Driving Growth: How ABC Launched a $100M Consumer Division with LBC

Client Introduction 

The client is a 4 decade old distribution company (ABC) based out of UAE, primarily focused on high-end specialty products with distribution to limited high-end retailers (Modern Trade). With a legacy of distribution of specialty products to limited retail customers, ABC now required support to establish a consumer division with focus on the mass market segment and launch brands catering to a wider audience.

Challenges ahead of LBC:

• Mismatch in Distribution: ABC’s focus was traditionally on high-end specialty products with limited distribution points while the principal focus is mass distribution across all channels of the trade. 
• New Division Creation: Building a new thought process and consumer division from scratch, separating from their existing business model. This required significant investment in people, IT, finance, and credit control. 
• Operational Challenges: Establishing necessary structures to support route plans, distribution strategies, and retailer relationships. 
• Resource Management: Hiring and structuring new teams for sales, brand management, trade marketing, software development, and handheld device implementation. 
• Market Penetration: Developing and executing a go-to-market (GTM) strategy, retailer listings, promotions, and marketing from the ground up. 
• Logistical Adjustments: Ensuring efficient logistics to support the increase in volumes.

The Way Forward:

• Division Structuring: Created a new consumer division with dedicated structures for sales, marketing, and distribution separate from the specialty division. 
• Resource Allocation: Evaluated and recruited the right candidates in sales & marketing divisions based on channel expertise, volume, and target coverage.
• Strategic Planning: Developed a comprehensive GTM plan along with the listing strategy to ensure wide market coverage and expand customer base.
• Marketing Initiatives: Designed promotion and marketing strategies with the trade marketing team to establish and grow the brand & reach in the market.
• Sales Execution: Launched brands and closely monitored the sales performance with the key team leaders on availability, visibility, and activation into the trade.
• Process Optimization: Improved logistics and inventory management process to handle the increased volume and high-inventory turnover products effectively.

Outcome of LBC involvement in the project:

• Sales Growth: The consumer division rapidly increased sales, reaching $100 million in sales today in the Retail division.
• New Brands: Streamlining and driving the sales force helped us understand the capabilities, thus introducing 6 international brands (existing in the market) into the consumer division in 4 years. 
• HORECA Expansion: Sales in the HORECA sector grew from $50 million to $120 million, contributing significantly to overall growth and market presence.
• Operational Efficiency: The high inventory turnover brands generated more cash flow compared to the specialty division, changing the business mindset and approach.
• Logistics Optimization: Enhanced logistics capabilities to support higher volumes and heavier products, ensuring efficient distribution and customer satisfaction.

Conclusion

The consulting engagement successfully helped ABC to establish a new consumer division within their existing setup, enabling the sale of commodity products while maintaining separation from the specialty division. By building robust structures, a dedicated team, and strategic market initiatives, the consumer division became a significant revenue driver contributing 20% of the annual turnover. The logistics, marketing, and operational strategies ensured sustainable growth and a positive shift in business strategy and profitability.