Insights to Accelerate International Expansion

Fall 2017 Volume 10 Issue 4

Our Mission: Help Manufacturers “Spend time Selling to Distributors versus Searching for Distributors”

The e-commerce revolution creates anexciting new playing field for exportdevelopment. This signals a momentousshift from the costly struggles to securelistings on constrained supermarketshelves to the unlimited possibilitiesoffered by cyberspace. Amazon UKoffers 15,857 tea items, ranging from160 sku’s of Tea Pigs to 6 variants ofPure Chimp tea. By comparison, Tescocarries 11 Tea Pigs sku’s and no choicesfor fans of Pure Chimp. Globale-commerce development ranges frominfant stages in many parts of LatinAmerica to 12.4 percent of sales inChina, according to Fung BusinessIntelligence. Could e-commercerepresent 10 percent of global sales?20 percent? Who knows, but it willcertainly be much larger by 2022.Exporters now possess an option tostrike first in many countries throughthe e-commerce channel. This allowsbrand owners to test consumer responsebefore committing to costly investmentsto expand into the supermarket channel.

Unlimited AssortmentToday, e-commerce retailers will listevery item that you offer. This includesseasonal items, special packs, and slowmoving, niche products. This providesbandwidth to encourage innovation,test markets, and stimulate theemergence of small suppliers.To date, entry is not accompanied by“big bucks” listing fees, although thereare a range of programs and fees thatvendors must participate in to win.

Unique Pack SizesIn 2022, it is possible that global giantslike Amazon will demand unique packsizes. This follows the example of clubsand cash & carry formats requiringlarger sizes and convenience storespreferring smaller packs. I am guessingthat Amazon will opt for sizes largerthan conventional supermarket items,but smaller than club packs to gainlogistics efficiencies. All of this could

In This Issue

New RetailerDatabaseExport Solutions has launched a newretailer database. This exciting toolprovides instant information on1,700 leading retailers in 96 countries.This includes most chain supermarketsfrom Argentina to Vietnam. Subscriberstrack leading customers by banner, formatand store count. The database suppliesretailer financial information and latestnews. Interested? See pages 4 and 5 formore information. Contact Export Solutionsfor a free sample retailer database report.Subscribe today at www.exportsolutions.com.

Are You Ready For Export 2022?

Page 1Are You Ready For Export 2022?

Page 2What is the Plan?

Page 3Preferred Supplier Scorecard

Page 4Retailer Search Made Simple

Page 5FAQ’s – Retailer Database

Page 6Can We Help You?

Page 8We’ve Got You Covered!

continued on page 7

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Picking the right distributor is not an exactscience. I know that each of us experiencesmoments of frustration when we question,“why did we ever pick that distributor?”Believe me, an equal number of examplesexist where a distributor may share the sameemotion about your company! Frequently, apartnership is christened by a positivedistributor interview or enthusiastic meetingat a trade show. Everyone is always in ahurry to negotiate prices and a contract and

secure the first order. However, in many cases the decision to work together is cementedwithout 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 eachother due to disappointing results.

I recently completed a distributor search project in the Middle East. We interviewed anumber of good candidates and identified two with high potential. Last month, I wasnotified by the export manager that he selected one of the candidates. I supported hisdecision, 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 beenappointed less than one year earlier. Initial results were severely below expectations.The first question I asked the brand owner related to the reconciliation versus theoriginal one-year business plan. What happened? In this case, there was generalunderstanding about the direction of the partnership, but never alignment around aone-page scorecard with KPIs and a logical road map.

Launching a new distributor relationship is like the birth of a child. A mother rarelyleaves the side of a baby, providing comfort, safety, and nutrition until the infant ishealthy and able to survive without constant oversight. The same philosophy mustapply to a distributor partnership. During the first few months, there must be frequentcommunication, 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 distributorappointed without anyone from the manufacturer committed to visit the country for thesales 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 countryand 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 partnershipsthrive 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 isfreely available in the Export Tips section of my web site or simply email me.What is your annual plan for each country?

Strategic ServicesContact Us for Export Solutions

1. Identify Best in ClassDistributors: 96 Countries

2. Best PracticesExport Strategy

3. Distributor ManagementWorkshops

4. Export 101:Let’s Get Started

5. New MarketPrioritization& Launch Plan

6. Personal DistributorIntroductions:96 Countries

7. Walmart International

8. Distributor Contracts,Margins, & Fees

9. Meeting Speaker

10. International StrategyExpert

Strategic ServicesContact Us for Export Solutions

1. Identify Best in ClassDistributors: 96 Countries

2. Best PracticesExport Strategy

3. Distributor ManagementWorkshops

4. Export 101:Let’s Get Started

5. New MarketPrioritization& Launch Plan

6. Personal DistributorIntroductions:96 Countries

7. Walmart International

8. Distributor Contracts,Margins, & Fees

9. Meeting Speaker

10. International StrategyExpert

www.exportsolutions.com

Greg Seminaragseminara@exportsolutions.com404-255-8387

“Spend Time Selling to Distributors versus Searching for Distributors”

What is the Plan?

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Launch Plan Proposal – Year One*

Brand Objective

Volume: _______________ Wtd. Distribution: _______________ Share: ________

Consumer Marketing Activities

Activity1.2.3.

Rationale Cost

Trade Marketing Activities

Activity1.23.

Volume Cost

Listing Fees

Customer1.2.3.

# SKUs, Space, Promotion Support Cost

Total Year One Volume Total Year One Cost Wtd. Distribution

Distribution Achieved with Above Spend Level

Customer1.2.3.

Stores % Country # SKUs Volume (annual)

*Feel free to attach other pages to support your recommended launch plan.

Coverage: 96 countries and 1,700 retailers

Supermarket

Convenience

Drug Store

Natural Food

Club, Cash & Carry

Supplying profiles, store counts, formats,news and info for Top 100 internationalretailers plus all overseas branches

Example 1: Who are supermarketretailers in Italy?

Example 2: How many stores does Krogeroperate by banner, in the USA?

NEW!

ORDER NOW!

Retailer Search Made Simple

4

Search by Retailer NameSearch by Country

Combo Search

www.exportsolutions.com

Search By Format

5

Why did you create the retailer database?Export managers dedicate a lot of time toresearching countries, retailers andpreparing business plans. A standardKPI measure is tracking product listingsfor key customers. I believe that ourindustry could benefit from a globalretailer database to instantly locateretailers and their store counts in96 countries. The retailer database is alogical extension of our leadingdistributor database which has helpedmore than 3,000 companies build exportsales 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 databasecovers 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 initialcoverage of drug stores, natural foodstores, and e-commerce channels.Our database does not coverDIY/hardware, toy, office, liquor, orsporting goods channels.

Retailer database: featured infoProfile – Retailers profile and link to theirinternet home page.

Formats – Retailer’s stores segmented byformat and banner.

We track supermarkets, hypermarkets,cash and carry, convenience stores,discounters, drug stores, natural foodstores, and e-commerce retailers.

News – Latest retailers’ news. In somecases (Asia), we substitute a link to theretailer’s latest promotional flyer.

Financial – Many leading retailers arepublicly traded. A link is provided totheir latest financial results. We do notoffer estimated financial information forprivately held or family owned retailers.

How is your coverage of global retailers?We offer total coverage for top 100 globalretailers. This includes all of theirbranches and banners. Searchable!Use filters to research Walmart, Costco,Carrefour, Tesco, Metro, Casino presenceby country. Database covers retailer’stotal store outlets as well as a breakout bybanner and format.

What can I use the retailer database info for?• Obtain an instant snapshot of an

average of 18 retailers per country for96 countries.

• Track presence of global retailers likeWalmart, Carrefour, and Metro AG.

• Create country specific listing mapswhere distributors measure brandauthorization by retailer.

• Conduct home office basedinternational category reviews and pricechecks from retailers’ e-commerce sites(not all retailers).

• Prepare annual reviews and reportswith up-to-date information on leadingretailers and channels.

SearchableThe database offers filters allowing you tosearch by country, format, or retailer name.You can also use a combination of filters foryour research.

Can I get a free sample of the retailer database?Sure! Check www.exportsolutions.com for acomplete profile of United Kingdom retailers.

Do you provide retailer’s annual sales ormarket share information?Accurate annual sales information isavailable through the financial link forpublicly traded companies. We do notprovide estimated financial information forprivately held and family owned retailers.Channel blurring occurs betweensupermarket, convenience, e-commerce,and even natural food operators. We do notprovide market share due to difficulty toaccurately isolate and define channelmarket share information, particularly withso many privately held retailers.

How accurate is the retailer data?Export Solutions’ retailer database wasjust launched in the fall of 2017, soinformation is highly accurate. Retailernames, web sites, and formats rarelychange. This makes the database 99%accurate at the company level. New storesopen every day, resulting in store countsthat may be 95% accurate. We intend toupdate store counts on a regular basis.

How much does retailer database access cost?Our 2017 introductory price is $495 USAdollars for an annual subscription.In 2018, subscribers will pay $975 forannual access. Special rates forgovernment trade organizations.

How do I access the retailer database?Visit www.exportsolutions.com and clickthe retailer database page. You can place asubscription or individual continent(i.e. Europe) into a shopping cart.Register and check out via credit card.The process takes two minutes and weautomatically send you an invoice.

About Export SolutionsExport Solutions was founded in 2004and is based in Atlanta, Georgia in theUSA. Export Solutions serves as a leadingprovider of business intelligence to thefood and consumer goods industries.Our distributor database covers 7,300distributors in 96 countries and has beenused by more than 3,000 clients.Our Export Express newsletter has acirculation of 5,000 and is viewed as animportant source of insights, strategies,and templates for internationaldevelopment. www.exportsolutions.com.

FAQ’s – Retailer Database

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Distributor Search Helper for:

YourLogoHere

Can We Help You?

Recent Distributor Search ProjectsAsia Europe Middle East Latin America

Australia Germany Bahrain Brazil

China Ireland Israel Colombia

Indonesia Netherlands Kuwait Costa Rica

Japan Nordics Qatar Cuba

Malaysia Spain UAE Ecuador

Philippines United Kingdom Mexico

Singapore Canada Panama

South Korea South Africa United States Peru

Grow your International Business!Contact Greg Seminara at (001)-404-255-8387 to discuss

your business development project.www.exportsolutions.com

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Are You Ready For Export 2022?

change based upon the evolution of the channel towardse-commerce pioneers like Amazon, Ali Baba, or Ocado versuslegacy retailers “click and collect” models.

Data Driven DecisionsInformation transparency in 2022 will supply exceptionalinsights into your shopper community. Powerful data will bereadily available to guide your overall customer marketingstrategy. Imagine an environment where you can source real timesales data by postal code and time of day? Or offer instant deepdiscount promotions that will drive incremental volume at theend of the month to hit a sales target?

Solving the New Merchandising MatrixPrice discounts, flier participation, and end-of-aisle displaysrepresent traditional tactics in the supermarket channel.In e-commerce, prime vehicles include payment for key words,short term “Today’s Deal” and cross promotion “suggestionselling.” Amazon Dash buttons are brand specific, wifi-connecteddevices to place anywhere in your home. Simply press the buttonwith a brand logo to reorder your favorite product and astandard replenishment order will be delivered,

Sampling – Sachet SolutionsInvestigate companies that produce and market sachets.New industries will emerge that deliver weekly boxes of sachetsize samples to shoppers in your target demographic group.Some consumers may elect to subscribe or buy sample boxes totry new products. E-commerce retailers will likely offer an“opt in” service where shoppers can receive free samples with apaid order of complimentary products.

Social MediaMobile addicted students of today are the moms of 2022.Their habit is to share their instant feedback via Instagram,Twitter, or Facebook. A challenge will be to identify appropriatesocial media “influencers” for your brand. Today, many vendorsclaim that their product is the best, without independentassessments. Category leaders will create communication tools

for competitive product performance, nutritional benefits andresults of consumer preference studies at the point of purchase.

Customer Strategy & Organizational DesignThe work to serve an e-commerce customer is different thanselling to a supermarket buyer. Gone are frequent face-to-facecommunications replaced by online templates to uploadinformation. Negotiations are different, with no old-fashionedhaggling, replaced by bidding for desired placement or keywords. The Amazon purchase of Whole Foods confirms channelconvergence. E-commerce requires different service requirementsand skill sets. However, the blurring of channels will create anenvironment where all brick and mortar supermarkets willmaintain an e-commerce platform. Developing a fair andequitable pricing and trade promotion policy is a key issue.

Role – International DistributorForward thinking distributors will grasp this opportunity andinvest ahead of e-commerce channel development. Logistics is afundamental part of any export sale, with overseas distributorsoffering local inventory with 48-hour delivery standards. In othercases, we are witnessing the evolution of e-commerce channelspecific distributor experts in China, South Korea and the USA(brokers). Will your distributors be leaders or laggards?

6 Point Plan – Act NowWhat strategies should export managers implement to capitalizeon the enormous growth curve offered by the e-commercechannel? Below is Export Solutions’ 6 point plan.

1. Identify e-commerce development as a 2018 priority.

2. Sync with your company’s overall e-commerce strategy,sharing resources and knowledge.

3. Create a global Amazon strategy. Evaluate results andpriorities, by country.

4. Invest in China e-commerce: “Ground Zero”

5. Challenge each distributor to develop and share ane-commerce strategy.

6. Establish e-commerce KPIs: sales, assortment, etc. Track results.

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E Commerce MAPS*Merchandising, Assortment, Pricing, Shelf Management

E Commerce Brick & Mortar

Assortment Unlimited assortment. Assortment limited by shelf space.

Pricing Frequent adjustments based upon

marketplace dynamics.

Tough to influence and implement

price changes.

Shelf Management Cyber space is unlimted.

Battle for preferred placement.

Fight for limited space. Private label

over spaced relative to sales.

Merchandising Bid for key words,

“Today’s Deal,” cross selling.

Price discounts,store fliers,

end of aisle displays.

continued from page 1

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Segmentation FactorsSegmentation analytics will vary by company. Absolutepopulation is just one factor warranting consideration. Othercriteria include size of the category, proximity to your producingplant, as well as per capita spending power. For example, mostUSA based exporters sell far more to Puerto Rico, an island with4 million people, than they do to China or Brazil. As a result,some USA brand owners place a strategic focus on the CaribbeanBasin countries adjacent to the USA and process only occasionalopportunistic shipments to complex countries such as China.

Mix of CountriesMost companies can dedicate focus on a strategic launch intoonly one or two “strategic” countries at a time. It’s appropriate tocreate a growth plan aimed at a mix of Strategic, Priority, andOpportunistic countries.

Market Share ExpectationsYour export road map should also be adjusted based upon yourmarket share expectations for a select market. Generally, there arethree scenarios for a brand to pursue.

Leader: Brand investment and innovation to become #1 in thecategory.

Player: Brand plans to compete effectively, obtaining a marketshare of 5% -20%.

Participant: Niche. Brand objective is incremental shipmentswith little/no investment.

Lessons LearnedCalibrate expectations to investments in brand support andmanagement oversight. Everyone wants to be a category leaderor player. To achieve this lofty status, you need to conduct localmarket research, innovate, maintain competitive pricing, investin marketing, and align with a strong sales team just as you do inyour home market. Projects fail as certain brands want categoryleadership but invest only to “niche” levels.

Strategic segmentation of export opportunities is “Job One” for export managers. Export Solutions divides countries into three groups:Strategic, Priority, and Opportunistic. This approach filters countries by “size of the prize” and investments required to win. The basicrationale is that a company should allocate different resources to develop a large country like Brazil, compared to a medium sizecountry like Belgium versus the Bahamas or Bermuda. Too frequently, we see companies handcuff all markets to one export program,with common strategy, pricing, and invest 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 BDIGlobal Retailers High Complexity

Significant Investmentin Brand support.Market Research

Management Visibility

Local Office orDistributor or Joint Venture

BrazilUSAMexicoChinaGermany

Priority (Manage)

Mid size Country (pop. 10 mm+) High GDP High Category BDI Mid Complexity

Moderate investment inbrand support.

Managed by ExportManager

Distributor

ColombiaAustraliaCanadaKorea/ThailandSouth AfricaPolandSaudi Arabia

Opportunistic (Profit)

ProfitableOpportunities. Low GDP CountriesLow Complexity

Minimal/no investmentin brand support

Distributor or Direct to Retailer

CaribbeanCentral AmericaMiddle EastAfrica

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Preferred Supplier ScorecardDistributors deliver their best results for their favorite principals. How do you rank?

Supplier Assessment ConsiderationsRating:

(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

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Distributor Performance: 20/20 Business AnalysisThe start of a new year is an appropriate time to review distributor performance. This process starts with the evaluation of the usualmetrics such as shipment results, market share, and success delivering new item placement. Normally, distributor performance rangesacross 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 AnalysisA valuable exercise is to segment your existing distributors intothe three groups: Leaders, Performers, and Laggards. Look at theorganizational models of your “Leaders” and Laggards.”Are there consistent threads between the business specializationof your distributor network? For example, do you find that your“Leaders” are all Large Distributors (versus small), Big BrandDistributors (vs. niche), Category/Ethnic specialists (vs. all typesof Food), technologically savvy versus “old school”? A similaranalysis should cover your “Laggard” distributors. Are underperformers small organizations that fail to meet yourrequirements? Or alternatively, large distributors where yourbrand is too small to gain sufficient attention? Your analysis mayreveal that one type of model works well for large or adjacentcountries while another approach works best for smaller orremote countries. Look for the trends!

Lessons LearnedCompleting the distributor segmentation exercise describedabove should yield some important conclusions on the bestpartner models to pursue for your brand. For example, an Italianmanufacturer of candy may confirm that his best performingdistributors are international confectionery experts, versusdistributors specializing only in Italian products. On the otherhand, an ethnic Asian food producer may find that the bestcandidates to represent his brand are Asian channel specialistsversus distributors that represent all types of fine food categoriessuch as Tea & Olive Oil.

Next StepsHonor your leaders and drive them to higher levels. Recognitionsuch as Distributor of the Year, visits with your company CEO,or requests to deliver a presentation on their “success story” areinexpensive motivators. “Laggards” impact our own ability toachieve our personal objectives. We often like the people who workat “Laggards”, but at times, you must act to protect the long terminterests of your company and pursue a change in distributors. It isimportant to recognize that all companies have distributors that are“Leaders” and “Laggards.” Proactive attention to fix the“Laggards” will only improve your results versus sufferingthrough another year with a poor performing partner.

Export Solutions Can HelpOur industry leading database has been used by more than2,700 brands to locate partners in 96 countries. This includes anaverage of 67 unique distributors per country. There are alwaysmany alternatives to consider in every country when you haveaccess to the Export Solutions database.

Export Solutions serves as a consultant to European andAmerican brands of all sizes. Our work includes analysis ofdistributor networks and development of strategies formotivating, measuring, and rewarding distributors. ExportSolutions has helped companies identify, interview, and signdistributors on every continent. Contact Greg Seminara atgseminara@exportsolutions.com to discuss your project. Ourmotto is “Spend time Selling to Distributors vs. Searching forDistributors.”

Distributor Segmentation

Results Next Steps

Leaders20% 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.

Performers60% 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.

Laggards20% 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!

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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 gseminara@exportsolutions.com 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 andupgrading the bottom performers

• Benchmark external brands from your category

• Practical and “action oriented” approach

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We’ve Got You Covered!67 Category Specialists Per Country!

Confectionery & Snack:23 Distributors/Country

Ambient/Hot Beverage:13 Distributors/Country

German Food & Sweets5.5 Distributors/Country

USA Importer/Distributor:462 Distributors

Gourmet & Ethnic Food:

22 Distributors/Country

Italian Food:10 Distributors/Country

Natural Food:5 Distributors/Country

UK Food & Sweets5 Distributors/Country

7,300 distributors – 96 Countries

Subscribe now at www.exportsolutions.com

“Spend time Selling to Distributors versus Searching for Distributors”