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Insights to Accelerate International Expansion USA Handbook Our Mission: Help Manufacturers “Spend time Selling to Distributors versus Searching for Distributors” The USA has served as a growth market for European traders for more than 400 years. Waves of immigrants have landed on the USA’s welcoming shores. Early arrivals hailed from the United Kingdom and France. Slavery delivered more than 600,000 Africans between 1700-1820. The industrial revolution lured people from European countries including Italy, Germany, Ireland, Greece, and Sweden. The last 50 years have redefined the USA again with almost 60 million citizens of Hispanic descent and 21 million of Asian heritage. The result is a melting pot of cultures which creates a unique appreciation of food from every corner of the world. USA Today The USA is the world’s largest consumer market with 328 million people and retail sales exceeding one trillion dollars. It’s a young country, with 32% of the population under the age of 25. Many exporters make the mistake of labeling the USA as a “mature” market, with low growth expectations. The reality is that the USA offers some of the best opportunities on the planet. This fact is validated by the combination of a large, wealthy population, that is adventurous in food habits. The retail industry is robust, with large stores bursting with food choices from around the world. Export Solutions recognizes that most exporters maintain business in the USA. However, our experience is that most international brands’ sales levels are modest relative to the size of the USA population and category development. Barriers to success include competition versus USA produced brands and difficulty in funding marketing and sales development activities. Export Solutions’ goal with our “Sell to the USA” handbook is to provide logical strategies, insights, contacts, and facts for international brands looking to build sales in the vibrant USA market. In This Issue 1000 USA Experts Export Solutions features the most extensive database of USA food brokers, distributors,and importers. Our proprietary information covers experts dedicated to every USA trade channel, major customer, and region. This includes specialists for Italian, Spanish, British, German, Asian and Hispanic food plus other supermarket categories. Export Solutions tracks more than 517 food brokers, as well as 470 food importers and distributors. These lists can be purchased individually or as part of an annual subscription to our database which covers 96 countries and more than 7,700 distributors. Access now at www.exportsolutions.com. Selling to the United States Page 2 USA: Bigger than BRIC? Page 7 Export Solutions: 15 Common USA Issues Page 15 USA Market Entry Alternatives: Broker versus Importer versus Direct? Page 20 Brand Owners: What Every USA Broker Wants to Know Page 39 5 USA Labeling Regulation Tips-FDA Page 40 How Well Do You Know the USA? 50 Industry Terms and Definitions

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Insights to Accelerate International Expansion

USA Handbook

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

The USA has served as a growth marketfor European traders for more than 400years. Waves of immigrants have landedon the USA’s welcoming shores. Earlyarrivals hailed from the United Kingdomand France. Slavery delivered more than600,000 Africans between 1700-1820.The industrial revolution lured peoplefrom European countries including Italy,Germany, Ireland, Greece, and Sweden.The last 50 years have redefined the USAagain with almost 60 million citizens ofHispanic descent and 21 million of Asianheritage. The result is a melting pot ofcultures which creates a uniqueappreciation of food from every corner ofthe world.

USA TodayThe USA is the world’s largest consumermarket with 328 million people and retailsales exceeding one trillion dollars. It’s ayoung country, with 32% of thepopulation under the age of 25. Manyexporters make the mistake of labeling

the USA as a “mature” market, with lowgrowth expectations. The reality is thatthe USA offers some of the bestopportunities on the planet. This fact isvalidated by the combination of a large,wealthy population, that is adventurousin food habits. The retail industry isrobust, with large stores bursting withfood choices from around the world.

Export Solutions recognizes that mostexporters maintain business in the USA.However, our experience is that mostinternational brands’ sales levels aremodest relative to the size of the USApopulation and category development.Barriers to success include competitionversus USA produced brands anddifficulty in funding marketing and salesdevelopment activities. Export Solutions’goal with our “Sell to the USA” handbookis to provide logical strategies, insights,contacts, and facts for internationalbrands looking to build sales in thevibrant USA market.

In This Issue

1000 USA ExpertsExport Solutions features the mostextensive database of USA food brokers,distributors,and importers. Ourproprietary information covers expertsdedicated to every USA trade channel,major customer, and region. This includesspecialists for Italian, Spanish, British,German, Asian and Hispanic food plusother supermarket categories. ExportSolutions tracks more than 517 foodbrokers, as well as 470 food importersand distributors. These lists can bepurchased individually or as part of anannual subscription to our databasewhich covers 96 countries and morethan 7,700 distributors. Access now atwww.exportsolutions.com.

Selling to the United States

Page 2USA: Bigger than BRIC?

Page 7Export Solutions: 15 Common USA Issues

Page 15USA Market Entry Alternatives:

Broker versus Importer versus Direct?

Page 20Brand Owners: What EveryUSA Broker Wants to Know

Page 395 USA Labeling Regulation Tips-FDA

Page 40How Well Do You Know the USA?50 Industry Terms and Definitions

The state of California ranks as the world’s8th largest economy, larger than India orItaly. USA population expanded by 45million people since 2000, an increasegreater than the size of Canada. Americansare spenders by nature, with 85% of thepopulation able to regularly purchasesupermarket brands. All internationalcompanies export to the USA, but percapita sales levels are usually very smallrelative to potential. Export Solutionsbelieves that many international brandswould see a higher return on investmentthrough efforts to build a strongerfranchise in the USA versus waiting for“BRIC dreams to come true.”

Global MarketplaceAmericans are spoiled with anoverwhelming assortment of foodoptions. An average USA supermarketstocks more than 40,000 unique items in a50,000 square foot store. Shelvesshowcase products from around theworld. During one week, a typical familywould enjoy a mix of Italian, Mexican,and Asian food to supplement mealsbased upon meat, vegetables, andpotatoes. American cuisine hasassimilated into international cuisinereflecting the rich heritage of ethnicdiversity. This creates an open gatewayfor brands from every continent.Americans are receptive to new andemerging flavors which is a significantpoint of difference versus BRIC marketswhich tend to remain glued to traditionaleating habits and choices.

13 Different Trade ChannelsUSA retail business exceeds 1 trilliondollars, through 13 unique tradechannels. Each USA trade channelmaintains a unique set of buyingpractices and selling experts. 40,000supermarkets account for 55% of thefood business, followed by 4,000Supercenters (primarily Walmart),and 1,400 high volume Club stores.Gourmet food stores such as WholeFoods and ethnic supermarkets

represent core outlets forinternational brands. Sales via theinternet are an emerging, highgrowth, channel offering visibilityand availability. Homesick expatriatesand food enthusiasts now discoverhard to find products instantly onlineversus the historical approach ofhauling overweight suitcases fromtrips overseas. Foodservice is anenormous channel, but focused oncommodity products produced in theUSA.

Three Phase Approach: Crawl, Walk, RunToo many international brands aremisaligned with a focus to sell toWalmart or even Kroger before theyhave established a meaningful trackrecord with other retailers. A keyinsight is a finely tuned strategyfocused on winning with a few highpotential, trend setting retailers priorto approaching the “Giants.”Normally, we recommend initial focuson ethnic and gourmet retailers suchas Whole Foods and Fresh Market.After success, consider expansion toupscale supermarket chains such asWegman’s and Harris Teeter. Phase IIIshould provide a track record andinvestment base to approach massretailers such as Walmart, Kroger, andAlbertsons.

USA: Bigger than BRIC?

USA Fast Facts

Population 328 million

GDP/Per Capita $61,454

Number of Supermarkets 40,000

Gross Margin (Supermarket avg.) 28%

Slotting Fee (avg. per store/item) $50

Food Brokers 517

Food Importers/Distributors 472continued on page 3

2

Who is Your Food Broker?Food brokers dominate sales through theUSA supermarket channel. Brokers providecritical mass and local relationships.Services include key account sales, categoryanalysis, trade marketing, and essentialretail coverage. Store level representation ismandatory to insure compliance withheadquarter authorized plans. Brokersrange in size from the massive “Big 3”which feature more than 20,000 employeeseach to smaller specialists focused againstone retailer. Export Solutions’ databasetracks over 517 brokers covering all marketsand channels. Leading USA importerspartner with brokers to provide the localexpertise and store merchandising servicesrequired to succeed.

Calibrate Expectations to InvestmentImagine approaching Carrefour, Metro, orTesco with a new brand with “net, netpricing” and limited marketing support.The USA market is no different, with amenu of account specific programsrequired to build your brand. If you don’t

invest, you will always be anchored toniche status at best. Retailers such asCostco with their demo programs andShop Rite retain good reputations fordelivering incremental cases for your tradespending.

Success Stories: Barilla, Bonne Maman, and WalkersCase studies exist for international brandsto successfully develop the USA market.Barilla is the USA’s leading pasta brand.Success strategy included building a USAfactory to offer competitive pricing,highlighting their Italian heritage, andalignment with a leading USA food broker.Bonne Maman and Walker’s trajectoryfollowed patient paths. Both brands built abase in the upscale retail sectors, beforemoving mainstream to mass availability. Acore message was the ability to upgradecategory sales and profits with a highquality, premium option. Both companiesinvest in having USA based sales managersversus managing via remote control fromEurope. Other European brands havedeveloped massive businesses throughunique programs dedicated to Costco.

USA Business – Next Level StrategiesEuropean brands frequently hireExport Solutions to provide insights ontaking their current USA business to the“next level.” Our sales orientedapproach involves market analysis,“lessons learned” andrecommendations of sensible options togrow your business. Suggestionsnormally include laser focus on brandbuilding at high potential customersplus best route to market partners(importers/brokers) by trade channel.

The USA still offers tremendous growthopportunities for many internationalbrands. USA success requires the sameformula as BRIC markets. Higher levels ofinvestment may be required to win in theUSA. However, market dynamics are moretransparent than BRIC and purchasingpower ranks among the highest in theworld. Contact Greg Seminara [email protected] for moreinformation on taking your USA businessto the next level.

USA: Bigger than BRIC?continued from page 2

Good USA Chains for International BrandsRetailer Type Sales (billions $) Stores

Ahold-Delhaize Supermarket 38 2,061

HEB - USA Supermarket 22 340

Meijer Supercenter 18 235

Wakefern/Shop Rite Supermarket 16 350

Whole Foods Gourmet 16 453

Giant Eagle Supermarket 10 429

Wegmans Supercenter 9 95

Sprouts Gourmet 5 290

Price Chopper Supermarket 3.7 136

Raleys Supermarket 3.3 123

Topps Supermarket 3 178

Fresh Market Gourmet 1.9 176

World Market Gourmet 1.0 280

Gelsons Supermarket 0.8 28

Kings Supermarket 0.5 25

3

4

Everyone wants to sell to Walmart.This is logical, as they rank as thenumber one retailer in the USA andLatin America, plus good presence in theUK, China, Japan, and South Africa.Walmart’s International business(outside the USA) is bigger than the totalturnover of Carrefour or Tesco. Selling tocountries where Walmart has storesmakes sense for USA producers.However, Export Solutions always

advocates a strategy of making export decisions based upon what’s best for the entirecountry, versus the preferences of an individual retailer, even if it is Walmart.

Walmart’s Central American buyers have been speed dialing leading brands pursuingdirect purchase agreements. These offers may be hard to resist, but manufacturers mustbe fully aware of the implications. Selling direct to Walmart International allows you tobypass the “distributor system.” This provides Walmart with a cost advantage at storelevel of around 15%. This may create a situation where it is difficult to sell to othermarket customers, because their list price resembles Walmart’s shelf price.

I visited Guatemala and Costa Rica recently. Walmart places many Direct Import brandsin one aisle, away from the product’s normal category placement. These Direct Importbrands are not supported by the armies of in-store merchandisers that are common inLatin America. I remember the story of when I served as Director of Sales for Clorox inBuenos Aires, Argentina. Someone from corporate sold my favorite Hidden Valley Ranchsalad dressing to Walmart International and it magically appeared on the shelves of myWalmart. I was thrilled, but apparently was the only happy customer. Most in Argentinahad never heard of Hidden Valley Ranch. Without advertising, promotion, anddistributor support, the brand gathered dust and was discontinued.

I am an advocate of partnering with distributors to sell to Walmart’s internationaldivisions. These local companies sell and merchandise at Walmart and all marketcustomers everyday. Distributors focus on brand building and can provide the muscle atstore level to push your brand. Retailers benefit because they can reorder any day versuswaiting for the container to arrive from the USA. In my opinion, the distributor model isusually the preferred route to market to create a sustainable business in these fastgrowing countries.

Many European companies are anxious to sell to Walmart's 3,550 USA supercenters.Slow down! Walmart’s USA supercenters specialize in category leaders and fast movingbrands. Their consumer base consists of middle and lower income customers who havelimited spending power to purchase super premium brands from overseas. Also,Walmart tends to be the “low price” leader. This may damage your ability to sell toupscale supermarkets, as they may be hesitant to stock an item that Walmart is carryingand selling for 15-25% less. My humble advice for European brands is to create a basebusiness with mid-upscale USA supermarket chains. Approach Walmart at a later stagewith your track record of market success.

Walmart is the world’s number one retailer and will serve as a major factor in ourstrategic decisions. It is flattering and encouraging that Walmart wants to sell ourbrands. The key is to devise the optimal route to market that builds your brand equityand facilitates your business development to all market customers, including Walmart.

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“Spend Time Selling to Distributors versus Searching for Distributors”

Selling to Walmart –When and How?

Greg [email protected]

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• Analyze USA opportunity foryour company:Category review, gap analysis, and“size of the prize”

• Next level development planfor brands already selling inthe USA:What’s working? What’s notworking? What to do next?

• Broker/Distributor/ImporterIdentification:National, Regional, or Trade Channelspecific solutions. Export Solutionsdatabase tracks 517 USA brokersand 472 distributors/importers.

• Develop strategic plan for USA:Priority brands, pricing model, regions, customers, and partners.

• Are you ready for USA?Label compliance, company credentials presentation in USA format, etc.

How We Help

Hire a USA Expert• USA strategy recommendation

• Category analysis and plandevelopment

• Identify priority channels,regions, and retailers

• Broker/Distributor identificationSpecialist

• Have a USA pro with 20+ years experience on your team

Contact Greg Seminara at (001)-404-255-8387 to discuss your

USA development project.www.exportsolutions.com

Contact us for a copy of our Selling to the USA Handbook.This free guide is packed with practical insights,market facts, and best practices to advance your business to the next level in the world’s largest market.

6

Made in USA BrandsFood products produced in the USA sell through 13 differenttrade channels. Supermarkets always represent the largestchannel with 55% of sales. However, this represents a continuousshrinkage from the dominant 85% share of food sales enjoyed bysupermarkets in the nineties. Walmart’s Supercenters are thenumber one customer for virtually all mainstream USA foodbrands, catering to the value oriented consumers. Kroger ranksas the top supermarket chain reaching across the incomespectrum, but viewed in most markets as the supermarket of thesuburbs. Costco & Sam’s Club stores represent an importantcustomer for number one brands in large categories.

Imported Brands – Retail DestinationsSupermarkets still account for 55% of sales revenue for foodbrands produced outside the USA. Frequently, internationalbrands derive their revenue from different supermarket chainsthan the mass market. Imported brands naturally do well atupscale supermarket chains like Wegman’s. Consider Shop Rite,a 350 store chain that moves high volumes and their customerslove international brands. Gourmet retailers such as WholeFoods and Fresh Market serve as prime showcases for foreignproducts. I love Eataly’s four stores and Dean & Deluca’s 12deli’s but they represent a small fraction of Manhattan, let alonethe broader USA market. Ethnic grocery stores account forimportant business for homesick expats missing their favoriteinternational foods. Amazon’s internet shopping platform is anemerging destination for international foods.

USA Entry CycleNormally, international brands start first in the ethnic channel.Demonstrated success creates opportunities to enter gourmetstores like Whole Foods and upscale and regional supermarketchains. Phase three provides critical mass to gain access to largesupermarket chains such as Kroger, HEB, and Publix. The finalstep is to create demand for access to Walmart Supercenters andmainsteam supermarket chains like Ingles and Acme. Brandstrying to “skip the cycle” and go to Walmart or Kroger too earlywill probably be delisted quickly, preventing access when youare ready.

OTC/Personal Care Brands ChannelsNon-food brands including household products, personal care,OTC, and general merchandise typically depend on differentchannel splits. The “mass” channel which includes total Walmartand Target may represent 50% of the business or more.Pharmacies account for around 30% of the business for OTC andpersonal care brands. Supermarkets also represent at least 20% ofthe business for all these categories, more for paper goods,laundry and cleaning products.

National Versus Regional RetailersThere are no national USA supermarket chains. Top 10supermarket retailers operate across multiple states, creatingchallenges for targeted marketing. This provides furthervalidation for new entrants to focus on upscale regional chainswhere they can test marketing investment alternatives. Walmart,Target and “Big 3” drug chains are national.

Sales By Channel: USA Brands vs. Imported

Sales By ChannelUSA Food Brands

Sales By ChannelImported Brands

Export Solutions: 15 Common USA Issues

Key Issue Solution

Difficult to Manage USA from Abroad.Hire one national sales manager to manage business. Or consider contract sales management team like Ram Group.

Headquarter authorization for my brand, but Ican’t find it at retail.

Hire a broker for store level coverage. Store level distribution may be 60% or less without broker coverage.

My brand sells well in New York, but notelsewhere.

New York is unique and represents only 7% of USA population. Markets like Atlanta, Dallas, Phoenix & Seattle are more representative.

Slow sales from the shelf for my product.Try a coupon (Sunday insert or on-pack). Increase TPR allowance level from 10% to 25%.

Walmart doesn’t want my product.Walmart sells basic items for value conscious consumers. Recommended focus: upscale retailers Whole Foods, Publix, etc.

My broker is a “one man” organization.Large Brokers (Advantage or Crossmark) have 20,000 employees. Find a broker offering retail coverage and category analysts.

My Importer (or Broker) claims sales to Kroger orAlbertsons, but sales are low.

Check number of chain stores where your brand is authorized. Kroger has 2,796 stores. How many are you in? See page 22 grid.

Importer/Broker is not achieving objectives.Export Solutions provides independent guidance on assessing your business and providing realistic solutions.

Secure distribution without paying listing fees.Target the ethnic channel and non-slotting retailers like Costco & Trader Joes.

Fancy Food Shows not generating quality buyer contacts.

Try Exhibitions focused on your Category. Sweets and Snacks for Confectionery, NACS for Beverages etc.

Importer/Broker achieves results at East Coastsupermarkets, but struggles elsewhere.

Appoint channel and customer specialists. No one importer or broker is successful everywhere.

How do I secure distribution at Costco? Great quality, large size pack, and commit to demos.

Is Private Label or Foodservice worth the effort?Private label/foodservice dominated by local producers. Focus energy on upscale supermarkets first.

I know a guy with connections at Kroger,Walmart etc.

200,000 + sales people in USA with customer relationships. Partner with a “company” with valid business track record.

Brokers are not interested in representing mybrand.

Offer to pay a minimum pioneering fee, with a success bonus.

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USA Retailers – 30 Channel Specialists

Channel Customer Dollar Sales (billions) Comments

Club Costco 98 Revenues from 520 USA stores

Club Sams 58 Revenues from 600 USA stores

Club BJ's 12 215 stores. Primarily North/Florida

Distributors UNFI 9 Supplies Whole Foods, Stop N Shop etc.

Distributors Kehe 3 Supplies Publix, HEB etc.

Distributors DPI 1 West/Mid-Atlantic

Dollar Dollar General 24 14,600 stores

Dollar Dollar Tree 22 14,500 USA stores

E-commerce Amazon 100 Online USA sales (ex. web services)

Foodservice Sysco 38 National, USA sales

Foodservice US Foods 24 National

Foodservice Performance Food 17 South/East

Foodservice Reinhart Foodservice 15 Midwest

Foodservice Gordon Foodservice 14 USA & Canada sales

Gourmet Whole Foods 16 453 USA stores

Gourmet Trader Joes 8 485 stores

Gourmet Sprouts 5 290 stores

Hard Discount Aldi 10 1,700 stores

Hard Discount Save A Lot 4 1,370 stores

Pharmacy Walgreens 88 8,200 Pharmacies

Pharmacy CVS 76 9,700 Pharmacies

Pharmacy Rite Aid 26 4,500 Pharmacies, selling to Albertsons

Supercenters Walmart 290 Sales for 3,550 supercenters

Supercenters Target 71 Total sales for 1,834 stores

Supercenters Meijer 18 235 Stores in Central USA

Wholesalers C & S 30 Supplies Ahold, Target, etc.

Wholesalers Super Valu 18 Wholesale and Retail sales

Wholesalers Associated – Kansas City 9 South/Central USA

Wholesalers Spartan Nash 8 Central USA

Wholesalers Bozz Uto’s 2 Northeast

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Retail buyers are challenged to maximize profits and sales from every available inch of shelf space. Every new item accepted mustimprove on the performance of the brand currently occupying that space. Buyers are overwhelmed by new product offerings, all withambitious promises. Improve your chances of success by incorporating Export Solutions’ 10 point check list on how to excite yourcategory buyer about your new product.

How to Excite Buyers – New Product Checklist

Buyers: New Product Assessment

High Interest Low Interest

Category Opportunity Large or high growth Declining or niche

Brand OwnerMultinational or proven local.

Category expertNew foreign supplier

or start-up

InnovationSomething new, supportedby consumer research

“Me too” product

Profit MarginEnhance current category margin

Equal to or less thancurrent category margin

Sales Generates incremental sales Cannibalizes existing sales

Marketing Investment Sampling, social media, PR None

Trade Programs Invests in retailer “push” programs Periodic discounts/rebates

Brand Track Record Successful at other local retailers Unproven in the country

Terms/Conditions Attractive deal structure Typical terms/conditions

Representation Dependable local distributor Small, niche entrepreneur

9

10

Europe and USA combined populationsexceed one billion people. Thesedeveloped markets serve as the source ofmost of the innovation and inspiration forthe food and consumer goods industry.Yet the clear fact is that most Europeanmanufacturers sell minimal quantities tothe USA, and American brands arevirtually absent from Europeansupermarkets. Multinationals like Nestle,Unilever, Coca Cola, and P & G areexceptions and play in a different league.Congratulations to brands like Barilla,Tabasco, and Pringles that achieve strongresults on both sides of the Atlantic.However, the list of winners on bothcontinents is short. This issue of ExportExpress explores Lessons Learned and tipsfor “Cracking the Code” in the worlds“First Billion” consumer market.

Euro – USA ImportanceSome brands avoid the battle and shiftstrategic focus to high growth markets ofAsia, Latin America, and the Middle East.This approach makes sense for companiesthat view export as an opportunisticsource of volume or do not own leadingbands. For most, Europe and the USAremain attractive targets due to the large,affluent, populations concentrated inorganized markets. Consumers inestablished countries value innovationand maintain the disposable income topurchase international brands.An important point is that Europe and theUSA share many similarities in eating,drinking, personal care and homecleaning practices. This environmentcreates instant consumer understanding ofour brands features and benefits versusmarkets such as Asia where the vastmajority of consumers live and eatdifferently.

Problem: “Me Too” ProductsMany leading food segments maintainsimilar development factors in the USAand Europe. Supermarkets on bothcontinents dedicate significant space touniversal categories such as Cookies(Biscuits), Coffee, Cake Mix, and Cereal.Innovation sweeps the globe, so it is amajor challenge to differentiate versusexisting choices. In our home countries,we enjoy the benefits of localmanufacturing, scale, and a tradition oflinkage with the consumer. However,these benefits disappear quickly as a USAbrand attempts to sell to Europe or vice-versa. In fact, drawbacks emerge

instantly, starting with overseas freight,duties, and distributor service fees. Theseroutine costs translate to dramatic pricepremiums where your product may cost2-3 times on the shelf versus comparablelocal brands with years of marketplaceheritage. In reality, your initial overseasbusiness base may consist of homesickexpatriates willing to pay any price fortheir favorite candy or tea brand fromhome.

Shopping Habits A typical USA supermarket averages50,000 square feet and stocks more than40,000 unique items. Private Label ispresent, but accounts for only 19% of totalsales. As a result, USA stores have plentyof space for international brands willingto “pay to play.” USA shoppers visit 4-5stores per week across different tradechannels, always on the hunt for bargains.Europe features a mix of large and smallstores, but the reality is that the commonsupermarket is only half the size of a USAstore. Shelf space is very limited, with realestate allocated to fast moving brands andprivate label. Gaining entry to Europeanstores is a challenge for local producers,let alone foreign brands.

What is Your Pull Strategy?Congratulations! Your brand has beenlisted at a European supermarket.The good news is that you may achieve arespectable level of sales simply by beingone of the small number of choices on theshelf. Naturally, sales will be proportionalto your investment in consumerawareness and trade promotion activities.Globalists will argue that it is much easierto get on the shelf in the USA, but muchtougher to “sell out.” USA consumers facea sea of choices and dedicate less than10 seconds to making a purchase

decision. Success in the USA demandsinvestment in coupons, trade ads andprice reduction offers.

Investment LevelThe USA market includes 328 millionconsumers. German population hoversaround 82 million, with France and theUK weighing in at 66 million and 65million, respectively. Brand ownersshould ask the fundamental question of“What a $100,000 investment buys in theircountry?” Then, that investment shouldbe divided by the number of people inyour target country. For example, $100,000allows some meaningful activity in acountry like Denmark or Ireland orChicago. On the other hand, $100,000 is asmall sum for the entire USA or evenCanada which has 35 million people. Bestpractice suggests using your “$100,000”budget to drive high impact promotions ata handful of USA retailers or 1 or 2European countries.

Brokers Versus DistributorsFood brokers are the dominantoutsourced model for selling to the USAsupermarket channel. Virtually allcompanies from giants like Nestle andP & G to start-ups hire brokers. Corebroker services are key account selling,category management analysis andmandatory retail merchandising. In theUSA, the term “distributors” refers towholesale distributors like UNFI whohandle slow moving specialty food items.USA importers play a role forinternational brands, but represent onlyone percent of USA turnover. In Europe,distributors serve as the key partners forforeign brands. Distributors provide an

Europe vs. USA – Vive La Différence

continued on page 11

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integrated portfolio of selling, logisticsand financial services. As with brokers,there are significant differences incapabilities between giant powerdistributors and small “one man show”companies. Export Solutions’ distributordatabase tracks more than 2,539 Europeandistributors and 517 USA brokers.

Crawl, Walk, RunUSA brands looking to enter Europeshould target the UK and Ireland as theirfirst point of entry. Find a distributor witha successful track record at importingother USA brands. Waitrose, Whole FoodsCostco, and perhaps Asda (Walmart) maybe logical first customers. Next stopwould be the Nordic region which valuespremium products and contains manyexcellent distributor options. ManyEuropean brands are already in the USAwith modest sales. Hire a USA basedemployee and locate a “mid-size” brokerto handle your brands. Focus on a limitednumber of upscale supermarket chainswith 50-150 stores each. Invest in tradeactivities to do it right at these accountsprior to expanding attention to giants likeKroger and Publix.

Need a Hand?Export Solutions can help on both sides ofthe Atlantic! I have been a featured speakerfor ESMA, the European DistributorsAssociation and am well connected withdistributors throughout Europe. I have alsospoken to European manufacturer groupsin Germany, Italy, and the UK on USA

entry strategies. Export Solutions hashelped Italian, German, UK, and Dutchcompanies on USA business developmentstrategies. Our approach is “salesoriented,” focused on creating tangiblesolutions to create new sales.

Europe vs. USA – Vive La Différencecontinued from page 10

USA Population by Region Population (millions)Percentage of USA

Population

South 125 38%

Northeast 56 17%

Midwest 68 21%

West 79 24%

Total 328

*estimated 2018

12

The USA represents the world’s largest market. A small marketshare in the USA can represent a bigger business than owning a50% market share in a smaller country. Many internationalbrands fail to reach their potential in the USA as they treat it asjust another export market. Listed below are Export Solutions’ten tips for improving your results in the USA, a consumermarket of 326 million people.

1. Develop a Channel StrategyThe USA Food business is segmented into 13 channels, withsupermarkets claiming an average of 55% of the business. Otherimportant channels include Supercenters, Mass, Foodservice,Value, Club, Convenience, Natural, Gourmet, Internet, Military,Gift, and Ethnic. One strategy is to concentrate efforts on winningin one channel to gain traction, versus spreading efforts in toomany areas.

2. Optimize Results at Top 10 USA RetailersThink Walmart, Kroger, Publix, and Food Lion that all operatemore than 1,000 stores. Many companies claim that they “sell toWalmart.” The key question is to identify a chain’s store countand measure how many of those stores your brand is availablein. Last year, an important European beverage brand told me thatthey were “selling to Walmart.” Turns out that his follow upinvestigation revealed that he was selling to only 46 of Walmart’s3,550 supercenters.

3. Think Beyond New York None of the top 5 grocery retailers maintain a presence in metroNew York. The USA has experienced a population shift to theSouth and West, with the Northeast actually representing thesmallest of the four regions. Visit Atlanta, Houston, Los Angeles,or Miami to get a more accurate gauge of industry dynamics.

4. Use a BrokerIn the USA, the brokers play a unique role, touching virtuallyevery brand in the supermarket aisles. Even importers usebrokers to supplement their own efforts. Export Solutions’database tracks 517 USA brokers, including the “Big 3.”

5. Retail Services are RequiredGreat news! You just received a listing at Kroger or Albertsons.Your work has just begun. Planogram integrity is an enormousissue in the USA. Compliance levels of new items at store levelmay reach only 60% without a broker at store level to “cut in”your product and monitor its availability.

6. Data Driven DecisionsThe USA market is blessed with the most sophisticated analytictools that are used on a daily basis. This includes availability ofpoint of sale data at the chain (and sometimes store) level tomeasure everything that scans. Business building and sellingincorporates use of post promotion analytic tools, market basketstudies, and brand sales by demographic cluster.

7. Try a CouponUSA Sunday newspapers are jammed with coupons offeringconsumers small discounts (.25 - $1.00) to purchase a product. Manysupermarkets up the ante, by doubling the value of the coupons.This is a proven strategy to drive listings, generate trial, and repeatpurchase. A coupon can force a retailer to carry your product, as hedoes not want to disappoint a customer with a coupon.

8. Hire a Sales ManagerAn international company should place at least one person in theUSA to manage their interests. Hire a veteran sales person andlocate him in a home office in a city with a great airport likeAtlanta or Chicago. This role will allow him to manage yourdistributor and broker network. You can also hire a contract salesmanagement group like Ram to perform this function. Hiring anemployee based in the USA signals that you are serious aboutbuilding your business in the USA.

9. TPR This stands for Temporary Price Reduction. USA supermarketaisles are filled with hundreds of these tags. The consumerrecognizes these tags to signal a special discount and “time tobuy.” TPR’s are normally 10% of everyday price and can be anefficient spend particularly on a “scan down” program.

10. Ethnic Channel: First StopYour product will be well received in channels specializing inyour country’s products. There are well established retailersspecializing in Hispanic, Asian, British and Italian Foods.Whole Foods and Cost Plus World Markets offer goodassortments of international brands.

Ten Tips for Foreign Brands: USA Growth Strategies

Good USA Chains for International Brands

Retailer Stores

HEB 340

Ahold-Delhaize 2,061

Meijer 235

Wakefern/Shop Rite 350

Whole Foods 453

Giant Eagle 429

Wegmans 95

Price Chopper 136

Raleys 123

Topps 178

Sprouts 290

Fresh Market 176

World Market 280

Gelsons 28

Kings 25

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USA vs. EuropeDifferences – Industry Fundamentals

USA Europe

Store Size (avg.) 50,000 sq. feet 20,000 sq. feet

Unique Items/store 40,000 18,000

Private Label Value Share 19 % 25-50 %

Price List (wholesale)Same pricing model for all retailers

Price may vary by retailer

Annual Negotiations Category Review Standard Practice

Organizational Model Food Brokers Food Distributors

Data Transparency Account/Store Level Data Country Level Data

Store Level ServiceMerchandisers required

for complianceConditions controlled by Chain Headquarters

Retail Coverage National/Regional Unique retailers by country

Sunday Coupons Popular Practice In-ad only

Note: Every market maintains differences. However, industry manufacturerseverywhere share the common goal of securing more shelf presence while retailersdemand more discounts.

14

Take Your USA Business to the Next Level

Export Solutions ServicesCurrent Business Assessment

Opportunity Gap Analysis

Customer/Channel Prioritization

Broker, Importer, Distributor Identification

USA Entry Plan

Measures: Concept to Shelf

Consumer/Trade Promotion Plan

Connect with Channel/Retailer experts

Team staffing and recruitment

Double Your Business Plans

“Spend time Selling to Distributors versusSearching for Distributors”

www.exportsolutions.com

Analysis

Partner

Sell

15

Outsourcing of sales functions to channel specialists is a commonorganizational strategy in the USA. Third party service providersinclude Food Brokers (now formally known as Sales & MarketingCompanies), Distributors, Importers, and Merchandising ServiceOrganizations. Most retail channels require a unique approach.

How do I determine the right strategy for my brand?

Project Sales by Trade Channel to Determine the Source of Your Volume.In the USA, there are 13 trade channels: Supermarket,Supercenter, Mass, Club, Ethnic, Natural Foods, Convenience,Drug, Dollar Store, Gourmet, Gift, Internet, and Military for mostfood products. Hardware is important for Non-Food productsand department stores for personal care brands. Normally,supermarkets account for 55% of sales for a food brand, but only30% of sales for “non-food” categories like cleaners, personalcare, or health care.

Determine the Services Required and the Complexity of OngoingMaintenance.Certain categories require a high focus on store level activity andspeed to shelf. In other categories, it is sufficient to “sell in” atheadquarter level and let the retailers’ systems execute for theirstores. Brokers and MSOs are the primary options for performingin store work.

Evaluate Your Internal Resources.How many direct people will your organization have focusedagainst customer development and sales execution? What canyour own organization realistically handle? Do you have peoplebased locally close to the retailer and people with experienceagainst leading retailers or trade channels?

Determine the Channel SpecialistsMany companies employ a food broker for the supermarketchannel (at minimum: retail services) but prefer to deal directlywith Club, Drug, and Dollar Store channels. Importers andDistributors function well for natural food products, gourmetspecialty foods, ethnic foods, and imported brands.

Hybrid Approach May Be OptimalWalmart prefers to negotiate directly with its vendors. Manymanufacturers hire a broker for retail services at Walmart tosupplement their own activity at headquarters. MerchandisingServices Organizations excel at dedicated, short term projects andhandling time consuming reset work.

USA Distributors Act As WholesalersThe USA distributor model is different from the international model.USA distributors are wholesale distributors providing selling,logistics, and collection services. However, they rarely import anddo not necessarily work on an exclusive basis by category.

Importers Need Broker Services TooImporters provide a valuable service for international brands.They offer an integrated service portfolio. The larger importerspartner with food brokers for better penetration of thesupermarket channel. As a rule, an importer alone will not serveas a complete solution for the USA supermarket channel. ABroker provides local customer expertise on a national basis plusessential retail services.

Avoid “One Man Shows”Size matters. There are more than 200,000 sales people in ourUSA industry. Everyone claims a “great relationship” with aspecific account. This is a start, but the preferred route is topartner with a broker organization that offers critical mass,category management, and retail services.

Big Brokers – Big Brands“Big 3” USA brokers maintain over 20,000 employees andimpressive sales, marketing, and administrative services. TheBig 3 performance may exceed the capabilities of even thelargest multinationals. In the USA, P & G, Kraft, Nestle, andUnilever all depend on brokers for certain categories andservices. However, most Big 3 brokers are reluctant to pioneernew companies or represent brands with modest salesrevenues.

Battle for Broker’s AttentionMost outsourcing to third parties represents a “shared services”approach where the manufacturer is effectively “renting” aportion of the broker or distributor’s sales force time. Thesethird parties profit by reselling this sales force to manymanufacturers, sometimes up to a 1,000 companies in the caseof a Big 3 broker. A constant battle exists for a manufacturer toget their “fair share” of the sales force’s time. On the otherhand, manufacturers must be realistic on their performanceexpectations relative to their amount of compensation to thethird party.

ConclusionThe old adage that “no one can execute better than yourself”does not apply in most cases in the United States consumergoods industry. In every sector, there are local specialists withsignificant critical mass that can execute a well defined brandproposition in an effective and efficient manner. Manufacturersshould focus their attention on direct relationships with globalleaders such as Walmart & Costco that require a high level ofsenior management interaction. International brands mayrequire a variety of outsourced partners to optimize results indistinct channels.

USA Market Entry Alternatives: Broker versus Importer versus Direct?

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USA Case StudiesExport Solutions helps International brandsimprove their USA sales or gain initial entryto the USA

Client: Leading European Canned Food BrandProject: Design USA entry strategy andarrange meetings with leadingimporters.

Client: European Ethnic Food BrandProject: Arrange meetings with potentialimporters,distributors, and brokers.

Client: Global Beauty Care BrandProject: Organize and select USAimporter, distributor, and brokernetwork.

Client: UK – Non-Food BrandProject: Design USA market entrystrategy. Hire USA manager. Arrangemeetings with leading USA brokers.

Client: Global Confectionery BrandProject: Design strategy to improve salesto the USA Market. Analyze categoryand hire USA broker network.

Client: Asian OTC BrandProject: Identify OTC importers orbrokers.

Client: Leading Italian Food BrandProject: Analyze market to take sales tonext level.

Client: Your BrandContact Greg Seminara at

(001)-404-255-8387 to discuss your project.

www.exportsolutions.com

Top 20 USA Grocery Chains

USA Sales

Retailer ($ billions) Stores

1 Walmart SC. 290 3,550

2 Kroger 120 2,796

3 Albertsons 60 2,330

4 Ahold Delhaize 38 2,061

5 Publix 35 1,155

6 HEB - USA 22 340

7 Meijer 18 235

8 Shop Rite 16 350

9 Southeastern Grocers 11 741

10 Giant Eagle 10 429

11 Hy Vee 9 243

12 Wegman’s 9 95

13 Winco 6 118

14 Demoula’s 5 80

15 Save Mart 4 213

16 Stater Brothers 4 169

17 Ingles 4 200

18 Price Chopper 4 136

19 Weis 3 204

20 Raleys 3 123

America’s Favorites Like Export Solutions

Recent Distributor Search Projects

Consulting Clients:

Asia Europe Middle East Latin America

Australia Denmark Bahrain Brazil

China Germany Kuwait Chile

Indonesia Ireland Oman Colombia

Japan Spain Qatar Costa Rica

Malaysia Turkey UAE Ecuador

Mongolia United Kingdom Mexico

Philippines Canada Panama

Singapore United States Peru

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

your business development project.www.exportsolutions.com

17

Hiring the right local partner is thethird most important step inoptimizing your sales. This followscreating a product with a uniqueconsumer value proposition andwillingness to invest in branddevelopment activities. Listed beloware some practical tips on selecting theright company to represent your brand.

Identify a Pool of Preliminary CandidatesCreate a large group of potentialcandidates. This could include distri-butors, importers, brokers, or localproducers of related products. Highlightcompanies that are specialists in themarket sector that you are aiming at.Export Solutions streamlines thisprocess with our online directory ofmore than 7,700 distributors, importersand brokers for 96 countries.

Establish Partner Selection CriteriaWhat are the key attributes of yourideal candidate? Productspecialization? Service portfolio?Existing results for current brands?Choosing a Large, “Best in Class”partner versus a “Small, Hungry”company willing to pioneer a newbrand is an important preference.

Determine Candidates PreliminaryInterest LevelSend a brief summary of your productproposition and company credentials tothe 5-10 most promising candidates. Afollow-up phone call to your topcandidates is an appropriate personalconnection. Brokers expressing aninterest should complete a briefcompany overview recapping theircorporate capabilities: Sales, Logistics,Marketing, etc.

Schedule a Meeting in the Candidates OfficeNormally, we recommend interviewingat least three candidates depending onthe size and scope of a project.Schedule the meeting 3-5 weeks inadvance. Provide a specific agenda atleast 2 weeks in advance, includingpre-work such as category marketanalysis. Meet the broker’s team thatwould work on your business, as wellas senior management. A broker’soffice provides clues on companyculture, scale, and capabilities.

Prepare Interview Questions andAssessment Grid in AdvanceCreate a list of key questions to ask eachcandidate. Topics could include localcategory dynamics, cost of entry, andDistributor success stories. Create astandard grid to evaluate and compareall candidates on a common platform.See page 21 for ten sample questions forevery broker interview.

Conduct an Independent Evaluation ofCandidates Performance for Existing BrandsVisit target outlets for your product toobserve category conditions. At thesame time, evaluate each candidate’sperformance for his existing clients. Dohis current brands maintain a strongpresence in the market? Or are hisbrands hard to find? Conduct thesevisits to leading retailers independently,as an accompanied visit may lead youto select stores which may not berepresentative of marketplace reality.

Reference Checks Represent anImportant Next StepRequest references of 5 of the broker’s top10 clients. Call at least three referencesand request insights into performanceand capabilities. Acknowledge that theseare likely to be positive references, butthey always provide significant value.Run a Dun & Bradstreet or other type ofcredit report on leading candidates.Export Solutions is often hired to conductindependent, confidential, referencechecks.

Invite Top Choice to yourCorporate HeadquartersThe visit should include meetings withsenior management, factory tour, launchplanning, and mutual commitment. Thetrip serves as an important bonding andrelationship building experience betweenyour company and your new partner.

My Way: Finding and Selecting the Right Broker or Importer

www.exportsolutions.com/ExportTips

200 Free ArticlesExport StrategyDistributor Management

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Criteria (weighting) Rating Evaluation Factors

Corporate Credentials 35%

Size, sales force, # employees. Reputation (reference check existing brands).National coverage. Key account teams.Multi-channel coverage.

Category Expertise 25%

Sells brands in my category. Shelf space for existing brands. Current brands selling to target retailer.Category analysis and insights.

Brand Building 15%Ideas to build or launch my brand? Marketing plan, cost, timing. Success stories.

Cost to Serve 15%Fair, transparent model relative to size ofbusiness, brand investment, and work required.

Enthusiasm for My Brand10%Advance preparation, CEO involvement.Follow-up on commitments.Alignment with your vision.

X Factors: People, Admin.,Professionalism, etc. +/-

CPG/FMCG background for leaders.Efficiency of scheduling meeting.Office environment.Do you enjoy the people?

Export Solutions Broker Assessment Grid

Evaluating Distributors or Brokers?

We can help!Export Solutions performs

Distributor Search in 96 countries.

20

Strong consumer goods brokers andimporters are deluged withrepresentation inquiries from around theworld. The emails are usuallysupplemented by a product catalog andpromise to mail a price list! In a best casescenario, this type of approach may leadto a request for more information from agood broker. More likely, the broker willskip your inquiry and move on to thenext opportunity in his mailbox. Listedbelow are Export Solutions tips for“breaking through the clutter” andproviding the right information togenerate excitement and interest from thebroker and importer community.

1. What is your Brand USP(Unique Selling Proposition)? USP defines your competitive edgeversus all other brands battling for thesame shelf space. The USP can revolvearound quality, value, assortment, orpackaging. However, you need to validate your claims. For example, a statement such as “tastes better than competitors A & B” should be supportedby market research of consumers or blindtests of a sufficient panel group that backsyour quality claim. Similarly, a retail pricereview can demonstrate a “better value”position. Your USP must also pass thelitmus test: Is your USP relevant to thepurchaser and consumer? For example,you might offer the only coffee withorange and lemon flavors, but is anyonereally looking for this product?

2. Have you done your homework on mymarket? The food/consumer goods industry is relatively transparent. Typically, brandowners simply need to visit the leadingsupermarket chains to obtain a“snapshot”of local category assortment,pricing and merchandising practices. Theassortment and shelf space allocation will provide clues regarding consumer preferences from a taste/usagestandpoint and potential gaps in themarket. Syndicated data providers suchas Nielsen and Euromonitor supplyreams of data tracking category sales andtrends. New brand representation offersto brokers that demonstrate a degree ofunderstanding of local category marketconditions will always receive an appreciative response.

3. What will the brand owner invest? The most important consideration afterthe USP definition! A broker believes thathe needs the right financial spend levelsto aid him in achieving the results that heis capable of. The correct spend levelusually reflects an appropriate mix oftrade development funds (listingfees/shelf space/flier participation) andconsumer awareness activities (sampling/pr etc.) The brand owner mustacknowledge that there are fixed fees toenter virtually every market. Some brokers are willing to split these fees.It’s usually not enough to case rate spending unless you have a very strongproposition. Bottom line: If you areunwilling to invest in your brand…whyshould the broker invest his time andresources building your brand?

4. Where has your brand been successful? Your track record at building brandscounts! Share your record proudly,particularly if the target country orretailer is well known. On the other hand,a “Produced in Europe” success storymay not be impactful if you don’t intendto duplicate the conditions that broughtyou success such as local production andmeasurable marketing investments.

5. How tough is the job to launch your brand? Are you attempting to enter a competitivecategory dominated by heavy spendingmulti-nationals? Or are you aiming at anattractive niche? What are the brandowners expectations in terms of productavailability and sales volume?

6. Can the broker make money with your brand?Brokers seek to obtain a fair profit fortheir activities to support your brand.Profit must be measured in dollars contributed versus percent of sales.Brokers rarely make money during yearone of an introduction as they allocate adisproportionate share of their resourcesto launch a brand. On the other hand,new brands in current categories for thebroker can bring new profits withminimal incremental effort. Globallyrecognized brands bring prestige to a broker’s portfolio and may serve as amagnet to attract other brands. Brandowners must present a convincing case tothe broker on the incremental profits thatyour company can deliver to the broker’sbottom line.

Brand Owners: What Every USA Broker Wants to Know

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10 Questions for Every Broker Interview1.Company HistoryHow long have you been in business? Who are theowners? How many direct, “payrolled” employeesdo you have? Approximate annual sales volume?

2. Company Brand PortfolioWhat are your top 10 companies/brands represented?For which channels do you represent each brand?How long have you represented each brand?Can you provide senior level references at each“brand owner?”

3. Key Account BuyersWho is the buyer for our category at the largestretailers in your market? What other brands do yousell to our buyer? How frequently do you visit eachmajor customer?

4. New Product Launch Success StoryProvide a recent example of a new brand launchsuccess story. Key retailer acceptance? Cost of entry?How long did it take? Key elements of the successstrategy?

5. Creative SellingProvide an example where you took an assignedmarketing/brand support budget and created asuccessful local program. How do you measuresuccess?

6. Retail ServicingHow many full time employees do you have visiting retailstores? Are they located countrywide or just in the capital city?How do you measure a “good store” in terms of brand presenceversus a “bad store?” Describe your retail reporting system.

7. PeopleWho would be our point of first contact? Would our contact also“sell” our brands to major accounts? What other brands is ourcontact responsible for? How do we insure that we get our fairshare of attention from your sales force?

8. Business Planning ModelWhat would your action plan be if we made an agreement tostart with your company? First steps? 90 Day Plan? Reporting?

9. Cost to ServeHow do you model your broker commission?Range of commission for our brands? How do you manage tradespending budgets?

10. Enthusiasm for our CompanyWhy is our brand a good match for your company?Why are you the best partner in the market for our brand?What commitment are you willing to make?

� History of Success pioneering other international brands

� Strong retail presence for current brands handled

� Logical launch plan, category analysis, and cost structure

� Positive references from existing brands and Dun & Bradstreet

� Enthusiastic about your brand and the business

Greg's Guidance: Broker Assessment Criteria

22

1. CaseManufacturer supplies a business caseconfirming brand “aspirations” for thecountry: Key items in portfolio, estimatedbase pricing, volume/market shareexpectations, and investment model.

2. Category ReviewDistributor supplies a local review ofcategory competitors, pricing, andmerchandising practices.

3. CapabilitiesDistributor shares detailed organizationalcapability and customer coverage.Could include references from existingsuppliers represented. An important stepwhen there are two or more candidatesunder consideration.

4. Commitment and CostsWhat is the Year 1 Plan and Forecast?Targeted listings, marketing activities,launch budget and volume estimateassociated with the spending plan.

5. Calculation – Value ChainLine by line, build up from port to retail storeshelf. Include currency assumptions.

6. ComplianceHighlight product registration and labelrequirements. Typical timelines forcompliance?

7. Captain of TeamWho will be our day-to-day brand manager orfirst point of contact? Which senior executivewill serve as our “Brand Champion?”

8. ContractOptions include formal contract, letter ofunderstanding, or handshake deal.Begin this process early!

9. Consumer MarketingWhat are planned activities to generateconsumer trial and repeat purchases?Trade marketing, consumer marketing,social media, etc.

10.Calendar /CloseDistributor supplies a detailed timeline ofall activities. When can we expect first orderand delivery to support launch?Frequent checkpoint calls or meetings.

10 C’s – Cooperation Model

Looking for Good Distributors?Export Solutions’ database covers 7,700 distributors in 96 countries.

www.exportsolutions.com

23

Year One Scorecard ExampleBrand owners and distributors enter new relationships with great expectations.

Most partnerships succeed, but some under deliver leaving both parties disappointed.Export Solutions Year One scorecard helps both parties align on KPI’s.

Objective Goal Results

Shipments to Distributor

Distributor Sales to Customers

Top 5 Customers

Region: Sales Split by Area

Channel: Sales Split by Channel

Market Share

Listings: Top 5 Customers

Retail Pricing

Shelf Positioning

Shelf Space

Sampling

Social Media

Displays

Manufacturer Investment

Brand Manager Performance

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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

Coverage: 96 countries and 2,100 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 Canada?

Example 2: How many stores does Loblawsoperate by banner, in Canada?

NEW!

ORDER NOW!

26

Search by Retailer NameSearch by Country

Combo Search

www.exportsolutions.com

Search By Format

Retailer Search Made SimpleCanada Example

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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 21 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?An annual subscription to the retailerdatabase is $975. This supplies one year,unlimited access to more than 2,100retailers in 96 countries. Special offersavailable for our distributor databasecustomers. Note: special pricing 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 7,700distributors 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

270 USA CustomersHow many are you selling to?

Export Solutions Retail Database Covers 270 Customers157 Supermarket Chains 27 Natural Foods

33 Convenience Chains 28 Wholesalers

Features

� Up-to-date store counts

� Direct link to retailers’ web sites

� Financial information for publicly traded retailers

� 63 Canadian retailers plus 1,800 retailers in 94 other countries

� Free sample accessOrder now: www.exportsolutions.com

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Coverage: 96 countries and 2,100 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: How many Harris Teeter storesare there?

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

NEW!

ORDER NOW!

29

Search by Retailer NameSearch by Country

Combo Search

www.exportsolutions.com

Search By Format

Kroger USA15 Banners – 2,796 Stores

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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 [email protected]

“Spend Time Selling to Distributors versus Searching for Distributors”

What is the Plan?

31

Channel Confectionery GourmetFood Food/Grocery Beverage Non Food

E-commerce x x x x x

Meal Kits x x x

Ethnic – “Homesick” x x x x

Gift Basket x x x

Natural Food x x x

Gourmet, Deli x x x

Liquor x x

Farmers Markets x x

Gift Channel x x

Toy, Party Stores x x

Movie Theaters x

Hardware, DIY, Office x x x

Duty Free x x x

Fundraising x x

Theme Parks, Stadiums x x

Airlines x

Butchers, Fishmongers x x x

Coffee Shops x x

Military x x x x x

Department Stores x x

Kitchen Supplies x x x

Dollar, Close Out x x x x x

Discount Clothing

(Marshalls, TJ/TK Maxx)x x

New Channels: Prime Prospects, By Category

Country Listing Map – USA Example*“Required Template for Every Country”

Retailer Stores SKU 1 SKU 2 SKU 3 SKU 4 SKU 5 Comments/Plans

Walmart SC 3,550 x x xSKU 1, 2, 3 stocked at only 2,000 Supercenters

Costco 520 x Special SKU 5 for Costco

Kroger 2,796 x x x x Category Review March

Albertsons 2,330 x x x New shelf set

Publix 1,155 x x x BOGO Ad November

Ahold-FL 2,061 x x x x New SKU 4 listing

HEB - USA 340 x x x Category Review March

Meijer 235 x x x x Holiday Display Program

Shop Rite 350 x x x x New SKU 4 listing

Giant Eagle 429 x x x SKU 4 delisted

*Instructions: List top 10 customers for every country. List all your key SKUs (items).“X” indicates item stocked at customer. Blank space represents a distribution void.

32

Create Your Own Export LibraryDistributor Search Guide

Export Handbook

Selling to USA Handbook

Distributor Management Guide

Finance & Logistics

All guides available free at www.exportsolutions.com in the Export Tips section.

Idea Guide:New World – New Business

Export Treasure ChestMy Favorite Templates & Forms

People PowerStrong Teams Build Great Brands

33

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 [email protected] 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

34

1. Respect For Their Right to Make a Reasonable ProfitBrokers have profit targets just likemanufacturers do. Brokers measure totalsupplier contribution, defined by salesmultiplied by gross margin. How muchvalue do you receive from your brokersrelative to your contribution to theirprofits?

2. Investment in Brand SupportBrokers love companies that invest inabove the line activities such as televisionadvertising, radio, social media, print,and sampling. Distributor volume isproportional to your investment in brandsupport activities. More marketingdollars usually translates to greater salesand profits for the distributor.

3. AwardsMost brokers proudly display theirDistributor of the Year awards in theiroffice lobby or executive conferenceroom. Recognition can be given fordistributor of the year, or achievement of$1 million in sales, most improved storeconditions, or ten years of service.

4. Market Visits (But Not Too Often)Periodic market visits allow you to shareideas, monitor progress, and discussissues. These trips serve as motivational,relationship building events, particularlyif you can spend time together “out of theoffice.”

5. Endorsement of Local Marketing EventsBest in Class partners maintain the abilityto create unique local programs to buildyour brand. Voting with your marketingdollars stimulates the team to deliver andcontinue to bring you their best ideas.

6. Trip Contests – Quota Makers ClubMany believe that achieving your annualtarget is a job standard. This is true, butwatch brokers ship cases like crazy whentrying to qualify for a trip to a resortlocation! Plus, the trip generatesincredible goodwill and all vow to meettheir objective to return “next year.”

7. Market ResearchBrokers aspire to appear as categoryexperts. Access to syndicated data fromNielsen plus local consumer researchallows them to distinguish themselvesfrom other vendors armed with hollowwords and broad claims on a PowerPointpresentation.

8. Invitation to Your Corporate HeadquartersA trip to the USA or Europe is a dreamcome true for distributor brand managersin emerging markets. Treat them like aVIP, and they will be loyal forever.

9. Lunch for the Support StaffOrder processing, customer service, andother administrative people form thehidden backbone of the brokers team.Buy the group lunch and you can be ahero for $100-$200. Guess whose orderswill be handled first at the end of aquarter?

10. Letter of ThanksOur industry depends on email toomuch. How do you communicatesincere thanks when someone receives200 emails a day? Send a personal lettervia the post office recognizing asuccessful new product launch, creativepromotion,or above and beyond effort.Extra points provided for a handwrittennote! These letters are treasured forever.

Ten Things That Brokers Like

Talk to an Expert• Find Distributors in 96 Countries

• International Strategy Road Map

• Fix Problem Markets

• Next Level Sales Management

• Export Workshops

• Motivational Meeting Speaker

Contact Greg Seminara at (001)-404-255-8387 todiscuss your business development project.

www.exportsolutions.com

35

1. Unrealistic ExpectationsCategory growth ranges from 1% to 5% inmost Western countries. So how can amanufacturer demand a 10% increase insales in a mature market? It’s possible ifthe brand plans a major increase inmarketing spending. However, normally,business growth parallels overall marketconditions.

2. Direct Contact With Their Assigned RetailersTricky retailers attempt to bypass adistributor by contacting the brandowner. Normally, the retailer has his handout for more money or wants to “buydirect.” Be polite, but ask the buyer towork with the distributor or schedule ajoint meeting for your next visit.

3. Cut Marketing BudgetsLeading brokers depend on joint businessplans, often created up to one year inadvance. Last minute squeezes,translating to budget cutbacks sometimesneed to happen, but still hurt.The distributor is left with delivering thebad news and also hitting the sales target,even with reduced support.

4. Short ShipmentsEveryone loses due to short shipments.Brokers could be assessed penalties byretailers. Store level shelf space may belost and need to be recaptured. Keep thepipeline filled, particularly during peakseasonality.

5. Price IncreasesRising raw material input costs mayrequire adjustments in list prices. Thereality is that price increases are brutal toimplement in many countries. Eventually,they are incorporated after months ofstand-off’s. In many cases, brokers areforced to accept the price increase fromthe brand, but are forced to swallow theincrease until they can negotiate with theretailers.

6. Endless ReportingSome brands are guilty of a constantstream of reporting requests that taketime to complete. Ask: Is the report reallynecessary? Legitimate requests areforecasts, shipment results, major retailerlisting maps, price surveys, and newproduct launch status updates.

7. Frequent Market VisitsYour partners require time to accomplishtheir objectives without constantoversight. Brokers appreciate short,productive visits on a quarterly basis.More frequently for a big company andless often for a small brand. Get in,conduct your business and off to the nextcountry. Week long visits to small marketsrepresent a distraction.

8. Margin ReductionsBrokers depend on their margin to coverfixed overheads like logistics and cost oftheir sales team. Often, their net margin isonly 3-5% or lower. Margin reductions orincreased costs challenge their ability tooperate a financially healthy business.

9. Last Minute RequestsEnd of the year volume pushes and rushorders are part of the business. However,everything functions better when normallead times are respected. Separate “mustdo” demands from “nice to have”requests.

10. Delayed Response to Local IdeasManufacturers encourage brokers tocreate unique local approaches to brandbuilding. Retailer buyers also call theirfavorite brokers with short termpromotional opportunities to participatein a special event. Brokers need quickdecisions on your ability to support theiridea. Few things are more frustrating fora distributor than a lengthy wait whiletheir proposal is debated by numerouslevels of your company management.

Ten Things Brokers Don’t Like

Need a hand? Visit www.exportsolutions.com.

36

RetailerYourBrandShare

Shareof

Shelf

EyeLevel(yes orno)

Next toBrandB

KeyItem$2.99

PriceGap vs.PrivateLabel

Comments/Plans

Walmart SC 35% 42% Yes No 2.69 + .50 Shelf review September

Kroger 35% 28% No Yes 2.99 + .30Increase shelf share tominimum 35%

Albertsons 35% 25% No No 3.19 + .20Increase shelf share tominimum 35%

Publix 35% 45% Yes Yes 2.99 + .20Maintain space in newschematic

Country Shelf/Pricing Tracker – USA Sample**Complete for all countries/retailers

Country Listing Map – USA Sample**Complete for all countries/retailers

Retailer Stores SKU 1 SKU 2 SKU 3 SKU 4 SKU 5 Comments/Plans

Walmart SC 3,550 x x xSKU 3 stocked at 2,000Supercenters

Kroger 2,796 x x x x Category review November

Albertsons 2,330 x x x x New shelf set

Publix 1,155 x x x Present SKU 4: July

Talk to an Expert• Find Distributors in 96 Countries• International Strategy Road Map• Fix Problem Markets• Next Level Sales Management• Export Workshops• Motivational Meeting Speaker

Contact Greg Seminara at (001)-404-255-8387 to discuss your business development project.www.exportsolutions.com

37

Create Your Own Export Library

Looking for a fresh point of view for yournext event or training workshop?

Contact Greg Seminara [email protected]

All guides available free at www.exportsolutions.com.

Export Strategy Guide

Distributor Search Guide

Export Handbook

Selling to USA Handbook

Distributor Management Guide

Finance & Logistics

300 Tips forExport Managers

Idea Guide:New World – New Business

Export Treasure ChestMy Favorite Templates & Forms

People PowerStrong Teams Build Great Brands

Have you ever experienced an incrediblefirst meeting with a distributor? Strongalignment, good fit, everyone smiling,timelines agreed. Then, nothing happens!The export manager may take up to sixmonths to translate his outlook from“done deal” to “dead deal.” There are tworeasons why this occurs.

First,distributors are positive, competitiveathletes, always striving to win newbusiness. However, in some cases, thedistributors wake up after time to reflectand decide they really weren’t thatinterested in the brand after all.Failure also results when a strong firstpersonal meeting at a trade show ordistributors office is followed by arelationship buried in emailcommunication, with no personal touch.Below are Export Solutions’ Ten Tips onconverting promising new business leadsinto tangible business partnerships.

1. Call/Skype – Don’t Depend on EmailMotivated distributors still returnphone calls, but frequently receive up to200 emails a day, many from existingbrand partners. Top distributors’ businessdays are captured by a continuous flow ofmeetings with customers, principals, andtheir own employees. Best bet is to call apotential partner or set up Skypemeetings. Email is okay for routinecorrespondence, but too easy to ignore ordelete.

2. Follow Up Immediately & FrequentlyTime slips away, as Export Managersfocus on existing businesses and“problems of the day.” One tip is to putregular follow up reminders on yourcomputer calendar.

3. Focus on 5 C’s: Category Review, Calculation,Cost of Plan, Compliance, ContractThere are 5 critical elements to translate a“lead” into shipments.

Category Review: How does yourcategory look in target country? Categorysize, competition,pricing,margins, andmerchandising activity.

Calculation: What is the distributor’sproposed calculation from your factorygate to the store shelf? What are standardcosts like duties and taxes? What areflexible or negotiable like trade discountsand distributor margin?

Cost of Plan: Each brand needs a plan togain market entry. This includes key

account “sell in,”followed by consumerand trade promotionactivities. Look at thedistributor’s proposedplan, as well as severaloptions with differentprice tags.

Compliance: Manycountries feature aproduct registrationprocess and labelingrequirements. In somecountries, this step iseasy with automaticcompliance for a USA orEuropean brand. Or asimple solution with a small distributorapplied sticker. In other countries likeJapan or Indonesia, plan on one year ormore to navigate the complex process.

Contract: “Ready, Set, Go” can be delayedby 3-6 months due to contractnegotiations. Company lawyers demand20 page agreements in English that eventhe Brits can’t understand. Distributorsprefer two page letters of understandingor a handshake deal. Do what is right foryour business, but expect delays andfrustration.

4. Request ReferencesA good idea is to quickly requestdistributor references from other brandsthey handle. Motivated distributors willsend impressive references right away.Also, have your credit department run aDun and Bradstreet or Equifax report assoon as possible. Many trade showmeetings are with “pretenders” who stateexaggerated claims and are ultimately toosmall to handle your brand. Better todiscover this sooner versus later.

5. Move Beyond the Distributor Owner/MDThe distributor owner “writes thechecks,” but frequently serves as a“bottleneck.” The key is to quickly getyour brand assigned to a “worker” whosetask is to move your project through thesystem and produce an order!

6. Establish Realistic TimelinesSync with category review dates andavoid holiday periods. Update timelinesfrequently. New distributor relationshipsalways take longer. Plan on six monthsfrom first meeting to first shipment.Be pleasantly surprised if things movequicker.

7. Distributor Response Time Signals Interest LevelHow often do you check your emails?Probably every hour. When I work ondistributor search projects for wellknown brands like Pringles, Tabasco, orBarilla, distributor response islightening fast. Motivated distributorswill chase you if they are interestedbecause they are anxious to start sellingyour brand!

8. Establish Regular Checkpoint CallsI suggest every two weeks at aminimum. Use a common document ofpriorities, action steps, and due dates.

9. Visit the DistributorIt’s amazing the amount of progress thatwill be made during a meeting at thedistributor’s office. Also, the distributorwill work hard in advance of your visitas your project moves up the priority listand they want to guarantee a favorableimpression. A visit to the distributor’smarket signals your commitment.Beware if the distributor is reluctant toschedule your visit. Either he haschanged his mind about a partnership orhis office and capabilities do not matchthe bold promises made at the initialtrade show meeting.

10. Parallel Path Two Candidates per CountryA favorable first meeting represents anexcellent start. However, there are stillmany steps (think 5 C’s in point 3)before you sign a contract and receiveyour first order. Always keep twocandidates in the process, in case yourtop choice disappoints. This can betough, but represents a better optionthan needing to start the entire processover again.

Ten Tips: Converting Promising Leads to New Partnerships

38

39

5 USA Labeling Regulation Tips-FDASo often we hear, “It is too complicated to export to the USA,”when in reality, nothing is further from the truth. Every countryhas its requirements and regulations and the USA is no different.The regulations are pretty much the same whether you are adomestic producer or a foreign manufacturer. Once you acquaintyourself with the requirements, it really isn’t that bad. If youfollow what needs to be done, you have taken an important stepin starting on a successful sales journey in the United States.

Here are some tips to get you started:

1. Product name must be clear. If not, you will need a productdescription immediately following the product name.

2. Net Weight statement must be in the lower 30% of theprinciple display panel (front label) and must include USAmeasure and the metric equivalent, e.g. NET WT 3.5 OZ (100g).

3. Nutrition Facts:

• Serving size is based on the reference amounts establishedby the FDA NOT on 100g

• Rounding rules have been followed

• Only one of the FDA established formats have been used

• Type size requirements have been followed

4. Ingredient List:

• Ingredients are listed in the order of predominance by weight.

• Only USA approved ingredients are used.

• Components are listed by their USA accepted common orusual name. Multicomponent ingredients are eitherbroken out or their individual ingredients are listedseparately without the all-inclusive ingredient name

5. Contact information: If it is the foreign manufacturer, it mustinclude the country even though the country of origindeclaration (Made in ____) immediately appears above orbelow. If it is not the manufacturer, an explaining functionmust be included, e.g. “Imported by,” “Exclusivelydistributed by” etc.

5 Common FDA Labeling ErrorsSome common mistakes to avoid:

1. Type Size of all mandatory information is too small. It shouldbe a minimum of 1/16 inch (1,6 mm) but should increase aspackage size increases. This requirement does not apply to theNutrition Facts.

2. Rounding rules in the Nutrition Facts are not followed.These apply to calories, cholesterol, sodium and vitamins.

3. Ingredients:

• Ensuring that the color is permitted in the USA(e.g. “safflower” is not permitted as a color)

• Using the common or usual name of an ingredient(e.g. “cocoa mass” is not an accepted term in the US)

4. Allergen Labeling:

• Ensuring that all allergens are clearly listed in theingredient statement. Bolding, italicizing allergens isNOT permitted

• Confirming that an ingredient is truly a recognizedallergen in the USA (differences between US, Canadianand EU allergen lists)

• Declaring the presence of trace allergens, if applicable

5. Country of Origin declaration is in close proximity to thecontact information (e.g. manufacturer, or importer, etc.address).

The above is a brief overview. It is crucial to have a professionalreview a label to avoid unnecessary problems at the time ofimport. Eurofoods Regulatory Advisors, LLC stands ready toassist you. Feel free to contact us!

Good Luck & Happy Sales!

Margaret EckertPresidentEurofoods Regulatory Advisors, LLC

Margaret Eckert is President and Owner of Eurofoods Regulatory Advisors, LLC since January 2010. She has over 30 years experience assistinghundreds of foreign food and beverage companies to comply with all required regulations in order to successfully export their products to the USAand Canada. Works closely with USA and Canadian government agencies. Margaret has conducted many seminars both in the USA and inGermany on major topics affecting imported products. She regularly contributes to leading trade magazines in the USA on current and upcomingissues affecting the industry. For more information visit our web site at www.eurofoodsreg.com.

Prior to her current position, she was Director of Trade Relations for the German Agricultural Marketing Board – CMA North American Office, aforeign government agency, where she was responsible for aiding German food and beverage manufacturers to fulfill all necessary regulatoryrequirements. Organized the German participation at major trade shows. She also actively participated in the rulemaking process of the NutritionLabeling and Education Act (NLEA), the Bioterrorism Act (BTA) as well as the USA – EU Beef Hormone Dispute and the US/EU Banana Disputeon behalf of the German industry. Margaret is now monitoring the Food Safety Modernization Act (FSMA) and its impact on imports.

Margaret Eckert42 Lehigh Lane

Hicksville, NY 11801-3313TEL: (516) 433-4864

[email protected]

40

Channel/Category DefinitionCPG Consumer Packaged Goods – refers to our

industry. Similar meaning to FMCG.ACV All Commodity Volume – used to describe

brand penetration. i.e. 77 % ACV availability.FDM Food, Drug, & Mass ChannelsFood/Grocery Channel Supermarket ChannelDrug Channel Pharmacy ChannelSupercenter Hypermarket format of Walmart. Leading

Walmart format and seller of food in USA.Vendorville Nickname for Bentonville, Arkansas.

Global headquarters for Walmart.Club Channel Membership Warehouse Clubs: Costco, Sam’s

Clubs. Annual fee of $40- $100 to shop.Dollar Stores Channel of retailers selling items for $1

Dollar or similar. Dollar Tree.Foodservice Channel Channel selling to restaurants, institutions

(schools) and contract feeders (companycafeterias).

C Store Convenience store. Includes chains like 7-11and stores aligned with gas stations.

OTC Over the Counter products. Healthcareproducts available without a prescription.

HBC Health and Beauty care products.GM General Merchandise/Non Food products.Grocery Usually shelf stable food and basic consumer

items like paper towels and laundry supplies.Spectra Database analyzing demographic purchasing

info for brands and categories.Dunhumby Database part owned by Kroger that analyzes

purchase data & facilitates targetedmarketing.

Store Operations/Supply ChainPlanogram Schematic. Official layout of store fixturesModular Same as Planogram. Term used by Walmart.Cut In Processing of physically making space for

your product on the shelf.Reset Process of physically updating the

planogram of a store or category.OOS Out of Stock condition at warehouse or store.Shelf Hog A brand that takes up more shelf space than

other similar category items.Cheater Pack Item that looks the same as competition, but

actually has fewer ounces/grams.Broker Agent providing headquarter sales, retail

coverage and admin services for brands.Distributor In USA, a wholesale distributor like UNFI,

Kehe, or DPI that stocks 25,000+ specialtyfood items.

SKU Stock Keeping Unit. An individual item orbrand size. Each SKU has an individualUPC.

Retail Link Walmart portal to share Point of Sale datawith their vendors.

Promotion DefinitionRobinson Patman Act USA law states that all retail customers

should get same price/promotional“opportunity”.

EDLP Every day low price. Strategy used byWalmart and others. Fewer “short term”promotions.

Hi Lo Retailer strategy to offer higher everydayprices, but deep discount special offers.

Accrual Promotional fund for retailer based upon aset amount per case purchased.

Deal Special promotion or allowance to a retaileras an incentive to push a product.

TPR Temporary Price Reduction. Usually, 10-20%price discount for 4 weeks, noted by in store tag.

Loyalty Card Card (free) required by chains to obtaindiscounts/special offers. Retailers analyze data.

Ad Weekly flier/circular by supermarket chainswith special promotions and discounts.

Menu Cost Standard “List Price” to participate in retaileractivities: Ad, Display, Slotting Fee. Negotiable.

Slotting Fee Fixed fee to gain entry for a product to aretailers shelf or wholesalers warehouse.

BOGO Buy One Get One Free Promotion.Scan Down Discount paid to retailer on products

scanned through the register behind a TPRpromotion.

In & Out Temporary stocking of an item. Usually for aHoliday or special season. No Slotting fee.

Billback An allowance paid by brand owner to aretailer after proof of promotionalperformance.

Shipper Promotional display piece with point of salematerial. Usually higher margin and “in andout”.

Bonus Pack Special size of a brand: free ounces versus thenormal size. i.e. 80 oz for price of 60 oz.

Lift Incremental sales behind a promotion offerversus your normal sales rate.

Dog Slow selling brand or item.POS Point of Sale materials. Promotional materials

placed on shelf or display.Coupon A discount certificate providing an

immediate savings (.25 - $1.00) on a specificproduct.

Double Coupon Some retailers double value of coupons (upto .50) at their own expense to attractshoppers.

Neckhanger Coupon or product literature attached to theneck of a bottle.

FSI Free Standing Coupon Insert. Coupondistributed via Sunday newspaper.

SPIF Money to incent a sales representative to sellmore of your product. Common inFoodservice.

Spender of the Year Joke: Some state that “Vendor of Year”awards go to the biggest brand “Spenders ofthe Year”.

How Well Do You Know the USA? 50 Industry Terms and Definitions

Looking for more USA Industry terms and definitions?100 + commonly used terms and their meanings.

Free Access: www.exportsolutions.com

41

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.

42

Export Solutions’ New Distributor Checklist____ Contract/Agreement

____ Price Calculation Model

____ Business Plan: objectives, marketing,spending, key dates

____ Category Review: Pricing, Shelf,Assortment, Merchandising

____ Label Compliance

____ Product Registration

____ Forecast: Year 1

____ Pipeline Order & Inventory

____ Brand Facts

____ Product Samples

____ Appointment Letter

____ Brand Specifications in System:Distributor & Customers

____ Training: Key Account Managers, Retail,Administrative Staff, Warehouse

____ In Store Standards: Pricing, ShelfManagement, Merchandising

____ FAQ’s/Handling Common Objections

____ Key Account Presentation

____ Customer Appointment Dates

____ Category/Business Review:Tailored to Each Key Account

____ Retail Sales Contest

____ Checkpoint Calls

____ Market Audit Date

____ Reporting: Track Distribution, Pricing,Shelf Positioning, Merchandising, etc.

Talk to an Expert• Find Distributors in 96 Countries• International Strategy Road Map• Fix Problem Markets• Entry Plans• Export Workshops• Motivational Meeting Speaker

Contact Greg Seminara at (001)-404-255-8387 to discuss your business development project.www.exportsolutions.com

43

Price Calculation Worksheet

Item Amount Comments

List Price (factory or port)Compare to your domestic list price? Avoid diverting risk.

Exchange rate Watch bank rate vs. distributor rate.

Freight (sea, truck or rail)Target full containers. Consolidation is costly.

DutiesApply correct Harmonized (HS) code. Confirm Free Trade Agreements.

Customs clearance, insurance Money and time!

Inland freight: port to distributorTranslate actual costs to case rate. Avoid flat percentage rates.

Landed Cost

Product Stickering Select countries.

Listing FeesFlat fee. One time only. Usually not in calculation.

Marketing fund accrualTypically, 10-20% of list price. Part of calculation or manufacturers price.

Distributor MarginNormal range: 15-35%. Depends on size, complexity of brand, services,and “what trade spend is included.”

Other Distributor FeesShould be part of distributor margin. Avoid hidden profit centers.

Price to RetailerFair and transparent model. Incentives for large customers, extra performance.

Retailer promotions, incentives,rebates

10 – 20% depending on the country.

Other Retailer FeesAt times for merchandising or central distribution.Should be allocated from distributor margin.

Retailer MarginGlobal average: 28% Range: 15% -45% based upon category, brand.

Sales Tax/VATIncluded in price in many countries. USA sales tax is on top of shelf price.

Consumer shelf price Everyday prices and promotional prices.

Category Review Template* – page 1(Estimate: Source info from Store Checks, Retailers, Nielsen, Euromonitor)

*Note: please provide your best estimate

Category Sales: Total, all channels, all customers

Retail Value _______________________________ Wholesale value___________________________

Category Sales: Percent by Segment

Segment A _________ Segment B _________ Segment C _________ Segment D _________

Category Sales: Percent by Channel

Supermarket _________ Convenience _________ Discount _________ Pharmacy _________

Wholesalers _________ Cash & Carry _________ E Commerce _________ Other _________

Category Peak Seasonality

Summer _________ Winter _________ Holiday _________ None _________

Category Sales: Top 4 Customers

Customer 1 _________ Customer 2 _________ Customer 3 _________ Customer 4 _________

Category Sales: Percent National Brand versus Private Label

National Brand _________ Private Label _________

Category Sales: Percent by Brand

Brand A _________ Brand B _________ Brand C _________ Brand D _________

Category Sales: Percent by Region

Region A _________ Region B _________ Region C _________ Region D _________

Category Sales: Market share (value) Top 4 Brands

Brand 1 _________ Brand 2 _________ Brand 3 _________ Brand 4 _________

Category Sales: Market share (units) Top 4 Brands

Brand 1 _________ Brand 2 _________ Brand 3 _________ Brand 4 _________

Category Sales: Top 4 SKU’s/Items

Item 1 _________ Item 2 _________ Item 3 _________ Item 4 _________

Category Sales: Top 4 Pack Sizes

Pack Size 1 _________ Pack Size 2 _________ Pack Size 3 _________ Pack Size 4 _________

44

45

Category Review Template* – page 2(Estimate: Source info from Store Checks, Retailers, Nielsen, Euromonitor)

*Note: please provide your best estimate

Category Size (circle)

Mass Standard Niche

Category Sales Growth (circle)

High 10 % + Average: 3-5 % Flat Declining

Buyer Interest (circle)

High Medium Low

Category Development (circle)

New High Growth Mature Declining

Retail Prices: Top 15 SKU’s/Items at number 1 customer

Item 1 _________ Item 4 _________ Item 7 _________ Item 10 _________ Item 13 _________

Item 2 _________ Item 5 _________ Item 8 _________ Item 11 _________ Item 14 _________

Item 3 _________ Item 6 _________ Item 9 _________ Item 12 _________ Item 15 _________

Shelf Space: Provide Photo’s/Planograms

Typical Section Size: Supermarket # Items: Average supermarket

Adjacent Category 1 Adjacent Category 2

Merchandising (circle)

Typical PercentPrice Reduction

10% 20% 30% Other

Store Flier Participation

weekly monthly seasonal never

Category displays weekly monthly seasonal never

Special Packs Bonus Packs Pre-Price Free Gift Other

What activity drives incremental category sales?

Category Insights: What’s hot?

Category Insights: What’s not selling well?

Category Summary/Other Insights

46

1. Determine Brand Ambitionfor CountryWill your brand be a category leader,player, or niche participant?

2. Establish distributor selection criteriaBig brand distributor, category specialist,or smaller entrepreneur?

3. Create a Pool of CandidatesExport Solutions database tracks7,700 distributors in 96 countries.

4. Determine Candidates PreliminaryInterest LevelSend introductory email, followed byphone call within 48 hours.

5. Obtain Candidates CorporateProfile PresentationKey Facts: Sales turnover, # employees, companiesrepresented, category/channel specialization.

6. Distributor Interview in Candidates Office4-6 weeks lead time. 2 hour meetings.Send advance agenda.

7. Independent Store ChecksProvides category insights and “real” distributorperformance for current brands handled.

8. Interview Preparation: Scorecard, Samples,Your Presentation, Key QuestionsExport Solutions’ templates: Assessment Scorecard &Ten Questions for every interview.

9. Distributor Interviews – Target 3 CandidatesReview capabilities, warehouse, cost to serve, andinterest in your brand.

10. Cooperation ModelWhat is the plan? Year one plan, pricingcalculation, and timeline.

Ten Step Distributor Search Process

Talk to an Expert• Find Distributors in 96 Countries• International Strategy Road Map• Fix Problem Markets• Entry Plans• Export Workshops• Motivational Meeting Speaker

Contact Greg Seminara at (001)-404-255-8387 to discuss your business development project.www.exportsolutions.com

47

Need a Hand? – 40 Great Resources

Sector Experts

Brand/Market Tests www.gamechanger.net

Category Management www.thepartneringgroup.com

Contract SalesManagement

www.ramgroup.net

German Brands www.germanfoods.org

Health & Personal Care www.emersongroup.com

Private Label www.daymon.com

Recruiting www.cpgjobs.com

Regulatory/Labels www.eurofoodsreg.com

Sales Strategy www.exportsolutions.com

UK Brands www.greenseedgroup.com

Sector Facts Specialty

Bevnet Beverage

CIA Factbook Country Facts

Food MarketingInstitute

Industry Facts

Foreign AgriculturalService

Reports/Stats

GMA Manufacturers

Kantar Retailer Insights

National ConfectionersAssociation

Candy & Snacks

National RestaurantAssociation

Foodservice

Nasft Specialty Food

Planet Retail Retailer Insights

News TopicAnalysis www.morningnewsbeat.com

Beverages www.bevnet.com

Brands www.supermarketguru.com

Candy & Snacks www.candysnacktoday.com

Gourmet www.gourmetretailer.com

Gourmet www.specialtyfood.com

Manufacturers www.smartbrief.com

Manufacturers www.progressivegrocer.com

Marketing www.adage.com

Supermarkets www.supermarketnews.com

Trade Shows SpecialtyComida Latina Hispanic Food

ECRM Buyers Shows

Fancy Food Gourmet

IDDB Dairy, Deli, Bakery

NACDS Health & Personal care

NACS Beverages

Natural Products Expo Natural Foods

NRA Food Service

PLMA Private Label

Sweets and Snacks Candy & Snacks

48

Every exporter has countries where theirbrand performance lags far behindexpectations and market potential. Thisappears as a serious issue when the poorresults are in a large strategic country likethe USA or China. The first step to fixingthe situation is to admit that you have aproblem. Too many times, export managersloyally cling to their plan and existingdistributor with hope that “next year willbe better.” The likelihood is that sub-partrends will continue without intervention.Remember, it’s your quota and job thatsuffer due to lackluster results in a country.Listed below are Export Solutions’ 10 Tipson action steps for under performingcountries.

1. Look in the MirrorChances are that your current brandproposition is wrong for the country. Yourproduct sales are a reflection on buyer andconsumer response to your product range.An underqualified partner does not help,but is usually just part of the problem.

2. Research Consumer HabitsConduct category research to understandwhy consumers in a foreign country do notappreciate your brand like they do “backhome.” Category habits and developmentvary widely, particularly around foodproducts. Recently, I confirmed severalexamples where Asian consumersdemonstrated little interest in certainWestern style foods (although everyoneloves candy and snacks!).

3. Investment LevelMany poor performers suffer the classicissue of insufficient funds to invest inmarketing and trade programs. There is acost of doing business everywhere and theinvestment requirements can be huge in aplace like China or the USA. Best bet is tobreak down the country into smaller areasand focus on targeted investments withhigh potential, regional retailers where yourbrand has a higher probability of success.Avoid the attraction of large, nationalretailers where you realistically cannotsupport the business. Don’t expect miracleswithout basic investments in marketing andtrade promotion.

4. Establish and Track In Store KPI’sMany exporters focus primarily on monthlyshipment numbers. Shipments representthe ultimate scorecard, but we stronglyadvocate the implementation of in-storemetrics. This process starts with major

account listing maps,tracking your SKUlevel authorizationsfor major customers.The second step is tolaunch and measurein-store presenceguidelines. How doyou judge a goodstore from a badstore? Ultimately,shipments are areflection ofconsumer purchases,not inventory sittingin a distributor’swarehouse. “What’smeasured is treasured.”

5. Spend a Day at Retail With Your Distributor ExecutivesWe all spend too much time in comfymeeting rooms sharing PowerPointpresentations with optimistic plans.Dedicate time for retail with thedistributor executive team. Visit stores atrandom, picking an area on the other sideof town from the distributor’s office.Create a store check sheet to captureobservations such as shelf space,promotions, and competitive activity.Speak to aisle clerks and store managersto get “street smart” on your product andcategory performance.

6. Secure Direct Buyer FeedbackEvery distributor should maintainexcellent trade relations with at least oneof his key accounts (if not all!). Schedulean appointment or a lunch with a friendlybuyer to secure his point of view. Try tokeep the conversation focused aroundcategory dynamics and trends versus justa request for more trade spending. Buyerslove to serve as “experts” and maysupport you if you follow their advice.

7. Distributor Brand ManagerThe Distributor Brand Manager serves asour everyday contact and the conduit todistributor resources. Problems mayrelate to having an experienced brandmanager handling too many companiesor a junior brand manager, lacking theclout to get things done with the busysales team. We all like our BrandManagers, as they take our calls andrescue us periodically, However,sometimes it’s just not working and youneed a change.

8. Share Best Practices – Adjacent CountriesEvery distributor will be quick to pointout “How different their country is.”The reality is that there are moresimilarities between countries thandifferences. Look at an adjacent countryor one with common retailers and sharelessons learned. This may represent acategory review, presentation approach orspecial sales contest. Invite the brandmanager to visit a successful country orattend a meeting where best practices areshared.

9. FaceTime in the TrenchesDistributors appreciate export managerswilling to contribute to joint resolutionof problems. Consider sending acompany employee to work for 3-6months on assignment at the distributor.Visit quarterly or more frequently.Schedule bi-weekly update calls. Better tofocus attention on fixing a high potentialcountry than regular visits to smallcountries achieving their objectives.“Distributor respects what the principalinspects.”

10. Partner ChangeA distributor change is the last resort, butsometimes partners outgrow each otherand are no longer a “fit.” Export Solutions’database tracks an average of 71distributors per country, so you alwaysmaintain options. Transition to a newdistributor involves business disruptionand even a temporary decline in shipments.The good news is that your new distributorwill be motivated, committed and anxiousto make a positive impression with a faststart. The key is to manage the process withdignity and open communication, so thatthe terminated distributor is not surprisedby your actions.

Ten Tips: Action Steps for Poor Performing Countries

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A Gentle ApproachChanging distributors is never easy, because we usually like the people involved. Best approach is toaccept part of the blame for the failed relationship. Provide the old distributor a believable soundbyte that he can repeat to maintain dignity in the marketplace: i.e. brand owner was looking for adistributor with more foodservice or small shop coverage. In the case of a long term partner (5 years ormore), it may be appropriate to offer a lump sum goodwill payment, payable 90 days after transitionin return for their cooperation. The good news is that a new distributor will emerge as motivatedpartner, anxious to take a “fresh look at old challenges” and deliver on their commitment to you.

Every company includes distributorsthat appear as chronic under-performers.Year after year, management listens toexcuses and we patiently “give them alittle bit more time.” 2017 results are inand it’s easy to spot the problems:big country, small shipments. The newyear is the right time to implement aprocess of upgrading your distributornetwork to a partner more aligned withyour business goals. Listed below arekey action steps.

New Year’s Resolution -–Preparing for a Distributor Change

� Secure agreement from management to change distributors

� Review your original distributor contract

� Send official letter to distributor recapping disappointing results

�Obtain current distributor price calculation

�Document and monitor inventory in the system, by SKU

�Watch account receivables and bill-backs

�Confirm in writing 2018 spending and promotion plan

� Interview and pre-select an alternate distributor

� Establish realistic transition timeline with new distributor

�Advise old distributor of change in person

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USA Population by Region

MD

Region Population (millions)Percentage of USA

Population

South 125 38%

Northeast 56 17%

Midwest 68 21%

West 79 24%

Total 328

*estimated 2018

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Distributor Capability AssessmentExport Solutions established 15 assessment criteria to identify “Best in Class” performers as well as “underachievers.” Many distributor relationships extend 10 years or more. Is your distributor network still a “good fit”for your current business requirements? Template can also be used as New Distributor Reference Check form.

Assessment Criteria Rating: (10 = Best)

Category Expertise/Critical Mass

Focus/Time Dedicated to your Business

Joint Business Plan Development, Execution, Delivery

Alignment with Brand Owners Vision. Relationship.

Cost to Serve (fair margin, extra costs)

Assortment/Shelf Space

Promotion Creativity, Effectiveness, and Efficiency

Key Account Relations (Senior level, buyer)

Leadership/Owner (engaged & committed to us?)

Brand Manager (seniority, clout,creativity)

Multi Channel, Multi Regional Coverage

Financial Stability, Payment Record

Supply Chain Management & Forecasting

Problem Solving: rapid response?

Sales Results versus Budget, Market, Category (CY, PY, 3 Years)

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Slotting allowances, listing fees or as the Irish say “Hello”money are all real estate rental fees charged in advance byretailers for access to their limited shelf space. Many retailersassign their buyers “budgets” for this type of incremental feeincome. Store owners seek to obtain maximum productivityfrom each shelf facing and fixed entry fees are a tactic to gainimmediate income from new products without an establishedsales history. At the end of the day, it’s a cost of doingbusiness. Our objective is to allocate as little money aspossible to listing fees to redirect our investments toconsumer awareness and trial generating activities.Recapped below are Export Solutions’ Ten Tips onminimizing listing fee payments.

1. Exclusivity Some large retailers will waive listing fees in order to achievefirst in the market status with an exclusivity arrangement.Normally, this extends for three to six months. Beware, youmay upset other customers who become “locked out” duringthe exclusivity period.

2. Pay Fees Over One YearThis approach reduces your initial outlay and also increasesthe likelihood that the retailer will keep your product on theshelf for at least one year. This may also allow you tostructure the payment as a percent of case cost versus a“lump sum” payment.

3. Free GoodsOur net cost of “Free Goods” may range from 30-50% of aproduct’s retail price to the consumer. The retailer recoups hislisting fee when the product is sold. Some retailers arehesitant to accept this option, as a slow moving brand mayforce him to wait to receive his money.

4. Approach “Non-Slotting” Fee Retailers FirstEvery country includes retailers and channels that do notdemand slotting fees. Create a success story with thesecustomers first. Your track record may validate the largerinvestment in paying the fees at a bigger account or successmay help you negotiate more favorable terms.

5. Create “All Inclusive” Annual PlanUltimately, the retailer has many “profit centers” to reachtheir internal financial targets. Customers respect a solid, yearone plan, with investments in their other programs likeadvertising, sampling, shelf rental and display. You maysecure your product listings as part of your annualagreement.

6. Negotiate Reductions – Multiple ItemsMy experience is that many retailers have published standardprices for listing fees. However, net payment often dependson your distributor’s clout. Big distributors, representingmultinational’s and a wide variety of brands know thedifference between what is requested and what is really paidon high profile brand launches where the retailer needs thenew brand to be competitive. The most frequent “discount” isreceiving a reduced fee for multiple items: example, paying afull listing fee on first two items and receiving authorizationfor two extra items as part of a group listing.

7. Retailer EntertainmentMost countries still permit buyers to socialize with suppliers.The cost of a few tickets to a high profile sporting event is far lessthan most listing fees. A VIP plane trip to view your factory oryour category in a “resort” country is another way to gain accessto the shelves without writing a big check.

8. Higher Everyday MarginTotal category margin is a key assessment metric for most buyers.Some may consider a lower listing fee, if your brand delivers amargin higher than the category average.

9. Distributor ContributionSome “hungry” distributors may cover or co-fund listing fees.There are options to “case rate” fixed fees into the distributormargin calculation. Ultimately, distributors benefit from increasedsales and margin contribution from a new product listing.However, many are reluctant due to short term contracts. Mostmaintain policies related to brand owners retaining 100 percentresponsibility for listing fees and consumer marketing activities.

10. Beg! Claim PovertyBuyers are human and realists too. They may “bend” in theirdemands if they like your brand and know that you represent asmall company. Long term distributors can request the occasional“favor” from a friendly buyer. Most retailers have programs toprovide “low cost” chances to entrepreneurial new or localsuppliers.

Ten Tips: How to Minimize Listing Fee Payments

Create Your Own Export Library

All Guides available free atwww.exportsolutions.comin the Export Tips section.

Distributor Search Guide

Export Handbook

Selling to USA Handbook

Distributor Management Guide

Finance & Logistics

Export Treasure ChestMy Favorite Templates & Forms

People PowerStrong Teams Build Great Brands

Export Workshops & Speechesby Greg Seminara

Export Workshops & Speechesby Greg Seminara

Export Workshop Overview• 1 and 1.5 day workshop options available

• 8 Export Development & Distributor Management Modules

• Includes 25 Common Export Problems group work

• 200+ topics available for tailored workshop

• One hour keynote or motivational speech

Contact Greg Seminara for more details and references:

[email protected].

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Australia – 215 Distributors

China – 158 Distributors

Hong Kong – 152 Distributors

India – 90 Distributors

Indonesia – 60 Distributors

Japan – 125 Distributors

Korea – 127 Distributors

Malaysia – 113 Distributors

Philippines – 93 Distributors

Singapore – 147 Distributors

Thailand – 84 Distributors

Vietnam – 50 Distributors

Egypt – 55 Distributors

Saudi Arabia – 103 Distributors

U.A.E. – 153 Distributors

South Africa – 102 Distributors

Plus 14 more countries

Austria – 55 Distributors

Belgium – 71 Distributors

Croatia – 66 Distributors

France – 109 Distributors

Germany – 160 Distributors

Greece – 77 Distributors

Hungary – 57 Distributors

Italy – 84 Distributors

Netherlands – 124 Distributors

Poland – 65 Distributors

Russia – 103 Distributors

Spain – 131 Distributors

Sweden – 93 Distributors

Switzerland – 82 Distributors

Turkey – 80 Distributors

U.K. – 226 Distributors

Plus 19 more countries

Argentina – 50 Distributors

Bolivia – 44 Distributors

Brazil – 128 Distributors

Canada – 167 Distributors

Chile – 77 Distributors

Colombia – 76 Distributors

Costa Rica – 49 Distributors

Ecuador – 49 Distributors

Guatemala – 48 Distributors

Mexico – 155 Distributors

Panama – 53 Distributors

Paraguay – 53 Distributors

Peru – 74 Distributors

Uruguay – 48 Distributors

USA – 472 Distributors

Venezuela – 58 Distributors

Plus 14 more countries

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Where Do You Want to Grow?Asia/Africa/Middle East Europe Americas

Use Export Solutions Databaseto fill in the Gaps in yourExport Coverage Map