FMCG cos look to boost sales via wholesale giants

NEW DELHI: FMCG companies within the country are taking a look beyond kirana shops to boost sales. Many are turning to business-to-business (B2B) wholesale giants, reminiscent of Metro Cash & Carry and Walmart, to tap into the accommodations, restaurants and catering (HoReCa) section, which outnumbers mom-and-pop shops in India.
While there are round 1.2 crore kirana shops throughout country, the HoReCa section accounts for approximately 1.three crore organisations, in step with information supplied via German wholesale store Metro Cash & Carry.

"Barring a few exceptions, most companies do not have a go-to-market strategy for HoReCa," stated Arvind Mediratta, MD & CEO of Metro Cash & Carry India. "We have a natural edge in this segment and these brands ride on our bandwagon to tap this."

Quoting information from Nielsen, retailers stated best 31 (0.2%) out of 15,000 FMCG launches be successful annually, whilst the remainder fail due to loss of an all-pervasive distribution strategy. Even the top FMCG companies in India set up to succeed in best 30-40% kirana shops with the penetration rate in their most sensible manufacturers stagnating at 50%.

"We have helped small Ho-ReCa members such as dhabas to grow their assortment range. HoReCa is an extremely important segment for us," stated Rajneesh Kumar, senior VP and head of corporate affairs at Walmart India. "The segment has strict requirements such as timely delivery and consistent quality. With the growth of nuclear families, more people are eating out and demanding safe food, as a result of which, the segment is growing fast."

Seeing the chance within the reasonably underserved section, shopper items giants, including HUL and Mars, are turning to cash & elevate channels. Other than HoReCa, companies reminiscent of Walmart and Metro additionally cater to the services and products and companies (SCO) section that accounts for round 2.5 crore entities.

"In India, we have around three times the distribution reach of Mars, the American confectionery and pet food company," stated Metro's Mediratta. "Many pharmacies come and buy from Metro that are not covered by their distribution channel. We analysed that these pharmacies are not buying the big packs of pet food, but the smaller ones."

Metro labored with Mars to create a different Rs 20 pack for the drugstore channel, and then, Mediratta stated the company's distribution reach larger via 25-30%. The store is these days operating with HUL for its meals business, including Knorr and professional range, Mediratta added.
FMCG cos look to boost sales via wholesale giants FMCG cos look to boost sales via wholesale giants Reviewed by kailash soni on February 12, 2018 Rating: 5
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