Nestle goes straight to retailers

Nestle Romania, the local branch of the Swiss food and beverage company has had a change of distribution strategy on the Romanian market, Paul Nuber, Nestle Romania’s general manager said.

The new strategy entails dropping dealers completely when doing business with the company’s best clients and, on the other hand, increasing the number of dealers for the business with the rest of the clients.

“We are completely changing our market approach as of this year. First of all, the sales to the top five retail chains, Metro, Selgros, Cora, Carrefour and Billa will be done directly, instead of going through the distribution company,” Nuber said.

The five aforementioned clients account for 25% of the company’s total sales. Nestle will create and manage a purchase account for each of them.

“Once the major retailers have entered the market, the retail landscape has radically changed and we are simply adjusting to the new market structure. It was the clients that asked for direct sales,” Nuber explains.

The main benefit of selling directly to one’s clients is a decline in costs, by dropping the link between the two parties, i.e. the dealer.

“The direct delivery also entails a long-term partnership with the client by which certain promotion or logistics programmes are set,” Nuber said.

Also this year, the company will drop the distribution system that used only a single dealer, Interbrands. The remaining 75% of the sales on the Romanian market will therefore be done through a more extensive network.

“Nestle Romania used to have a sole distributor until now, but we will multiply the number of dealers as of this year. We will work with no more than 18 distribution companies that will cover every region of the country. The reason for this is better territorial coverage, as some distributors are stronger in certain regions,” Nuber added.

The largest sales are registered in the big cities, especially those in Transilvania, and the lowest are registered in the southern and eastern Romania, as well as in the rural areas.

Nestle will soon finalise its last investment in the Joe wafer factory in Timisoara, which it bought in 2000.

“We have been constantly investing in equipment, management and human resources since the acquisition. We also built a logistics platform in Timisoara due to become operational in March this year. The investment will create another 40-50 jobs,” Nuber says. The factory is currently employing 320 people.
georgiana.stavarache@zf.ro