Top FMCG distributors focus on international retail networks

The top ten biggest companies specialising in the distribution of consumer goods have increased their businesses at a rate of 25% in the last year. The first four-five months of the year brought companies new opportunities for partnerships, following accession to the EU.
Last year, the overall FMCG market grew 15% in terms of value against 2005, according to estimates made by the MEMRB Retail Tracking Services research company. However, wholesale distributors did not rely exclusively on increased consumption last year, but also forged new partnerships with foreign producers, attracted by the prospect of Romania’s entry into the European Union.
The competition for large volumes has led distributors to focus greater attention on international retail networks, whose growth was reflected in the business models of several distributors on the market.
The growth in the number of stores affiliated to international networks, estimated at 40% in 2006 against 2005, will continue this year at a higher rate than previously, according to the plans announced by foreign retailers.
Changes in retail structure have forced distributors to adapt, both in terms of their sales teams, by introducing training courses for merchandisers in key-account stores (hyper/supermarkets, cash & carry stores and discount stores), and in terms of transport fleets and warehousing capacities.
Last year, most distribution companies invested in regional distribution centres or in new warehouses, choosing the full packages of logistical services (which include storage, transportation, packaging and repackaging, and promotional activities). With cumulated investments of tens of millions of euros, the leading players in the distribution sector have been forced to move from a traditional method of distribution to a more modern model, as has the retail sector.
As well as wholesale distributors, companies specialising in logistical services (storage, packaging and repackaging) are also experiencing significant growth.

(More details in the Top Economic Players yearbook, in June)