For many Zimbabwean SMEs which are into fast moving goods consumer goods (FMCGs) getting their brands onto major supermarkets’ shelves seems an unattainable dream. This is because of some supermarket’s procurement policies which favour large established companies which have the capacity to produce in large quantities and accept credit terms of up to 30days or imports which are cheaper than locally-produced FMCG brands. Another reason is that many SME manufacturers are content with producing goods which are only good enough for local neighbourhood tuck-shops where they only compete on the basis of price. Granted, financial resources to enable them to up their game are not easy to come by but a good number of them seem to be happy to just supply neighbourhood shops. Some are where they are because they do not know how to go about improving their brands so that they can earn supermarket shelf space at some of the renowned retail brands such as OK, TM or SPAR. Yes, many of such supermarket brands do not entertain first time suppliers for reasons such as lack of a track record or fears of reliability issues, but some retailers such as SPAR give first time suppliers a chance and a trial period to prove themselves. In order to take advantage of such chances here are some of the issues that you need to address about your brand before knocking on the supermarket buyer’s office for a supply contract appointment;
Demand for your product
Many supermarket chains stock only those brands which are on demand to avoid locking their financial resources in slow-moving stock. Carry out research with supermarket buyers to establish whether products in your brand category are in demand. Sometimes the products may not be in demand because of minor issues such as packaging issues. Ask them how you can address the issues so that your brand can be accepted.
The profit margins on most FMCGs are very low and supermarkets make profits through driving large volumes. In view of this, you have to ensure that your pricing is acceptable to the retailer. Many Zimbabwean entrepreneurs still live in the by-gone pre-2008 era of super profits. You have to make the choice between a long-term sustainable relationship with a supermarket and making one huge sale you have been waiting for in order to buy the Merc you have been dying to buy. Make sure that the buying price which you accept from the supermarket is not too low that it will drive your enterprise out of business.
One of the major problems with most SME manufacturers is poor or inconsistent product quality. This is caused by ignorance or shortcutting in order to realise more from raw materials among other reasons. As long as your quality remains low your brand will be permanently consigned to the neighbourhood shops. Work on your product quality if you wish to secure shelf space on national supermarket brands. One way of doing this is by obtaining a Standards Association of Zimbabwe (SAZ) certification. This does not come easily but it is worth every cent and effort. In the past SAZ certification was the sole preserve of large established corporate entities such as the Unilevers and the National Foods of this world but today nothing stops your SME manufacturing concern from obtaining it if you are determined. The certification assures retailers and their customers of the high quality of your product.
Brand packaging is one of the most problematic areas that retailers have with most local products. Today’s average supermarket customer is more sophisticated and demanding than his 1990s counterpart. He is more travelled and exposed to current global trends. The importation of South African grocery brands into the country has put some pressure on local manufacturers in terms of brand packaging quality. To cope with the competition posed by South African high quality packaging many manufacturers are importing their packaging from the same country. This is not to say that local packaging is bad or poor. There are local packaging suppliers such as Arkay Plastics who are still supplying high quality packaging despite the prevailing economic challenges. Most SME manufacturers produce very high quality products only to let themselves down by not paying attention to their packaging. They assign brand packaging designing to the nearest cheapest graphic designer and the results are often the cheapest in quality. Assign your packaging designing job to a seasoned graphic designer, preferably one who has advertising agency experience in order to get the best design.
Ensure that your product labels address all the basics of brand labelling such as the product’s net contents by volume, best before date, manufacturer’s physical address and storage instructions among others. Ascertain that your packaging is of high quality and can compare well with the very best in your brand category both locally and regionally. Even if you supply farm produce, package it professionally. This way your commodity can fetch more compared to selling it unpackaged. No supermarket would want to associate with a brand which is packaged in low quality containers pasted with photocopied labels. Secure bar codes for your products. Supermarkets have moved away from the old ringing NCR cash registers and adopted modern point of sale software for their checkout processes. This calls for the use of bar codes on products as these are just scanned and detailed information about your product is captured in both the retailer’s computer system and on their customers’ receipts. Bar codes also help in the retailers’ management of the stocks of your brand in their warehouses.
You may address all the above aspects but if your enterprise has no capacity to supply your targeted supermarket with the agreed quantities of your brand then the contract is doomed and your enterprise’s reputation is set to be negatively affected. Your enterprise’s supplying capacity is determined by your manufacturing capacity. Before you approach the supermarket buyer attend to your manufacturing and supplying capacity. This may involve re-equipping your manufacturing outfit or securing generator set as a way of getting around power outages which may affect your production. It may also mean employing an experienced manager who can optimally use the available resources in order to meet production targets.
The route to supplying major supermarkets is a long one which requires proper planning and patience. It takes resources – financial, human and material – but it worth every effort because once your brand is accepted by one supermarket chain, this may mark the opening of doors of other retail chains. If your product proves popular with the market, people will ask for it from other supermarkets and satisfied brand users refer others to it. Supplying your brand to supermarkets marks your enterprise’s gradual graduation from a small business to a big league enterprise which is every entrepreneur’s dream. If you cannot achieve it this year because of one challenge or the other do not let it kill your dream. Work on getting the challenge out of the way until you see your enterprise’s brand prominently standing shoulder to shoulder on the supermarket shelf with other manufacturers’ brands.