s lots of potential new
business if you know where to look.
The “loud” conclusion is that most
brands should consider an Asian pivot
focusing on high growth countries with
large populations and expanding middle
class. This includes priority countries like
China and southeast Asian Tigers like
Indonesia, but also Saudi Arabia and
is “Bigger than BRIC” for international
brands. Favorable exchange rates make
this an excellent time for international
brands to invest in taking their USA
business to the next level.
Country Segmentation Definitions
All countries are not created equal, with
population and GDP representing just
starting points. Category development,
retail fragmentation, and cost of entry
also signify key filters. Historically,
Export Solutions’ one page strategy
grids have segmented countries into three
groups. First, Strategic countries such as
China, India, and Mexico that boast large
populations and require focused
investments in marketing and human
resources. A second group of countries
is identified as Priority countries. Priority
countries are mid-size, with populations
between 10-50 million and require more
modest levels of investment and
management oversight. Our third
group can be considered Opportunistic
countries. These are small countries
which can be important profit generators
with minimum resources deployed.
Crawl, Walk, Run, Wait, Halt
Export Solutions is adding five
incremental segments to assess market
potential. Crawl, Walk, Run, Wait, and
Halt refine our market development
recommendations based upon
commercial realities of the countries
today. These comments reflect the
position the countries may be in the
development curve combined with
current economic and retail dynamics.
Crawl
Crawl countries are markets where it’s
time to get started! This may include an
initial market assessment and a small first
order. Crawl countries have an emerging
retail structure supported by a network
of professional distributors. The objective
in crawl countries is to establish a brand
presence, gain learning, and secure some
first mover advantage benefits before the
“rest of the crowd” arrives and listing fees
escalate. Maintain modest expectations,
even in giant countries like India.
Walk
This signals a second phase in country
development. It is likely that your brand
has already established a beach head and
may be experiencing impressive year
on year results from a small base. These
countries warrant more attention and
investment. In the walk phase, you
may change your partner from a small
distributor who is really a “buyer” to
a more powerful partner capable of
building your brand at another level.
Philippines, Indonesia, Colombia, and
Saudi Arabia are all excellent examples
of “Walk” countries.
Run
Now is the time for brands to invest in
these high potential countries. China and
the USA (foreign brands) top the list of
strategic countries where your senior
management must commit to incremental
resources. This includes local teams,
small factory (or copacker/jv), research,
and marketing investments. Evaluate
your China and USA shipments and
validate that you are content with your
current shipment trajectory. More than
likely, you will need to revise your
strategic plan to better access these
benchmark countries. The Gulf, Korea,
and Panama are smaller countries that
offer exceptional growth opportunities.
Wait
I am a big believer in Brasil. However,
the current recession coupled with
existing market complexities make Brasil
a country for only the most seasoned
multinationals to compete. Africa’s one
billion citizens represent the last, great
untapped consumer market for most
consumer brands. Each month, I receive
two types of calls on Africa. The first
requests help, as no one seems to have
cracked the code. The second type of call
relates to another diversion problem from
Nigeria, Kenya, or Ghana. I never receive
calls on any success stories. South Africa
is the exception, a “Crawl” or “Walk”
country for most.
Halt
Newspapers and financial indicators
accurately identify these countries. Some
exporters with “poor eyesight” continue
to pursue these countries despite the
obvious risks. This month, I took a call
from a mid-size Italian company, where
the export manager had lost his job over
a $400,000 default from a well known
Russian distributor. I recently completed
a $20 million project for Argentina where
the big issue was not brand building
capabilities but access to capital and
ability to clear foreign goods through
customs. Most hope that the fourth
Crawl, Walk, Run, Wait, Halt!
continued on next page
13
Crawl, Walk, Run, Wait, Halt!
quarter election results in Argentina will
break down protectionist import barriers
and resume normal trade with one of my
favorite countries.
What About Europe?
Most European producers find Europe
excruciatingly difficult, let alone the
possibility for premium foreign brands
to enter. Opportunities always exist in
Europe, particularly for innovative
brands or pursuing ethnic channels like
the market for “Made in the USA” or
Asian products. However the high cost
of entry in Europe coupled with declining
populations signals that you will likely
enjoy a higher ROI elsewhere. Proceed
cautiously and profitably!
Next Steps
The Crawl, Walk, Run, Wait, Halt
assessment model provides a framework
for all exporters. However, actual grid
output may will vary for each company
based on brand dynamics and existing
export footprint. For example, Mexico or
Philippines may be “Run” countries for
certain USA brands, but less important
for European companies. I would argue
that China and USA development focus
would be a long term “Gamechanger”
for most companies. Please excuse our
pessimism on “Wait” and “Halt”
countries, as it is our hope that these
important countries recover to create new
business in the future. Export Solutions
works in 96 countries, with relevant field
based, insights based upon projects for
many mid-large size USA and European
brands. Contact Greg Seminara at
help you define your Export Strategy
Road Map.
Country Segmentation
(*actual country input will vary by brand)
Strategic
(Focus)
Priority
(Manage)
Opportunistic
(Profit)
Crawl
Brasil, India, Russia
Vietnam, South Africa,
Thailand
Myanmar, Cuba, Sri Lanka,
Mongolia
Walk
Indonesia, Mexico
Philippines, Malaysia,
Saudi Arabia, Colombia
Guatemala, Bolivia, Ecuador
Run
USA, China South Korea, Taiwan, Peru Gulf, Israel, Panama, Costa Rica
Wait
Africa Argentina, Turkey, Iran Libya
Halt
Ukraine, Venezuela Yemen
continued from previous page
www.exportsolutions.com/ExportTips
200 Free Articles
Export Strategy
Distributor Management
14
15
Export Lessons Learned Template
Why are Countries Leading or Lagging?
(Complete based upon your company performance)
Leading
Countries
Lagging
Countries
Country Performance:
Measure: sales per capita
Brand Development:
Measure: market share
Biggest Opportunity
Countries:
Measure: category size/growth
Promotion Effectiveness:
Tactics creating incremental sales
Distributor Performance:
Measure: sales increase,
commitment
16
Does Your Distributor Network Need A Check Up?
Export Solutions Can Help!
• Distributor Network Assessments
• Motivational Speeches
• International Strategy
• Find Distributors in 96 Countries
Contact Greg Seminara at [email protected] or (001)-404-255-8387.
www.exportsolutions.com
Exporters manage distributor networks extending to 20, 50, 70 countries or more!
Every company has a few distributors that under perform.
“Under achievers” prevent us from attaining our personal objectives.
Distributor Network Check Up
• Independent assessment from Export Solutions
• Establish methodology for ranking Best in Class distributors and “Laggards”
• Supply strategies for recognizing top distributors
and upgrading the bottom performers
• Benchmark external brands from your category
• Practical and “action oriented” approach
Consider a revision to your country
prioritization map as your 2022 New
Year’s resolution. All industry players
identify international expansion as a
primary growth engine. However, most
companies remain anchored to the past,
with resources devoted to managing
“old businesses in mature countries.”
Real progress can be achieved through
research and investment to multiply your
sprouting sales in flourishing regions of
Asia, Latin America, and the Middle East.
This requires a tricky balancing act of
maintaining your existing business base
while shifting focus to far flung markets.
Move From Your Backyard
Most USA companies count on
neighboring Canada, the Caribbean,
and Central America for the bulk of their
export sales. This is natural, given the
proximity to producing plants and
familiarity with “Made in the USA”
products. Similarly, experienced
European exporters have cultivated
strong businesses in adjacent European
countries. “Border” businesses are a
logical first export step. Nearby countries
tend to be easier to manage and may
share comparable eating and lifestyle
habits. In many cases, these businesses
were optimized many years ago.
Committed companies must place serious
new stakes in the ground in distant
markets outside your comfort zone if you
desire to obtain more than your fair share
of future industry expansion.
Export vs. Strategic Brand Building?
I frequently raise the question of “What
does it take to build a brand in your home
country?” during my export speeches and
workshops. The consistent responses
focus on the fundamentals of research,
adaption to local tastes, in-country
production, well connected sales team,
and investments in consumer marketing
and trade activities. This approach is
often at conflict with export reality.
Export tactics involve shipping a
standard package from your home plant
with a modest investment and hoping
for brand acceptance in a foreign country.
Winners have the ability to bridge the gap
between strategic brand building and
opportunistic exports.
Regional Hub Model
Successful companies understand that
you need to get close to the consumer and
your customers. Advanced suppliers have
already established regional sales offices
in places like Singapore, Panama, or
Dubai. One model is to extend this
concept to create regional manufacturing
centers. This can be achieved through
a new factory, contract packer, or
acquisition of a local category competitor.
These regional hubs can export to
adjacent countries. General Mills and
Heinz are two of the most successful
multinationals in Brazil. Both acquired
local food companies and leveraged
this platform to sell their international
product portfolio. Recently, Pringles
opened a new plant in Malaysia.
New Flavors, Small Packs
Eating habits and practices are different
in emerging markets. Portion sizes are
smaller and a meal may feature many
dishes. How well does your product pair
with rice (or beans)? Candy and Snack
products are the exception, with a
universal acceptance for most “sweet
segments.” In every country, upscale
shoppers exist, hungry for foreign brands
at any price. While this is your initial
target market, you ultimately need to
reach the masses with products in sync
with their cuisine. Affluent western
shoppers fill shopping carts with large
sizes to store in kitchen pantries.
Emerging market consumers shop daily,
allocating limited funds to purchase
essential food items. International
marketers need to consider small sizes
with affordable price points to be relevant
in low GDP countries like the VIP’s
(Vietnam, Indonesia, & Philippines).
Commit to One Country
Too many export programs aim to plant
small flags everywhere. This does not
impress anyone if you’ve created a
handful of minor businesses, particularly
in large, high potential countries. Better
idea is to identify one country with
superior growth prospects. Study the
market and commit financial and “human
capital” to the country. Encourage senior
management and functional team
leadership visibility to the project.
Set 3, 5, and 10 year objectives, as these
investments will not pay out in the short
term. I recently helped one of my forward
thinking clients study 17 potential
expansion countries. “Crawl, Walk, Run.”
2022 Hot Markets
Many global citizens continue to live
better and eat better. This expanding
middle class creates new potential
consumers for our brands. Asia contains
4.5 billion people, more than 61% of the
world’s mouths. China and the VIPs
continued on next page
A New Export Road Map
17
18
New Export Road Map
Current Top
Export Markets
New Export Focus Hot Countries
USA Brands
Canada
Caribbean
Central America
Latin America
China, SE Asia
Middle East
Mexico, Colombia
China plus VIPs
Saudi Arabia UAE
European Brands
Europe
Russia
North Africa
USA China, SE Asia
Middle East
USA, Mexico
China plus VIPs
Saudia Arabia, UAE
A New Export Road Map
represent the best potential, with India a target for those further
along the development curve. Latin America population now
exceeds 600 million with GDP larger than the UK, Japan, and
India combined. Brazil, Mexico, and Colombia are strategic
countries where all brands should be performing at much
higher levels. The Middle East reflects a dynamic marketplace,
particularly in the oil rich nations of Saudia Arabia, UAE,
Qatar, and Kuwait. Population totals more than 300 million
and is growing exponentially through birth rates and
expatriate workers. These markets offer attractive long
term return on investment versus trying to mine new sales
from declining countries.
USA – Bigger than BRIC’s
The USA features a population of 333 million relatively affluent
consumers. USA citizens are open to cuisines from around the
world. A typical American diet would include Italian, Asian, and
Mexican food. Most international companies sell in the USA, but
per capita sales levels are small relative to potential. The issue
relates to the practice of treating the USA as another “export
market.” Success requires a USA based manager and a hybrid
organization including channel specific “Food Brokers.”
Consider construction of a small factory or a contract packer.
Be prepared to invest in consumer and trade programs, just
as you would in your home market.
Export Solutions Can Help
Our distributor identification services completed more than
300 distributor search projects on five continents. This year,
we’ve helped brands find distributors in tough to access
countries like Brazil, Mexico, Indonesia, and the Philippines.
Export Solutions has the unique ability to leverage the power of
our distributor database with prospective distributor candidates.
Our leading distributor database covers 96 countries and more
than 9,200 distributors and importers of supermarket products.
This includes more than 2,713 confectionery and snack
distributors. Our database has been recognized for excellent
coverage of emerging markets such as India, Brazil, and Mexico.
Contact us to learn more about how Export Solutions can
leverage our distributor contacts for your benefit in 2022.
continued from previous page
3 7 Billion people live outside Europe and North America! Everyone eats!
3 Follow Global Retailers: Walmart, Carrefour, Costco, Metro
3 USA Opportunity is “Bigger than BRIC” for most international brands
3 How do you win in your home market?
Apply the same principles to large foreign markets: Research, international factories, local
teams, plus investment in Marketing and Trade support
3 Best way to predict distributor success is to evaluate in store visibility for his current brands
3 Big difference between having “any distributor” and a “Best in Class” partner
Greg's Guidance: New World – New Business
19
How do you forecast for 2022? Most
companies approach cautiously, anxious
to accelerate international expansion, but
hesitant to over commit until it’s safe.
Fortunately, it’s a good time to be in the
food and consumer goods industry. Our
retail customers captured sales lifts averaging
+10% versus 2020. As the vaccination line
creeps forward, we all face the core question
of where to play and how to win in 2022.
Green = Gold
Retailers looking to refresh their assortment
seek brands that demonstrate credible
environmental benefits. Aligning with your
customers’ ESG (Environmental, Social, and Governance) platform
is good for the planet and positive for your business prospects. A
key initiative is to translate your company’s strong commitment to
ESG in your home country to your global partners.
Digital Marketer: #1 Hire
Social media is an effective and efficient way to market to
overseas consumers. Influencers, Facebook marketing, and
YouTube videos are now standard tactics. Exporters’ top hires
should boost your international digital marketing team.
Distributors need help with proven strategies and content to
execute locally. Distributors must also join the digital party,
hiring young people to lead their efforts.
No Copy/Paste: Trade Promotion
Exporters repeat the same boring “price off” trade promotions
year after year. The world has changed, with supermarket chains
looking for creative special offers tailored to their customers, not
the general market. Try something new!
USA: Bigger than BRICs
Most international brands claim sales to USA, but market share
is always tiny compared to potential. USA is wide open to world
food. Our retailer database tracks 370 USA customers, all looking
for unique new food items. The path forward requires that
brands play by USA rules with brokers, slotting fees, and
promotion discounts, supported by a country manager. Don’t
forget Canada – an attractive country with 38 million people.
Middle East is Hot
The price of oil surged in the last twelve months and could
move higher with a post pandemic recovery – good news for
oil rich nations such as Saudi Arabia, Kuwait, UAE, and Qatar.
These countries were proactive and obtained vaccines early.
Saudi Arabia is always the big prize with a population of 35
million, bigger than the other GCC countries combined. Regional
tourism outlook is favorable with Expo Dubai and World Cup in
Qatar in 2022.
Meet the VIPs
Vietnam, Indonesia, and the Philippines contain 500 million
people. Vietnam is a top performer, as companies shift
production from China to a lower-cost production location
and avoid the China-USA trade war. The Philippines maintains
strong ties to the USA. Japan appears attractive for exporters
due to the emergence of a gourmet channel featuring 10 chains
with more than 1,000 outlets featuring wide selections of
international brands.
Tackle a Tough Country
The time has come for some ambitious companies to tackle either
Mexico or Poland. Both countries offer exceptional potential for
those willing to invest in developing a brand the “Right Way.”
This includes consumer research, significant marketing, and
local oversight.
Big Wins: Small Markets
Consider Qatar, Ireland, Panama, and Israel. Small countries
import a higher percentage of their food and most use
distributors. This creates a level playing field for retail pricing
competitiveness. Export Solutions’ database tracks an average
of 84 distributors per country.
continued on next page
Hot Countries
1. USA
2. Saudi Arabia
3. China
4. Poland
5. Mexico
6. Japan
7. Vietnam
8. South Korea
9. Philippines
10. Qatar
Where to Play, How to Win 2022
20
E-commerce: 20% of sales?
E-commerce has emerged from niche to mainstream status.
Winning organizations have redesigned their route to market
strategies to incorporate e-commerce and digital marketing for
each element of the business. E-commerce is more than Amazon.
Strategies should incorporate unique requirements to service
“supermarket click and collect,” TMall, Ocado style, and other
platforms. For exporters, it is worthwhile to consider an
e-commerce “first” launch, particularly in Asia.
Export Solutions Can Help
Our distributor database covers 96 countries and more than
9,200 distributors and 2,700 retailers. The current environment
provides a unique window where it’s easier to contact distributors
regarding new business opportunities. Export Solutions has
launched several new programs which allows us to supply
distributor search services via Zoom/Teams meetings.
Where to Play, How to Win 2022
continued from previous page
2022 Winning Stategies
Geographic Accelerate USA Development for Overseas Brands
Saudi Arabia
Mexico or Poland
Vietnam, Indonesia, Philippines (VIPs)
Sales Execution E-Commerce KPIs
Listing Maps – Every Country
In-store Visibility Guidelines. What is a Good Store (vs Bad Store)?
Team Upgrade Underperforming Distributors
Hire Digital Marketing Manager
USA Country Manager (Overseas Brands)
Looking for Good Distributors?
Export Solutions’ database covers
9,200 distributors in 96 countries.
www.exportsolutions.com
Are you selling more to China or Canada?
China and the BRICs represent a big
disappointment for most exporters. Ten
years ago, a gold rush started, with brand
owners dreaming of selling to just one
percent of China’s 1.4 billion population.
Veteran export managers long ago deleted
those optimistic presentations with
ambitious volume targets for China,
India, Russia, and Brasil. The stark
reality reveals that eating habits remain
dramatically different in China (and
India). BRIC countries like China are
complex and largely self sufficient,
feeding their own nations. This leaves
little shelf space for premium foreign
brands with different taste profiles
unless they are supported by massive
advertising budgets.
Fab 5
Exporters enjoy greater success targeting
mid-size countries more dependent
on imports for their food requirements.
Export Solutions recommends 2022 focus
and expansion in Canada, Malaysia,
Morocco, Peru, and Saudi Arabia. 2022
represents the year to adjust resource
allocation to our Fab 5 countries. These
five countries all maintain populations
between 30-40 million people and a
history of openness to international
products. Many companies claim sales
to Fab 5 countries. However, my
experience suggests that sales levels
usually lag significantly below potential.
Fab 5 appear as strong candidates to
contribute a good return on your
incremental investment and focus.
Canada – Melting Pot
Canada’s GDP ranks tenth in the world,
larger than Russia, Spain, or Australia.
Canada’s population surpassed
38 million, + 10% in the last ten years.
Canada’s growth is fueled by
immigration from Asia and Europe
(Italy). Asian and European brands
perform well, as Canadian newcomers
are often “first generation,” still homesick
for their favorite brands. Most exporters
know of leading retailers such as
Loblaws, Sobeys, and Metro. The “big 3”
supermarket chains operate multiple
formats competing across far flung
provinces of Canada, supplying many
places to get started with your bilingual
package. Export Solutions databases offer
excellent coverage of Canada, including
86 retail customers and 205 international
food distributors. Canada: worth a fresh
look in 2022!
Malaysia – Land of Gold
There may be riches to be discovered in
Malaysia’s supermarket shelves, although
gold is no longer mined in the country.
Malaysia is a bright spot in Southeast
Asia, with a population of 33 million and
GDP growth averaging 5% percent since
2012. Malaysia benefits from its proximity
to Singapore, its small but prosperous
neighbor. Malaysia’s retail segment is
dominated by multinationals such as
Tesco and Cold Storage (Dairy Farm).
A strong distributor community exists,
with 128 distributors of all sizes and
specializations, ready to serve as your
route to market partner.
Morocco – Magnet
Over 11 million tourists arrive each year
to the experience the magic of Morocco.
Morocco is a peaceful country, hugging
the northwest African coast, close to
Spain. Population exceeds 37 million
people, with stable GDP growth
averaging 4 percent. I visited last year,
and checked impressive hypermarkets
from Carrefour and Marjane, a chain
owned by the king. The Morocco
opportunity is amplified by the
foodservice channel, catering to the
tourists as well as a local population
familiar with nearby European brands.
Peru – Latam Star
Peru stands out as a star in Latin America
business development, approaching
Chilean status as an outpost of
dependability. This appears as a
refreshing alternative in a continent
dominated by the political and financial
turbulence of its bigger neighbors in
Brasil, Colombia, and Argentina. Peru
will host 4.5 million tourists this year,
lured by Machu Picchu. Lima has
emerged as a gastronomic capital, with
three of the world’s top fifty restaurants.
Export Solutions maintains good
familiarity in Peru, through three recent
distributor search projects and coverage
of 82 distributors in our database.
Saudi Arabia – 50% of the Gulf
Most companies sell to Saudi Arabia, but
few approach their true potential in the
richest country in the Gulf. Normally,
Saudi Arabia should represent 50 percent
of your total Mid East business, if your
sales are proportionate to population and
the opportunity. This tends to be three
times the level of tourist friendly Dubai.
Hot Countries 2022: China or Canada?
continued on next page
21
22
Hot Countries 2022: China or Canada?
Why Saudi? Saudi boosts a population of
36 million and the worlds second largest
oil reserves. Saudi Arabia is an affluent
country, with the government providing
jobs, education, and other subsidies for
their citizens. 2022 outlook is mixed,
based upon oil prices. Still, tremendous
upside exists for most brand owners.
I am always fond of Saudi Arabia, as
I worked there for three years for a large
FMCG and met my Irish wife at a wine
tasting party!
USA – Bigger than BRICs
The USA development opportunity is
the largest single priority for European
brands. All European brands sell to the
USA, but volumes are usually quite
modest relative to the potential. USA
features ten different trade channels
and more than 300 retailers. Many chains
are open to innovative products from
overseas, as long as the manufacturer
“does his homework” by supplying true
category innovation. Trade promotion
investments and payment of listing fees
are mandatory in most cases. Normally,
I urge my European clients to “start
small” in the USA, focusing initially
on ten northeast USA chains with 30-150
stores each. Hire your own USA business
manager to work with local brokers and
optimize your investments in critical
trade promotion activity. Initial success
validates the phase two investment levels
required to compete effectively on the
shelves of larger retailers such as Kroger,
Ahold, or Publix.
China – Lessons Learned
Multinationals like Coca Cola, Starbucks,
Nestlé, Ferrero and Procter and Gamble
can point to China as their top global
priority. Unfortunately, I struggle to list
many (any?) smaller companies that are
generating important tonnage in China
on an export basis, even after ten years
or more of trying. Factors limiting
development include a strong
preference for local foods (except
Confectionery/Snacks), lack of strong
distributor options and requirements
to have large teams of people in country
to attack the opportunity. Emarketer
estimates that ecommerce represented
52%of sales in 2021, with brick and
morter retailers declining by 18%. This
also changes the playing field beyond
the capabilities of most overseas based
brand owners.
2022 Guidance
There are no easy answers in the world of
export. If export was easy, they wouldn’t
need us! Export Solutions advocates
consideration for business improvement
in attractive Fab 5 countries which
offer good upside with more limited
investment and complexity than China
and India. The USA appears as a high
priority for many in the 2022 post-Brexit
world. USA winners must play the USA
game, with USA factories (or copackers)
paired with local brokers and a channel
specific strategy. Export Solutions
can help!
Talk to an Expert
• International Strategy Road Map
• Fix Problem Markets
• Entry Plans
• Find Distributors in 96 Countries
• Export Workshops
• Motivational Meeting Speaker
Contact Greg Seminara at (001)-404-255-8387 to discuss your business development project.
www.exportsolutions.com
continued from previous page
Population (millions)
Canada 38
Malaysia 33
Morocco 37
Peru 34
Saudi Arabia 36
23
When was the last time you reviewed your distributor contracts?
Fortunately, both brand owners and distributors only dedicate
time to these documents at the start of a relationship or when the
end is near. View our ten tips on handling distributor contracts.
1. Contract, Letter, or Handshake deal?
Most companies maintain a mix of these type of relationships.
This is normal, although most wish to standardize the model.
The rule of thumb is that the “more money you spend, the more
detailed the contract you need.” A simple two page letter of
understanding may be appropriate for a small business or a
handshake commitment in situations where the distributor
“buys and resells.” However, fully supported brand launches
and business management of a global brand usually requires
a detailed contract to protect both parties.
2. Sole Versus Exclusive Distributor
Most distributors demand country exclusivity. This is standard,
but may cause problems if the region is subject to inbound
shipments from global customers, e-commerce, or grey market
traders. A compromise is to offer a contract as the “sole”
distributor, providing protection from the manufacturer
appointing multiple partners in a country.
3. Distributors are Customers
At contract time, some manufacturers fail to remember that
distributors are customers, buying your product and reselling
to all local retailers. Suppliers may forward “one way” contracts
that are biased to terms favoring the manufacturer. Would you
send a contract like that to Kroger, Carrefour, or Tesco? Key is
to strike a reasonable balance favoring commercial sensibilities.
4. E-Commerce Implications
Many distributor contracts were executed before the advent
of e-commerce. Revised agreements may be necessary
incorporating e-commerce service requirements: items,
pricing, inventory, metrics, channel exclusivity.
5. Local Law Dominates
Overseas companies should have their contract reviewed by
a local law firm to guarantee compliance with local regulations.
For example, in Puerto Rico and Belgium, distributor (agent)
protection laws supercede any contract language.
6. Point of Arbitration
Normally, the brand owner automatically assigns his home
country as a point of arbitration for any disputes. In some cases,
both parties select a neutral country like Switzerland. A global
corporate counsel once taught me that ultimately any dispute
will need to be resolved in the distributor’s home country. For
example, a USA company can sue a distributor in a USA court. It is
unlikely that the distributor will hire a USA lawyer or even show
up. The USA court may enter a judgement, but the brand owner
still needs to go to the distributor’s country for enforcement.
7. Notification of Contract Termination
Standard contracts appear for two or three years with provisions
for automatic renewal. Distributors fight for long lead times;
a loss of brand can represent a major disruption. From a brand
owner’s side, would you want a terminated employee working
for you for six months or one year? I prefer three months
notification, but that can also backfire if the distributor resigns
your business.
8. Loss of Major Principal
Sadly, I have witnessed distributor bankruptcies because they
were doing “too well.” A distributor grows the brand to a size
where the manufacturer decides to take the brand back and form
a subsidiary. The distributor scrambles, but sometimes they need
to lay off more people and causes a rapid exit of other brands.
2022 contracts should require distributors to inform you within
10 days of notification (not effective date) of any loss of principal
representing ten percent or more of their business.
9. Global/Regional Customers
Large players like Walmart, Costco, Amazon, and Carrefour can
be difficult to manage. They demand best pricing system wide or
threaten to trans ship from other locations. In some cases, these
retailers may demand to “buy direct.” In this case, you can add
an “indent” clause permitting this practice while compensating
the distributor for local services such as merchandising.
10. Late Payments & Currency Exchange Rate
A distributor that pays late signals financial difficulties. Include
a clause that allows you the option to consider the contract in
default with payment delays beyond 45 days or with frequent
problem payers. The benchmark for calculating currency
exchange rates should be specified in the contract. I have seen
cases where a distributor assigns a five to ten percent benefit in
his favor to protect against the possibility of currency swings.
10 Tips: Distributor Contracts 2022
Need more information? Visit www.exportsolutions.com.
24
“The Right Way” – New Country Launch
Retail buyers and distributors are receptive to brand launches from multinationals. Why?
Multinationals succeed, as they introduce new products “The Right Way.” Export Solutions recaps
30 components of launching “The Right Way.” Exporters create magic with limited budgets!
Winners check as many boxes as possible on “The Right Way” scorecard.
Product Retailer
o Meaningful innovation – not “me too” o Boost category sales, margin, and profit
o Consumer market research insights o Syndicated data (Nielsen) – category facts
o Technical confirmation of product differentiation o Invest in retailer “push” programs
o Reasonable retail price – premium (not sky high) o 4-6 high value promotional events per year
o Test market results – similar country or retailer o Retailer VP, distributor CEO at intro call
Marketing Excitement
o 360 marketing plan: TV, in-store, social, PR o Launch party – memorable location
o Sampling o PR, social media, trade press
o Social media o Celebrity endorsement
o Displays: end of aisle and shelf blocks o Distributor sales contest
o Special offers – retailer fliers o Donation to local charity
Team Scorecard
o Distributor – best in class, category expert o Year 1: invest; year 2: break even; year 3: profit
o Local manager – launch oversight o Sales volume (retail sell-out)
o Marketing, social media, PR agencies o Market share
o Brand/technical resource from headquarters o Retail availability (weighted distribution)
o Total distributor engagement: reps. to CEO o Year 2 commitment and enthusiasm
25
From High Class to Mass
International brand builders may validate a logical progression
to market entry. Most export brands deliver unique products, but
at a premium price. It’s a natural first step to target “gourmet”
food stores and supermarkets patronized by upscale shoppers
first. E-commerce is an excellent channel to gain early visibility
for an overseas entrant. Many exporters should focus on success
in these channels prior to targeting mainstream supermarkets
supplying middle class shoppers. These chains tend to offer
larger store counts, but higher cost of entry and promotion.
Phase three retailers represent a final challenge once your brand
has achieved a respectable market share. These retailers tend
to be “value oriented” and demand lower price points to gain
acceptance by shoppers on a more limited budget.
Export Solutions recommends conducting a retailer
segmentation exercise for each country. Align customer
demographic characteristics with the market development
trajectory for your brand.
Sequence Demographic Retail Targets
Phase One High Class • High end supermarkets
• Gourmet deli’s
• “Homesick” expat shops
• Specialty retailers
• E-commerce
Phase Two Mainstream • Conventional supermarkets targeting
“suburban” shoppers
Phase Three Mass • Value oriented supermarket
and hypermarket chains
• Convenience – “small shops”
Looking for Good Distributors?
Export Solutions’ database covers
9,200 distributors in 96 countries.
www.exportsolutions.com
26
20 Tips to Accelerate a Mature Business
Activity Strategy
Creative Promotions
Retailer specific events. Offer fresh ideas.
Distributor Brand Manager
Upgrade talent. Secure “A” players on your business.
Pricing
More profit through higher volume at lower price?
Country Manager
Hire local manager or assign HQ person for 3-6 months.
Local Production or Copacker
Lower cost structure with added complexity.
Brand Ambassadors
Hire team with “brand uniform” to sample at local events.
White Space – Distribution
Fill voids on retailer listing map: Top 10 customers.
Social Media
Partner with influencers. Targeted local investments.
New KPIs
New measures: Listing maps, shelf placement, etc.
E-commerce Development
Invest to lead in this emerging channel.
In-Store Visibility
Educate and measure team on in-store presence goals.
Sampling, Sampling, Sampling
Aggressive distribution of free sample size.
Distributor Team Linkage
Zoom/Teams contact with Key Account Managers, etc.
Launch NPD Innovation
Excite team to launch innovation “The Right Way.”
Distributor CEO
Treat CEO as VIP. Create special relationship.
Sponsorship
Support local events and retailer charities.
Sales Contest
Excite and motivate retail sales team.
Alternate Channel Focus
Small shops, foodservice, duty free, drug stores.
High Spend Test
Will heavy up marketing or trade discounts drive sales?
Distributor Change
Motivated new team, high energy to solve old problems.
2727
Are you selling more to Ireland, Iceland
or India? To the Bahamas, Baltics, or Brasil?
UAE or United Kingdom? Small countries
offer solid business opportunities, with
lower complexity and investment required.
All companies export development plans
should include a mix of strategic countries
like China and the USA (Europeans) plus
revenue generators with fewer than ten
million people. Listed below are Export
Solutions’ ten tips on why small countries
deliver big business.
1. Limited Local Production
Small countries are highly dependent on
food imports. Even multinationals tend to
locate factories in larger hub countries. This
creates the opportunity for exporters to fill
a high percentage of a small countries food
supply requirements.
2. Distributor Model – Primary Route to Market
Most companies partner with distributors
in these countries. Leaders like Nestlé
and Unilever may find it more productive
and efficient to use distributors versus
establishing a local subsidiary. For example, Export Solutions’
distributor database supplies information on 63 distributors
in Panama, 87 in Kuwait, and 78 distributors in Croatia.
3. Value Chain – Level Playing Field
Brands are frequently able to compete on a level playing field in
smaller countries. Most products maintain similar cost structures
with importation fees, distributor margins, and retailer margins.
International brands do not suffer the same type of price gap
problems versus homegrown brands as they encounter in large
countries with local plants.
4. Low Complexity – Ship and Sell
In many cases, you are able to sell existing Made in the USA
or Europacks. Compliance may be achieved with a small,
distributor applied sticker. Many countries in this cluster
do not require a lengthy registration process accepting USA
or European standards.
5. Brand Awareness Exists
Surprise! Some consumers in an adjacent small country will
already be aware of your brand. This could result from cable TV
advertising or visits from their citizens to your country. Costa
Rica, Malta, and the Caribbean represent tourist hubs. These
popular hosts feed seasonal residents from the mainland and
boatloads of visitors hungry for their favorite brands.
6. Reasonable Cost of Entry
Launching a new brand is economical. Retailers are frequently
happy with a “free fill” of the first order versus an excessive
listing fee. Demos in a handful of high profile stores will
create visibility. Distributors appreciate your existing point
of sale materials.
7. Best in Class Distributors
Some of the best distributors of the world are based in small
countries. The reason is that even enormous multinationals
partner with distributors in these regions. This propels the
leading players to top ten suppliers to the retail trade. These
distributors implement the best practice models from companies
like Procter & Gamble and apply them to all the brands in their
portfolio. I witness many examples where a powerful distributor
creates a huge success story for a smaller brand based upon their
marketplace clout.
8. Currency and Freight Impact
Many countries consider the USA dollar or Euro as legal tender.
This reduces the impact of currency fluctuation and perhaps
some financing charges. Small countries that depend on imports
across all industries enjoy frequent freight service. This creates
competitive rates and potentially lower logistics costs.
9. Distributors: Excellent Relationships and Coverage
Everyone knows everyone in these countries. Distributor owners
emerge as respected community leaders. They know how to get
things done. Distributors are forced to be generalists, selling to
all customers across all channels and all regions within a
small geography.
10. International Brands: Affordable Luxury
Consumers take pride in offering their families the best food
treats from overseas. These world class brands may only be
a few cents more expensive versus private label type options
which face similar cost structures.
Export Solutions serves as a distributor search “helper,” with
400+ projects completed for more than 50 companies of all sizes.
Contact us to leverage our distributor database and strong
relationships with distributors in 96 countries.
Ten Tips: Small Countries Deliver Big Business
28
Coverage: 96 countries and 2,700 retailers
Supermarket
Convenience
Drug Store
Natural Food
Club, Cash & Carry
Supplying profiles, store counts, formats,
news and info for Top 100 international
retailers plus all overseas branches
Example 1: Who are supermarket
retailers in Canada?
Example 2: How many stores does Loblaws
operate by banner, in Canada?
NEW!
ORDER NOW!
28
Search by Retailer NameSearch by Country
Combo Search
www.exportsolutions.com
Search By Format
Retailer Search Made Simple
Canada Example
2929
Why did you create the retailer database?
Export managers dedicate a lot of time
to researching countries, retailers and
preparing business plans. A standard
KPI measure is tracking product listings
for key customers. I believe that our
industry could benefit from a global
retailer database to instantly locate
retailers and their store counts in
96 countries. The retailer database
is a logical extension of our leading
distributor database which has helped
more than 3,000 companies build export
sales during the last 10 years.
What is your geographic coverage?
96 of top 100 GDP countries worldwide.
This includes most Asian, Middle Eastern,
and European countries. Our database
covers every country in the Americas.
In Africa, we cover South Africa.
What is your format coverage?
Excellent coverage of chain supermarkets,
hypermarkets, clubs, cash and carry,
and convenience formats. Solid initial
coverage of drug stores, natural food
stores, and e-commerce channels.
Our database does not cover
DIY/hardware, toy, office, liquor,
or sporting goods channels.
Retailer database: featured info
Profile – Retailers profile and link to their
internet home page.
Formats – Retailer’s stores segmented
by format and banner.
We track supermarkets, hypermarkets,
cash and carry, convenience stores,
discounters, drug stores, natural food
stores, and e-commerce retailers.
News – Latest retailers’ news. In some
cases (Asia), we substitute a link to the
retailer’s latest promotional flyer.
Financial – Many leading retailers are
publicly traded. A link is provided to
their latest financial results. We do not
offer estimated financial information for
privately held or family owned retailers.
How is your coverage of global retailers?
We offer total coverage for top 100 global
retailers. This includes all of their
branches and banners. Searchable!
Use filters to research Walmart, Costco,
Carrefour, Tesco, Metro, Casino presence
by country. Database covers retailer’s
total store outlets as well as a breakout
by banner and format.
What can I use the retailer database info for?
• Obtain an instant snapshot of an
average of 24 retailers per country
for 96 countries.
• Track presence of global retailers like
Walmart, Carrefour, and Metro AG.
• Create country specific listing maps
where distributors measure brand
authorization by retailer.
• Conduct home office based
international category reviews
and price checks from retailers’
e-commerce sites (not all retailers).
• Prepare annual reviews and reports
with up-to-date information on
leading retailers and channels.
Searchable
The database offers filters allowing you
to search by country, format, or retailer
name. You can also use a combination
of filters for your research.
Can I get a free sample
of the retailer database?
Sure! Check www.exportsolutions.com for a
complete profile of United Kingdom retailers.
Do you provide retailer’s annual sales
or market share information?
Accurate annual sales information is
available through the financial link for
publicly traded companies. We do not
provide estimated financial information
for privately held and family owned
retailers. Channel blurring occurs
between supermarket, convenience,
e-commerce, and even natural food
operators. We do not provide market
share due to difficulty to accurately
isolate and define channel market share
information, particularly with so many
privately held retailers.
How accurate is the retailer data?
Export Solutions’ retailer database is
updated weekly, so information is highly
accurate. Retailer names, web sites, and
formats rarely change. This makes the
database 99% accurate at the company
level. New stores open every day,
resulting in store counts that may be
95% accurate. We intend to update store
counts on a regular basis.
How much does retailer database access cost?
An annual subscription to the retailer
database is $975. This supplies one year,
unlimited access to more than 2,700
retailers in 96 countries. Special offers
available for our distributor database
customers. Note: special pricing for
government trade organizations.
How do I access the retailer database?
Visit www.exportsolutions.com and click
the retailer database page. You can place
a subscription or individual continent
(i.e., Europe) into a shopping cart.
Register and check out via credit card.
The process takes two minutes and we
automatically send you an invoice.
About Export Solutions
Export Solutions was founded in 2004
and is based in Atlanta, Georgia in the
USA. Export Solutions serves as a leading
provider of business intelligence to the
food and consumer goods industries.
Our distributor database covers 9,200
distributors in 96 countries and has been
used by more than 3,000 clients. Our
Export Express newsletter has a circulation
of 9,900 and is viewed as an important
source of insights, strategies, and
templates for international development.
www.exportsolutions.com.
FAQ’s – Retailer Database
3030
Distributor Search Helper for:
Your
Logo
Here
Can We Help You?
Recent Distributor Search Projects
Asia Europe Middle East Latin America
Australia Germany Israel Argentina
China Ireland Kuwait Brazil
Indonesia Netherlands Qatar Colombia
Japan Nordics Saudi Arabia Costa Rica
Malaysia Spain UAE Ecuador
Philippines United Kingdom North America Mexico
Singapore Africa Canada Panama
South Korea South Africa United States Peru
Call the Export Accelerator!
Contact Greg Seminara at greg@exportsolutions.com
to discuss your business development project.
www.exportsolutions.com
31
One Billion consumers reside in stable
markets of Europe and North America.
These established countries represent
14% of the world’s population, but
account for 70% of all retail sales and
90% of the volume for most supermarket
brand producers. Growing sales in our
current selling universe of one billion
people is exceedingly difficult. It requires
true innovation (which may be quickly
copied) or costly investments in
marketing and trade spending to steal
share from your competition. Most
established markets achieved 2021 GDP
growth rates of 0-3%. Forward thinking
brand owners search for new growth
regions to offset mature categories in
current markets.
Size of the Prize
Our industry is fortunate that all 7.8
billion of the worlds citizens require food
products. Current reach extends to one
billion consumers for most companies.
Two billion people live on less than $2 per
day, surviving on the basics. This leaves
manufacturers with a potential untapped
market of 4.4 billion people that will
eat more and better in the future. This
will create new demand for our food,
confectionery, household, and personal
care products. Emerging Middle Class
populations are blossoming everywhere
from the legendary BRICS to previously
forgotten Sub-Saharan Africa countries.
New Holy Grail
A new Holy Grail of “selling to the next
one billion consumers” has been adopted
by industry leaders. The next billion
effectively doubles the size of the prize
for brands. Success with this lofty goal
requires marketers to teach consumers
new habits and practices or convert
consumers from local brands. This
represents a case of “Back to the Future”
for global brands. We must adjust our
sophisticated category management
approaches tailored for global retailers to
shift to the fundamentals of penetrating
fragmented markets. Plant managers will
wince at the request to shift production
from Costco sized packages to “pouches,
packets, and other pint sized portions”
required to gain trial and attractive
opening price points.
Rethinking Market Segmentation
Export Solutions segments markets into
three groups. “Established” markets
Finding Our Next Billion Consumers
Total Population Potential Next Billion
China 1.45 billion 225 million
India 1.41 billion 200 million
Africa 1 billion 100 million
Latin America 600 million 150 million
South East Asia 600 million 100 million
Russia/East Europe 300 million 115 million
Middle East 300 million 75 million
Turkey/Central Asia 160 million 35 million
Total Population 5.71 billion 1 billion people
continued on next page
32
Country Segmentation 2022
Established Developing New Frontiers
Markets
Western Europe
USA/Canada
Japan/Australia
Central/East Europe
Latin America
(ex Brazil)
Saudi Arabia/Gulf
China/Korea/Taiwan
Africa
Brazil
India/Turkey
Balance Middle East
Balance Asia
Population 1 billion 2.2 billion 4.7 billion
Share Global Population 13% 28% 59%
Share Global Retail Sales 70% 20% 10%
2022 GDP Growth 0-3% 3-7% 3-7%
Finding Our Next Billion Consumers
represent evolved markets such as
the USA, Western Europe, Canada,
and Australia. “Developing” markets
indicate markets such as China, Russia
and Mexico where many companies do
business, but per capita consumption
levels are low. ”New Frontiers” reflect
countries (Africa) with no existing sales
for a brand, or tiny businesses relative to
the size of the population. (India/Brazil).
High Potential Regions
China leads the list due to a reported
middle class of 175 million people. India’s
middle class of 150 million is expected
to double in the next five years. Latin
America also looks promising due to
strengthening economies in Brazil
& Mexico plus proximity to the USA.
Population explosion in Southeast Asia
could allow Indonesia to reach 300
million people and the Philippines and
Vietnam to each surpass the 100 million
population threshold. Middle East and
Russia will remain attractive, as long as
the price of oil is $80 per barrel or higher.
Follow the Global Retailers
Brand owners can quickly identify
priority countries by following the lead of
global retailers. Leaders such as Walmart,
Carrefour, Metro, and Tesco spend
millions analyzing market potential. Look
at China, where every global retailer has
battled for the last 10 years. Retailers are
all planting small flags in India, quietly
creating infrastructure and “wholesale
based” presence in advance of the
eventual opening to foreign supermarket
operators. Walmart’s exceptional results
in Mexico offset stagnant performance
from their USA business. Global retailer
presence is smaller in Southeast Asia, the
Middle East, and Russia. However, my
bet is that the giants are watching local
supermarket chains sweat to build critical
mass before sweeping in to acquire once
the initial footprint has been created.
Distributors – Local Experts
Most manufacturers prefer to partner
with a distributor versus creating a local
subsidiary in “New Frontier” markets.
This allows brands to test their way
into a market and focus investments
on brand building versus infrastructure.
Companies instantly benefit from the
distributors long standing relationships
with local supermarket buyers and can
gain valuable “lessons learned” from
the distributor’s other brands. Seek
distributors with experience pioneering
other premium, international brands.
Export Solutions’ distributor database
covers 96 countries, tracking more than
100 distributors each in China, Brazil,
Russia, Mexico and 98 in India.
Next Steps: Management Commitment
Selling to the next billion consumers
requires familiar strategies and tactics.
Brands tap into their learning base of
best practices across the globe. Most
companies know how to gain product
trial in emerging markets and how to
penetrate countries dominated by small
shops. The key is to secure senior
management commitment to the vision
of selling to one billion new consumers.
The real investment is in people required
to execute the plan. Export Solutions
can help!
continued from previous page
33
There are 196 countries in the world.
How many is your company selling to?
International expansion to new countries
is a strategic imperative for most
exporters. The challenge is to determine
which countries will deliver the greatest
financial return for your investment of
time and resources. Listed below are
some practical considerations for
determining where to sell next.
Determine Category Size: Data exists
to allow you to capture the size of your
category in target countries. Syndicated
data suppliers such as A.C. Nielsen
and Euromonitor sell category sales
information and trends. Government
agencies track sales for core categories
impacting their local producers. Category
size may be estimated by sourcing the
information from a friendly retailer and
projecting country level sales based upon
that retailer’s market share.
Population: Just One Factor: A logical
conclusion would translate that large
countries like China and India would
represent the greatest opportunity.
Population levels are relevant, but not
the only factor. A classic case study is
the story of Colombia and Puerto Rico.
Most USA based consumer goods
manufacturers sell more product
to Puerto Rico, a commonwealth
of 3.3 million people than to Colombia,
a country of 52 million people.
GDP: Follow the Money: Per capita,
gross domestic product (GDP) is an
important consideration. International
exporters are known for marketing
premium, value-added brands.
The higher the countries purchasing
power, the more likely that middle
income citizen’s can afford our brands.
This appears as one reason that European
markets such as Germany, France, Italy,
& the United Kingdom may create a
larger opportunity than countries such
as Pakistan, Indonesia, or Bangladesh
that have far more people.
Growth Rates: Think to the Future:
Export development often represents
an investment for the long term. Your
country prioritization analysis should
look at population and GDP growth rates.
I worked in Saudi Arabia in the early 90’s
when the population was around
14 million, but growing at 8%. Today,
Saudi Arabia’s population is more than
34 million. Which countries will be the
largest in 2025 versus 2022?
Proximity to Manufacturing Plants:
Transportation costs contribute one
of the largest line items in your pricing
calculation. Logically, shipping to a
neighboring country is likely to cost
less than shipping half way across to the
world. Citizens of adjacent countries have
probably visited your country and may
have seen your brand or a commercial for
it. Canada occupies the northern border
of the USA and is the single largest export
market for USA consumer goods
manufacturers (and vice versa).
Extend Current Retailer/Distributor
Partnerships: Global retailers such as
Carrefour, Metro, Walmart, and Costco
operate in many countries (and
continents.) Asia and Europe feature
regional distributors. Your brand has
established a track record with these
leading players. Your company is already
proficient at working with their operating
models. Leverage these relationships to
enter new markets. Warning: this can be
a risky strategy when you base your plan
on a large global retailer that happens
to have a small presence in your target
market. Examples: Whole-Foods UK,
or Walmart-Argentina.
Cost to Enter: There is a cost of doing
business in each market. Markets such
as Italy and Hong Kong maintain
notoriously high cost of entry into
the supermarket channel. Latin
American/Asian markets require
investment, but at more modest levels
relative to Europe or the USA.
Market Complexity: How difficult will it
be to enter the market? Certain markets
are consolidated with a few major
retailers and many qualified distributors.
Other markets are complicated, with
multiple trade channels, fragmented retail
environment, and a disparity in usage
profiles for your category. Larger markets
are challenging to enter. However, a 5%
market share in a large country may
deliver greater long term dividends than
a 50% market share in a small country.
Competitive Environment – Get Ready
for Battle: Evaluation of the competitive
landscape in your target market is critical.
Does the market represent virgin
territory? Or will you face 2-3 major,
multinational competitors? In competitive
markets, existing market combatants will
typically spend heavily to defend their
brand position to blunt a competitive
introduction. It is likely that you face
competition in every market. However,
it is important to calibrate the existing
competitive environment.
Availability of Enthusiastic Local
Partner: Selection of a qualified, local
partner is another key factor. Strong
distributors and importers exist in every
market. Pro-active contact from a leading
distributor indicates that this market
expert sees potential in your product.
This is favorable and may encourage you
to prioritize this type of market. However,
you must conduct due diligence to insure
that this enthusiastic distributor (that you
meet at a trade fair) maintains the critical
mass and skill set required to succeed in
building your brand.
These factors all play an important role
in determining the “Size of the Prize”
in new markets. Veteran exporters will
weigh each factor to establish the right
path forward for their export
development plan.
New Country Expansion Prioritization
34
Take Your Export Business to the Next Level
Export Solutions Services
Current Business Assessment
Opportunity Gap Analysis
Customer/Channel Prioritization
Broker, Importer, Distributor Identification
USA Entry Plan
Measures: Concept to Shelf
Consumer/Trade Promotion Plan
Connect with Channel/Retailer experts
Team staffing and recruitment
Double Your Business Plans
“Spend time Selling to Distributors
versus Searching for Distributors”
www.exportsolutions.com
Analysis
Partner
Sell
35
Distributor Performance: 20/20 Business Analysis
The start of a new year is an appropriate time to review distributor performance. This process starts with the evaluation of the usual
metrics such as shipment results, market share, and success delivering new item placement. Normally, distributor performance ranges
across the spectrum from outstanding results delivered by top distributors to under-achievers who fail to meet their shipment budget.
Each scenario warrants a different approach in terms of managing for the future.
Distributor Segmentation Analysis
A valuable exercise is to segment your existing distributors into
the three groups: Leaders, Performers, and Laggards. Look at
the organizational models of your “Leaders” and Laggards.”
Are there consistent threads between the business specialization
of your distributor network? For example, do you find that your
“Leaders” are all Large Distributors (versus small), Big Brand
Distributors (vs. niche), Category/Ethnic specialists (vs. all types
of Food), technologically savvy versus “old school”? A similar
analysis should cover your “Laggard” distributors. Are under
performers small organizations that fail to meet your
requirements? Or alternatively, large distributors where your
brand is too small to gain sufficient attention? Your analysis may
reveal that one type of model works well for large or adjacent
countries while another approach works best for smaller or
remote countries. Look for the trends!
Lessons Learned
Completing the distributor segmentation exercise described
above should yield some important conclusions on the best
partner models to pursue for your brand. For example, an Italian
manufacturer of candy may confirm that his best performing
distributors are international confectionery experts, versus
distributors specializing only in Italian products. On the other
hand, an ethnic Asian food producer may find that the best
candidates to represent his brand are Asian channel specialists
versus distributors that represent all types of fine food categories
such as Tea & Olive Oil.
Next Steps
Honor your leaders and drive them to higher levels. Recognition
such as Distributor of the Year, visits with your company CEO,
or requests to deliver a presentation on their “success story” are
inexpensive motivators. “Laggards” impact our own ability to
achieve our personal objectives. We often like the people who work
at “Laggards”, but at times, you must act to protect the long term
interests of your company and pursue a change in distributors.
It is important to recognize that all companies have distributors
that are “Leaders” and “Laggards.” Proactive attention to fix the
“Laggards” will only improve your results versus suffering
through another year with a poor performing partner.
Export Solutions Can Help
Our industry leading database has been used by more than
3,000 brands to locate partners in 96 countries. This includes an
average of 85 unique distributors per country. There are always
many alternatives to consider in every country when you have
access to the Export Solutions database.
Export Solutions serves as a consultant to European and
American brands of all sizes. Our work includes analysis
of distributor networks and development of strategies for
motivating, measuring, and rewarding distributors. Export
Solutions has helped companies identify, interview, and
sign distributors on every continent. Contact Greg Seminara
at [email protected] to discuss your project.
Our motto is “Spend time Selling to Distributors vs. Searching
for Distributors.”
Distributor Segmentation
Results Next Steps
Leaders
20% of total
Shipment increase of 10% or more.
Growing Market Share.
Innovative Strategies.
Recognition: Public & Financial.
Invest in team generated ideas.
Share learning with other markets.
Performers
60% of total
Shipments + 5% and in-line with
overall market growth.
Consistent results over
many years.
Support current growth trajectory.
Challenge to reach “Leader” status.
Laggards
20% of total
Flat/declining shipments.
Poor results for 2+ years.
Low energy/innovation.
Probation status for existing partner.
Evaluate different representation options.
All markets have alternatives!
36
Criteria Rating Evaluation Factors
Shipment Results
Overall growth for our industry in your market?
Distributor company wide sales performance (all brands)?
Distributor sales results for my brand?
Change vs. benchmarks?
Brand Performance
Key brand performance versus overall category.
Shipment growth, market share, weighted distribution.
New item success.
Key Account Results
Results at top 3-5 accounts (or channels).
Improvements: new items, shelf presence,
merchandising.
Are we getting “fair share” of retailers growth?
What Worked?
Strategies or performance that achieved results.
Ideas that delivered incremental sales.
Key Issues?
Problems or barriers to achieving results.
Pricing, investment, competition.
People
Performance by key people touching our business.
Organizational changes? Who made a difference?
Financial
Distributor’s financial health. Planned investments.
Efficiency opportunities in Partnership.
2022 Requirements
Resources required to achieve 2022 shipment expectations.
Critical activities, timelines, changes to structure/plan.
Distributor Market Review
Greg’s Ten Tips
1. Good news travels fast and bad news
travels slowly
2. If you want to know what’s really going
on, spend a day visiting stores
3. Pick up the phone and call a friend or business
partner versus email
4. Be positive. Think, “why not?”
5. Results are directly proportionate to your
investment: Marketing, People, Focus, Time
6. A distributor (or Broker) “respects” what the
Brand owner “inspects”
7. Shipment numbers rarely lie
8. Put it in writing
9. If two people agree on the principle of a deal,
you can usually work out the financial terms
10. There is more in common with industry
practices across the globe than differences.
Brand owners everywhere desire more shelf
presence and retailers demand more discounts.
Recognize the differences, but focus on the
universal requirement for superior products,
marketed at a fair price.
37
Retail stores serve as showrooms for our products,
the destination where supply chain inventory is
translated to a sale. Leading multinationals such
as Unilever, Coca Cola, Mondelez, and Kellog’s are
placing renewed emphasis on in-store execution
through “Perfect Store” initiatives. Basically,
perfect store programs seek to optimize supplier
and store sales through improved brand visibility
and an enhanced consumer shopping experience.
The concept of a Perfect Store or improved in-store
presence applies to manufacturers of all sizes.
Cultural Shift
Successful execution of Perfect Store programs
mandates a cultural shift.Today, most companies
exhibit laser focus on volume and headquarter
based product listings. This same attitude and
determination must be applied to key performance
indicators (KPI’s) on store presence for your brand.
This shift requires an organizational realignment
around roles and responsibilities, time allocation,
and performance measures and incentives.
Define Your Perfect Store
The first step is to ensure that each member of your sales team is
“crystal clear” on your brand’s in-store objectives. Create a store
conditions resource guide, including photos that can be
distributed or shared online. I’ll always remember a store visit
in Cordoba, Argentina when I was a sales manager for Clorox.
The distributor representative proudly brought me to his “best”
store. The store was not bad, but below objective because our
brand only commanded 50% of shelf space versus our 65%
market share. When I mentioned my disappointment, the
representative accurately claimed that “no one had ever
shared” this shelf objective before.
Focused & Fact Based
Perfect store programs should concentrate on your highest
volume and profit items, not every product in your range.
Establishment of Perfect Store criteria should be logical and
demonstrate that successful execution translates to increased
sales and profits for the retailer. Normally, manufacturers share
test data based upon similar store sizes or formats.
The Right Stuff
Mondelez speaks of four components to retail execution:
Right Assortment
Right Pricing and Promotion
Right Location
Right Displays
What attributes form the “Right Stuff” for your brand?
Secondary Placement
A recent project revealed that my client’s category was found in
seven distinct store locations. Sales grow exponentially through
placement in multiple store sections. Examples include off-shelf
displays, secondary shelf placement, or cross merchandising with
related products. Capture secondary placement in your Perfect
Store vision.
What’s Measured is Treasured
In-store KPI’s can be measured via mobile devices. Normal
tracking creates objectives that can be counted by a numerical
response or a yes or no answer. Core measures focus on items
available (assortment), retail pricing, share of shelf space, and
incremental displays. Distributors and export managers must
create systems to evaluate results and track progress just as we
do shipment performance.
Incentives & Excitement
Perfect Store programs require the same energy and excitement
as other strategic initiatives. Leaders have aligned compensation
bonuses to attainment of goals. Others have supported the
initiatives with contests and media support. Google “Perfect
Store” to see instructional videos from multinationals.
Emerging Market Weapon
Many emerging markets are transitioning from small urban
shops to modern retail. These countries offer greater flexibility
to make changes at store level than tightly controlled Western
markets. These new markets often serve as lead markets for
Perfect Store rollouts due to acceptance of point of sale materials
and ability to establish a firm foundation for the future.
Future – Amazon and Online Retailers
Amazon’s web pages represent a change in dynamics where new
brand visibility strategies may revolve around web placement
and cross promotions. What is the perfect store for an online
environment? The future is today.
Achievement of our sales targets requires a new attitude towards
in-store execution. Every member of your distributor network
should maintain a clear understanding of whether each store
is an A, B, C, or D or a Perfect Store and Why? Export Solutions
works with brand owners on a program called Next Level Sales
Management which creates specific measures for improving your
in store performance.
What is Your Perfect Store?
3838
Create Your Own Export Library
Looking for a fresh point of view for your
next event or training workshop?
Contact Greg Seminara at
greg@exportsolutions.com
All guides available free at www.exportsolutions.com.
Export Strategy Guide
Distributor Search Guide
Export Handbook
Selling to USA Handbook
Distributor Management Guide
Finance & Logistics
300 Tips for
Export Managers
Idea Guide:
New World – New Business
Export Treasure Chest
My Favorite Templates & Forms
People Power
Strong Teams Build Great Brands
New Distributor
Cooperation Model
39
Hiring the right local partner is the third
most important step in optimizing your
sales. This follows creating a product with
a unique consumer value proposition
and willingness to invest in brand
development activities. Listed below are
some practical tips on selecting the right
company to represent your brand.
Identify a Pool of Preliminary Candidates
Create a large group of potential
candidates. This could include distri-
butors, importers, brokers, or local
producers of related products. Highlight
companies that are specialists in the
market sector that you are aiming at.
Export Solutions streamlines this process
with our online directory of more than
9,200 distributors, importers and brokers
for 96 countries.
Establish Partner Selection Criteria
What are the key attributes of your
ideal candidate? Product specialization?
Service portfolio? Existing results for
current brands? Choosing a Large,
“Best in Class” partner versus a “Small,
Hungry” company willing to pioneer a
new brand is an important preference.
Determine Candidates’ Preliminary
Interest Level
Send a brief summary of your product
proposition and company credentials
to the 5-10 most promising candidates.
A follow-up phone call to your top
candidates is an appropriate personal
connection. Distributors expressing
an interest should complete a brief
company overview recapping their
corporate capabilities: Sales, Logistics,
Marketing, etc.
Schedule a Meeting in the Candidates’ Office
Normally, we recommend interviewing
at least three candidates depending on
the size and scope of a project. Schedule
the meeting 4-6 weeks in advance.
Provide a specific agenda at least 2 weeks
in advance, including pre-work such as
category market analysis. Meet the
distributor’s team that would work
on your business, as well as senior
management. A distributor’s office (and
warehouse) provide clues on company
culture, scale, and capabilities.
Prepare Interview Questions
and Assessment Grid
Create a list of key questions to ask each
candidate. Topics could include local
category dynamics, cost of entry, and
Distributor success stories. Create a
standard grid to evaluate and compare all
candidates on a common platform. Export
Solutions’ website contains ten sample
questions for every distributor interview.
Conduct an Independent Evaluation of
Candidates’ Performance for Existing Brands
Visit target stores for your product to
observe category conditions. At the
same time, evaluate each candidate’s
performance for his existing clients.
Do his current brands maintain a strong
presence in the market? Or are his brands
hard to find? Conduct these visits to
leading retailers independently, as an
accompanied visit may lead you to select
stores which may not be representative of
marketplace reality.
Reference Checks Represent
an Important Next Step
Request references of 5 of the distributors
top 10 clients. Call at least three references
and request insights into performance
and capabilities. Acknowledge that these
are likely to be positive references, but
they always provide significant value.
Run a Dun & Bradstreet or other type
of credit report on leading candidates.
Export Solutions is often hired to
conduct independent, confidential,
reference checks.
Invite Top Choice to your
Corporate Headquarters
The visit should include meetings with
senior management, factory tour, launch
planning, and mutual commitment. The
trip serves as an important bonding and
relationship building experience between
your company and your new partner.
My Way: Finding and Selecting the Right Distributor
www.exportsolutions.com/ExportTips
300 Free Articles
Export Strategy
Distributor Management
Strategic Export
Development Program
Export Passport
Export Passport
40
Distributor Search Challenge
• Some distributors are too big…
• Other distributors are too small!
3
Export Passport identifies
Prime Prospect distributors
that represent the Right Fit
41
42
Exporter Classification*
Type Description
Export Profile
10 Multinational Strong market share everywhere across multiple categories.
9 Global Multinational. Mix of leading countries and niche participation.
8 Category Champion One core mass category. Strong performance globally.
7 Icon Well known, niche leader. Global availability. Example: Tabasco.
6 Regional Leader Strong share across one continent/region. Some export success.
5 National Hero National treasure, #1 brand. Exports to homesick expats, tourists.
4 Player Respectable share in home country. Opportunistic exports.
3 Participant “Me too” product. Opportunistic exports. “Trader”/private label.
2 Challenger Innovator. Some listings in home country. New to export.
1 Start-up Trying to get traction in home country. Export “dreamer.”
*Export Solutions’ classification system
43
Distributor Classification*
Stars
Title
Description
Prime Prospects
HHHHH
Champion
Massive distributor.
Handles multinational/#1
brands across many
categories.
Brand leaders.
$$$ marketing budgets.
Exporter types: 6-10
HHHH
Captain
Category Captain.
Handles leading brands in
one segment.
Category
innovators/leaders.
$$ marketing budgets.
Exporter types: 5-9
HHH
Player
Mid-size distributor.
Handles #2/3 brands or
niche leaders across many
categories.
Differentiated,
premium brands.
$-$$ marketing budgets.
Exporter types: 4-7
HH
Participant
Respected local.
Diversified product
portfolio.
Results equal to investment.
Flexible, challenger brands.
$ marketing budget.
Exporter types: 2-4
H
Pioneer
Small distributor.
Entrepreneurial, open to
innovative new companies.
Start-up brands.
“Pay as you go” marketing.
Exporter types: 1-3
Need more information? Visit www.exportsolutions.com.
*Export Solutions’ classification system
44
Recipe: Best in Class Partnerships*
Ingredient Brand Owner Distributor
Results
Realistic expectations based upon
investment/market conditions.
Achieve sales increase in excess
of overall market growth.
Category Expertise
Share knowledge, trends, and
category analysis.
Serve as local category expert.
Educate the buyer.
Innovation
Contantly deliver important
new product ideas to market.
Successfully launch new products
into the market.
Investment
Appropriate Investment levels:
marketing/trade promotion.
Optimize return on investment.
Store Presence
Create clear, realistic guidelines
for in-store presence.
Share of shelf exceeds market
share. Maximize visibility.
Ideas
Support market driven ideas to
build the business.
Relentless pursuit of new and
better ways to grow sales.
Reporting
Concentrate on Basics: Listing
Map, Pricing, Merchandising Plan.
Complete reports accurately and
on time.
Focus
Periodic market visits and “rapid
response” to issues.
Appropriate level based upon
brand size and opportunity.
Cost to Serve
Remember that distributors need
to make money too!
Fair margin based upon brand
size and complexity.
Recognition
#1 Fan. Frequent recognition of
good results by all team members.
Strong commitment to exceed
expectations everyday.
*Mix Well for Best Results
The state of California ranks as the
world’s 8th largest economy, larger
than India or Russia. USA population
expanded by 51 million people since 2000,
an increase greater than the population
of Canada. Americans are spenders by
nature, with 85% of the population able
to regularly purchase supermarket
brands. All international companies
export to the USA, but per capita sales
levels are usually very small relative to
potential. Export Solutions believes that
many international brands would see
a higher return on investment through
efforts to build a stronger franchise in the
USA versus waiting for “BRIC dreams to
come true.”
Global Marketplace
Americans are spoiled with an
overwhelming assortment of food
options. An average USA supermarket
stocks more than 38,000 unique items
in a 48,000 square foot store. Shelves
showcase products from around the
world. During one week, a typical family
would enjoy a mix of Italian, Mexican,
and Asian food to supplement meals
based upon meat, vegetables, and
potatoes. American cuisine has
assimilated into international cuisine
reflecting the rich heritage of ethnic
diversity. This creates an open gateway
for brands from every continent.
Americans are receptive to new and
emerging flavors which is a significant
point of difference versus BRIC markets
which tend to remain glued to traditional
eating habits and choices.
13 Different Trade Channels
USA retail business exceeds 1 trillion
dollars, through 13 unique trade
channels. Each USA trade channel
maintains a unique set of buying practices
and selling experts. 40,000 supermarkets
account for half of the food business,
followed by 4,000 Supercenters (primarily
Walmart), and 1,400 high volume Club
stores. Gourmet food stores such as
Whole Foods and ethnic supermarkets
represent core outlets for international
brands. Sales via the internet are an
emerging, high growth, channel offering
visibility and availability. Homesick
expatriates and food enthusiasts now
discover hard to find products instantly
online versus the historical approach of
hauling overweight suitcases from trips
overseas. Foodservice is an enormous
channel, but focused on commodity
products produced in the USA.
Three Phase Approach: Crawl, Walk, Run
Too many international brands are
misaligned with a focus to sell to Walmart
or even Kroger before they have
established a meaningful track record
with other retailers. A key insight is a
finely tuned strategy focused on winning
with a few high potential, trend setting
retailers prior to approaching the
“Giants.” Normally, we recommend
initial focus on ethnic and gourmet
retailers such as Whole Foods and Fresh
Market. After success, consider expansion
to upscale supermarket chains such as
Wegman’s and Gelson’s. Phase III should
provide a track record and investment
base to approach mass retailers such as
Walmart, Kroger, and Safeway.
Who is Your Food Broker?
Food brokers dominate sales through
the USA supermarket channel. Brokers
provide critical mass and local
relationships. Services include key
account sales, category analysis, trade
marketing, and essential retail coverage.
Store level representation is mandatory
to insure compliance with headquarter
authorized plans. Brokers range in size
from the massive “Big 3” which feature
more than 20,000 employees each to
smaller specialists focused against one
retailer. Export Solutions’ database tracks
over 566 brokers covering all markets and
channels. Leading USA importers partner
with brokers to provide the local expertise
and store merchandising services
required to succeed.
Calibrate Expectations to Investment
Imagine approaching Carrefour, Metro,
or Tesco with a new brand with “net, net
pricing” and limited marketing support.
The USA market is no different, with a
menu of account specific programs
required to build your brand. If you don’t
invest, you will always be anchored to
niche status at best. Retailers such as
Costco with their demo programs and
Shop Rite retain good reputations for
delivering incremental cases for your
trade spending.
Success Stories:
Barilla, Bonne Maman, and Walkers
Case studies exist for international brands
to successfully develop the USA market.
Barilla is the USA’s leading pasta brand.
Success strategy included building a USA
factory to offer competitive pricing,
highlighting their Italian heritage, and
alignment with a leading USA food
broker. Bonne Maman and Walker’s
trajectory followed patient paths. Both
brands built a base in the upscale retail
sectors, before moving mainstream to
USA: Bigger than BRIC?
continued on next page
45
46
mass availability. A core message was
the ability to upgrade category sales and
profits with a high quality, premium
option. Both companies invest in having
USA based sales managers versus
managing via remote control from
Europe. Other European brands have
developed massive businesses through
unique programs dedicated to Costco.
USA Business – Next Level Strategies
European brands frequently hire Export
Solutions to provide insights on taking
their current USA business to the “next
level.” Our sales oriented approach
involves market analysis, “lessons learned”
and recommendations of sensible options
to grow your business. Suggestions
normally include laser focus on brand
building at high potential customers
plus best route to market partners
(importers/brokers) by trade channel.
The USA still offers tremendous growth
opportunities for many international
brands. USA success requires the same
formula as BRIC markets. Higher levels of
investment may be required to win in the
USA. However, market dynamics are more
transparent than BRIC and purchasing
power ranks among the highest in the
world. Contact Greg Seminara at
[email protected] for more
information on taking your USA business
to the next level.
USA: Bigger than BRIC?
continued from previous page
Good USA Chains for International Brands
Retailer Type Sales (billions $) Stores
Ahold-Delhaize Supermarket 56 2,050
HEB - USA Supermarket 32 355
Meijer Supercenter 23 260
Wakefern/Shop Rite Supermarket 18 361
Whole Foods Gourmet 17 510
Hy Vee Supermarket 12 285
Giant Eagle Supermarket 11 216
Wegmans Supercenter 11 106
Harris Teeter Supermarket 8 260
Sprouts Gourmet 6 370
Raleys Supermarket 4 126
Fresh Market Gourmet 1.8 159
World Market Gourmet 1.0 242
Gelsons Supermarket 0.8 27
Kings Supermarket 0.4 19
47
Everyone wants to sell to Walmart.
This is logical, as they rank as the
number one retailer in the USA and
Latin America, plus good presence
in the UK, China, Japan, and South
Africa. Walmart’s International business
(outside the USA) is bigger than the total
turnover of Carrefour or Tesco. Selling
to countries where Walmart has stores
makes sense for USA producers.
However, Export Solutions always advocates a strategy of making export
decisions based upon what’s best for the entire country, versus the preferences of an
individual retailer, even if it is Walmart.
Walmart’s Central American buyers have been speed dialing leading brands pursuing
direct purchase agreements. These offers may be hard to resist, but manufacturers must
be fully aware of the implications. Selling direct to Walmart International allows you to
bypass the “distributor system.” This provides Walmart with a cost advantage at store
level of around 15%. This may create a situation where it is difficult to sell to other
market customers, because their list price resembles Walmart’s shelf price.
I visited Guatemala and Costa Rica recently. Walmart places many Direct Import brands
in one aisle, away from the product’s normal category placement. These Direct Import
brands are not supported by the armies of in-store merchandisers that are common in
Latin America. I remember the story of when I served as Director of Sales for Clorox in
Buenos Aires, Argentina. Someone from corporate sold my favorite Hidden Valley Ranch
salad dressing to Walmart International and it magically appeared on the shelves of my
Walmart. I was thrilled, but apparently was the only happy customer. Most in Argentina
had never heard of Hidden Valley Ranch. Without advertising, promotion, and
distributor support, the brand gathered dust and was discontinued.
I am an advocate of partnering with distributors to sell to Walmart’s international
divisions. These local companies sell and merchandise at Walmart and all market
customers everyday. Distributors focus on brand building and can provide the muscle
at store level to push your brand. Retailers benefit because they can reorder any day
versus waiting for the container to arrive from the USA. In my opinion, the distributor
model is usually the preferred route to market to create a sustainable business in these
fast growing countries.
Many European companies are anxious to sell to Walmart's 3,571 USA supercenters.
Slow down! Walmart’s USA supercenters specialize in category leaders and fast moving
brands. Their consumer base consists of middle and lower income customers who have
limited spending power to purchase super premium brands from overseas. Also,
Walmart tends to be the “low price” leader. This may damage your ability to sell to
upscale supermarkets, as they may be hesitant to stock an item that Walmart is carrying
and selling for 15-25% less. My humble advice for European brands is to create a base
business with mid-upscale USA supermarket chains. Approach Walmart at a later stage
with your track record of market success.
Walmart is the world’s number one retailer and will serve as a major factor in our
strategic decisions. It is flattering and encouraging that Walmart wants to sell our
brands. The key is to devise the optimal route to market that builds your brand equity
and facilitates your business development to all market customers, including Walmart.
www.exportsolutions.com
“Spend Time Selling to Distributors versus Searching for Distributors”
Selling to Walmart – When and How?
Greg Seminara
404-255-8387
Strategic Services
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Strategic Services
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Export Solutions
1. Identify Best in Class
Distributors: 96 Countries
2. Best Practices
Export Strategy
3. Distributor Management
Workshops
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Let’s Get Started
5. New Market
Prioritization
and Launch Plan
6. Personal Distributor
Introductions:
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7. Walmart International
8. Distributor Contracts,
Margins, and Fees
9. Meeting Speaker
10. International
Strategy Expert
4848
The USA represents the world’s largest market. A small market
share in the USA can represent a bigger business than owning a
50% market share in a smaller country. Many international
brands fail to reach their potential in the USA as they treat it as
just another export market. Listed below are Export Solutions’
ten tips for improving your results in the USA, a consumer
market of 333 million people.
1. Develop a Channel Strategy
The USA Food business is segmented into 13 channels, with
supermarkets claiming an average of 52% of the business. Other
important channels include Supercenters, Mass, Foodservice,
Value, Club, Convenience, Natural, Gourmet, Internet, Military,
Gift, and Ethnic. One strategy is to concentrate efforts on winning
in one channel to gain traction, versus spreading efforts in too
many areas.
2. Optimize Results at Top 10 USA Retailers
Think Walmart, Kroger, Publix, and Food Lion that all operate
more than 1,000 stores. Many companies claim that they “sell to
Walmart.” The key question is to identify a chain’s store count
and measure how many of those stores your brand is available
in. Last year, an important European beverage brand told me
that they were “selling to Walmart.” Turns out that his follow
up investigation revealed that he was selling to only 46 of
Walmart’s 3,571 supercenters.
3. Think Beyond New York
None of the top 5 grocery retailers maintain a presence in metro
New York. The USA has experienced a population shift to the
South and West, with the Northeast actually representing the
smallest of the four regions. Visit Atlanta, Houston, Los Angeles,
or Miami to get a more accurate gauge of industry dynamics.
4. Use a Broker
In the USA, the brokers play a unique role, touching virtually
every brand in the supermarket aisles. Even importers use
brokers to supplement their own efforts. Export Solutions’
database tracks 566 USA brokers, including the “Big 3.”
5. Retail Services are Required
Great news! You just received a listing at Kroger or Albertsons.
Your work has just begun. Planogram integrity is an enormous
issue in the USA. Compliance levels of new items at store level
may reach only 60% without a broker at store level to “cut in”
your product and monitor its availability.
6. Data Driven Decisions
The USA market is blessed with the most sophisticated analytic
tools that are used on a daily basis. This includes availability of
point of sale data at the chain (and sometimes store) level to
measure everything that scans. Business building and selling
incorporates use of post promotion analytic tools, market basket
studies, and brand sales by demographic cluster.
7. Try a Coupon
USA Sunday newspapers are jammed with coupons offering
consumers small discounts (.25 - $1.00) to purchase a product. Many
supermarkets up the ante, by doubling the value of the coupons.
This is a proven strategy to drive listings, generate trial, and repeat
purchase. A coupon can force a retailer to carry your product, as he
does not want to disappoint a customer with a coupon.
8. Hire a Sales Manager
An international company should place at least one person in the
USA to manage their interests. Hire a veteran sales person and
locate him in a home office in a city with a great airport like
Atlanta or Chicago. This role will allow him to manage your
distributor and broker network. You can also hire a contract sales
management group like Ram to perform this function. Hiring an
employee based in the USA signals that you are serious about
building your business in the USA.
9. TPR
This stands for Temporary Price Reduction. USA supermarket
aisles are filled with hundreds of these tags. The consumer
recognizes these tags to signal a special discount and “time to
buy.” TPR’s are normally 10% of everyday price and can be an
efficient spend particularly on a “scan down” program.
10. Ethnic Channel: First Stop
Your product will be well received in channels specializing in
your country’s products. There are well established retailers
specializing in Hispanic, Asian, British and Italian Foods.
Whole Foods and Cost Plus World Markets offer good
assortments of international brands.
Ten Tips for Foreign Brands: USA Growth Strategies
Good USA Chains for
International Brands
Retailer Stores
Ahold-Delhaize 2,050
HEB – USA 355
Meijer 260
Wakefern/Shop Rite 361
Whole Foods 510
Hy Vee 285
Giant Eagle 216
Wegmans 106
Harris Teeter 260
Sprouts 370
Raleys 126
Fresh Market 159
World Market 242
Gelsons 27
Kings 19
49
Many supermarkets offer sections
dedicated to products from foreign
countries. The “Homesick” shelf allocates
one meter, mini departments, represented
by iconic niche brands from the USA,
Germany, Italy, UK, Brazil, or Mexico.
Despondent expatriates rush to this
section hoping to find their favorite
candy or “sauce” brand from back home.
Often, this represents a “foot in the door”
and a starting place for your business
development. However, most brands
soon become frustrated with this remote
shelf location and plot strategies to enter
the main fixture to compete side by side
versus local competitors. Read Export
Solutions Ten Tips to gravitate from
“Homesick Shelf to Category Captain.”
1. Analyze the Data
Government census data (and embassies)
can reveal the number of your citizens in
a foreign country. For example, in the
USA there are many Italians and Brits in
New York, Germans in Pennsylvania and
Mexicans in California. Tourism statistics
also supply guidance where to find your
current customer base overseas. Current
sales per capita figures indicate countries
where your brand has traction beyond
your core expatriate base. This analysis
provides you with the first clues on where
to focus your investments.
2. Research Local Preferences
A food scientist or market research
company could study local food
preferences and your product portfolio.
Are there options to incorporate your
brand into traditional recipes? Consider
adapting your core product line to meet
local flavor preferences. Pringles built
exceptional sales and excitement by
launching innovative new flavors such
as Jalapeno, Curry, Grilled Shrimp,
Ketchup, and Pizza.
3. Test “Higher Spend” Marketing Plan
Everyone knows the fundamentals of
brand building: sampling, billboards,
radio, and social media. Usually,
exporters may be hesitant to invest
in advance of sales. However, it may
be “low risk” to pick one small-medium
size country to test a targeted marketing
support plan.
4. Hire a Local Manager
It’s tougher and tougher to manage
exports via remote control from company
headquarters. Smart exporters are
opening offices in regional centers like
Shanghai and Dubai for placement close
to the action. You have a choice to send a
missionary from company headquarters
or a local hire who understands the
language, market, and how to get
things done at store level.
5. Focus on Upscale Supermarkets
Identify the “upscale” supermarket chain
in a country. Their consumer base is likely
more adventurous and boasts higher
purchasing power. Invest to be a category
leader at these high profile customers.
Often, middle income supermarkets look
to these upscale chains for assortment
inspiration. In the USA, think of HEB and
Whole Foods first, not Walmart. In the
UK, look to Waitrose vs. Morrison’s. The
same analogy applies to every market.
6. Manufacture in Country
Eliminating overseas freight charges and
duties may allow you to compete more
effectively on a price basis. Labeling in
the local language may be a plus. A small
factory also establishes you as a member
of the community with employees that
will create goodwill. A manufacturing
site may be complex and expensive, but
co-packers may represent another option.
7. Move to a Bigger Distributor
Frequently, a new brand will align with
a small distributor consolidating brands
from one country. This is a logical and
viable strategy to get started. However,
I’ve witnessed countless cases where the
brand’s aspirations and requirements
outstrip the capabilities of the small
distributor. Brands may consider
moving to a more powerful distributor,
with deeper brand building capabilities.
Warning: be prepared to invest more
with a big distributor or you risk losing
ground as unsupported brands may
get lost in the mix. Export Solutions’
database tracks an average of 85
distributors per country.
8. Sponsor a Sports Team or Charity
Fans everywhere love their teams.
Alignment and support of a local sports
team yields dividends. Pick a charity
that contains a meaningful link to your
product or target consumer. Many
supermarket chains have a favorite charity
providing a route to collaborate with a
trading partner for a worthwhile cause.
9. Bring Your Team
Retailers are desperate for fact based
consumer insights. Bring your research
and technical experts from headquarters
to visit overseas retailers and distributors.
Let them “wow” them with their category
knowledge. Note: you may need to coach
your experts on appropriate messages as
sometimes foreign buyers don’t care how
you operate in Chicago or London.
10. Create an Anniversary Event
Many brands have been available
in foreign markets for 10, 20, 30 years
or more. Why not design an anniversary
event commemorating “25 years in
the ______ Market.” Elements could
include special packages, consumer
contest, public relations, charitable
donations, and a celebratory dinner
for your retail customers.
Ten Tips: From Homesick Shelf to Category Captains
There are 196 countries in the world.
How many are you selling to? In the past,
export managers impressed management
with claims of sales to 20, 50, 100
countries or even more. Welcome to
2022, when export success is tracked by
countries where your brand captures
tangible market share, not opportunistic
sales measured in pallets. Emerging
markets and e-commerce have created
strategic opportunities for “new sales to
old markets.” Middle class population
now exceeds three billion worldwide,
with emerging market consumers living
better and eating healthier. E-commerce
provides an exciting channel to kick start
new sales, as online retailers remain open
to accepting your entire product range.
E-commerce has no physical space
limitations and costly entry fees of
traditional supermarkets.
Prime Prospects Defined
2022 is the year to tackle prime prospects.
Prime prospects are defined as countries
where many exporters are present, but
your business is underdeveloped relative
to country size and potential.These
countries typically feature large
(30 million +) populations and
growing economies. Many companies
have underperformed in prime prospect
countries, distracted by the illusion of
BRIC riches. Veteran export managers
learned the hard way on difficulties of
marketing new meal solutions to Chinese
and Indian consumers and now have
shifted focus to more promising countries.
Success Recipe
Prime prospect countries are open
for business, receptive to international
brands. The key is to identify one or two
prime prospect countries as 2022 focus
markets. Match the priority with a
stronger investment plan, more frequent
visits, and distributor alignment on your
higher aspirations and scorecard
objectives. In some cases, you may need
to upgrade to a stronger partner, with
broader brand building and customer
penetration capabilities. Simply asking
a distributor to “sell more” with the same
resources will not yield the desired results.
United States
The USA opportunity is bigger than all
BRICs combined for most international
brands. USA population exceeds 333
million people and features big stores
open to new brands that are willing to
“pay their way.” Amazon represents a
new growth customer for all international
brands. USA consumers are adventurous,
with most families regularly consuming
Italian, Mexican, and Asian food.
Most European brands claim sales to the
states, unfortunately at levels well below
potential. Cracking the code requires a
channel and region specific strategy
supported by targeted investments in
trade promotion and a manager based
in the USA to oversee it all. International
companies must treat the USA as a prime
prospect, not just another export market.
Mexico
Mexico surpassed Japan to be the world’s
10th largest country, with a population of
135 million. Mexico’s economy ranks 15th
in the world, bigger than Saudi Arabia!
Mexico benefits as a supply depot to the
healthy USA market. Many industrial
manufacturers construct enormous factories
in northern Mexico to take advantage of
lower costs and skilled workforce, less
than one day transit time from the USA.
Walmart, HE Butt, and Costco maintain
an impressive presence, investing for
the future.
Vietnam
Vietnam emerges as a bright spot in the
southeast Asia VIP (Vietnam, Indonesia,
Philippines) cluster. Business is booming,
as certain industries shift manufacturing
there to avoid the China trade brawl. Count
on another year of 6% growth. New middle
class consumers are flooding into modern
trade. However, per capita GDP remains
low, hovering around $2,900 for the
population of 99 million.
Colombia
Population now exceeds 52 million people,
bolstered by almost 1.5 million Venezuelans.
Colombia is a diverse country, from the
sprawling cities of Bogota and Cali to
historic sites like Cartagena and Medellin.
2021 retail sales increased an average of
four percent, a good performance.
Prime Prospects 2022
Prime Prospects
1. USA (Europeans)
2. Mexico
3. Vietnam
4. Colombia
5. Spain
6. Saudi Arabia
7. Philippines
8. Japan
9. Peru
10. Poland
continued on next page
50
5151
Spain
Record tourism and export levels, coupled
with revived domestic consumption,
helped drive Spain’s economic recovery.
Spain is the top performer of Europe’s
major economies, with another year of
growth close to three percent. Mercadona
is a tough chain to crack, but there are
plenty of other retailers like El Corte
Inglés and Taste of America that
showcase international brands.
Saudi Arabia
Saudi remains the big prize in the gulf,
accounting for 50% of region volume.
Market conditions have stabilized,
although the pay for performance
environment still exists. Senior executives
need to challenge their team to get out of
Dubai and focus on Saudi Arabia and the
wealthy 34 million population!
Philippines
Recently, I completed several distributor
search projects in the Philippines.
I continue to be impressed by this country
with a young population of 112 million.
The economy is a top global performer,
with another year of 6% GDP growth.
Philippines is attractive for USA
exporters. In 2022, it will rank in top 10
worldwide, with purchases exceeding
3 billion dollars. Supermarket shelves
are stuffed with popular USA brands,
many arriving without the benefit of
a local distributor. Significant potential
exists for those willing to make an effort.
Export Solutions’ database tracks
98 Filipino distributors.
Japan
Japan’s 125 million citizens had been
ignored by many international suppliers,
as exporters chased a China Gold Rush
that never occurred for most. Now, the
pendulum has shifted back to Japan.
Japan claims a sophisticated food culture,
with deep pocketed consumers. Japan
features more than 1,000 gourmet stores
like Seijo Ishi, Kaldi, and Meidi-Ya,
focused on imported brands. Worth
a fresh look.
Peru
Peru is an exciting culinary destination
with Central and Maido ranking in the
top ten restaurants worldwide. Peru’s
growing population exceeds 33 million,
also benefitting from new arrivals from
Venezuela. GDP growth has slowed from
its peak, but is still projected to reach 3.9
percent this year, the top performance in
South America. The big 3 supermarket
retailers maintain a rational approach to
market entry.
Poland
Poland is a bright spot in Europe, with
expansion rate of 3.8% expected. Poland’s
economy has consistently outpaced the
2% benchmark for the euro zone.
Poland’s 38 million citizens enjoy
increasingly better lifestyles, albeit their
income still lags behind the EU average.
Watch List
Qatar is surviving its regional isolation
and is building full steam ahead in
preparation for the 2022 World Cup.
Ireland is doing well, helped by a Brexit
scare bounce. Ireland also has the most
to lose from a disruption in trade with
their biggest customer. The Dominican
Republic and Panama remain bright spots
in the Caribbean basin. Everyone dreams
of big business in Africa. Ethiopia’s
population is now 115 million, with
another year of eight percent growth.
Still tough to access, but probably some
first mover rewards for the pioneers.
Find Distributors – Prime Prospect Countries
Export Solutions’ distributor database
covers 96 countries and more than
9,200 distributors and importers of
supermarket products. The database
features filters which allow subscribers
to search by country, category, or brand.
Export Solutions completed more than
200 consulting projects across Asia,
Americas, Middle East, Europe, and of
course the USA. Brands work with us as
an “export accelerator” to quickly partner
with leading distributors. Contact us to
learn more about how Export Solutions
can leverage our distributor contacts for
your benefit in 2022.
continued from previous page
Prime Prospects 2022
Watch List
1. Qatar
2. Ireland
3. Dominican Republic
4. Panama
5. Ethiopia
Export Solutions Can Help!
• Distributor Network Assessments
• Motivational Speeches
• International Strategy
• Find Distributors in 96 Countries
Contact Greg Seminara at [email protected] or (001)-404-255-8387.
www.exportsolutions.com
Many brands appear exhausted by
chasing BRIC dreams in China and
India. Along the way, some have
missed the “miracle called Mexico.”
Mexico is blessed in many ways:
beautiful beaches stretching along
5,600 miles of coastline, rich mineral
resources (oil) plus a convenient
location just south of the USA border.
Mexico’s population of 135 million
ranks 10th in the world, equaling the
UK and France combined. GDP per
capita of $9,900 signals a good level of
purchasing power, eliminating
comparisons with poor countries like
Indonesia and Vietnam. Another
attraction is more than 2,600 large
format stores including Walmart,
Costco, and HEB.
USMCA = USA Supply Depot
The USA conducts over $661 billion
in trade with Mexico, facilitated by
the USMCA. This reflects a relatively
balanced 58/42 split between imports
and exports. Many multinational
companies locate factories south of
the 1,954 mile border to supply the
USA market. This strategic location
reduces long lead times and lengthy
freight journeys from Asia. Monterrey,
a booming metropolis of 5 million,
is situated only 143 miles from the
Texas border.
Consumer Habits
Thank Mexico for “Taco Tuesday” and
the global popularity of their special
cuisine. As you stroll the aisles, other
categories are stocked with familiar
global names. In fact, categories like
cereals, snacks, and carbonated
beverages enjoy some of their highest
category development in the world.
A recent trip revealed mainstream
acceptance of natural and organic food
products, with broad assortments, at
least in Mexico City. Club stores like
Sam’s and Costco serve as showcases
for most leading USA brands.
Walmart = $30 Billion Leader
Walmart operates more than 2,700
stores across 5 formats, registering an
impressive $30 billion in sales. Some
may be surprised to learn that Bodega
Aurrera is their leading banner with
more than 2,200 value oriented
outlets. They also operate 97 upscale
supermarkets called Superama, the
first destination for many overseas
products. Watch out: a standard
service in Mexico includes dedicated
merchandisers responsible for shelf
stocking. Walmart may tempt some
companies with direct purchases, but
your brand may not escape the back
room without merchandisers.
193 Distributor Options
Export Solutions’ distributor database
covers 193 distributors in Mexico.
This includes a broad assortment of
category specialists of all sizes. Many
enjoy large portfolios of USA or
European favorites. Another option
is to partner with a large Mexican
producer who may be willing to
pioneer your brand. Note: most
distributors are based in Mexico
City or Monterrey, close to leading
customers. Beware of border “traders”
with elaborate stories and an appetite
for English language packaging.
Lessons Learned
Many brands fail in Mexico.
Postmortem analysis usually shifts
blame directly to the manufacturer.
Mexico is a large country that politely
requires an amount of TLC. Cost of
entry is rational, with a discount
structure built in the price list.
However, manufacturers should hire a
Why Mexico: 135 Million Reasons
Mexico Fast Facts
Population 135 Million
GDP per capita $9,900
Population under 25 45%
Supermarkets 2,600
Distributors 193
continued on next page
52
53
Why Mexico: 135 Million Reasons
53
local manager or at least commit to visit four times per year.
A year-round, in-store activation plan is required. It is not
an extreme challenge for a good brand to gain access to the
shelves of the retail giants. However, without investments
in marketing and “pull” activities, your brand will soon
disappear. This all sounds fundamental, but you will be
shocked by the number of overseas brands that sell to a
Mexican distributor at dead net price and never visit and
wonder why their sales are so low.
135 Million Reasons – Next Steps
Mexico is a growth country, tied to its USA neighbor “for
better or for worse.” Its 135 million consumers represent
an attractive target, as they have purchasing power and
familiarity with many global brands from cable television or
relatives living in the USA. Export Solutions has conducted
more than 10 distributor search projects in Mexico and can
assist with your market entry plans. We speak Spanish and
maintain good relationships with leading distributors. For
more information, contact Greg Seminara at
Top 10 Mexican Retailers
(source: Export Solutions’ retailer database)
Retailer Owner Format Stores
Bodega Aurrera Walmart Discount 2,200
Sams Club Walmart Club 165
Walmart Supercenter Walmart Hypermarket 291
Superama Walmart Supermarket 97
Soriana Soriana Super/Hypermarket 910
La Comer La Comer Supermarket 73
Oxxo FEMSA Convenience 19,500
Chedruai Chedruai Supermarket 315
Costco Costco Club 40
HEB HEB Supermarket 71
continued from previous page
54
Elite teams require training. This applies
to sports, military, and the international
road warriors who manage export
departments. Many companies claim a
deep commitment to training and people
development in their mission statements.
Two years of Covid-related travel limitations
and the emergence of Zoom tools has
created an efficient new forum for training
our internal and distributor teams.
Education For All
A lot has changed in the last two years.
Everyone can benefit from an updated
course in winning requirements for
2022. This should apply to your
distributor network and international
team, as well as your own personal
development plan. Another opportunity
exists to teach colleagues in your home
office on the unique dynamics of export
and the enormous potential available
in the global market of 7.9 billion people.
Portal – 24/7 Resource
Leading companies implemented a global
export portal. This gateway provides
instant access to brand facts, digital
images, and success stories. Expanded
portals allow order placement, sales
forecasting, and other export reporting.
A must for best-in-class performance
this year.
Distributor Training
Zoom allows you to connect with large
groups instantly. I have participated in
global distributor meetings linking sales
teams from around the world. Other
export managers have used web tools
for new product launch meetings, to
kick off a retail sales contest, or to manage
a planning session with the entire key
account team. The goal is to make the
meetings entertaining and engaging
for your remote audience. One
beverage company’s web meeting
featured a surprise appearance by
a Euro Vision winner!
Functional Experts
Each company features deep functional
expertise at their headquarters. Overseas
distributors appreciate access to these
professionals. Why not schedule a web
meeting featuring your digital marketing
manager, supply chain VP, or IT guru?
Another option is to develop a session
for your global team managing a common
customer such as Carrefour, Walmart,
or Metro AG.
E-Commerce
E-commerce is the primary growth
channel for all companies. However, most
managers’ fundamental training focuses
on brick and mortar principles. Consider
hiring an external expert to speak about
“doing business with Amazon.” Focus
on the practical operational requirements
such as supply chain and search strategies
versus a speaker who tells you “how fast
e-commerce is growing.”
Personal Plan
What are your personal development
plans for 2022? The new year is a
great opportunity to allocate time to
attend a leadership development class or
a session on managing teams. Evaluate
options early and receive management
commitment before budgets are cut!
Self-Paced Programs
Frequently it is a challenge to sync
everyone’s schedule for a training event.
An alternative is to record training
webinars and share them for review
later. Multinationals frequently offer
individual training via self-paced
modules to indoctrinate new distributors
or brand managers.
Export Solutions Workshops
Each year Export Solutions offers more
than 10 export workshops throughout
Europe and the Americas.
There are eight topics offered in
45-minute sessions. Highlights include
• Distributor Sear
ch Best Practices
• How to Gain Mor
e Distributor Focus
• Distributor Economics: "How they
make money!"
• Mor
e in the Store: Shelf Tactics
• Handling 25 Critical Export Pr
oblems
• Next Level Distributor Management
• Export Strategy: A World
of Opportunity
Client References
Workshop delivery can be via Zoom or,
in many cases, on-site programs. Clients
have included Barilla, Tabasco, Church &
Dwight, Lorenz, Bolton Group, Seeberger,
Manner, and others. Contact Greg
Seminara for more information.
What is Your 2022 Training Mission?
55
E-commerce now accounts for five percent of USA omnichannel
sales, up forty percent in the last year according to Nielsen.
This includes almost 12 billion dollars sold through online
grocers. No one can accurately gauge how big e-commerce will
become, but it is safe to predict that it will be much, much bigger
in the next five years. Billion dollar multinationals and scrappy
start-ups are attacking this channel with vigor, widening the
performance gap versus successful national brands. In China and
India, e-commerce accounts for a majority of the sales for many
imported products. Read Export Solutions’ ten tips for capturing
your fair share of the growth in this strategic channel.
1. Conduct E-Commerce Survey for Core Countries
Create a one page template capturing local e-commerce
customers, online grocery trends and current distributor
engagement. Calibrate where each country is on a development
curve. Source best practices from distributors in China, India,
United Kingdom, and the USA where e-commerce maintains
highest acceptance levels.
2. Speak to Millennials
Spend time with young people, learning how they shop and
blaze through digital marketing messages. Learn why millennials
avoid “their mothers brands” and how many rarely make
a “stock up shop” at a neighborhood supermarket. Another
revelation is the trust that they place in online reviews and
key influencer recommendations.
3. Create a Global E-Commerce Strategy
Align with your company’s overall e-commerce strategy.
Establish benchmarks and toolkits to share with your
distributors. Acknowledge the fast pace of development,
allowing flexibility to pivot fast.
4. Distributors: E-Commerce Business Plan
Request each distributor to create a 2022 e-commerce business
plan. Include new distribution targets, marketing plans, and
shipment objectives for e-commerce customers. Challenge
distributors to hire a young person to serve as a dedicated
e-commerce key account manager. Review each distributor’s
e-commerce marketing plan early and often in 2022.
“A distributor respects, what the brand owner inspects.”
5. Learn Online Marketing Tactics
Goodbye end caps and slotting allowances. Hello “pay per
click” and first page search results. Unlimited shelf space exists
in cyberspace, with room for every sku that you (and your
competitors) produce. Face-to-face buyer meetings are replaced
by online marketing menu programs and transparent sales
ranking information. Learn the new rules or you will fail the
e-commerce test.
6. Treat Amazon and Alibaba as Global Customers
Amazon revenue will exceed $500 billion by 2022, including
more than $400 billion sourced from sales of goods. Amazon
will comfortably rank as the world’s number two retailer, far
exceeding sales by Carrefour or Costco. Multinational category
leaders have established customer teams to service Amazon.
Many place their best, young talent against this high growth
customer. Multifunctional team roles may share the same titles
in Finance, Supply Chain and Marketing, but the “work” is much
different. What dedicated resources are assigned to Amazon and
Alibaba today at your company?
7. Consider a Web Shop
Direct to consumer represented a complex route to market in the
past. Today, new brands and leading companies are jumping at
the opportunity to showcase their innovation and share in depth
product knowledge through their own proprietary web shop.
Outsourced supply chain experts exist to provide fulfillment
solutions. Tangible profits may be elusive today, but there is
valuable, inexpensive learning to be gained from pioneering
in this area.
8. Hire an International E-Commerce Expert
Appear as a preferred supplier by your distributors by providing
leadership insights into this new trade channel. Distributors in
emerging markets are hungry for best practices in establishing
e-commerce brand building models. Send your e-commerce
expert to core markets to conduct workshop training sessions.
Your investment in an e-commerce strategy and guru positions
your company as a preferred partner helping to build the
distributor’s entire business.
9. Appoint E-Commerce Distributors – Asia
Selling through the e-commerce channel requires different routes
to market capabilities and skill sets than marketing through
brick and mortar supermarkets. Consider appointing a separate
e-commerce distributor in advanced countries like China and
South Korea. A key issue is managing pricing equilibrium
between your conventional distributor and e-commerce partner.
10. Track E-Commerce Results
Establish KPI’s and measure performance at key customers such
as Amazon. Are you getting your fair share of the growth?
E-commerce development is a top 2022 priority for every brand
and distributor. Some may say that e-commerce is evolving
slowly in their country or too complex and unprofitable to
allocate resources. These are the same people whose parents
were probably in the horse and buggy or fax businesses.
Enhanced focus on e-commerce will position you as a leader
(or survivor) for 2025.
Ten Tips: Ex-Selling at E-Commerce
56
Europe is not easy, with 50 independent
countries, 750 million people, and 24
official languages. Within Europe, you
have the European Union of 28 countries,
including 18 who use the Euro currency.
The supermarket business includes a few
multi-country players such as Carrefour,
Tesco, Rewe and Auchan. However, each
country tends to have its own dominant
retailers with unique operating practices
and distributor communities. Europe
appears to be bouncing back, with strong
GDP growth in Germany, United
Kingdom, Nordics and improved
conditions elsewhere. Europe appears
attractive for USA exporters due to the size
of the prize and respect for innovation.
American lifestyle and products are
appreciated by many. Export Solutions
provides Ten Tips on cracking the code
to develop new business in Europe.
1. What is Your USP?
Europe shares many eating habits with
the USA, creating a difficult environment
to compete with higher priced, “me too”
products. Success stories typically
involve categories such as Peanut Butter,
Microwave Popcorn, or Tex Mex that are
viewed as “uniquely American.”
2. Labeling & GMO
Most European countries require labels
with nutritional information in the native
language. A frequent approach is to create
a “Euro Pack,” with multiple languages
crammed on the back of the package.
There are only a few countries that accept
the “stickered” approach. Most European
retailers do not accept products with
GMO ingredients. This is a hotly debated
issue that we will not solve here. Bottom
line is to offer non GMO versions or don’t
waste your effort in the strict countries.
3. Define Your Ambition
Are you looking to become a player
in your category, prepared to invest in
marketing support and trade activities?
Or are you just looking for incremental
shipments based upon an “America’s
favorite” platform? Either option is
acceptable, but you should align
expectations and choice of partner
with your investment model.
4. First Stop UK, Then Nordics
Made in the USA brands should consider
the UK and Ireland as their initial point of
entry. Common language, familiarity with
USA brands, and organized trade
structures enhance your chances of
success. American retailers such as
Walmart (Asda), Costco, and Whole
Foods may be charmed to add your
product to their UK shelves. Nordic
countries are worth consideration. Many
food brands are imported into the region
from other European countries, so the
price gap for American brands is not
as great. An educated consumer base
with strong spending power add to the
attractiveness. Cost of entry is modest, at
least compared to Germany or France.
5. Distributor Model – Best in Class
The European distributor model provides
an integrated solution of key account
sales, country level marketing, logistics,
and financial services. These exclusive
partners service all country retailers and
actually serve as your primary “bill to”
customer in country. The USA broker
model is not common in Europe, as most
brands require financial and logistics
services, not just “selling.”
6. 3,139 Distributors – 34 European Countries
Export Solutions database covers 3,139
European distributors across 34 European
countries. This provides an average of
75 distributors per country of various
specialties: Gourmet Food, Confectionery,
Beverage, Natural Food, HBC, and other
supermarket categories. We also cover
238 “Americana” distributors handling
primarily “Made in the USA” products.
7. Investigate ESMA
ESMA is the European Sales and
Marketing Association. This is an
organization of 80 of the top distributors
across Europe. These best in class
distributors are serious companies, with
a history of brand building for companies
with unique products and a willingness
to invest. ESMA features an annual
conference (Vilnius in June), that provides
a venue for manufacturer members to
network with leading distributors across
Europe. For more information, visit
www.esma.org, and tell David O’ Neill,
ESMA CEO, that Greg sent you!
8.Trade Shows: SIAL, ISM, and CIBUS
Participation in European industry trade
shows is a must. These shows attract from
50,000 to 150,000 visitors including most
European buyers and distributors. In
2022, SIAL in Paris will be the best show
for most brands. ISM is Europe’s version
of the USA’s Sweets and Snacks show.
Biofach is important for natural foods
and PLMA for private label. Each country
also features an exhibition such as CIBUS
in Italy, IFE for the UK, and Alimentaria
for Spain. The USA features a pavilion
at each of these shows. Rent a booth
and test reaction and interest for your
product line.
9. Americana Strategy
Each European country has retailers and
distributors that specialize in America’s
favorites. Dedicated stores like Taste of
America in Spain or Gray’s in Sweden
offer a broad assortment of USA brands to
fans of American lifestyle and homesick
expatriates. Other leading supermarket
chains offer dedicated sections of
American products. This approach is
about availability and visibility not
pricing and slotting allowances. An
Americana strategy may appear as a low
cost way to test market acceptance of
your product.
10. Cracking the Code – Look in the Mirror
USA exporters considering Europe should
think about what it takes to get on the shelf
at Kroger or Stop and Shop: innovative
product, slotting fees, promotion plan,
competitive pricing, and a strong broker.
The fundamentals for entering Europe are
not that much different, other than you are
the “new guy,” with the added expense of
freight from the USA. Start slowly, with
realistic expectations of starting in a
handful of European countries versus
selling across Europe. American products
are well received, but Europe is not the
destination for those just looking to sell
a few extra cases.
Europe: Cracking the Code
57
Looking for Top Distributors?
Finding the right distributor is tough work! Why waste time? More than 2,700 companies depend
on our database to quickly find reliable distributors. Export Managers call us everyday to obtain
our personal insights, advice, and comments on the 9,200 distributors in our database.
Export Solutions launched a new “Top 5” help desk service. Top 5 service customers receive
recommendations on the best distributor candidates for your brand in 96 countries. Contact us and
we’ll tell you the Top 5 distributors per country that are a “fit” for your brand and Top 5 distributors
to avoid. We’ve completed more than 300 distributor search projects in Asia, Middle East, Europe,
and throughout the Americas (Brazil/Mexico). Distributor Identification is our core business.
Top 5 Program Details
Export Managers submit list of countries where they require a distributor. Greg Seminara researches
request. Phone meeting in 72 hours to discuss Top 5 candidate results. Purchase Premium
subscription to Export Solutions database for $2575. Includes one year unlimited access to entire
database plus 12 Top 5 phone meetings. Other distributor search packages begin at $150 through
our Talk to an Expert program.
Contact Greg Seminara for Top 5 service.
(001)-404-255-8387
gseminara@exportsolutions.com.
58
Few companies achieve sufficient sales volume to operate offices in every country. Even Procter & Gamble, Nestle, & Unilever regularly
use third party distributors for certain countries or brands. Distributors, Importers, Brokers, and Agents form an essential part of our
industry. Each model provides local expertise in a variable cost model. This frees up valuable company resources to invest in brand
building versus start up costs and complexities associated with managing your own subsidiary. However, all models are not created
equally. Different third party models play unique roles depending on the country.
Pros & Cons: Route to Market Models
Model Advantages Issues
Subsidiary
100% of sales force attention.
Direct interaction with customers.
Fixed Cost. Start-up - expensive.
Requires critical mass.
Distributor/Importer
Integrated solution. Variable cost.
Multiple brands drive scale.
Universal. Available everywhere.
Battle for distributor focus.
Margin impacts pricing.
Lack scale in biggest markets.
Joint Venture: Local Manufacturer
Integrated solution.
Local expertise, critical mass.
Lower start-up costs.
Focus vs. in-house brands.
Loss of control.
Not strategic for jv partner.
Broker/Agent
Efficient, Variable cost.
Critical Mass: USA/Canada.
No logistics/financial services.
Limited scale outside N. America.
Direct to Customer
Cost efficient (no middleman).
Direct interaction with customer.
How to sell all market customers?
Store level execution problems.
Consolidator
Ships small quantities to market.
Few label changes/currency issues.
Another Middleman and expense.
Diverting risk. Small volume.
Local Subsidiary
Companies create their own offices in
large countries and locations where they
maintain factories. All producers require
the same portfolio of logistics, sales,
retail coverage, and financial services.
A manufacturer must generate a certain
threshold of sales volume to provide the
depth of services to efficiently operate a
local subsidiary. The clear benefit of this
option is that your entire team is 100%
dedicated to your brand’s priorities.
Universal Model: Distributors
The global standard for third parties is the
distributor/importer model. Each country
features a variety of distributors offering an
integrated “one stop shop” of commercial,
logistics, and financial services. Many types
of Distributors exist, ranging from category
experts to channel specialists. Export
Solutions’ database tracks more than
9,200 distributors in 96 countries.
Distributors: Different Services
It is important to recognize that there
are at least three types of distributors
active in our industry. The most
common international model is the
distributor/importer which imports and
sells brands, usually with exclusivity to
one brand per category. In the USA, the
wholesale distributor model plays a
critical role. The wholesale distributor
serves as a logistics/financial partner, but
does not import and markets all category
brands on a non-exclusive basis. Regional
Distributors are common in Brazil, India,
Russia and China. These distributors work
exclusively, but normally handle only one
designated region and rarely import.
USA Supermarket Brokers
Why do most successful USA brands
use brokers to sell to supermarket chains?
Most companies operate factories in
the USA, eliminating the need for
importation services. Logistics providers
are plentiful and retailers are financially
reliable. As a result, most USA brands do
not require the integrated services from
a distributor/importer, only niche foreign
products. Brokers supply essential local
selling services. They maintain excellent
customer relationships and provide
critical store level merchandising. “Big 3”
USA brokers offer tremendous economies
of scale, but are organized to handle
leading brands. Brokers are powerful
partners to the supermarket channel.
Most manufacturers “sell direct” to
Walmart, Costco, Pharmacy, and other
non-supermarket channels.
Problems with Joint Ventures
Joint Venture proposals look good on
PowerPoint presentations in the board
room. Potential value exists in partnering
with a dominant local brand owner, with
built in critical mass. Unfortunately, my
experience is that most joint venture
relationships wind up in divorce. Senior
management may be committed, but the
norm is for the sales team to default focus
to their own brands which they find
easier to sell.
Consolidators: Opportunistic Volume
Consolidators are local customers who
will purchase your brand, comingle it
with other products and ship mixed
containers to foreign distributors or
retailers. Manufacturers with “lean”
export departments view this as simple,
incremental business. These companies
like the fact that they do not need to deal
with label changes, currency exchange,
and foreign distributors. In many cases,
serious exporters move beyond the
consolidator model to take control
and optimize sales volume.
Direct to Customer Challenges
Walmart and Carrefour sponsor
established global sourcing or “direct
buy” programs. For some countries,
these programs represent an efficient
route to market solution. In other
countries, exhibit caution, as direct sales
to one customer can disrupt distributor
relationships and an entire market.
59
Big Brand Distributors
Large distributors supply an economical
alternative for leading brand manu-
facturers versus operating their own
subsidiary. Normally, they handle
multiple categories and offer critical
mass. A potential issue is the struggle
for attention among brands all vying
for focus from one sales team.
Category Expert
Buyers value partners that serve as
category experts who can share insights
and innovation for the sector. Distributors
dedicated to one sector provide logistics
efficiencies and capability to share best
practices from complimentary products.
Managing product conflicts is a frequent
problem with distributors concentrated
on only one category.
Channel Expert
Many distributors built their business
platform centered on servicing the
supermarket channel. Incremental growth
today is dependent on penetrating under-
served channels such as foodservice,
small shops, or pharmacy. In larger
countries, it’s possible to maintain one
organizational approach for supermarkets
and then appoint a specialist for a
different channel. Alternate channels
normally feature smaller store footprints
which can provide a barrier to entry for
all but the leading brands.
Country Expert
Some distributors have created viable
businesses as the source for brands from
one country. These distributors supply
brands to consumers “homesick” for their
favorite brands at a premium price. A
benefit with this option is the distributor
who can consolidate shipments from one
country and is connected with the retailers
and consumers for this “expat” segment.
This approach works well for niche
products or brands focused on availability
without marketing investment.
Fine Food Importer
Food enthusiasts everywhere are
passionate about the gourmet experience.
Fine dining restaurants are dependent
on unique products and ingredients from
around the world. The classic fine food
importer fulfills this role. Fine Food
importers seek brands of the highest
quality, with unique attributes and
reputation. Not an option for commodities
or “me-too” type products.
Niche Entrepreneur
Pioneering a brand with no existing
sales is tough in any country. While many
brands would prefer partnering with a
prestigious specialist, the reality is that
a smaller distributor may be your best
option to start. Niche entrepreneurs are
hungry and flexible to work without
significant resources supplied by the
brand. It is important to calibrate your
expectations when working with a niche
entrepreneur and conduct due diligence
on their financial situation.
Evaluate Your Current Distributor Mix
A valuable exercise is to evaluate your
current roster of distributors “by type.”
Which models are delivering superior
results? Which models are lagging
behind? Are there any universal
conclusions which may apply when you
expand to new markets or considering a
distributor change? One type does not fit
all scenarios. However, it is important to
segment your partners and understand
the inherent strengths and issues with
different types of distributor partners.
All distributors are not created equally! Most exporters recognize obvious differences based upon the size of distributor and br
eadth
of service offering. Export Solutions has identified six common types of distributor business models. Global brands maintain a mix of
distributor relationships. Some partnerships are new while others have evolved for thirty years or more. With time, requirements for
servicing our industry have changed. While some distributors have remained generalists, handling many brands and channels. Others
elected to focus against a specific market segment. Which model delivers the best result for your brand?
Distributor Types: Different Experts for Different Situations
Distributor Types: Different Experts for Different Situations
Distributor Type Model Application
Big Brand Distributor
Large Distributors.
Handles # 1 or # 2 brands.
Multiple categories/channels.
Outsourcing solution. Option for
Latin America, Middle East, Asia,
Europe (excluding large countries)
Category Expert Dedicated to one category
Specialists for Confectionery, Frozen, OTC,
Beverages, Natural Foods, Dairy, Beauty
Channel Expert Dedicated to one channel
Specialists for Foodservice, “small shops”,
or Pharmacy channels
Country Expert
Represents brands exclusively
from one country/region
Specialist for Brands from USA, UK, Germany,
Asia, Italy, or Spain
Fine Food Importer
Represents leading international
gourmet/niche brands.
Handles brands like Tabasco, Maille, Bonne
Maman, Twinings, Bahlsen, Ryvita
Niche Entrepreneur
Small distributor.
Willing to pioneer new brands
with limited marketing support
Option for small brands or countries where
brand does not want to invest.
60
Is Your Distributor Best In Class?
Best in Class Distributor Average Distributor
Size Top 10 Supplier to Retailers. Top 100 Supplier to Retailers.
Coverage
Countrywide.
Offices outside Capital.
Major retailers only.
Technology
EDI, Web Portal,
Handhelds for sales reps.
Basic desktop capabilities.
Talent
Management:
Multi-national expertise.
“Home grown” talent.
Channel
Covers all channels
and small shops.
Major retailers only.
Marketing Full Brand Management services. Trade promotion only.
Retail Presence
Dominant presence at retail for
distributors brands.
Mixed presence at point of sale.
Cost to Serve Competitive, transparent model. Average cost to serve.
Logistics
Multiple warehouses.
24 hour delivery.
1 warehouse, 48 hour delivery.
Results Results exceed market growth. Results = market growth.
61
A few years ago, I described a
multinational’s “Big, Big, Big” strategy.
This company focused on Big Brands,
Big Countries, and Big Customers. This
approach may function well for billion
dollar giants, capable of building local
factories, hiring large teams, and investing
millions in brand support. However, many
exporters have been disappointed the last
five years when “BRIC dreams turned into
Export nightmares.”
Exporters: consider a “Small, Small, Small” strategy as a route to profitable growth.
Small Channels – E-commerce, Gourmet, Ethnic.
Small Countries – South Korea, Chile, Saudi Arabia, Spain etc.
Small Investments – Trade/marketing costs everywhere, but total spend is lower
in emerging channels and small/mid-size countries.
Listed below are considerations for developing your “Small, Small, Small” strategy.
1. Massive Supermarket Chains: Demanding & Declining
Traditional supermarket chains are losing share. To sell to them today, you “spend more
to sell less!” Smaller chains and channels may be more open to innovation and feature
lower cost of participation.
2. Limited Local Production: Small/Mid-Size Countries
Big countries feature well established local producers, guarding their shelf space.
Smaller countries frequently do not contain many local manufacturers and remain
dependent on adjacent countries or USA, UK, Germany, Italy etc. for many of their
brands. Examples include USA companies selling far more to Puerto Rico than they
do to Brazil. UK companies export more to Ireland than to Russia or Italy.
3. Lower Investment Levels
Brand investments are relatively proportional to country population and per capita
income. A $10,000 – $100,000 investment drives significant presence and funds solid
marketing activities in many small/mid-size countries. This allows your brand to
capture market share versus serving as a niche player in a large country.
4. Distributor Capability: Inversely Proportional to Country Size
Some of the world’s best distributors are based in Panama, Norway, UAE, or Singapore.
Why? In these countries, even multinationals like P & G, Kellogg’s, and Barilla may
partner with national distributors. In large countries like the USA, China, India,
distributors usually handle only niche brands, regional coverage, or small shops.
5. Make Multi-Channel Bets
There is incremental business available through attacking new trade channel opportunities.
This may require distributors to expand coverage and “attack something new.”
Manufacturers should conduct a “Lessons Learned” exercise. What countries are
delivering superior growth and highest market shares? Which new channels and
customers are recording double digit sales increases? What are channel success stories
from other countries? Which markets do not demand mandatory listing fees and deliver
superior results for your investment? What is your global e-commerce strategy?
In many cases you can deliver “big” increases from thinking “small.” Good luck!
www.exportsolutions.com
Greg Seminara
404-255-8387
“Spend Time Selling to Distributors versus Searching for Distributors”
Small, Small, Small Strategy
Strategic Services
Contact Us for
Export Solutions
1. Identify Best in Class
Distributors: 96 Countries
2. Best Practices
Export Strategy
3. Distributor Management
Workshops
4. Export 101:
Let’s Get Started
5. New Market
Prioritization
and Launch Plan
6. Personal Distributor
Introductions:
96 Countries
7. Walmart International
8. Distributor Contracts,
Margins, and Fees
9. Meeting Speaker
10. International
Strategy Expert
Strategic Services
Contact Us for
Export Solutions
1. Identify Best in Class
Distributors: 96 Countries
2. Best Practices
Export Strategy
3. Distributor Management
Workshops
4. Export 101:
Let’s Get Started
5. New Market
Prioritization
and Launch Plan
6. Personal Distributor
Introductions:
96 Countries
7. Walmart International
8. Distributor Contracts,
Margins, and Fees
9. Meeting Speaker
10. International
Strategy Expert
Export Accelerator
Contact Us for Distributor Search Help in 96 Countries
Greg Seminara • greg@exportsolutions.com
“Spend time Selling to Distributors versus
Searching for Distributors”
62
Why have Barilla, Pringles, Nature Valley, Starbucks, Duracell,
Nestlé, Tabasco, Pepperidge Farm, and other leaders used
Export Solutions as a distributor search consultant?
• Powerful distributor network: owner of industry database
9,200 distributors – 96 countries
• Professional 10 step due diligence process
• Results! We make Export Managers’ lives easier!
63
I just returned from Central America where retailers such as
Walmart, Auto Mercado (Costa Rica), and Super 99 (Panama)
suffer from out of stock conditions due to direct import practices.
A retailer’s primary objective is to maximize sales, which is
tough to achieve if there are gaps on your shelf as you await the
next container from the USA. “Service” defines best-in-class
manufacturers like Coca Cola and distributors which maintain
local inventory and strong commitments to keeping in store
product showrooms “looking good.” Listed below are Export
Solutions’ Ten Tips why an international retailer should source
your brand from a local distributor versus waiting for a direct
shipment from your central factory.
1. Local Inventory: 24-48 Hour Delivery
Local distributors promise 24-48 hour delivery, instantly
correcting costly out of stocks. Direct import supply chains may
take up to six weeks for inventory replenishment. We have all
witnessed situations where a retailer allows 1-2 items to run out
of stock for weeks to wait to place a consolidated order or to
encourage sales of a size where they are overstocked.
2. Brand Building vs. Availability
Direct import brands look lonely on the shelf, without any
activation or promotion. I remember the case of Hidden Valley
Ranch, the leading USA salad dressing from Clorox. I was
thrilled when it showed up on the shelf of my Walmart in Buenos
Aires. However, I was one of a few homesick expats who knew
about Hidden Valley. Without support, the brand gathered dust
and was discontinued.
3. In-Store Merchandisers: Emerging Markets
In-store merchandisers or distributor appointed “shelf stockers”
represent an essential function across Latin America, Asia, and
the Middle East. Large distributors maintain armies of merchandisers
to fight for shelf space and brand presence for the brands that
they represent. Retailers typically offer “prefunctory” stocking
for direct import brands, with low level of compliance versus
agreed to terms. I recall a situation in Mexico for a leading USA
beverage brand. The retailer had complained about slow rotation
of the direct import brand. We checked stores and saw that only
2 of 4 sizes were typically cut in on the shelf, with items relegated
to the bottom or top shelf, nowhere near “planogram promises.”
4. Distributors: Local Category Advisors
Distributors understand local taste preferences and share trends
from other market customers. In emerging countries, normally
there is a preference for smaller sizes than the family packs
offered in USA or European supermarkets.
5. Problem Solving: Pricing, Shelf Tags and More
Success in the consumer goods industry requires focus on the
myriad of details from the factory to the store shelf. Without a
distributor, difficult to identify and correct routine problems like
incorrect pricing, missing shelf tags , and misshelved goods.
6. Promotions Drive Trial and Tonnage
Local distributors offer periodic promotions to stimulate sales.
Typically, this translates to price discounts, but can also include
sampling, banded packs, and joint displays. Direct import brands
usually sit on the shelf without the benefit of local activation.
7. Point of Sale Material and Stock Rotation
Emerging markets permit point of sale materials which
encourage sales. Distributors provide special display pieces
or trial size shippers. Merchandisers rotate stock regularly
to facilitate “first in, first out” movement.
8. Damaged, Expired Goods or Product Recall
Local distributors provide a valuable service on returned goods.
This allows a retailer to remove out of date or damaged products
for a credit. With direct imports, the sub-prime product lags
unattractively on the shelf, with no one focused on replacement.
9. Payment Terms
Distributors offer retailers 30-60 day payment terms. Smart
retailers fund their inventory from the “float,” buying and
selling goods before the payment is due. On direct imports,
retailer needs to tie up his money in inventory, in some cases
paying in advance and then storing goods until the unsupported
brands sell. Is this the best use of capital?
10. Retailers: Support Your Local Distributor Community
Distributors represent small/mid-size local businesses
which provide jobs to members of the community. Distributor
employees are shoppers too, likely to shop at customers that
are supporting their company.
Success: Create Total Country Customer Strategy
Export Solutions recommends dealing with a local partner
(distributor) who is capable of serving all market customers.
This allows you to optimize sales and maintain pricing
equilibrium. Retailers attempting to buy direct offer the
temptation of short term volume, but rarely translate to
long term brand building for the supplier.
Retailer Benefits: Purchase from Local Distributors
64
Preferred Supplier Scorecard
Distributors deliver their best results for their favorite principals. How do you rank?
Supplier Assessment Considerations
Rating:
(10 = Best)
Annual Sales Revenue • Percent of total distributor sales
Annual Profit Generated ($)
• Net sales times gross margin
Years of Service • New to 20 years or more
Compound Annual Growth Rate
• Flat to 10% or more
Supplier Investment Level • Zero to 25% of sales
Celebrates Success
• Awards, dinner, thank you notes
Shares Best Practices
• Serves as category expert
Logistics Service Level
• Target 98% on time, complete orders
Visits Retail Stores
• Never to full day every visit
Reimbursement of Billbacks • 2 weeks to 3 months
Senior Management Relationship • None to long term partners
Export Manager Experience • New hire to 10 years or more
Response Time • Same day to one month
Supports Distributor’s Ideas
• Invests in local ideas
Good on Customer Calls
• Avoids calls to customer favorite
Admin Requirements • Orders only to multiple reports
Supplier Visit Frequency • Never to weekly
Relationship: Entire Team • Finance, logistics, administration
Respects Fair Profit for Distributor • Healthy distributor is profitable
Achieves Joint Business Targets • Creates culture of success
65
Driving export development requires a balance of headquarter resources and people “waking up”
in the country they are managing. Export Solutions shares 12 key roles required to partner effectively.
Noted: Export managers create miracles, with one person handling many functions!
Who, What, & Where
Role Work Location
VP/General Manager
• Develop export strategy
• Obtain resources for team
• Deliver annual results
Headquarters
New Business Development
• Prioritize expansion countries
• Due diligence on new partners
• Close new business deals
Headquarters
E-Commerce Manager
• Create e-commerce strategy
• Develop export tool kit
• Train distributor teams
Headquarters
Distributor Management
• Establish local priorities
• Train distributor teams
• Distributor customer service
• Deliver annual results
Regional
Supply Chain Manager
• Deliver distributor orders
• Manage forecast
• Distributor customer service
Headquarters
Regional
Trainer
• Share best practices
• Support new launches
• Company “missionary”
Headquarters
Digital Marketing Manager
• Develop/distribute content
• Train distributor teams
• Maintain digital portal
Headquarters
Trade Marketing Manager
• Develop local promotions
• Facilitate distributor execution
• Analyze results
Regional
Consumer Marketing Manager
• Develop global strategy
• Conduct market research
• Drive new product pipline
Headquarters
Regional
Category Analyst
• Analyze Trends
• Identify opportunities
• Calibrate “size of prize”
Headquarters
Regional
Finance Manager
• Manage risk
• Monitor receivables, f/x
• Deliver financial results
Headquarters
Compliance Coordinator
• Facilitate regulatory, registration,
trademark, and packaging
Headquarters
66
Picking the right distributor is not an exact
science. I know that each of us experiences
moments of frustration when we question,
“why did we ever pick that distributor?”
Believe me, an equal number of examples
exist where a distributor may share the same
emotion about your company! Frequently,
a partnership is christened by a positive
distributor interview or enthusiastic meeting
at a trade show. Everyone is always in a
hurry to negotiate prices and a contract and
secure the first order. However, in many cases the decision to work together is cemented
without a formal business plan where expectations, road map, and KPI’s are established.
Unfortunately, one year later both parties may find themselves pointing fingers at each
other due to disappointing results.
I recently completed a distributor search project in the Middle East. We interviewed a
number of good candidates and identified two with high potential. Last month, I was
notified by the export manager that he selected one of the candidates. I supported his
decision, but questioned how the plan proposals for the two distributors compared?
The vague response confirmed no plans, just that he liked one distributor better.
This year, another project brought me to a country where a new distributor had been
appointed less than one year earlier. Initial results were severely below expectations.
The first question I asked the brand owner related to the reconciliation versus the
original one-year business plan. What happened? In this case, there was general
understanding about the direction of the partnership, but never alignment around
a one-page scorecard with KPIs and a logical road map.
Launching a new distributor relationship is like the birth of a child. A mother rarely
leaves the side of a baby, providing comfort, safety, and nutrition until the infant is
healthy and able to survive without constant oversight. The same philosophy must
apply to a distributor partnership. During the first few months, there must be frequent
communication, care and visibility from the supplier with the new “brand parents.”
This approach results in a healthy brand. Too many times, I see a new distributor
appointed without anyone from the manufacturer committed to visit the country
for the sales launch meeting or conduct a retail sales audit within the first sixty days.
Parents bring their newborn to the doctor frequently for checkups.
Listed below are Export Solutions’ tips on creating a clear annual plan for each country
and distributor partner.
1. Select new distributors based upon the quality of their year one plan:
targeted listings, volume forecast, and retail penetration.
What is their written commitment and timeline for achievement?
2. Current distributors should also have a confirmed one page plan.
Merchandising events, new listing targets, spending, and shipment targets.
Many brand owners treat distributors as good customers which is a smart approach.
The distributor is paying your invoice, not a retailer. Successful distributor partnerships
thrive when both parties are aligned and committed to a simple, one-page plan.
Looking for a sample format? I’ve prepared a one-page business plan template that
is freely available in the Export Tips section of my web site or simply email me.
What is your annual plan for each country?
www.exportsolutions.com
Greg Seminara
404-255-8387
“Spend Time Selling to Distributors versus Searching for Distributors”
What is the Plan?
Strategic Services
Contact Us for
Export Solutions
1. Identify Best in Class
Distributors: 96 Countries
2. Best Practices
Export Strategy
3. Distributor Management
Workshops
4. Export 101:
Let’s Get Started
5. New Market
Prioritization
and Launch Plan
6. Personal Distributor
Introductions:
96 Countries
7. Walmart International
8. Distributor Contracts,
Margins, and Fees
9. Meeting Speaker
10. International
Strategy Expert
Strategic Services
Contact Us for
Export Solutions
1. Identify Best in Class
Distributors: 96 Countries
2. Best Practices
Export Strategy
3. Distributor Management
Workshops
4. Export 101:
Let’s Get Started
5. New Market
Prioritization
and Launch Plan
6. Personal Distributor
Introductions:
96 Countries
7. Walmart International
8. Distributor Contracts,
Margins, and Fees
9. Meeting Speaker
10. International
Strategy Expert
6767
What Distributors Want to Know?
Strong distributors are overwhelmed by calls from brand owners looking for new partners. Distributors assess
each opportunity carefully, as any new brand must add incremental sales and profits and not distract from
priorities from existing brands handled. What is the “size of the prize” for the distributor?
Assessment Criteria Facts Rating (10 = Best)
Your company: size/ reputation
Existing business: sales in distributors country?
If zero “current sales,” what is realistic expectation?
Brand’s USP…your point of difference/innovation?
Size of investment plan: Marketing and Trade?
Potential distributor revenues?margin?
How does the product taste? (or peform)
How attractive/compliant is the packaging?
Pricing relative to category?
Brand success story in an adjacent country?
Competition intensity in category?
Brand range complexity?Product shelf life?
Local market research? Syndicated data?
Will brand invest in marketing and social media?
Will this be a tough product to launch?
Can we grow with the brand owner?
Your brand: core distributor category or adjacency?
Will the export manager be good to work with?
Will we be proud/excited to represent this brand?
What is the “size of the prize?”
6868
1. Case
Manufacturer supplies a business case
confirming brand “aspirations” for the
country: Key items in portfolio, estimated
base pricing, volume/market share
expectations, and investment model.
2. Category Review
Distributor supplies a local review
of category competitors, pricing,
and merchandising practices.
3. Capabilities
Distributor shares detailed organizational
capability and customer coverage.
Could include references from existing
suppliers represented. An important step
when there are two or more candidates
under consideration.
4. Commitment and Costs
What is the Year 1 Plan and Forecast?
Targeted listings, marketing activities,
launch budget and volume estimate
associated with the spending plan.
5. Calculation – Value Chain
Line by line, build up from port to retail store
shelf. Include currency assumptions.
6. Compliance
Highlight product registration and
label requirements. Typical timelines
for compliance?
7. Captain of Team
Who will be our day-to-day brand manager or
first point of contact? Which senior executive
will serve as our “Brand Champion?”
8. Contract
Options include formal contract, letter
of understanding, or handshake deal.
Begin this process early!
9. Consumer Marketing
What are planned activities to generate
consumer trial and repeat purchases?
Trade marketing, consumer marketing,
social media, etc.
10.Calendar /Close
Distributor supplies a detailed timeline
of all activities. When can we expect first
order and delivery to support launch?
Frequent checkpoint calls or meetings.
10 C’s – Cooperation Model
Looking for Good Distributors?
Export Solutions’ database covers
9,200 distributors in 96 countries.
www.exportsolutions.com
6969
Channel Confectionery
Gourmet
Food
Food/Grocery Beverage Non Food
E-commerce x x x x x
Meal Kits x x x
Ethnic – “Homesick” x x x x
Gift Basket x x x
Natural Food x x x
Gourmet, Deli x x x
Liquor x x
Farmers Markets x x
Gift Channel x x
Toy, Party Stores x x
Movie Theaters x
Hardware, DIY, Office x x x
Duty Free x x x
Fundraising x x
Theme Parks, Stadiums x x
Airlines x
Butchers, Fishmongers x x x
Coffee Shops x x
Military x x x x x
Department Stores x x
Kitchen Supplies x x x
Dollar, Close Out x x x x x
Discount Clothing
(Marshalls, TJ/TK Maxx)
x x
New Channels: Prime Prospects, By Category
70
Selling more to Bermuda and Bahamas
versus Brazil? More business in Hong
Kong than China? Join the club. The
long road to BRIC success is filled
with dangerous curves and uncertain
junctions. “Low hanging fruit”
opportunities in these countries have
long disappeared replaced by a scrum of
category combatants from all corners of
the world wrestling for market share in
what could be small categories for a long
time to come. There are no miracle
solutions! Our ten tips apply to large
emerging markets such as China and
Mexico as well as companies having
troubles penetrating Germany, Japan,
Italy or the USA.
1. Apply Fundamental Lessons Learned
from your Home Market
Think about the factors that drove your
success in your home market: Unique
product, Consumer Research, Local
Production, Competitive Pricing,
Marketing Budget, Strong sales team, etc.
The same fundamentals apply to entering
large new markets. I always challenge the
senior management of my clients with
the following Business Case Study: What
would you do if competing Global Brand
“A” from another continent tried to enter
your home market? The response is filled
with aggressive plans to defend the home
turf. My next question is “Don’t you think
that the local competition will react the
same way when you plan to enter their
home market?”
2. Stop Treating Large Countries
as Export Markets
Shipping small quantities of product
thousands of miles and visiting twice
a year will not win in a large market like
Germany, the USA, Mexico, or China.
Large markets need to be treated
strategically, with a separate business
strategy and resource commitment versus
a small export market. In some cases, it is
better to exit a large market if you can not
commit versus potentially harming the
brand image with lackluster shipments
through a subpar effort.
3. Conduct Market Research
Extensive category research is required
in strategic markets. Is your category
developed or evolving? For developed
categories, what unique characteristics
does your brand deliver and how much
do you plan to invest to source share from
existing brands? In new categories, what
does the consumer say about your brand?
Is the taste profile
appreciated, even if it
foreign versus the local
cuisine. Syndicated data
is available which will
help you gauge the “size
of the prize.”
4. Pursue Local Manufacturing
Export programs to large
countries infrequently
generate substantial
businesses. The incremental
overseas freight costs and
duty structures normally
translate to retail prices far higher
than competition produced in country.
Building a factory represents a long term
commitment. Contract packing could
provide a less costly, interim option.
5. Prepare Your Board for
a Long Term Investment
Creating a meaningful new business in a
large country is not a 1-2 year event. More
realistic is a 5-10 year plan depending on
existing acceptance of your category.
Brands and habits and practices take
years to create except in the case of true
innovation. A significant investment in
marketing is mandatory, even in the case
of a true category innovation.
6. Buy a Local Competitor
The quickest way to gain a presence
in a large market is to acquire a local
competitor. Conduct a category review
and see which competitor would be
the best “fit” for your company from a
product portfolio and cultural standpoint.
Price is always a consideration, as you do
not want to overpay for future growth in
an emerging market or pay too much for
market share in a mature market.
7. Don’t Tackle Many Large Countries At Once
Companies multi task. Morning meeting
on Mexico and we’ll attack Russia after
lunch. A better idea is to pick one major
country and plan to focus the teams
resources on winning in that country for
the next 1-2 years. This includes
deployment of human resources as well
as investment dollars. Get it right and
management will be pleased to fund a
broader expansion. Spread yourself too
thin and you may fail everywhere.
8. Invest in an Expatriate
Companies need a soldier from your head
office on the ground in the country of
focus. This facilitates the transfer of best
practices and company culture to the new
country. The expatriate knows who to call
at the home office to get things done. He
can report the true status of initiatives
and has a long term dedication to the
company. Best bet is to partner the
company soldier with an experienced
local player who knows the local market,
culture, customers etc. Language barriers
can present a challenge, but the benefits
far outweigh the issues.
9. Scorecard against In Store Fundamentals
Your sales team must be equipped and
measured against the fundamentals of
securing strong in-store presence at
leading retailers. Too many times, a
team’s progress is judged solely upon
shipment numbers. Another scenario
reflects positive reports regarding chain
headquarter authorizations, but no follow
up execution at store level. Our business
succeeds with a team focused with
winning the battle store by store.
10. Consider a Local Partner
Plans may be fast tracked through a local
partner. Partnerships can take many
forms including a joint venture, licensee,
services contract, or distributor type
relationship. Extensive due diligence is
required as unsuccessful partnerships can
be difficult to exit. Export Solutions has a
thorough nine step process we deploy on
our many partner identification projects.
Lessons learned including alignment
from your partners senior management
to the retail merchandiser, as often the
partners commitment gets diluted
through the supply chain. It’s advisable
to have your own representative “in
house” at the partner to look out for your
company interests. Partner results are
directly proportional to your investment
as even the best sales teams require the
right financial resources to allow them
to obtain optimal performance.
Fixing the Problem: Small Shipments to Big Countries – Ten Tips
71
Need A Hand?
Contact Greg Seminara at gseminara@exportsolutions.com
to discuss your international development project.
We can help!
Recent Distributor Search Projects for Export Solutions
• Global distributor search across 26 countries supporting sale of 1 billion dollar food brand
• USA entry strategies and importer/broker search for 70 million dollar European ethnic food brand
• Indonesia, Malaysia, Philippines & Singapore distributor search for global snack brand
• Global strategic assessment: Europe, Asia, Middle East and Latin America for leading USA food company
• Brazil: “next level” business development for famous global food brand
• Europe and Latin America distributor search supporting spinoff of leading non-food brand
• Peru & Ecuador distributor search for 6 billion dollar food company.
• Mexico distributor search for global biscuit brand
Export Solutions serves as a phone consultant on more than 50 distributor search projects every year.
Why use Export Solutions as a distributor identification consultant?
Export Solutions has the unique ability to leverage our proprietary database of 9,200 distributors in
96 countries. Distributors everywhere respect Export Solutions as a valuable source of new business leads.
Our ten step distributor selection process is a proven system to identify and hire the best candidate to build
your brand. You provide us the brief and we facilitate the rest within 60 days!
72
International brands find a
natural audience overseas
with homesick expatriates
missing their favorite Oreo
cookies, PG Tips tea or
Kuchenmeister cakes.
“Ethnic” favorites must move
beyond their base business as
a niche American, Italian, or
German product into the
mainstream to achieve
ambitious growth targets.
Adoption as a local brand
rewards the manufacturer
with dramatically higher
sales. My Irish wife swore
that American icons such as
Heinz and Kellogg’s were
British brands because their
labels stated “by appointment
to Her Majesty the Queen.”
It was probably the one time
in our marriage when I was
actually right. Listed below
are my Ten Tips for Making
a Global Brand a local “hero.”
1. Manufacture in Country
Pride is generated when a
brand is produced locally. The
factory employs people from
the neighborhood and spends
money in the community.
It may be costly to open
a dedicated plant, but co-
packing is usually an option.
This approach may also
generate cost savings through
the elimination of duties and
overseas freight.
2. Label in Local Language
Frequently a manufacturer
cuts corners by placing a
sticker on a package or other
minor fine tuning to comply
with labeling laws. Producing
your brand with local labeling
sends a powerful message to
the trade and consumer about
your interest in their business.
Warning! Display care with
translations to avoid
embarrassing mistakes.
Google “Nova Spanish”
if you need an example.
3. Promote Recipes
Using Your Brand
A food scientist or market
research company could
study local food preferences
and your product portfolio.
Are there options to
incorporate your brand into
traditional recipes? Nutella
is finally gaining important
traction in the USA as a
breakfast spread, after
years of niche status.
4. Create an Anniversary Event
Many brands have been
available in foreign markets
for 10, 20, 30 years or more.
Why not design an
anniversary event
commemorating “25 years
in the ______ Market.”
Elements could include
special packages, consumer
contest, public relations,
charitable donations, and a
celebratory dinner for your
retail customers.
5. Sponsor a Sports Team
Fans everywhere love their
teams. Alignment and
support of a local sports team
yields dividends. A starting
place may be sponsorship of
youth leagues versus budget
busting football deals.
6. Core Brand –
Market Specific Line Extension
Consider adapting your core
product line to meet local
flavor preferences. Pringles
built exceptional sales and
excitement by launching
innovative new flavors such
as Jalapeno, Curry, Grilled
Shrimp, Ketchup, and Pizza.
7. Sponsor a Charity Event
There are many worthy
organizations looking for
financial support for their
programs. Normally, there
are chances to gain visibility
for your brand with
sponsorship of an event.
Pick a group that contains
a meaningful link to your
product or target consumer.
Many supermarket chains
have a favorite charity
providing a route to
collaborate with a
trading partner for a
worthwhile cause.
8. Co-Promotion
or Co-Branding with Local Leader
Partner with a traditional
local brand that has a long
history in the market. For
example, an international
cereal brand could align
with a local milk producer.
Similarly, an international jam
or marmalade brand might
consider a joint event with
a leading bread company. Co-
branding is also a possibility,
but reflects a long term
commitment. For example,
Post cereals markets a version
of their famous Raisin Bran
cereal which includes
authentic Sun-Maid raisins.
9. Billboards and Radio
Viewed as Local Media
Advertising or public
relations agencies are experts
at creating campaigns to build
brand equity. Billboards and
radio offer local execution and
adaptation possibilities.
10. Brainstorm with
your Distributor
Distributors are local
marketing experts with a rich
understanding of market and
consumer dynamics in their
country. Schedule an “off site”
meeting in a peaceful location
to brainstorm ideas for raising
your brands profile with
local consumers. This
approach secures distributor
participation and ownership
of the program.
The evolution of an
international brand from
niche curiosity to local
favorite requires time, energy,
and investment. However,
each activity will bring a step
change in terms of local brand
acceptance and sales. What
can you do differently in 2022
to increase your brands local
profile in export markets?
Ten Tips: Making a Global Brand Local
73
30 Ideas to Help your Distributors
1. Trade Promotion
Share Best Practice Trade Promotion concepts
16. Innovation
Launch new items with successful track record
2. Celebrate Success
Distributor of the Year Awards
17. Sales Contest
Fund contest to incent and motivate distributor team
3. Category Expert
Provide fact based trend updates
18. Thank You Letter
Letter of recognition for team to distributor CEO
4. Logistics Service Level
Target 98% on time, complete orders
19. Event Sponsorship
Support distributor events, especially retailers’ charities
5. Store Check
Periodic visits to understand “retail reality”
20. Distributor Workload
Work proportional to distributor income
6. Billback Reimbursement
Prompt (30 days?) payment of distributor invoices
21. Price Increase
Provide fair lead time for price increases
7. Distributor CEO
Regular (quarterly?) checkpoint web meetings
22. Reference
Write testimonial or volunteer to serve as reference
8. Response Time
Earn reputation as “quick responder”
23. Training
Create Zoom training session for sales team
9. Marketing
Support distributor’s ideas. Invests in creative programs.
24. Portal
Create Portal with presentations, brand facts, digital tools
10. Customers
Do not deal directly with distributor’s customers
25. Social Media
Corporate experts available to help/share content
11. Reports
Stick to basics: sales, forecast, inventory, listing maps
26. VIP Trip Your Headquarters
Introduce distributor to your senior executives
12. Market Visits
Visit, but not too often
27. Samples
Support large sampling programs
13. Team Building
Create team relationship: finance, logistics, administration
28. Corporate Functional Experts
Provide distributor access to your corporate experts
14. Distributor Profit
Respect that a profitable distributor is a healthy distributor
29. Consumer Research
Conduct local research for consumer insights
15. Syndicated Data
Invest in Nielsen data
30. Create Culture of Success
Achieve joint business targets
74
Distributor Supplier Relations
Managing the New Normal
Actitivity Old School New School
Customers Mass Supermarkets Omni Channel
Mom: Whats for? Dinner Breakfast, Lunch
Sales Team Over 50’s Under 30’s
E-Commerce Channel Niche Mass
Assortment Limited (supermarkets) Unlimited (e-com.)
Retail Conditions Store visits Web shop checks
Business Management Sales targets Profit targets
Distributor Expertise Generalists Specialists Category, Channel
Business Manager Brand Manager Idea Generator
Check Point Conferences Telephone calls Teams/Zoom
Overseas Supplier Visits Monthly/Quarterly Quarterly/Annually
Brand Presence Shelf Visibility Page 1 results (e-com.)
Distributor Logistics Delivery by case Delivery by unit (e-com.)
Recipe Ideas Your brand only Total meal solutions
Training Annual meeting Webinar (anytime)
Consumer Marketing Mass via multi media Targeted and digital
Brand Information Email to distributors Online portal
Pricing: Distributor Calculation “Closed Book” “Open Book”
Trade Shows Visit in person Hybrid:Virtual and in person
Foodservice Restaurants Home Delivery
Forecasts/Reports Monthly “Live,” real time
Results-Expectations Achieve your Objective Achieve your Objective
75
1. Extensive Due Diligence
on all New Distributors
Visit each new distributor’s office and
warehouse to calibrate the size of his
business with other principals. This
includes reference checks from existing
manufacturer clients as well as from
leading retailers in his home country.
Run a Dun & Bradstreet or Equifax
financial report.
2.Design a Distributor Fact Sheet
Require each potential distributor
candidate to complete a one page
template recapping their capabilities.
Pay particular attention to sales turnover,
number of employees, and references
from existing brands handled.
3. Ship Directly to Distributor
in his Home Country
Do not allow for distributor sponsored
consolidation at a USA port such as Jersey
City, Miami, or Los Angeles during the
initial launch phase. Allow distributor
pick-up at your factory only after your
relationship and brand have been
established for a year or more.
4. Label your Product in the Local Language
Stickering is acceptable only if it is done
in the destination country or at your own
in-house contractor.
5. Sell Only to Distributors Based
in your Target Country
Avoid shipping product to foreign
distributors with offices and warehouses
in your own county. The goods have little
incentive to leave local ports. Export
Solutions Distributor Directory contains
more than 9,200 local distributors in
96 countries.
6. Create an “International Package”
This could be multilingual label or
a different size. One tactic is to label
packs “Export Only.” This reduces the
risk of it being diverted back to the
domestic market.
7. Establish an International Price Structure
A model could consist of export base price
plus freight charges. This prevents one
country from enjoying a price advantage.
8. Don’t Believe Stories About
Cruise Ships and Mining Camps
Sophisticated diverters come up with
elaborate stories to convince you that
your product will be sold to legitimate
outlets. Is it really worth the risk?
9. Analyze Orders Versus Size of Country
Leverage technology to alert you to
unusual order patterns outside of
historical trends. Believe me, it is not
possible that Greece or Bermuda are
selling that much product! Analyze
Nielsen consumption data versus
shipments to the market, if possible.
10. Unannounced International Market Visits
Check retail outlets independently,
without a distributor “tour guide”
to confirm a problem. Visit distributor
warehouses with short lead time to check
inventory. Recently, I visited a distributor
claiming to represent famous brands
and found that many were missing
from his warehouse or had less than
30 cases of stock.
11. Avoid Risky Countries with Low GDP
I am naturally suspicious about
distributor orders from poor African
nations, Jordan, Haiti, or Belize.
Realistically, how many consumers
in these countries can afford premium
European or USA brands?
12. Watch Out: No Web Site
Perform a Google search on a
new distributor. Virtually all serious
companies have web sites or some
internet references. A distributor without
a web site in 2022 is either hiding
something or too unsophisticated to
grow your business. Also, beware of
generic web sites that do not show basic
information like brands represented.
There are exceptions, but lack of a web
site sets off alarm bells.
Export diverting is a serious issue
at many companies causing distrust
and lack of support for export programs.
I admire producers that regularly follow
the practices described above to “weed
out” questionable distributors. When
in doubt, offer the distributor your
standard list price from your home
country. Good luck!
Twelve Tips to Derail Export Diverting
Need a hand? Visit www.exportsolutions.com.
7676
Slotting allowances, listing fees or as the Irish say “Hello” money
are all real estate rental fees charged in advance by retailers for
access to their limited shelf space. Many retailers assign their
buyers “budgets” for this type of incremental fee income. Store
owners seek to obtain maximum productivity from each shelf
facing and fixed entry fees are a tactic to gain immediate income
from new products without an established sales history. At the
end of the day, it’s a cost of doing business. Our objective is to
allocate as little money as possible to listing fees to redirect
our investments to consumer awareness and trial generating
activities. Recapped below are Export Solutions’ Ten Tips on
minimizing listing fee payments.
1. Exclusivity
Some large retailers will waive listing fees in order to achieve
first in the market status with an exclusivity arrangement.
Normally, this extends for three to six months. Beware, you
may upset other customers who become “locked out” during
the exclusivity period.
2. Pay Fees Over One Year
This approach reduces your initial outlay and also increases
the likelihood that the retailer will keep your product on the shelf
for at least one year. This may also allow you to structure the
payment as a percent of case cost versus a “lump sum” payment.
3. Free Goods
Our net cost of “Free Goods” may range from 30-50% of a
product’s retail price to the consumer. The retailer recoups his
listing fee when the product is sold. Some retailers are hesitant to
accept this option, as a slow moving brand may force him to wait
to receive his money.
4. Approach “Non-Slotting” Fee Retailers First
Every country includes retailers and channels that do not
demand slotting fees. Create a success story with these customers
first. Your track record may validate the larger investment in
paying the fees at a bigger account or success may help you
negotiate more favorable terms.
5. Create “All Inclusive” Annual Plan
Ultimately, the retailer has many “profit centers” to reach their
internal financial targets. Customers respect a solid, year one
plan, with investments in their other programs like advertising,
sampling, shelf rental and display. You may secure your product
listings as part of your annual agreement.
6. Negotiate Reductions – Multiple Items
My experience is that many retailers have published standard
prices for listing fees. However, net payment often depends
on your distributor’s clout. Big distributors, representing
multinational’s and a wide variety of brands know the difference
between what is requested and what is really paid on high profile
brand launches where the retailer needs the new brand to be
competitive. The most frequent “discount” is receiving a reduced
fee for multiple items: example, paying a full listing fee on first
two items and receiving authorization for two extra items as part
of a group listing.
7. Retailer Entertainment
Most countries still permit buyers to socialize with suppliers.
The cost of a few tickets to a high profile sporting event is far
less than most listing fees. A VIP plane trip to view your factory
or your category in a “resort” country is another way to gain
access to the shelves without writing a big check.
8. Higher Everyday Margin
Total category margin is a key assessment metric for most buyers.
Some may consider a lower listing fee, if your brand delivers a
margin higher than the category average.
9. Distributor Contribution
Some “hungry” distributors may cover or co-fund listing
fees. There are options to “case rate” fixed fees into the
distributor margin calculation. Ultimately, distributors
benefit from increased sales and margin contribution from
a new product listing. However, many are reluctant due to
short term contracts. Most maintain policies related to brand
owners retaining 100 percent responsibility for listing fees and
consumer marketing activities.
10. Beg! Claim Poverty
Buyers are human and realists too. They may “bend” in their
demands if they like your brand and know that you represent
a small company. Long term distributors can request the
occasional “favor” from a friendly buyer. Most retailers have
programs to provide “low cost” chances to entrepreneurial
new or local suppliers.
Ten Tips: How to Minimize Listing Fee Payments
Create Your Own
Export Library
All Guides available free at
www.exportsolutions.com
in the Export Tips section.
Distributor Search Guide
Export Handbook
Selling to USA Handbook
Distributor Management Guide
Finance & Logistics
Export Treasure Chest
My Favorite Templates & Forms
People Power
Strong Teams Build Great Brands
77
1. Determine Brand Ambition
for Country
Will your brand be a category leader,
player, or niche participant?
2. Establish distributor selection criteria
Big brand distributor, category specialist,
or smaller entrepreneur?
3. Create a Pool of Candidates
Export Solutions database tracks
9,200 distributors in 96 countries.
4. Determine Candidates Preliminary
Interest Level
Send introductory email, followed
by phone call within 48 hours.
5. Organize Introductory Web Interview
Key Facts: Sales turnover, # employees, companies
represented, category/channel specialization.
6. Distributor Interview in Candidates Office
4-6 weeks lead time. 2 hour meetings.
Send advance agenda.
7. Independent Store Checks
Provides category insights and “real” distributor
performance for current brands handled.
8. Interview Preparation: Scorecard, Samples,
Your Presentation, Key Questions
Export Solutions’ templates: Assessment Scorecard
& Ten Questions for every interview.
9. Distributor Interviews – Target 3 Candidates
Review capabilities, warehouse, cost to serve,
and interest in your brand.
10. Cooperation Model
What is the plan? Year one plan, pricing
calculation, and timeline.
Ten Step Distributor Search Process
Talk to an Expert
• Find Distributors in 96 Countries
• International Strategy Road Map
• Fix Problem Markets
• Entry Plans
• Export Workshops
• Motivational Meeting Speaker
Contact Greg Seminara at (001)-404-255-8387 to discuss your business development project.
www.exportsolutions.com
78
Distributor Selection Road Map
Export Solutions Performs Distributor Search in 96 Countries
Most companies maintain diverse distributor networks: A mix of large and small distributors, category
specialists, and those focusing on brands from your home country. Export Solutions recommends performing
a distributor model analysis of your current distributors to determine which type of distributor is delivering
“Best in Class” results. An important consideration is your brand ambition and investment level for a country
when evaluating distributor performance. The results of your distributor model assessment can be used to
guide new distributor selection or upgrade your current distributor network. Export Solutions can help!
Brand Ambition
Country Importance Strategic Priority Opportunistic
Brand Market
Share Objective
Leader Player Niche
Brand Investment Model Mass Marketing 10% of Sales Dead Net Price
Distributor Selection Criteria
Preferred
Distributor Size
Large Medium Small
Channel Specialization Supermarkets Foodservice Pharmacy
Category Specialization All Food
Confectionery &
Snack
Beverage
Gourmet Natural Food Health & Beauty
Ethnic Food Frozen/Chilled Household/Non Food
Country Specialization USA France Germany
Italy Spain United Kingdom
Asia Latin America Middle East
Benchmark Brands
(examples)
Pringles Barilla Tabasco
7979
Brand owners express frustration at
the lack of response from distributors to
their representation inquiries. Qualified
distributors are flooded with emails from
companies looking for new distributors
to handle their unknown brands. It’s
difficult to convince massive retailers
to take a chance on a new brand without
a proven track record. It’s even tougher
to persuade the owner of a mid-size
distributor to write a check for the first
order of your product, particularly if
you are not committed to a significant
marketing campaign. Brand building
from ground zero requires one-two years.
Research reveals that approximately
20 percent of new products are still on the
shelves two years later. Listed below are
Export Solutions’ tips on increasing your
chances that your new brand will be a
“Gold Mine” for a successful distributor.
Distributors: Always Looking for New Brands
Every distributor is looking for new
brands. Distributor profitability rises
exponentially when they add new
business. New business allows them to
leverage their fixed costs of warehouse
space and sales teams. Most distributors
search for adjacent brands that
complement their existing portfolio.
For example, confectionery specialists
look for other snack items that may be
purchased by the same buyer and are
located in the same aisle as their current
brands. Distributors need new
companies, as all distributors (even
the good ones), lose brands due to
acquisition, performance, or direct
models. The key is to position your
new brand opportunity as an attractive
addition to the distributor’s portfolio.
What Every Distributor Wants to Know
While you rave about your brands
superior taste, the distributor has
three thoughts on his mind :
1. How much money can he make
representing your brand?
2. Will it be tough to secure
market acceptance?
3. What will the brand owner commit
to in marketing investment?
Manufacturers that position their
proposition in these terms have a better
chance of gaining market acceptance.
Review Export Solutions’ article “How to
Excite Buyers, New Product Checklist”
for an independent product assessment.
Resistance to Pioneering
New product launch cycles require up
to one year from time of first distributor
meeting until he receives retailer payment
for his first order. During this incubation
period, the distributor must allocate his
sales and marketing resources to your
company without compensation. This
time dedicated to your company is
sourced from their other brands that are
currently generating income. Access to
the shelf does not guarantee consumer
trial and repeat purchase. A distributor
may buy your brand, capture shelf space,
and suffer disappointment when the
product does not sell. Unfortunately,
these pessimistic comments reflect reality
and provide insights on why best in class
distributors are hesitant to pioneer.
On the Road to Gold Mine
How can brand owners overcome
distributor resistance to pioneering?
Distributors are impressed by large
companies and brands that have been
successful in adjacent countries. Some
distributors will accept a product that
offers some existing market penetration
with the belief that their stronger team
can drive the business to the next level.
Manufacturer commitment to a powerful
marketing program sends a loud
message that you are serious. For mid-
size manufacturers, offering a small
monthly pioneering fee ($3,000 - $7,000)
demonstrates that you are a patient
partner, willing to co-fund the launch
preparation until distributor sales begin.
At the end of the day, distributors look for
a strong partner, with a good track record,
and a firm financial commitment to
support youir mutual marketing efforts.
How to Find an Enthusiastic Partner?
Export Solutions compiled an extensive
Distributor Search guide covering all
aspects of the distributor search process.
In pioneering scenarios, it is critical to
consider a wide variety of potential
partners. Schedule a one week trip
to a country. Plan to visit at least 5
distributors. Most distributors will be
open to an introductory meeting with an
overseas principal if you are professional
in your approach. Referrals from your
local government trade support contact or
another one of their current brand owners
helps pave the way. Trade Shows also
generate leads from interested
distributors. Post a large sign saying:
Distributors Wanted, listing countries of
interest. This will encourage visitors to
stop and chat.
Pioneering is tough but not impossible.
In reality, creating new brand sales from
a zero base is the essence of the Export
Manager’s job responsibility. Fortunately,
Export Solutions’ database covers more
than 9,200 distributors looking for
opportunities. Good luck!
Pioneering: A Gamble, Not a Guaranteed Gold Mine
Why do Export Managers Partner with
Export Solutions for Distributor Search Help?
4 Industries Leading Distributor Rolodex
• Excellent relationships across 96 countries
• Database tracks 85 distributors per country
• 300+ distributor search projects completed.
4 10 Step Distributor Search Process
• Logical, thorough due diligence process
• Professional approach yields positive results
• Publisher: Distributor Search Guide
4 Independent Expert Assessment
• Expert partner to export managers
• Focused on all aspects of distributor search
• Working for you!
4 Results
• 90%+ success rate
• Align with “Best in Class” distributors
• Typical project takes 4 months from project brief to distributor selection
4 Make Your Life Easier!
• Identifies 5-8 qualified candidates per country
• Organize meetings with top candidates
• Sounding board during assessment process
• Export Solutions participation sends positive message to distributors.
Export Solutions Can Help!
• Distributor Search helper in 96 countries
Contact Greg Seminara at
gseminara@exportsolutions.com
or (001)-404-255-8387
www.exportsolutions.com
80
81
Launch Plan Proposal – Year One*
Brand Objective
Volume: _______________ Wtd. Distribution: _______________ Share: ________
Consumer Marketing Activities
Activity
1.
2.
3.
Rationale Cost
Trade Marketing Activities
Activity
1.
2
3.
Volume Cost
Listing Fees
Customer
1.
2.
3.
# SKUs, Space, Promotion Support Cost
Total Year One Volume Total Year One Cost Wtd. Distribution
Distribution Achieved with Above Spend Level
Customer
1.
2.
3.
Stores % Country # SKUs Volume (annual)
*Feel free to attach other pages to support your recommended launch plan.
82
New Country Launch – How Long It Takes
* Some activities may be completed concurrently
Minimum Typical
Research Distributor
Candidates, Schedule
Meetings with Lead Time
2 weeks 4-6 weeks
Distributor Meetings 2 days 1 week
Post Meeting Due Diligence 1 week 4 -8 weeks
Distributor Appointment 1 week 4-8 weeks
Labeling Compliance already compliant 12-26 weeks
Product Registration* 1 week 4 -12 weeks
Business Plan Development* 1 week 4 weeks
Contract/Agreement* 1 week 4-8 weeks
Initial Order Arrives 3 weeks 4- 8 weeks
Key Account Calls 1 week 2- 4 weeks
Key Account Acceptance 1 week 4-8 weeks
Retail Placement 2 weeks 4-8 weeks
Marketing Starts 1 week after retail availability 4 - 8 weeks
Consumer Sales
Repeat Purchase
Total 6 Months One Year
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Distributor Capability Assessment
Export Solutions established 15 assessment criteria to identify “Best in Class” performers as well as “under
achievers.” Many distributor relationships extend 10 years or more. Is your distributor network still a “good fit”
for your current business requirements? Template can also be used as New Distributor Reference Check form
.
Assessment Criteria Rating: (10 = Best)
Category Expertise/Critical Mass
Focus/Time Dedicated to your Business
Joint Business Plan Development, Execution, Delivery
Alignment with Brand Owners Vision. Relationship.
Cost to Serve (fair margin, extra costs)
Assortment/Shelf Space
Promotion Creativity, Effectiveness, and Efficiency
Key Account Relations (Senior level, buyer)
Leadership/Owner (engaged & committed to us?)
Brand Manager (seniority, clout,creativity)
Multi Channel, Multi Regional Coverage
Financial Stability, Payment Record
Supply Chain Management & Forecasting
Problem Solving: rapid response?
Sales Results versus Budget, Market, Category (CY, PY, 3 Years)
8484
Country Experts
Looking for distributors specialized in brands from your country?
Search Export Solutions database to find overseas distributors handling
food, beverage, and sweets brands from your country.
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USA Food & Sweets
1,189 Distributors
Spanish Food & Sweets
408 Distributors
Italian Food & Sweets
1,397 Distributors
UK Food & Sweets
682 Distributors
Latam Food & Sweets
543 Distributors
German Food & Sweets
648 Distributors
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Price Calculation Worksheet
Item Amount Comments
List Price (factory or port)
Compare to your domestic list price?
Avoid diverting risk.
Exchange rate Watch bank rate vs. distributor rate.
Freight (sea, truck or rail)
Target full containers.
Consolidation is costly.
Duties
Apply correct Harmonized (HS) code.
Confirm Free Trade Agreements.
Customs clearance, insurance Money and time!
Inland freight: port to distributor
Translate actual costs to case rate.
Avoid flat percentage rates.
Landed Cost
Product Stickering Select countries.
Listing Fees
Flat fee. One time only.
Usually not in calculation.
Marketing fund accrual
Typically, 10-20% of list price.
Part of calculation or manufacturers price.
Distributor Margin
Normal range: 15-35%.
Depends on size, complexity of brand, services,
and “what trade spend is included.”
Other Distributor Fees
Should be part of distributor margin.
Avoid hidden profit centers.
Price to Retailer
Fair and transparent model.
Incentives for large customers, extra performance.
Retailer promotions, incentives,
rebates
10 – 20% depending on the country.
Other Retailer Fees
At times for merchandising or central distribution.
Should be allocated from distributor margin.
Retailer Margin
Global average: 28%
Range: 15% -45% based upon category, brand.
Sales Tax/VAT
Included in price in many countries.
USA sales tax is on top of shelf price.
Consumer shelf price Everyday prices and promotional prices.
8686
Cost Calculation Assessment*
*Ambient grocery example: Higher margins – Chilled and Health & Beauty products
Assessment Criteria
Global
Benchmark
Actual
Retailer: Everyday margin
20-35%
Retailer: Back margin (rebates, discounts)
0-10%
Retailer: Other margin
(Damage, merchandising, central warehouse)
0-5%
Total Retailer Gross Margin
25-40%
Trade Promotion (Manufacturer)
5-20% of net sales
Total Distributor Margin
15-35%
Warehouse/Stickering
2-4%
Delivery
2-5%
Total Distributor Logistics
3-7%
Key Account Sales
1-3%
Brand Management
1-2%
Merchandisers/Field Force
0-4%
Total Distributor Sales Team
4-6%
Administration
1-2%
Finance and Collections
2-5%
Overheads (office, IT, corporate)
2-5%
Distributor Promotion Investment
0-10%
Distributor Net Profit
2-5%
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Reduce Export Diverting
Activity Bad Practice Best Practice
Logistics
Allow factory pickup or
delivery to USA* port
Ship directly to distributor
Label USA* pack, 100% English
Translated to distributor’s
language
Distributor Profile
Small company with no
web site or brand references
Well known local distributor
handling other global brands
Pricing
Low price combined with
USA* port pickup
Export pricing model,
ship directly to distributor
Partner Due Diligence Start partnership without visit
Extensive evaluation,
including in market visit
Pack Size Standard USA* package
Special “multi language” pack,
labeled “Export Only”
Store Check No trip to check stores
Annual visit to document store
conditions and warehouse stock
Listing Map No customer level information
Report local product
authorization, by retailer
Syndicated Data No data
Obtain data to compare
purchase levels with
market consumption
Reference Check
No financial or commercial
checks
Check current principals plus
financial institutions (D & B)
* For Made in USA brands
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88
Category Review Template* – page 1
(Estimate: Source info from Store Checks, Retailers, Nielsen, Euromonitor)
*Note: please provide your best estimate
Category Sales: Total, all channels, all customers
Retail Value _______________________________ Wholesale value___________________________
Category Sales: Percent by Segment
Segment A _________ Segment B _________ Segment C _________ Segment D _________
Category Sales: Percent by Channel
Supermarket _________ Convenience _________ Discount _________ Pharmacy _________
Wholesalers _________ Cash & Carry _________ E Commerce _________ Other _________
Category Peak Seasonality
Summer _________ Winter _________ Holiday _________ None _________
Category Sales: Top 4 Customers
Customer 1 _________ Customer 2 _________ Customer 3 _________ Customer 4 _________
Category Sales: Percent National Brand versus Private Label
National Brand _________ Private Label _________
Category Sales: Percent by Brand
Brand A _________ Brand B _________ Brand C _________ Brand D _________
Category Sales: Percent by Region
Region A _________ Region B _________ Region C _________ Region D _________
Category Sales: Market share (value) Top 4 Brands
Brand 1 _________ Brand 2 _________ Brand 3 _________ Brand 4 _________
Category Sales: Market share (units) Top 4 Brands
Brand 1 _________ Brand 2 _________ Brand 3 _________ Brand 4 _________
Category Sales: Top 4 SKU’s/Items
Item 1 _________ Item 2 _________ Item 3 _________ Item 4 _________
Category Sales: Top 4 Pack Sizes
Pack Size 1 _________ Pack Size 2 _________ Pack Size 3 _________ Pack Size 4 _________
89
Category Review Template* – page 2
(Estimate: Source info from Store Checks, Retailers, Nielsen, Euromonitor)
*Note: please provide your best estimate
Category Size (circle)
Mass Standard Niche
Category Sales Growth (circle)
High 10 % + Average: 3-5 % Flat Declining
Buyer Interest (circle)
High Medium Low
Category Development (circle)
New High Growth Mature Declining
Retail Prices: Top 15 SKU’s/Items at number 1 customer
Item 1 _________ Item 4 _________ Item 7 _________ Item 10 _________ Item 13 _________
Item 2 _________ Item 5 _________ Item 8 _________ Item 11 _________ Item 14 _________
Item 3 _________ Item 6 _________ Item 9 _________ Item 12 _________ Item 15 _________
Shelf Space: Provide Photo’s/Planograms
Typical Section Size: Supermarket # Items: Average supermarket
Adjacent Category 1 Adjacent Category 2
Merchandising (circle)
Typical Percent
Price Reduction
10% 20% 30% Other
Store Flier
Participation
weekly monthly seasonal never
Category displays weekly monthly seasonal never
Special Packs Bonus Packs Pre-Price Free Gift Other
What activity drives incremental category sales?
Category Insights: What’s hot?
Category Insights: What’s not selling well?
Category Summary/Other Insights
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Where Do You Want to Grow?
Asia/Africa/Middle East
Europe Americas
Use Export Solutions Database
to fill in the Gaps in your
Export Coverage Map
Australia – 274 Distributors
China – 160 Distributors
Hong Kong – 177 Distributors
India – 109 Distributors
Indonesia – 78 Distributors
Japan – 176 Distributors
Korea – 146 Distributors
Malaysia – 128 Distributors
Philippines – 109 Distributors
Singapore – 163 Distributors
Thailand – 94 Distributors
Vietnam – 49 Distributors
Israel – 61 Distributors
Saudi Arabia – 115 Distributors
U.A.E. – 195 Distributors
South Africa – 106 Distributors
Plus 14 more countries
Austria – 68 Distributors
Belgium – 85 Distributors
Croatia – 78 Distributors
France – 125 Distributors
Germany – 188 Distributors
Greece – 90 Distributors
Hungary – 68 Distributors
Italy – 105 Distributors
Netherlands – 155 Distributors
Poland – 90 Distributors
Russia – 108 Distributors
Spain – 157 Distributors
Sweden – 103 Distributors
Switzerland – 100 Distributors
Turkey – 82 Distributors
U.K. – 274 Distributors
Plus 19 more countries
Argentina – 61 Distributors
Bolivia – 52 Distributors
Brazil – 135 Distributors
Canada – 205 Distributors
Chile – 92 Distributors
Colombia – 82 Distributors
Costa Rica – 73 Distributors
Ecuador – 55 Distributors
Guatemala – 61 Distributors
Mexico – 193 Distributors
Panama – 63 Distributors
Paraguay – 57 Distributors
Peru – 82 Distributors
Uruguay – 52 Distributors
USA – 598 Distributors
Venezuela – 38 Distributors
Plus 14 more countries
