Analyse²

Analyse² Blog

Welcome to our blog. We'll use this blog to share some interesting things going on in our company and the food industry.

Sue Nicholls and the Category Management Knowledge Group

By Analyse2, 19/01/2012 – 14:01 | Posted in In English, Interviews | Comments (0)

Sue Nicholls founded the Category Management Knowledge Group (CMKG) in 2005, after managing the Canadian category management team and sitting on the global category management team at Procter & Gamble for over 20 years. “When CMKG was first started”, Sue recalls, “I spent much of my time travelling across continents including Asia, South Africa, Russia, Latin America and North America, running “live” category management training sessions to both retailers and suppliers.”

Her experiences made her aware of two things:

1) Category management is the same no matter where you go – it’s the retailers and the data sources that differ; and

2) There is a huge opportunity to find a way to create more accessible category management training for individuals, teams and organizations.

One of Sue’s objectives as President was to turn CMKG’s vision of the global category management e-Learning solutions into reality. When CMKG was founded, the Category Management Association (www.cpgcatnet.org) also developed the industry standards in category management in the United States. “At that time,” Sue explains, “we also decided to focus our efforts on becoming the first training company globally to offer courses in accredited category management training.”

The importance of Global Category Training Methods

Global business is accelerating rapidly, and so is the global training business. A key driver of the need for global category training is the expansion of global retailers. This ongoing shift in business is creating huge opportunities. The best way to meet this increased international demand for higher levels of training and performance is through e-Learning. Global category training methods provide organizations with many advantages. First, a global approach creates a common foundation of standards in category management, resulting in standardized and efficient business processes. Secondly, it also gives organizations an opportunity to institute and communicate a global culture across the most important components of category management. Finally, high-quality e-Learning programs provide a cost-effective, sustainable and flexible option for organizations.

Global training must not only be valid, but targeted and replicable over time. As CMKG learned years ago, category management training’s foundations are similar internationally. All of the CMKG’s courses and programs teach their students with hands on experience, and a thorough understanding of everything that relates to category management, regardless of who they purchase their data from, what categories they compete in, or if they are suppliers or retailers. Thousands of international students have completed the programs, and they’ve all been happy with the education they’ve received.

Efficient procedure implementations and their benefits

The CMKG has been able to work closely with their corporate clients and students to figure out how to implement effective blended e-Learning programs. As each client is unique, so should the implementation processes be executed. However, there are several components in the implementation process that are consistent across most of their clients. Sue shares with us two components that have proved efficient for procedure implementations in the CMKG:

a) A pre- and post-evaluation of category management understanding for each individual, which helps to identify key areas where individuals require training and provides the organization with a return on investment measure for their training initiative;

b) Scheduled training, to ensure students stay on track and complete their training program. Offering live webinars to corporate clients to be used as checkpoints for students keeps them engaged and on track in their program.

For more information click here:

Analyse²´s very own Brazilian Market specialist, Leonardo Cyreno, tells us about changes in Brazilian consumption behavior

By Analyse2, 13/01/2012 – 16:21 | Posted in In English, Interviews, Market Trends | Comments (0)

About Leonardo

Leonardo Cyreno, our new Latin American Regional Director, has 13 years of experience in the Brazilian retail market. He started to work in the Bompreço (nowadays Walmart) retail chain in 1999, which is located in Northeast of Brazil and had 116 stores at that time.

Bompreço was bought by Walmart Brasil in 2004. Leonardo started working there as a trainee in quality programs to increase the productivity and efficiency of the offices and stores. Then, he worked with projects, modulars, pricing, marketing, item file, and integrations, until finally he became Category Management Director, with the challenge of building a category management area and process for Brazil. He was also responsible for modular, store layout, assortment planning, business plan construction and merchandising strategies.

As Leonardo mentions, “building that process with the suppliers’ participation was a very interesting opportunity to know the Brazilian Market and also to understand much available research about Brazilian Shoppers’ change in shopping behavior and also consumption migration between classes A and B to C and D”, which will be discussed by Leo in the following section.

Changes or Phenomena in the Brazilian Market

There are so many changes in Brazil that affect product consumption and shopping directly, that it is hard to focus on primary things. Nevertheless, let’s give a general vision in three topics that will allow you to have an idea about changes in Brazil:

a) A, B and C classes’ growth and D and E classes’ reduction.

When we study Brazil’s changes in classes for less than 10 years you can see how big the change has been. In 2003, there were 66 million people in Brazil’s C Class (38% of total population). In 2009 this amount was 94,9 million (50% of Brazil’s population). This means that almost 29 million people moved to the C class and most of them came from the D and E classes. Therefore, those two classes had a reduction from 96 to 73,3 million in the same period.

If you take a look at the A and B classes, the change was even bigger. In 2003, the percentage of the population in this class was 7% (13 million); in 2009 the number was 11% (20 million). This means that from 2003 to 2009, 7 million people entered top class consumption in Brazil, an increase of 41% for the A Class and 38% for the B Class, compared to the C class, which was 34% in the same period. (See Chart below.)

Population by Social Class in Brazil

For 2014, according to the FGV institute in Rio de Janeiro, we expect 31 million in A and B classes (an increase of 11 million), 113 million in the C Class (increase of 18 million) and 59 million in the D and E Classes (decrease of 14 million).

Now stop for a moment and imagine what happens with consumption and shopper habits and behavior at the stores with that change of money availability in the shoppers’ hands… They will buy different products, different categories and also increase the amount of what they already buy. In other words, they are looking for better products in general, making the market much more sensitive to product characteristics and the benefits that they want to receive from them.

b) The amount of information that shoppers have available now is changing the consumption and shopping habits

Let’s use an even smaller period than the previous example. In 2006, the Internet penetration in C Class was 33%, basically one out of every three persons had access to Internet.

In 2009, just 2 years later, the Internet penetration rate rose up to 66%, duplicating in 2 years. This didn’t happen just for C Class, it also happened in D and E Classes, from 11% in 2006 to 33% in 2009; three times bigger.

Now imagine the amount of information that one person has with no Internet access, and then imagine what happens when they start to use the network. We could assume that they are using the Internet only for social networking, which by itself already changes the shopping behavior a great deal, through information and perception exchanges. However, that is not the main reason why people use Internet; 87% of the C class uses Internet for research against 69% for social networking, and additionally, 68% of C Class and 42% of D Class do price research in the Internet before buying something.

c) Huge dimensions with huge social and economic differences between regions.

Brazil is a country with very large dimensions. This fact does not affect only geographical aspects, it is also easy to see different economic factors that are directly related to shopping and consumption behavior.

Just to give some dimensions about these facts, let’s use an example: For the A and B Classes which we talked about in the first topic, 63% of the population from these classes are located in the SE Region, 15% in South, 13% in the NE, 7% in the Center and 4% in the North.

However, this scenario is also changing. When you look at economic development, the NE region is growing much faster than the other regions. When you look at GDP in 2010, Brazil reached 7,5% and NE achieved 8,3%. This growth is making the changes even faster and more aggressive, forcing the national retail chains to be very flexible, fast, and assertive with assortment definition, trying to avoid the loss of market shares.

The growth in Brazilian’s C class changing the assortments in Brazilian supermarkets

If you want to keep sales growth and market share, you have to look very closely at the C Class. They are already the majority of the population in Brazil, have most of the consumption participation, and they are changing faster than any other segment. It basically means that, except for very specific retailers that offer solutions specifically for A and B class, if the assortment, layout and store merchandising don’t fit their needs, they will buy somewhere else.

Analyse²- Successfully Working with Kesko for Better Assortments

By janne, 09/01/2012 – 14:32 | Posted in In English, Interviews | Comments (0)

Ari Akseli, former Senior Vice President of Kesko Food and present CEO of KCM-Anttila which is part of Kesko, a Finland-based retailing giant, explains how Analyse² helped Kesko Food start building store-level assortments, resulting in various benefits. With the help of Analyse², Kesko Food´s gross margins increased by one percent and its sales by five percent, yielding over 40 million euros of yearly benefit. Analyse² also helped Kesko Food dramatically reduce the time needed to build the assortments for the K-chains.

The Challenge for Kesko

In the 1980′s K-Citymarket stores had around 5000 different stock keeping units (SKU) in the food section. Today there are around 20 000–25 000 units. With such a large number of SKU’s and the stores being so different, it is impossible to plan assortments without suitable tools.

In addition, according to Akseli the basic most important 1000 products still stand for 50% of the sales and the most popular brands remain the same from year to year for all the chains. The remaining percentage of sales is the big question; it varies enormously at store level. This is the assortment that should be planned most carefully and which gives every store its competitive advantage. This is where Analyse² comes in.

“We thought about this problem and started to solve it together with Analyse², and soon found a common idea of how to do it”, Akseli says.

Analyse² Solution

Analyse² and Kesko Food Commercial Department launched the category management tools related to assortment planning and pricing and a supplier collaboration system in the beginning of 2008.

According to Akseli the uniqueness of the system is that you can combine three important elements: the customer loyalty card (K-Plussa in Kesko’s case), rich product information linked to customer needs, and store level point of sales (POS) data.
“This combination is so effective that we are able to build very unique assortments at store level for the customers. It depends a lot on what kind of shopping the customers are doing in the store”, Akseli says.

With the Analyse² solution, Kesko can now find trends and look at the customer base in the stores. In addition they can see what shopping behavior is typical in each store, allowing them to better build the assortments.

“The assortment is not anymore just suitable, we are hitting right in the target.” Akseli says.

According to Akseli retail is “basically a very simple business”, but he adds that if a company wants to have a competitive advantage towards its competitors, it has to be open to new solutions. They are simply necessary.

“You may lose some money (while investing), but you can make hundred thousands more”, he says.

Akseli believes that you cannot compare standard software like ERP for assortment building to the versatile Analyse² Galaxy solution. He adds that the “safe road”, meaning using one integrated solution from one provider, is very typical of the IT department. It does not, however, always mean it is the best way to operate.

“It’s easy for the IT managers, but you are not the best in the business if you take decisions like that.” Akseli says.

Next Steps for Kesko

Akseli says the next step would be to refine the assortment planning tool to make the store level assortment planning even more accurate.

“Our main competitive advantage is having the right products. I think it’s one of the most important advantages; maybe the most important one”, he adds. It is therefore also the area he believes Kesko should focus on developing.

He concludes in reference to Kesko, “we are not the cheapest, but our pricing is very reasonable. We have better assortments for the customers, and they are not built only with what the customers are saying, they are built by what they are actually doing, and that’s the big difference.”

The customer

Kesko is a major Finnish retail specialist operating in the Nordic and Baltic countries, Russia and Belarus. It operates in the food, home and specialty goods, building and home improvement, as well as in car and machinery trades.

Kesko has approximately 2.000 stores in eight countries and their total retail and B2B net sales is 11 billion euros.

ECR Baltics Congress: Return of Baltic Tigers

By Analyse2, 01/12/2011 – 14:21 | Posted in Events, In English | Comments (0)

Author: Constant Berkhout, an Independent Consultant in the areas of Category Management and Shopper Insights

In November 2011 the ECR Baltics committee organised its fifth congress. Analyse² is a proud sponsor of the ECR movement in the Baltic countries. We were pleased to deliver a presentation on shopping and retail trends and how these affect assortment decisions of both retailers and suppliers.

It was a great pleasure to meet the people from Estonia, Latvia and Lithuania, who are known for their warm welcome. They have kept their good and open spirits despite hectic economic turbulence. Professor Morten Hansen showed that after a boom, the economies in these countries collapsed deeply in 2008 / 2009. The Baltic countries managed to overcome strong negative growth figures of approximately minus 20% and turn these into the growth figures of 5% that we see today.

On behalf of Analyse², Constant Berkhout illustrated that the recession will not stop the shopper from looking for value once the recession is over. Once they have tasted private labels they will have more appetite. And Lidl has recently announced plans to open discount stores in Lithuania. The other shopping trend that will impact retailer decisions is the hunger for more convenience. This finds its origin in the demographic shift to an older population and the urbanisation trend.

These shopping trends need to be reflected in retailer decisions now. And this sounds easier than it is. When it comes to setting the right size of the assortment, some retailers cut off the tail too quickly without realising they miss out on unique shopper needs. Or they have too large an assortment with products that cannibalise each other. You need to find out if and, if so, which unique contribution each product delivers. Socio-demographic information is helpful but surely not enough. If we tell you about two Englishmen who were born in 1948, have been married twice, have children, are members of the Church of England and have a high income, the first assumption is they shop in the same way. However, this description is true for both Prince Charles and Ozzy Osbourne and their shopping behaviours and needs could not be more different.

For more information on Analyse2′s presentation at the ECR Baltics and case studies about setting the assortment size please contact:

Contact Information:
Jorge Monteso
Vice President International Sales & Marketing
jorge.monteso@analyse2.com
GSM: +34 686 63 40 84

Analyse² at the ECR Forum in Riga, Latvia

By Analyse2, 12/11/2011 – 12:16 | Posted in Events, In English | Comments (0)

Analyse² attended the 5th annual Efficient Consumer Response Baltic forum in Riga on November 10th, 2011, where Contant Berkhout, consultant in the areas of Category Management and Shopper Insights, gave a speech for us.

ECR Baltic Forum is the annual meeting for the managers of various roles operating in both retail and manufacturing sides of Fast Moving Consumer Goods (FMCG) sector. The aim of the event is to facilitate the development of FMCG sector in the Baltic countries, knowledge management and implementation of new – globally existing solutions on the local market.

This year’s forum slogan was “Improving Together!” – retailers and manufacturers together to serve consumer wishes better, faster and at less cost by bringing efficiencies and removing unnecessary costs from supply chain and creating value for consumers.

Contact Information:
Jorge Monteso
Vice President International Sales & Marketing
jorge.monteso@analyse2.com
GSM: +34 686 63 40 84

To view the presentations during the event go to: http://www.ecr-baltic.org/en/ecr-baltic-forum/ecr-baltic-forum-2011/presentations/

For more information about the event, click on the image below to go to the ECR Baltic website:

Analyse² is the 3rd Fastest Growing Technology Company in Finland in 2011

By Analyse2, 08/11/2011 – 15:31 | Posted in Events, In English | Comments (0)

For the 3rd year in a row, Analyse² accomplishes this recognition!

We, at Analyse², are experts in retail business and a leading developer of software tools for consumer-centric category management. We are celebrating our 3^rd year in a row of being in the fastest growing technology companies in Finland.

Just as last year, we are at the third place on the Deloitte Fast 50 Finland list. Read moreOn Deloitte’s 2011 Technology Fast 500 EMEA list (Europe, the Middle East, and Africa) we were ranked at number 47, with a 2630% growth rate.

Last year, we were ranked number 22 on Deloitte’s 2010 Technology Fast 500 EMEA list (Europe, the Middle East, and Africa- growth rate of 4068%) and number 3 on Deloitte Fast 50 Finland list (growth rate of 4068%). In 2009, we were the fastest growing company in the category of young companies in Finland (Deloitte’s Rising Star list – growth rate of 1241%).

Analyse² is currently engaged in business with retailing companies abroad. In addition to the Finnish markets, an increasing focus is concentrated overseas, as the industry is still constantly developing.

From left to right: Kari Erämaa, Jari Erämaa, Janne Anttila & Jukka-Petteri Suortti

For additional information, please contact:

Janne Anttila
CEO
Mobile: +358 50 516 6921
janne.anttila@analyse2.com

About Deloitte’s Technology Fast 50™ Finland programme
Deloitte Technology Fast 50 Finland, one of the Finland’s foremost technology award programmes, is a ranking of the country’s 50 fastest-growing technology companies based on percentage growth in revenue over five years. The program is part of Deloitte Technology Fast 500, which is well established around the world.

Analyse² at the Category Managements Association’s Conference in Atlanta

By Analyse2, 01/11/2011 – 15:17 | Posted in Events, In English | Comments (0)

Janne Anttila at the CMA's Conference in Atlanta

Janne Anttila, Analyse²'s CEO, at the CMA's Conference in Atlanta

Analyse² participated in the 2011 Annual Category Management Conference – Cross-Category Partnering in Atlanta, GA in October, 2011

This category management event was organized by the Category Management Association, whose mission is to enable category management professionals to connect with peers around the world.

The conference gathered retailers, manufacturers, consultants and educators from all over the world. The agenda included speeches from leading Category Managers and retailers, and among them, Analyse²’s CEO, Janne Anttila, was able to give a speech during the event.

To view more pictures from the event, please follow this link:
http://albums.phanfare.com/isolated/IgWgMLPE/1/5337503_6078523#imageID=144722698

Contact Information:

Jorge Monteso
Vice President International Sales & Marketing
jorge.monteso@analyse2.com
GSM: +34 686 63 40 84

For more information visit:

2011 Annual Category Management Conference, Atlanta, webpage: http://www.cpgcatnet.org/page/2011CatManConference/index.v3page

Click below for the Category Management Association webpage:

U.S. Retailers enthusiastic about Shopper Insights

By Analyse2, 21/10/2011 – 10:46 | Posted in Events, In English, Market Trends | Comments (0)

Author: Constant Berkhout, an Independent Consultant in the areas of Category Management and Shopper Insights

This summer, Analyse² visited the Shopper Insights in Action Congress which took place in Chicago in July, and that exceeded all expectations. We got a fantastic idea of what shopping will look like in a few years. Smartphones and the Internet have changed the American shopper behavior and also the market research industry itself. Other notable themes were the elaborate efforts to connect the needs of consumers at home with shopper behavior in the store, and the widely accepted belief that the majority of purchasing decisions are not taken in stores but at home. But what has remained with us most is the use, yes, even the intimate embrace of shopper insights by U.S. retailers.

New Cash & Carry concept

At the conference more than 10 retailers spoke. On top of their knowledge of their shoppers and the advanced techniques they use, the enthusiasm they exuded was striking! Sam’s Club, Wal-Mart’s cash & carry formula with sales of US$ 47 billion, told how they involved the shopper in the design of a new C & C formula.

In the first phase, Sam’s Club members evaluated three variants through photos and an online questionnaire. The winning version includes a wider range of fresh and personal care, a central aisle, greater visibility of service departments, such as pharmacy and optician, and photographs and aisle signs to make finding products easier. Sam’s Club members clearly opted for a warmer shop with more help in navigation and more food products. That became an immediate challenge for the team at Sam’s Club: The favorable price image was not to be lost. And the new concept had to be attractive to both small business owners and consumers. The winning concept was refined through a virtual eye-tracking study and shop-alongs in a first real store near Dallas. Sam’s Club is enthusiastic about applying hard, primary colors. Regular customers discovered for the first time that Sam’s Club sold meat after the butcher shop was “framed” in red. Other shopper feedback was more difficult to decipher. After much analysis it appeared that shoppers just felt better between high, orange walls without realizing why.

Fast growth for

GameStop, a retailer of video game software and hardware told how they grew to US$ 10 billion revenue despite the growing range of games on the internet and on smart phones. Other competitors are retailers such as Wal-Mart and BestBuy. In their little accessible data, GameStop found that the 20% largest customers were not only young men who spend all day playing games (“geeks and loners”) but also they also consisted of an older group with an equal male / female balance who played less time (“because they still had jobs”). The desire was to not only understand the transactions, but also the shopper. The loyalty program was launched in October 2010 on the various target groups with different rewards: accessories, pizza coupons, space invader t-shirts and even meetings with game designers. Geeks have the option of a paid “Pro” membership.

Despite the fact that the program was launched such a short time ago, it has already proven its usefulness:
- Increased customer profitability: GameStop knows which services help increase profit per customer till 8 times more;
- Store optimization point: The loyalty card data is linked to software with maps. This shows an overlap of customers, or rather potential for a new location. GameStop keeps continuously track of outlets that are either to be opened or closed;
- Increased basket spend: New POS software shows the most recent transactions of the shopper at the checkout. The cashier of GameStop has time to start a conversation, deepen the relationship and sell an additional product;
- Direct Mail: GameStop sends recommendations based on the recently purchased games. GameStop discovered that many games have a very specific target group: often 1% of the customers is responsible for 20-40% of sales. Therefore, GameStop has launched highly targeted campaigns to increase the success of new video-games.

It’s impressive how GameStop develops profitable programs from a vast amount of data. Now 10 million Americans have a GameStop loyalty card and more than 50% of the transactions are registered with the card. The best game releases bring more money in the drawer than movie blockbusters.

Transformation of

One of America’s fastest growing retailers is Family Dollar. This retailer started as a textile shop in 1959 and in recent years it has transformed into a value convenience retailer. Shopper insights played a crucial role in this transformation. The first focus groups in 2005 indicated that shoppers visited Family Dollar for more than 30 types of shopping trips. However, each of the trips was small and of low frequency. In a test store Family Dollar added more food products to increase the visit frequency. The atmosphere became more pleasant and open when more light was used, pleasant colors were added and the stone storefront was replaced by a glass alternative. Revolutionary for Family Dollar was the idea to convert part of the store into a permanent research area. 47 cameras record all shopping trips. Surveys in the aisle are linked to the shopping carts. In this way Family Dollar continues to sharpen its concept while at the same time hundreds of stores are remodeled each year. One of the most recent findings says that two thirds of the shoppers are baby boomers. As a result Family Dollar added more healthy products, better signage and wider paths.

Family Dollar made a huge transformation with more knowledge about the customer. The cultural shift from internally to shopper focused cannot be told better than by using the private label policy. Till 2009, new, fancy private label brands received the names of the children of the Family Dollar category managers. Today there are several layers of private label with a clear link to the mother brand, Family Dollar.

New phase for Shopper Insights

Strange as it may sound, the American retailers admit that they do not know their shoppers well enough and have neglected them. Seven years ago Wal-Mart had no insights team and relied on their intuition and their suppliers. Electronics retailer BestBuy established the program Voice of the Customer through Employees (Voce) in which employees send suggestions about and from shoppers to head office through in-store computer kiosks. The CEO of the more than 150 years old department store Macy’s changed the sign on his door to Chief Customer Officer to emphasize the perspective he takes in internal meetings. The huge presence of large retailers at this specialized conference, their accessibility and their sincere commitment show we have entered a new phase of shopper insights.

Click to read more about the event:

Interview with Alexey Kovalyonok: Food Safety & Quality

By Analyse2, 10/10/2011 – 14:50 | Posted in In English, Interviews, Market Trends | Comments (0)

Our experts at Analyse² are constantly in touch with key players in the field of food retail and FMCG to create long-lasting relationships and with the purpose of exchanging ideas and opinions. An example of this is how one of our experts contacted one of her professors from Moscow State University of Food Production, Assistant Professor Alexey Kovalyonok, and asked him to participate in our blog, to which he happily accepted! The next few paragraphs are his thoughts on the subjects of quality and food safety in the retail field.

About Alexey

Alexey graduated from the Moscow State University of Food Production (MGUPP) as a Bread, Pasta and Confectionary Products Engineer and Manager of Production plants.

In parallel with working in a Production plant (production of food flavorings) he started post graduate studies in MGUPP. Alexey’s main research subject was “Production of pastry products with functional features”, and he has written 5 articles concerning this subject.

Alexey obtained a PhD in Food Science, and has more than 5 years of experience as a lecturer. His main areas of interest are Organic Chemistry and Food Product Safety. Alexey is a co-author of 2 books: “Safety of Food Products” (published in 2010) and “Technology of Food Products” (to be published).

Currently he occupies the position of Quality Assurance Manager at METRO Cash&Carry.

Food safety and consumer satisfaction: Protecting business and increasing consumers’ loyalty and trust

Under the conditions of market globalization, including food stock markets, food production and retail business, problems associated with ensuring food safety are highlighted. In Russia, global quality standards and food quality labels that are common in European wholesale and retail have not yet become the norm – even though consumers are asking for them.

The most important principle for providing safe and high-quality food products to consumers is to follow safety terms and regulations throughout the supply chain: from primary agricultural production up to their subsequent distribution and sale from the retail chains’ shelves to the end consumers. We should also consider the technological chain, where we observe the conditions of production and risk-preventing technologies. That means that not only producer or exporter countries are currently concerned with problems associated with product stock or food safety. Potential food safety threat can affect all the supply chain participants: producers, exporters, retail agents, and, ultimately, end users.

This is why the implementation of food safety principles and requirements is common for all participants across the supply chain. It becomes a vital task for all global market participants. The resolution of this goal is the task of HACCP (Hazard Analysis Critical Control Point), and the recommendations of the Food and Agriculture Organization of the United Nations (FAO) and the World Health Organization (WHO). In the Russian Federation there are regulatory legal acts issued by executive authorities, as well as specialized standards and regulations containing requirements on assurance of safety of food stocks and finished food products. Additionally, the traceability of the supply chain from food stock receipt to food product arrival on the retail chains’ shelves is also considered.

The influence of consumption trends on food safety

Regarding relatively new consumption trends towards organic, natural and less-processed food, we have to take into consideration the fact that risks linked with food safety are increasing. It might be assumed that the products that have been grown under the “natural” conditions should be more safe and healthy because of absence of nitrates, pesticides, genetically modified nature, and contain more macro and microelements and vitamins. However, the safety of such products remains an issue for discussion. We must not forget that chemicals used for cultivation of plants not only stimulate their growth but at the same time protect from pests and other kinds of microbiological contamination. Or, products without preservatives remain unsafe because such products can be easily contaminated. Thus, the biggest question is about safety of selling such products – obviously, they have to be sold and consumed within a short period of time, which is a hard task for retailers.

It is necessary to pay attention to the control on such products – there are no special regulations to control organic foods and requirements are not clarified yet. Certainly, the requirements have to be different from those for conventional products. First, the methods of identification of such products (to avoid falsification) and the levels of toxic elements and microbiology content should be defined. Moreover, they should be different and stricter because of absence of preservatives and temperature treatment and so on.

Challenges of supplier selection in Russia: How to ensure quality on the long run?

To ensure long term quality it is important to take into consideration several facts. First, the internal and external conditions should be considered.

Internal: Russian food market is a developing market (not saturated and not stagnating) in comparison with European or American markets. Alexey considers Russian market to be more comparable to the Asian, and especially the Chinese market.

In conditions where all the basic products (except some niche products) are subject to huge national demand, producers can benefit from developing production facilities. Nevertheless, quality is a component of a developed market, as the producers are forced to develop it because of hard competition (as in the European market).

External: Moreover, food production is characterized by complex products in the context of safety and relatively low gross margin (except such products like cocoa, confectionary and alcohol). Government measures don’t always help and have a periodical matter. All these aspects work for maintaining some acceptable quality level, but not always for development.

Under these conditions it is better to talk about the primary characteristic of products – safety. Fortunately in Russia it is not a subject of discussion and compromise, but of priority, which is ensured by enough control from legal authorities, highly developed regulations and a variety of sanitary rules, such as the GOST’s (Russian State Standards).

The development of quality –at a customers’ satisfaction level- is possible, when a market becomes saturated, and economic conditions (like joining to World Trade Organization (WTO)) are changed.

Our latest visit to Moscow: Retail Business Russia Summit

By Analyse2, 20/09/2011 – 14:05 | Posted in Events, In English | Comments (0)

Analyse² was at the Retail Business Russia, 10^th Industry Summit on September 8-9^th, 2011 in Moscow.

Retail Business Russia, held annually since 2001, is the leading summit for Russia’s retail industry.

The delegates attending the event are the owners and chief executives of retail chains in all market sectors, international and national manufacturers, distributors, investment companies and government representatives, making it the largest event of its kind in Russia and the former Soviet Union.

There were approximately 100 key speakers at the summit, consisting mostly of chief executives of the market’s largest companies. Amongst the retail industry leaders who discussed retailer strategies, business process improvements, category management, and best practices for promotions, Analyse² shared its expertise by means of two speeches: “Assortment planning in Brazil, Russia and Finland: Methods and Tools” and “The innovative ways of using KPI’s”.

Our old friend Vladimir Novikov, the Technical Director of France Informatique & Technologie (FIT) and Leonardo Cyreno – who previously worked at Walmart Brazil as Category Management Director and is Analyse²’s newest addition to our team as Director for the Latin American Region – joined our CEO, Janne Anttila, for the first speech! We were positively surprised with the level of interest and recognition from the audience and visitors as well as the good discussions we had. During the event we interacted with several key players of Russian & CIS FMCG market and look forward to collaborating with them in the future.

Liudmila Zyaparova (Analyse2's Russian Expert) & Jorge Monteso (VP International Sales and Marketing)

Leonardo Cyreno explaining his "Tail-Chasing Dog" metaphor to describe retailers during his speech at the conference