Problem Solver: I'm aiming to distribute my product to the big retailers
Published 01/09/2016 | 02:30
Q: Can you advise me on how best to distribute my product into the supermarket sector?
A: Food distribution is complex and is probably the number one challenge faced by most early to mid-stage producers. Many producers start by doing distribution themselves and this is probably wise in that it gives them a good grounding on the landscape they are supplying. It also helps to form relations with store owners and managers.
After this point the challenges occur. When you get to supply over 20 shops, you will start to feel the pressure of trying to get the products out to them each week.
This will be further exaggerated if you have a short shelf life product as you will be constantly delivering. Some producers chose to buy a vehicle and employ a member of staff, but the cost can be more than they realise. Bord Bia estimates it costs €60,000 to run a delivery vehicle, if you take all of the costs into account.
Another option is third party distributors. There are many excellent ones in the food sector who will manage relationships with stores while distributing the product. Of course they have to be paid and your commercial model would need to allow for this.
Most large retailers have their own central distribution. This requires you, the producer, to drop your stock to a central location and the retailers' transport fleet takes over from there, and distributes to branches. While this might seem a perfect solution it does have the effect of cutting the producer off from the marketplace. In other words you receive a bulk order from the retailer but you can't see what individual branches are ordering and miss opportunities. It's complex and the best advice is to contact your Local Enterprise Office who have support programmes and specialist mentoring for producers.
Q: What are your views on building management structure for a mid-sized business with 12 retail outlets?
A: There is sometimes an apparent conflict between needing to put in structure when the business reaches a certain size, and the ideal objective to keep the company structure flat and avoid having layers and layers of hierarchy.
We all know of businesses whose decision-making is paralysed by too many layers of decision makers. The key link in your structure will be the managers you employ and it is here I would encourage you to place most emphasis.
At one point at Superquinn, I handed each manager a photograph of the exterior of their branch, with the Superquinn logo removed, and the manager's name in its place. The message I wanted to convey was that they were fully empowered to make decisions and I wanted them accountable for this.
I did not want them relying on area managers or other directors for instruction and ideas. Choose your managers carefully and tell them you are empowering them as entrepreneurs to run the branch as they see fit within the structure of the business.
I have no doubt that your managers will need back-up through a series of duty managers, etc. I have long had a view that everyone in the business should be a 'Mini Manager'. One other initiative we ran was to give every single person in the business some responsibility. That entailed the 18-year-old, new employee who was merchandising the health and beauty section being empowered as "The Manager" of that space.
The response was fantastic, and while it was more about an approach than a title, it did motivate those involved and we started to get more focus on the minute detail as each individual felt accountable for an area.
Make sure that communication is strong throughout the organisation, and there is a mechanism to get messages from head office through to the management team and staff in an accurate way. Use tools, like daily huddles, WhatsApp groups, etc, for your management team to allow you make direct contact.
And make sure you are fully accessible to every person in the business. Sometimes if you put in a new structure people feel afraid to go to the owner and bypass others in the chain of command. In reality most people will go to their direct report, but if the business is to be open and transparent you must give a sense that you are accessible.
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