MARKETPLACE FOR NUTRITIOUS FOODS

Transcription

1 MARKETPLACE FOR NUTRITIOUS FOODS 12 th Community of Practice 30 th June 2016 Venue: Jacaranda Hotel Reaching Low-Income Consumers with Nutritious Foods Round Table Discussions

2 The Background The Process We created a survey on key topics around reaching low-income consumers with nutritious foods, aiming to discover the major challenges and pitfalls of companies within the Community of Practice. This was completed by 21 members. We then conducted two interviews with selected members of the Community of Practice, to delve deeper into our findings from the survey. The Group Business Goals Ages The below is based off our initial survey of a sample (21 members) of the CoP. Scale your business Get your business off the ground 41+ Following this, we identified three topics, of which the community members have various levels of experience in, to create great discussions that would enable members to both share with and learn from others After creating a broad question per topic, we facilitated round table discussions on those questions for 2 hours at the GAIN Community of Practice on 30/06/2016, with approximately 60 members. This report is the summary of those findings. Roles Challenges 47% CEO/Director/Founder 18% Managerial Position 35% Other/Employee Top three challenges mentioned by the group in trying to achieve their business goals: Financial constraint and funding Business model for low income consumers Lack of resources (HR, raw materials, etc.)

3 The Round Table Discussions

4 Question 1 What are the main issues within the distribution chain and how can you overcome them?

5 The distribution chain is a little bit broken, and where it is complete it is managed by brokers. One of the challenges is being able to get others on board who have premium products. Anonymous Community of Practice Member

6 The Findings Survey Results We asked What is the major difficulty in getting your product/s into your local market?. A large number of answers related to the distribution chain, including: Presence of middlemen Distribution channel Cartels in the market Discussion Issues What are the main issues within the distribution chain and how can you overcome them? Solutions No money to distribute a product/s to the market. Costs include: Vehicle, fuel and maintenance Manpower Maintaining the product (equipment for cold chain) Middlemen and brokers underpaying the producer. Organise forums for the agribusinesses, financers, and distributors, to encourage collaboration. Purchase, or hire, a truck as a community, as well as look into the optimisation of the vehicle costs. Connect the producers to the market, through an association of similar producers, so that better rates can be had together. Form a local committee that ensures better trade practice for the producer and quality assurance for the brokers. Poor infrastructure with bad roads - most farms are located in places without easy accessibility. Talk to local government to see if they can help sort out the road issue. Retailers/wholesalers not being open to a new product Use the known distributors in a particular area, and consider increasing the distributor s margin.

7 Question 2 How can you innovate your packaging and pricing to reach the low-income consumer?

8 The interesting thing that came out in the packaging discussion was this principle of reduce, reuse, recycle. If we can put in some more thought and stimulate people to think along those lines, we can come up with innovative ideas. Anonymous Community of Practice Member

9 The Findings Survey Results Out of the following options: Creating Value Branding Pricing and Packaging Accessing Finance Developing Competitive Products 57% of you listed Packaging and Pricing for Low-Income Consumers as the most, or second most, difficult. I don t know how to package my products for low-income consumers. How much do you agree? 43% 24% 33% Strongly Agree or Agree Neutral/ Don t Know Disagree or Strongly Disagree Discussion How can you innovate your packaging and pricing to reach the low-income consumer? IDEA CONSIDERATION IDEA CONSIDERATION IDEA CONSIDERATION Encourage reusable packaging, or bring your own container. E.g. A container that you can refill for milk. How can you encourage re-using packaging in a way that is hygienic? Small packaging for the kadogo economy. (Other options include selling by weight) How can you preserve the food? Sell the product as a combination, with a refill package. Are there other uses of the by-product? E.g. Animal Feed CONSIDERATION How can you enhance packaging to make the supply and logistics efficient? IDEA Come together with producers of similar products and see how you can package together. Use similar packaging, but labels to differentiate. CONSIDERATION Are there other uses for your product? E.g. Watermelon - Juices, smoothies, etc. IDEA Use quality by affordable packaging E.g. Instead of Tetra Pak you can use pouches for milk, or resealable sachets for small products. CONSIDERATION How can you differentiate your packaging for different markets? (High-end and lowend) IDEA Organise sourcing of packaging materials in a group, so you can order in bulk (consider a farmers group or coop).

10 Question 3 How can you create recognition of the value of your products?

11 This becomes a challenge because a majority of the people within the BOP market don t concentrate much on quality or premium, they just want the product. They don t care if the good agricultural practices have been adhered to. When you bring it to the market they don t put into consideration the effort you have put into that product. Anonymous Community of Practice Member

12 The Findings Survey Results Do you think you have a strong brand? No I don t know Yes It is hard to stand out in the lowincome consumer marketplace. How much do you agree? 48% 52% Strongly Agree Disagree or or Agree Strongly Disagree What is the major difficulty in getting your product/s into your local market? Almost 40% of you mentioned brand/unawareness/differentiation, e.g.: Brand unawareness Mindset of the consumer Awareness on nutritional value Discussion How can you create recognition of the value of your products? Online sales/marketing (especially useful for marketing to youth) Branded retail outlets Painting shops with your brand Free samples Partnering with other brands (co-branding and umbrella branding) Emotional branding Simple names Educate - Build a platform to reach your market and tell your user about the benefits Outline the ingredients clearly Appeal to a company s corporate social responsibility Brand ambassadors Get recognition from a charity or foundation Short and concise product story - a clear nutritional message Bulk SMS Free radio/tv interviews On-location promotion Exhibitions Become an opinion leader - e.g. do free nutri-talks Roadshows Authority on product to speak about the value Talks at schools Door-to-door talks Brand creation research (GAIN support) Brochures, pamphlets, posters, etc.

13 Some Key Quotes From CoP Members There has been a breakdown in the distribution component of trade in Kenya. That leaves many companies to do the production as well as distribution of their trade. If we can find a way of strengthening the distribution chain that would really help to pool our resources together. All nutritious foods could have a distribution chain that does that. The low-end market rarely looks at the brand itself, they are more into quantity not quality. They don t look at how well it is packaged, they look at the price. So reduce your cost of productions. Have individual packages, supply the stockist with a bag of e.g. 100 containers of products, and he dispenses to individuals in small measurable quantities and they maybe bring their own bag. Other than individual companies talking about their own products, I think it would also be good to have a product authority, lets say the maize board, or milk board, that talks about the benefit across the board. Because if an individual company starts taking on that role then it s mistaken for a sales gimmick - people say you are just saying it because you have to sell. There needs to be a collective body that does research. We have a very discerning middle class and it s also trickling down to the BOP. You are saying it s nutritious, show me how! The product name or the business name should relate with the product. Relation between the brand name or the business name to the product you are working with. E.g. Water always aqua. Certification came out as something key. Get recognised bodies who will then go out and talk about it s presence. GAIN can also help with this, informing the public that when they certify something it is of quality.

14 We hope everyone was able to learn and share a lot of information during the round table discussions. There is a huge wealth of knowledge within the Community of Practice, from a range of experiences, so keep discussing and progress together! Thanks, from the swivelbox team!

15 Contact us: Website: Facebook: Marketplace for Nutritious Foods, Kenya "This information is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of GAIN and do not necessarily reflect the views of USAID or the United States Government.