Project 8 - GTM Strategy Global Food Manufacturer (New Market Entry)
Intro:
Go-to-Market Strategy project for a fresh food (mostly chilled) manufacturing company. The client was looking for ways to expand its business globally, as the market in its home country (Korea) had matured and become satiated. The client is one of the top 3 fresh food manufacturers in the home country, with a competitive portfolio mostly in the tofu, noodles, and kimchi segments. Along with the recent trends of expanding its portfolio of processed foods, including ready meals and HMR, the client also wanted to promote its brand of being more 'healthy', all the while leveraging the origin of the company, thus promoting the K-food trend. K-Food continues to grow in popularity across the world, and begins to become widely acknowledged as much as Japanese or Chinese food in select markets. Therefore, in order to accelerate GTM as much as possible, the project entailed first figuring out the most attractive markets to target based on the client's food portfolio, and then to assess the competitive landscape to develop an appropriate strategy to position its food in the market, especially in comparison with the local players, and also in regards to developing relevant partnership models with local retailers.
As is expected with consumer product projects, it was difficult to develop a sexy storyline to deliver to the CEO to answer the most basic questions. I mean, it is relatively easy to build up a logical and coherent argument to why we should enter a particular market, whether it be due to the market size, or ease of entry, but generally these projects require a more 'emotional' pitch as well to convince the clients that a previously ignored market could be the most lucrative if tackled correctly.
Duration/Members/W&L Balance:
This project lasted for around 10 weeks, although it had originally been scheduled for 7. A three whole weeks was added, mostly because of the fact that the scope of the project was way too wide to begin with: the client's had requested a full in-depth GTM strategy of 7 different short-listed countries, from calculating the market size, down to the minutiae of implementing the proper marketing techniques to target the appropriate retailers to sell their products. That would mean we would have 1 week per country; this simply was not a task that was possible to the level of detail that the client requested; we spent a good portion of the early stages simply arguing over the scope. Regardless, the project was staffed with 1 PL + 4 consultants (of which 1 was a unbilled new-joiner, so 3 consultants in regards to up-to-speed working capacity), with me being the most senior of the team, so I had to commit to the 'anchor' role as well.
To be honest, this project was my worst project in terms of W&L balance over the 3+ years I spent in consulting. Ended up working 8 days on the weekends (basically every weekend, sometimes both sat+sunday), and averaged probably 110 hrs/week over the course of the entire project. (finished work on 3~4 am on any given day). The epitome of this W&L balance occurred before the middle examination, where the team spent 50 hrs working consecutively with only a 3 hr break in between. I had not thought it to be humanly possible, but we had somehow pulled it off. However, I vowed never again to work in such a manner again, meaning I'll need to do a better job navigating the firm to get matched with a better manager and practice area. These type of hellish projects happen sooner or later in a consultant's career, but I guess it does feel consoling to know you've hit rock bottom in regards to the most arduous project in your life so far.
Tofu Manufacturer Benchmarking
Along with following the health trends and diversity of dietary preferences, tofu was an interesting food item to explore, as it is consumed in so many different ways across Western and Eastern cultures, that it was difficult to pinpoint the exact category of fresh food, produce that tofu can belong to in any given supermarket.
Examples of newer ideas surrounding tofu in Europe include: The Tofoo Company (UK), Cauldron (DEU), etc.
Thoughts on Industry:
Fresh Food and retail is a sector that requires a lot of industry experience, especially with regards to how to interpret emerging new trends, and understand the embedded human habits in grocery shopping, and the growth of a particular cuisine in a given culture and market. In particular, it seems really difficult to really understand the consumer sentiment, and actual trends without and on-site inspection and visit, but due to the pandemic situation and time constraints, we were not able to travel and we had wished. Many different types of sources are used to gather information on changing market views, and we had access to our global offices to help conduct focus group interviews, as well as accessing consumer surveys conducted by local firms in each market.
In addition, we had to understand the perspective of the retailer, especially in regards to how they position and categorize their food categories, and we got to understand that such categorization methods differs per country, and also by retailer if probed even further. For example, tofu as a food would be sold in the alternative to meats/vegan category in the UK, whereas it may be positioned under the vegetable and poultry section within Southeast Asia. This is done all in consideration of the consumer journey and their grocery shopping needs.
Only then are we able to understand how to position our food, and whether that category as a whole is poised to grow in the long term future. We also had to verify whether the existing K-food trend would still be a lasting cuisine, and we were not sure how Korean food would be viewed in the long term: when compared to its Asian counterparts, Japanese cuisine is considered more of a luxury, with its sushi and omakase restaurants, whereas Chinese food is considered more as an accessible street food: breaking down how such an image was implanted in the views of the typical consumer can really help project our views on differing cuisines across the world. For example, generally the trajectory of a food item entering the premises of a household through retail entails consumers becoming more aware and cognizant of the food through the restaurant industry, which is a firstly propagated through a diaspora of the cultural/ethnic communities first immigrating to the target country, and slowly building up a large enough influence to be then readily accepted by the local people in the market. This gave us a lot of food for thought in crafting a reasonable story to show where the current portfolio of the client was headed, by also analyzing the restaurant scene in the target countries, and availability of similar tasting/looking food items in the market as well.
Chilled vs. Frozen Food Differences
Generally frozen food caters towards more low-income countries, as it provides a greater convenience in regards to storage, and tends to be cheaper (as mostly prepared in bulk).
In comparison, more and more chilled food options, including premium ready-to-eat meals, are starting to replace the frozen food sections in most supermarkets, and propagating a new wave of competition amongst food manufacturers. It’s difficult to produce much variety in chilled food options, as exports become relatively more difficult and the logistical challenges become more pronounced.
Project Details:
The methodology of how we approached this project was relatively straightforward. We first needed to shortlist the target countries, which entailed us coming up with the appropriate standards to compare each country, including both quantitative and qualitative indicators, such as market size, growth, competitiveness, openness to international cuisines, etc. Then we conducted an in-depth analysis of the competition and retail status on the products in strategic categories, and seeing whether there were gaps in the market offerings that the client could fill. Then we assessed the viable brand strategy of entering the market, including whether to partner up as a Private label with retailers, or go through as a MB, alongside understanding the appropriate locations to position the manufacturing facility.
We focused mainly on two continents throughout the project: Europe and Southeast Asia, as the client already had begun operations in the large markets of the U.S. and China. We had filtered a short list of countries to target in each region, and then began to understand the requirements of the retailers and manufacturers in regards to the strategic food categories that the client was interested in, such as tofu and ready meals. Since both of these food required a high degree of refrigeration (chilled, not frozen), and an intricate supply chain network due to the short shelf life, we were able to filter out markets with a low maturity of its modern trade channels (CVS, supermarkets, etc) compared to the traditional grocery market (think wet markets), and those with restrictive regulations in food logistics, especially towards foreign food manufacturers. Every country has different views on health safety regulation for fresh food products, so just making sure that the client was able to accommodate the requirements was another task in itself.
Personal thoughts:
As stated above, this project was the worst I've experienced so far in regards to W&L balance. To be frank, the difficult of the project was not that high, as the problem solving or the analysis was quite straight forward for a GTM case. However, the problem was mostly one of mis-management, and the team did not have sufficient chemistry trying to navigate internal stakeholders at our firm. Unfortunately, the project manager was also staffed on multiple projects, leading to mis-allocation of capacity, and bottlenecks occurring frequently at the leadership level rather than at the working level. Projects in this sector require a lot of debate, and a lot of talk into what makes a more 'attractive' storyline and analysis: as food is a topic that is quite accessible, and because every stakeholder might have a reasonable but different view on every angle of the project, it is difficult to manage expectations, and there is a higher need to align more frequently with the partners and with the champions of the project on the client side as well. The relationship with the client was not the best as well, as unfortunately we had to play down the original views of the client in regards to their priority target markets, as in our view, the attractiveness of their preferred markets could not be substantiated, despite our very best efforts to do so. Nonetheless, that view by itself is value that we provide as consultants: to point out where the client was wrong, and fight back when needed, despite it providing a bitter aftertaste in the actual resolution of the project. More than anything, I'm just glad that this project ended (I actually thought there was risk of bigger conflict towards the end), and at least I got to understand a bit more of my own preferences and work style: I like a more analytical twists to the project, and appreciate more in-depth intricacies in understanding the nuances of a particular industry, rather than trying to formulate a 'fun' story in the very well-known subjects in the consumer goods practice.
Consulting Lingo:
New Business Entry
Growth Strategy
Market Sizing/Segmentation
GTM/RTM (Route-to-Market)
Competitive Landscape
Food Retail/Market Positioning/Brand Strategy