From Bazaar to Big Box, Retail Grows Up and Out

Even makers of the world’s most iconic consumer brands rely upon local channel partnerships.  If you’re charged with mapping channel expansion, and eyeing new frontiers such as Brazil, Russian, India, China — the BRIC — or the Middle East and North Africa (MENA), you may feel as if you’ve hit a “bric wall” in the search for reputable retailers with whom to partner.

Local partnerships are always valuable, and often mandatory. Indeed, it’s in such countries that retail has been dominated until recently by the aptly named “unorganized retail” channel. Unorganized, yet powerful, they’ve held the key to premium shelf space and brand awareness.

Trading companies who’ve established a regional base are gatekeepers to your success in retail. Influential in property development, transport and logistics, wholesale brokerage, and finance, they have naturally branched into retail to complete the distribution food chain. So, you can bet they will not yield market share to the invading big boxes, mega-malls, and hypermarkets from the US and Europe.  When faced with sink or swim, shrewd traders everywhere are usually apt to swim, at a Michael Phelps pace, to secure regional dominance.  As a result, they remain influential, local, visible, motivated, and innovative. And, as you might imagine, they’ve embraced the concept of mall-centric retail experiences, to enable retail tourism. Their hard-to-find local retailers are growing up and out, occupying places in shiny new mega-malls.

As you prepare your launch in the prosperous Gulf Countries, for instance, get to know Jacky Panjabi. Jacky is founder and managing director of Jacky’s Electronics, an influential retail and trading group in fast-growth, premium retail sectors found from Hong Kong to the United Arab Emirates.  Or make friends with the Al-Futtaim Group, a UAE-based trading company who convey such global brands as Marks & Spencer, Lexus, and Toys-R-Us.

This means that you will spend less time plying through the souks, bazaars, and markets to find small, yet reputable and popular stores to help you gain a foothold in these interesting new markets.   That’s not to say you world travelers still can’t immerse yourself in the sights, sounds and smells of open-air markets and trade with local retailers.  Once, while meandering the souks of Nazareth, the aroma from open barrels in a dark, cool spice warehouse stopped me in my tracks and led me by the nose in for more. If cameras only had a smell-o-rama setting… Talk about effective brand placement. But I digress, because that’s not the same type of shopping experience I’m writing about here.

Rather, it’s the every day trips to buy a microwave, flat screen, shoes, or wall paint by residents who live and work in these countries. And, since retail therapy is here to stay as part of vacationing, it’s also the emergence of mega-malls that hook tour buses in such places as Dubai. You know what else I find interesting about this particular retail setting?  It’s the added influence of foreign service workers — their buying power, day in and day out, after the tourist flies out.  

Filipino expatriates who live and work in Gulf locales have no ties to the traditional, “unorganized retail” storefronts in the old markets. As newcomers, they seek a more generic, anonymous shopping experience, such as that offered by big box retailers and hypermarkets. They, along with tourists, are the Preferred Customer that regional merchants have in mind as they make the shift from a neighborhood storefront — Unorganized Retail — to a master-planned retail environment.  

And all this makes the job of vaulting that wall and finding trusted, innovative channel partners in these not-so-new frontiers much easier.

Gee Whiz Job: Bees For Hire

If you want to grow and sell fruits, nuts, or vegetables, you need arable soil, sun, seeds, water, equipment, and elbow grease. Your bounty will only reach store shelves via channel partners like natural and organic wholesalers and retailers, hospitality and foodservice brokers, even that roadside stand outside your farm. But wait – what one vital element, if missing, can send your entrepreneurial endeavor crashing to its knees?

Honeybees. Millions and millions of industrious worker bees keep our agricultural and horticultural markets humming. Without them, there is no harvest, there is no bounty.

Bees make plenty of honey, this we know. The U.S. market for honey food products stands at about $160 million now – that’s a lot of sticky squeeze bear bottles. But those sales numbers pale in comparison to the vital role they and their keepers play in commercial agriculture. Bees pollinate a third of our nation’s fruits, nuts, and vegetables. On the wings of these insects rests the well being of an agricultural industry worth $15 billion. And that’s a lot of buzz.

What happens if the bees don’t happen to be swarming when and where they’re needed? What if, with commercial farms often in excess of 10,000 acres producing our crops, there aren’t enough bees to go around? Enter commercial beekeepers.

All year, these unlikely road warriors take their show on the road, toting hives between coasts, where bees find the most abundant sources of nectar while getting down to pollinating. The flight of the bee is helped along by the interstate highway system, as some beekeepers log up to 60,000 miles a year, their bees all the while producing honey and wax.

• One pumpkin grower’s crop is sold by Wal-Mart each Halloween. It all starts with 30 bee visits to a single flower, followed by pollination of 300 acres of future jack o’ lanterns
• And one million bee colonies are needed just to start the annual almond crop across California
• Those numbers add up, exponentially, across the nation and across all growing seasons.

Keepers rent their bee colonies to growers of almonds in California, cantaloupes in Florida, and blueberries in Maine. Humble worker bees – each of which produces about one-twelfth of a teaspoon of honey in its short lifespan – and their dedicated keepers are, thus, one of the most interesting and vital, yet overlooked, sub-segments of the food industry.

Sure their sting hurts and yes, you step on them when you see them on the sidewalk, but next time you see a honeybee, remember that were it not for these furry flyers, your fruits and vegetables would cease to bee.

GeeWhiz Jobs

I like to take apart business models to see how they work. I get a kick out of learning the vital role played by a behind-the-scenes and little-touted provider of goods or services in bringing our daily bread to the table. It’s those unglamorous, nuts-and-bolts parts of the supply chain that yield the mother lode for family-owned businesses and multinationals alike.

For instance, one of my favorite TV shows is called “How It’s Made.” It airs on the Science Channel, and each episode follows the production process for mundane, yet vital things: eyeglasses, fluorescent tubes, bandages, toilets, printed circuit boards, breakfast cereals, jeans.

Each episode shows an array of process control equipment that’s been invented and built to perform a specific function, day in and day out: formers, grippers, shapers, cutters, blowers, fillers, dyers, sorters. As I watch and study an injection molder machine’s form and function, it occurs to me that some clever Joe invented that injection molder that tints, cools, and forms 64 colors of Crayola® crayons. Some business out there right now is refining its design, registering patents, and re-inventing a faster, cheaper injection molder. Their sales and marketing team is trolling the aisles at industry trade shows, extolling their molder’s features and benefits, wooing channel partners to install it on their customers’ assembly lines, forecasting revenue and commissions and bonuses. But wait … an after-market ecosystem of suppliers and service providers orbit around that injection molder, too, while it churns out those 64 colors.

And that injection molder is but one stop along one company’s assembly line, in one city. Gee Whiz.

And so, here I initiate my newest blog category: the Gee Whiz Job.

Through periodic entries, I will enlighten readers about ways in which people and their businesses have struck the mother lode in most unexpected, yet vital ways. The masterpiece drawing that’s hanging on your fridge right now was colored by your talented and gifted toddler, and – yes – was brought to you in part by Mr. Clever Joe, inventor of that crayon injection molder.

Stalking Healthy Alternatives at 2009 Natural Products Expo West

There are no bad days at a trade show where a potluck of world delicacies is featured as giveaways. There’s a spring in my step whenever I enter Expo West in Anaheim, CA. Maybe it’s the thrill of rubbing elbows with über-healthy people who are passionate about nutrition and keeping bodies in good working order, inside and out. Or, it could be that I’m like a fine thoroughbred heading for the feed bag.  Where else can you tantalize your tongue with smoky tapas of Spain’s finest jamón Serrano and wash it down with Ayala’s Herbal Water, (Lavender Mint flavor, by the way…) which was created by a pediatrician on a quest to provide healthy, tasty beverages for her family and friends?

In every aisle, “chow-n-chat” sessions proved that sellers and makers of healthy, organic foods and personal care products see gold in the modern consumer’s quest for balanced living and responsible consumerism.  All those “why-didn’t-I-think-of-that?” moments reminded me that the natural food and personal care industry is full of innovative folks with can’t-lose attitudes and the guts to make products that are both healthy and tasty. The result? Smart, novel, and tasty products like new Buddy Fruits fruit paste in a squeeze tube from Ouhlala in France (as in Ooh La La!), perfect for lunches; Pukka Herbs, from clever Brits who craft herbal teas and personal care; and Fruitwell, freeze-dried fruit snacks from the Pacific Northwest, aka God’s Country (so says Grandma Julie).

Stories of regional allure abound at Expo West. Hawaii Kai, maker of pure sea salts from Molokai, tells of their microeconomic business model that honors the island’s quest for the delicate balance between nature and commerce, while resurrecting the time-honored Hawaiian craft of salt making. Also on hand was the self-described “rocket-scientist-turned-spice connoisseur” whose Awaken Savor handcrafted blends enhance regional cuisines. Canaan Fair Trade’s delicacies and personal care lines from Palestine promote Fair Trade.

The presence of marquee exhibitors like Clif Bar and Aubrey Organics sets a smart, confident tone that rubs off on smaller exhibitors, and reminds everyone who has a stake in the game that growth, success, and brand dominance are within reach. 

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