BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED - Business - Nairaland
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| BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 11:05am On Sep 26, 2019 |
Bread is by all means the most important and equally most prevalent staple in our diet. This is the case all around the world. Wherever you find yourself in the world at any time of the year, bread is bound to be a major constituent of the local meals offering. The same is applicable here in Nigeria. Bread connotes different things to different people. In some of the really rural settings (especially 30 years ago) bread was only seen and enjoyed as a snack provided when someone returns from a trip to the city. For some other people (mostly today) it has assumed the status of a convenient food especially among those who reside in high octane environments where time is a most precious commodity. The product has also evolved that it is also sometimes viewed as a product that is served in the form of a periodic treat where special types of bread are consumed. 1 Like |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by Vikky2(m): 11:28am On Sep 26, 2019 |
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| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 11:43am On Sep 26, 2019 |
Vikky2: ? ? ? ? ? ? ? ? ? ? ? ? ? ? |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 11:56am On Sep 26, 2019 |
However way you choose to look at it, bread is a hot in demand product and I daresay that bread sales nationwide in Nigeria will probably have crossed a daily threshold of 5 Billion Naira. This is unverified statistics but I am positive that it is proximate enough. The big question here is; how can one integrate oneself into the already existing value chain and draw profitability therefrom? The bread value spectrum is quite large and long too, accommodating many major and minor players. On the one hand it commences with the financing of huge wheat farms in terms of actual cultivation and harvesting, then transportation to the Flour Milling factories, processing, transportation of finished goods, warehousing, distribution/wholesaling, retail and then bread making. It continues on another pedestal with the wholesale purchase of the bread by major distributors and then it goes through the process of retailing in order to get to the direct consumer. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 12:36pm On Sep 26, 2019 |
This is the part of the value chain that this thread will seek to address and examine objectively the dynamics of the segment with a view to unveiling the potentials that are inherent in this segment of business. I will also guide readers on how to approach this business in terms of entry into the industry, creating a distribution chain and sustaining demand. Now the crux here is that you can choose your type of entry. Is it going to be a big bang or you are going to tread carefully with minimal capital? I will attempt to highlight the pros and cons of both entry approaches. For the younger ones among the readers who reside in neighbourhood that are ‘bread friendly’ and who may not necessarily have the capital to start big I will craft an entry model that will ensure that you can enter this sector with as little money as possible with a view to growing into a colossus. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by connkg(m): 2:23pm On Sep 26, 2019 |
Fingers crossed... |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by mmb(m): 5:12pm On Sep 26, 2019 |
Following and enjoying |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 10:48am On Sep 28, 2019 |
connkg: I am wondering why your fingers are crossed. Do you have any reservations you may wish to share? |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 10:49am On Sep 28, 2019 |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 3:08pm On Sep 28, 2019 |
Launching into the bread distribution business big time [/i]requires big money. It must however be stated clearly that the abundance of capital is no guarantee that the business will succeed phenomenally. There are many intricate variables that contribute to the success of a business. If you reside in Lagos ([i]and indeed any other major city) and have your eyes on the ground, you will agree with me that one of the most regularly seen products on sale is bread. There are shops selling bread, display units, stands, stores, kiosks,car boots, buses. Tricycles, motor bikes and even the ubiquitous street hawkers. In supermarkets, provision shops and even pharmacies you still have bread being displayed and sold. As impossible as it may sound, most of these loaves are sold off before the close of business every day. This is quite instructive. Bread is indeed our most valued staple. Now, the above analysis only captures the regular family sized bread which most families buy on a daily basis. It does not include the more sought after ‘agege’ bread and neither does it include the less in demand bread such as baguettes and wheat bread which is for the more sophisticated bracket of our population. Different models are adopted by different bakeries to ensure that they capture and retain a sizeable share of the market. For the majority of mass targeted bread producers It is indeed the size of the market that determines their profitability. This underscores the need for a very viable distribution mechanism. Naturally, a new corollary of the baking business is thus birthed. Let us now discuss the how of entering the bread distribution business as a bigger boy or girl. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by connkg(m): 7:04am On Sep 29, 2019 |
ONNYX: No, Sir. You were gone so long that I'm really looking forward to your experience-sharing now. Banks are failing SMEs at 22% interest, and skill in investment can't come at a better time for me. 1 Like |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 10:04am On Sep 29, 2019 |
connkg: Well my experience is more in investments that assure of survival first while also providing a framework for the building of a business that will thrive over time. Essentially, you must understand that all the businesses in the informal sector of the economy that are conducted in small scale by the different supposedly small players are scalable to heights that are difficult for some of us to fathom. I could adduce a few examples. Sachet packaged water more popularly called pure water has its foundation in water that was tied up in cellophanes and sold to primary school children 30 years ago. You will also recall (if you are old enough) that sachet milk as we see it today predates the launch of cowbell by Promasidor 30 years ago. Ditto for detergents, bar soap etc. Omo and Elephant was sold in small handy cartons that were not affordable for many many folks. But we also had those who bought it in large sacks and repacked them for micro-retailing then. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by xpresseeve: 1:27pm On Sep 29, 2019 |
OP you promised at least two updates this weekend. We are expectant. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 11:59pm On Sep 29, 2019 |
xpresseeve: Yes I did. And I will. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 12:16am On Sep 30, 2019 |
Launching into bread distributorship as a big time operator has its advantages. It will naturally require a large initial capital outlay. You will need to acquire a depot (shop/warehouse), a car(s), staff and of course seek out and engage large and very well established bakeries whose products are already well known among consumers. Growing gradually from a small investment into large scale distribution on the other hand could take anything from 2 to 5 years depending on certain variables. You would need to have the mastery required to identify the best bread types in the market, identify where to place your foot soldiers, create a logistics plan that ensures the delivery of fresh bread to your retailers/sales points on a daily basis or as may be required. So, should an investor consider gaining entry at this level he will need some clout, an effective and efficient sales strategy and a whole lot of money. That will be the only way to make the investment worthwhile and profitable within a very short time. Please note that in order to succeed you will need a lot of strength as you are bound to meet a lot of resistance on the way. I may add here that your biggest challenge may be the already existing distributors who will do everything possible (and I actually mean it when I say everything) to restrain your incursion into this very profitable niche. So do not be surprised if your attempts at registering ion the really large bakeries are rebuffed repeatedly. Of course there are ways that you can overcome this resistance. One (or a combination) of several available methods could be adopted after studying the peculiar circumstances and situation based on individual merit. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 3:23pm On Sep 30, 2019 |
Above are the essentials of starting a bread distribution in a big way. I would rather not go into more detail as I presume that more readers will be more interested in starting on a small scale and growing the business organically. This could be attributed to either inadequate funding on the one hand and or also their preference for a more cautious, less risky but profitable growth curve punctuated with inexpensive experiences etc. I will on the strength of the above recognition spend more effort towards guiding those readers interested in starting small and growing steadily into a major bread distribution force in their neighbourhood. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 3:37pm On Sep 30, 2019 |
Starting small does have its own pro. Of course there will be the attendant cons too. But I assure you that the pros outweigh the cons if you are considering the business as a long term investment. The lessons you will learn at this entry level will be invaluable to you and your company now and in the future. The most important pro for me then is the fact that you understand the business and how it works right from the very scratch. And just like any other business, if your investment adopts an approach that uses a lot of initial capital outlay, it is only natural that your expectations will be rife as regards the turnaround of the money and of course the pressure on you to meet predetermined projections are enough to make you go bonkers. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 4:40pm On Sep 30, 2019 |
So in considering to start small, we will have to define small in the context it is used here in this essay. Small is quite a relative term, however for the purposes of commencement I will suggest that anybody who has between 20,000 and 200,000 as initial capital outlay will find these guidelines useful. To even make it better, we will adopt a very gradual investment model that will enable you determine the viability of the business before committing to a major inflow as regards the business. This approach which could be seen as only suitable for risk averse people is very adequate for new entrants into business. I personally adopt it for any investment that I wish to make. I refer to it as toe testing; a process that involves my testing the temperature friendliness of the water before taking a plunge. The underlying implication here is that when money is involved, you have to thread a little careful and ensure that your initial investment capital is quite small in relation to your entire arsenal of saved funds. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 4:42pm On Sep 30, 2019 |
We will now embark on a step by step analysis of the process of making a bold but careful entry into the very rewarding world of bread distribution. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by mmb(m): 5:58pm On Sep 30, 2019 |
great. God will reward you. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 6:06pm On Sep 30, 2019 |
STEP ONE: As would be expected, this would be the most important stage of the business venture. What is involved at this point is information gathering. It is actually very simple as what is required is for the potential distributor to hit the road and seek out relevant information as regards bread sales in his immediate environment. The most important information he needs to seek out are listed below; 1. What is the fastest moving bread size in that locality; Is it the 400.00, 250.00, 100.00 or 50.00? 2. Which is the preferred brand of bread in that neighbourhood and why? 3. How do the resellers get their supplies and how regularly? 4. What is the shelf-life of the preferred brand? 5. What is the average purchase volumes of the individual retailers? Please note that these questions are no means exhaustive. A closer and regular interaction with the vendors would reveal far more than a one off formal inquiry. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 7:06pm On Sep 30, 2019 |
STEP TWO Having established the fastest moving products, your next bet is to refine the information with a view to establishing the viability of the business. This entails that you do the following; 1. Establish the location of the preferred brand (Bakery) and the cost of transportation and/or fuel considerations. 2. Initiate discussions with the bakery with a view to ascertaining your eligibility to become a direct distributor. The rule of thumb here is that the older and better known the bakery the steeper the conditions for new distributors. My advice at this point is that since you may not be allowed to buy directly from well established bakeries that you would naturally prefer, just go ahead with the discussions and negotiate long and hard. The skill and info will prepare you for the next bakery you visit. Please do not make a commitment at this point. 3. Seek out alternative bakeries who are similarly well established and initiate similar discussions. At this point you will begin to get a feel of the dynamics of the bread business. Conduct this discussion with at least 3 or 4 bakeries within a realistic radius and then objectively analyze the similarities and the divergences. 4. Search for a reasonable bakery that has really good products. They may not be located within your vicinity but if they have reasonably good products which will be hot in demand then you could be in business. Typically, every bakery will like to make market inroads into areas where its products are not yet sold. All they need is an assurance that there is potential for growth and they will make some sacrifices with the understanding that with an increase in volume of production profits will equally increase thus absorbing the incidental costs arising out of deliveries. It is indeed a win-win situation and every bakery will jump at it if you provide him with the required impetus. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by xpresseeve: 9:45am On Oct 01, 2019 |
ONNYX: Pls kom and kontinu |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 1:29pm On Oct 01, 2019 |
STEP 3 At this point you are almost ready to start. So you having chosen your preferred bread size, and the brand, your next activity is to conduct a practical acceptability survey. This translates to the fact that you will invest a little money just to justify your previous research results. Approach the preferred bakery and buy a limited quantity of the bread; I will suggest that you consider between 10 - 20 dozens. Do note however that this is a trial and may or may not yield returns. But I assure you that if you conducted your theoretical survey as guided in step 1 and 2 then your response will be quite good. Your prospective customers (retailers) will offer you some resistance initially. Please do not feel bad or dejected on this account as their rejection or resistance is normal and predicated on prior experience. Also, do not only seek out big outlets who have very large traffic as they usually as a rule are quite condescending and may discourage you seriously. The smaller outlets are you better bet. Another way of converting them is to ensure that you supply them without seeking immediate payment. Inform them that you are willing to take the money after they have finished selling. This usually works for the majority as you have absolved them of all risks. Please remember to drop your phone number and insist that they either store it in their phones or at the very least they should write it out boldly somewhere visible. This is very important because the number on the bread packaging will be the company’s hot-line and you do not want them calling the company directly at least until you have territorial exclusivity or sole rights to that area. Within 2 -3 days you will begin to attract responses. If you chose the product well then the response will be superb. If for any reason the results are negative then you have to go back to the drawing board. Your product choice vis-a-vis your market (territory) have a disconnect. You would need to repeat the survey and this time pay more attention to details relating to the demographics and the preferred product. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 9:19am On Oct 03, 2019 |
Bear with me. I will update soon. Too much to do and so little time. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by Kamkamdd: 5:17pm On Oct 03, 2019 |
Very nice biz idae. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 12:00pm On Oct 04, 2019 |
So, here we are. We have discovered a good product. It appears to hold some promise. What is the next step? |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 12:08pm On Oct 04, 2019 |
The next step involves you expanding your trials. All you need to do here is to increase the number of loaves purchase and also expand in terms of the number of outlets. I assure you that the response/outcome will be faster this time than previously. This is how you grow the business steadily and yet surely into a consistent income stream. The beauty of this model is that when there is acceptance of your product in the market place, your income stream only increases with every passing day in so far as you are also consistent in supplying and constant in your expansion efforts. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 12:14pm On Oct 04, 2019 |
One last yet very important item you need to tackle is exclusivity. What this means is that you must negotiate hard with the bread producers and insist on getting them to avail you territorial exclusivity rights. This essentially requires that you should be accorded some monopoly status that enables you be the only one selling the product in your area even if it is for a specific mutually agreed upon time frame. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 1:45pm On Oct 04, 2019 |
In order to bring the analysis to an end, I will be more specific and will address the details of commencement with an outlined strategy that has been tested and proven. I saw this very strategic model in action and it was developed by a young (then unemployed) graduate residing in Lagos who commenced bread distribution late last year (precisely September 2018) and today is doing very well by whatever standard you may use in appraising his efforts and attendant results. I will describe it here in detail so that those who can connect with this model may wish to replicate it in their immediate environment with a few tweaks and modifications that will reflect their own local peculiarities and unique identity. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 2:18pm On Oct 04, 2019 |
If you have the fortune of living in or around a very densely populated area in Lagos, then your best bet is to commence the bread sales distributorship with a product offering that is within the 50.00 – 100.00 recommended retail price tag. You will be amazed at how fast this business can and will grow. All you need to do is follow the above outlined steps. |
| Re: BREAD DISTRIBUTION - A QUIET, UNTAPPED GOLDMINE; THE MYTHS & THE FACTS UNVEILED by ONNYX: 2:23pm On Oct 04, 2019 |
In this particular choice however, your emphasis will be in converting the operators of Aboki kiosks and small time provision shops. The understanding is that many artisans and children patronize these outlets and are always on the lookout for the cheap stuff that can be found within this price range. |
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