“If it was easy, everybody would do it!”
How a market-leading position in Russia helps Danish pet food producer Aller Petfood to penetrate new and unexplored pet food markets.
Aller Petfood is something as seldom as:
- A Danish company with the majority of the organisation based in Russia – 500 employees.
- The leading player in the Russian private label pet food market with a market share of 60%.
In this article, Henriette Bylling shares some insights about what it takes to become and maintain a leading position in a market like the Russian, and how the company benefits from the knowledge obtained during the last 14 years.
What makes a Danish pet food producer go all in on the Russian market?
“Haha – a Chinese business connection of mine actually finds me to be crazy in the cool way because I never try the easy way. I thrive on a challenge,” Henriette laughs and continues: “The opportunities in the Russian market are far greater than in little Denmark and also greater that in a saturated European pet food market. And yes, of course is has not been easy. But if it was easy then everybody would be there, right?”
10-11 years ago, Aller Petfood experienced a lot of turbulence as the company was starting up and implementing the processes. Slowly and gradually a top-tuned organisation was built, and market shares conquered.
Henriette underlines the importance of team as THE critical success factor: “We have a team of experts and the majority of our middle managers have been with us for 6-10 years. So, we are close-knit company. Next to that we have focus on structure and we have descriptions for everything we do. This systematisation ensures the quality in everything we do.”
In combination Aller Petfood’s organisation is extremely resistant and moreover, it is significantly different from Russian companies. In this case, it has proven to be the road to success.
Henriette & her Russian sales team
Why are you the leading player in the Russian private label pet food market?
“Because we do things differently and we do them better. Our product quality is supreme and stable. Our service package is better than our competitors’. We offer quality logistics, quality products and then pick’n’pack (mixed pallets) to all of our partners who do not have central distribution centres. The pick’n’pack option is exclusively offered by us – none of our competitors do this.”
Henriette explains that Aller Petfood wants to be more than just a producer: they want to be a partner. This approach is actually very uncommon in the Russian private label pet food industry. One way that Aller Petfood underlines to focus on partnerships is to do promotions together with the private label partners. And this approach is indeed very untraditional because normally a supplier would never interfere in the customer’s marketing activities.
“However, we often see that there’s very little focus on marketing and we know that the Russian consumer shops for discounts. So, instead of keeping this knowledge to ourselves, we share it with our partners. Another thing is that traditionally the purchaser in a retail chain responsible for pet food is also responsible for toilet paper and fabric softener. Why this is the typical combination, I have no idea”, Henriette smiles and continues: “Another fact is that there’s a high rotation on the purchasers because the retail chains do not want the purchasers to build actual relationships with the pet food supplier. The consequence is that the purchaser has very little knowledge about the product. That’s why we are open about sharing our knowledge about product, industry and consumers. And as I started out by saying: this is uncommon for the industry.”
How does your brand distributors and brand business benefit from your Russian private label experience?
“Actually, our Russian experience gives us a lot of street credit!” Henriette laughs a little bit and moves on to explain that you earn respect when you run a business in Russia as a foreigner. Because no matter where you’re from in the world, everybody knows that it is difficult to run a foreign business in Russia.
“What we see now is that our experience from the last 14 years in an unpredictable Russian market – with success – enables us to advise our new partners. Both strategically and practically. When you decide to enter a new and immature market the fact is that many of the challenges and obstacles are the same regardless if the market is Russia or Kenya, for instance.”
Henriette explains that there is a huge advantage in having been there yourself when you start up partnerships with new brand distributors. Especially because it is Aller Petfood’s strategy to penetrate immature markets and look for opportunities here. Thus, the new partners are always in need of support due to e.g. bureaucratic and logistic challenges, restrictive authories or special customer segments: “Our partners feel understood and helped because we can truly say that we do understand. And that we have ideas for how to move forward. It creates credibility and trust and the foundation for an even stronger unity is built.”
What is your best piece of advice to companies that want to try it out in unpredictable markets?
Henriette starts out by underlining that the strength of Aller Petfood is the organisation’s ability to adapt while maintaining the Danish approach. “To create a success in Russia we’ve had to develop a state-of-the-art logistics organisation. We have been able to do this because I have a team of ambitious, dedicated and loyal people who are not afraid of doing things differently. And they have been ready to adapt to our Danish leadership approach.” Henriette stops and thinks for a second: “My best piece of advice is that you source locally and that you exploit the best features of the culture you come from. Make it your strength that you are able to do something different than the local competitors for the benefit of the market and for the end consumers.”
Did you enjoy the article and want to learn more?
If you want to find out more about the Aller Petfood private label business, please click here
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