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The Australian grocery market is one of the most concentrated in the world and just a handful of accounts need to be called on in an attempt to gain distribution. So why then do companies launch products with the assistance of a broker or merchandising company? The answer is that brokers know the market, know what the retailers need by way of presentation documents, and, generally have high level trade relationships that can assist in expediting the decision making process. At the very least, they ensure that a manufacturer gets a fair hearing.

One manufacturer that has only recently engaged a broker for a major product launch is Sealord, one of the world’s largest fishing companies. Sealord has one of the largest trawling fleets in the world and in its home market of New Zealand it has developed its canned seafood business to become clear market leader with over 50 per cent share.

According to Phillip Knight Sealord’s General Manager for New Zealand,the plan to launch into the larger Australian market was two years in the making. Australia, with a larger consumer base was seen as a natural opportunity to grow volumes in a category where Sealord had built up a strong reputation in its domestic market.

Whilst Sealord runs its own sales team in New Zealand, there was never any thought of launching into the Australian marketplace with out using a broker. The selection process was conducted over an extended period and two brokers made the short list resulting in the eventual appointment of Counterpoint Sales and Marketing [CSM] to represent Sealord and to co-ordinate the launch.

CSM is a company now in its 17th year of operation and provides full national account management , merchandising and even a warehousing option for its clients.
The launch of the Sealord canned seafood range is one of the biggest launches that CSM has been involved in for some time, however over the years the company has been instrumental in other large scale and strategic launches including the entry of Parmalat into Australia in 1997 and the launch of the then revolutionary laundry concentrate Biozet in 1993.

In the final countdown CSM won the account because it offered a seamless service with its warehousing and distribution option taken up by Sealord which could see no sense in having a third party logistics provider involved. CSM also provides a range of technologies including integrated EDI and invoicing for Sealord.

This end result of all this planning and execution is that 34 new Sealord lines are going into Woolworths during October. This covers Tuna, Pink and Red Salmon and Heat’n Eat meals. According to Phil Knight the above and below the line spend from Sealord will significantly boost the market and assit his broker sales team in driving the category.

And, in a move to further demonstrate commitment to the Australian market Sealord has now appointed Miles Toomey as its National Sales Manager located in an office within the Counterpoint building. This allows him to work in partnership with his broker on achieving objectives making him available to both the trade and Counterpoint team on a daily basis.

Another product handled by a broker is the Vodafone entry into the supermarket chains. The Vodaphone range of phone cards and accessories is looked after by Crossmark.

Vodaphone does not have the traditional grocery experience so appointing a sales and marketing company like Crossmark
means that Vodafone can concentrate on advertising and promoting phones and phone cards, whilst Crossmark takes care of the nitty gritty like ensuring stores carry the authorised range and promotions are being complied with.

Vodaphone is a different type of product from most of the traditional grocery lines that Crossmark represents although it does have a ten year association with Fuji Film. In these examples Crossmark provides an experienced account manger to work on the Vodafone account has CSM does with Sealord. CSM in fact provides two National Account Managers for Sealord.

In both cases the broker provides a vast number of people in the field, far more than the average manufacturer can hope to muster. So in the case of a new company trying to enter the market a broker is the logical choice.
Whilst there are some companies that do not suit the brokerage concept and most of the professional brokers admit this, the majority of products in the market can be successfully looked after by an outsourced sales function. What is lost by not having dedicated staff under a manufacturers control is gained by the sheer weight of field staff employed by the broker.

The Purex Brand of toilet tissue with its famous ‘Roly Dog’ was unheard of in Australia prior to 1994. But Caxton’s ,part of the giant Carter Holt Harvey paper group, launched the product onto the Australian market in record time with the aid of brokers including one of NSW oldest brokerage firms WK Wing Sales which is now known as Strikeforce.

At a Supermarket Show presentation in 1994, a Caxtons spokesman recognised the expertise and speed to market facilities of his group of brokers in getting the brand established. Nine years later and nothing has changed. Brokers are still the best bet in getting a new brand into distribution quickly.

Author: David Burton,
Executive Director, ABML

This article first appeared in Retail World. David Burton is a regular contributor to the magazine.