How to get on to shelves in Shoprite, Pick n Pay, Massmart, and Food Lover's stores
- Big retailer supermarkets have various initiatives to get small business on to their shelves, and in front of consumers.
- Shoprite, Food Lover's Market, Pick n Pay, and Massmart told us how South African entrepreneurs can get that opportunity.
- Shoprite is looking to work with more suppliers with smaller annual turnover.
- Food Lover's Market helps list products of small businesses through a programme called the Seed of Change Supplier Development Partnership.
- The Pick n Pay Enterprise Supplier Development initiative brings local products to customers.
- For more stories go to www.BusinessInsider.co.za.
There are various ways for small business to get their goods on to the shelves of the largest retailers in the country, through supplier development and enterprise development programmes with slightly different approaches and objectives – but an open-door policy for entrepreneurs in common.
Shoprite Holdings, Food Lover's Market, Pick n Pay, and Massmart told us what small businesses need to do – and consider – to get their products sold in big supermarkets.
Competitive pricing and making sure your product is a fit for the retailer you target is key, they agree.
Here's what you should know about getting your products on the shelves of some of SA's biggest retailers.
Shoprite Holdings has almost 20,000 suppliers, from micro to national. The retailer also helps small suppliers grow their businesses by connecting them to investors.
Shoprite is always looking to expand its supply network to offer customers a variety of products. How to apply:
- Explain in detail what your product and your business is.
- If your business looks good, buyers will review it in more detail and contact you if you are a good fit.
- If accepted and you meet all the listing requirements, you're well on your way to becoming a supplier.
The scale of your business will determine just where you fit in.
If your business generates a turnover of R10 million or less, then you are considered an Exempted Micro Enterprise or micro supplier, and should enlist as such.
Businesses that have turnover of R10 million to R50 million are considered small and medium suppliers or Qualifying Small Enterprises and should enlist under that category.
Large suppliers are those that have a turnover of over R50 million and have a national or regional footprint.
Pricing, minimum unit order, and payment terms vary depending on factors such as market forces, product volumes supplied, whether the SMME delivers directly to stores or via one of the group's distribution centres.
Supplier Development Investment Fund
Shoprite has a supplier development investment fund to further develop top-performing suppliers by providing support, growth capital, and access to market.
The food retailer works with Thuthuka Nathi Ventures, a black-owned independent venture and growth capital investment firm that focuses on innovation-driven ventures.
Thuthuka Nathi Ventures' investment aims to:
- Accelerate the growth of the investee
- Drive transformation in an all-inclusive manner
- Contribute towards employment
Click here for details.
Food Lover's Market
At Food Lover's Market, small suppliers can simply approach the food retailer's buyers directly. The business is also open to working with suppliers at community level.
Additionally, the food retailer launched a programme called the Seeds of Change Supplier Development Partnership in January – but applications closed in February 14 for this year.
Entrepreneurs are given the opportunity to showcase their product and stand a chance to work with a business coach to help them scale up their operation and possibly become one of the food retailer's suppliers.
Interested candidates simply need to fill in a form and should meet these requirements:
- Your business needs to be trading already
- The product or service you provide needs to be used or sold in the Food Lover's Market environment.
This year, 839 interested businesses applied online and the top 20 attended a workshop, which gave them a taste of what's required to become part of the supplier network.
The workshop is followed by a four-day bootcamp and on the final day entrepreneurs pitched their businesses to a senior panel of Food Lover's Market executives to become suppliers to the business.
The Village Market Africa, a social enterprise established out of a need to address the decreasing bee populations while combating rural poverty through bee initiatives in remote African villages won the challenge this year.
Entrepreneurs that become direct suppliers of the food retailer dictate the minimum quantity order to Food Lover's Market, while pricing is market related.
"We understand that it's tough for small businesses, so we work with small suppliers to ensure constraints in working capital and cash flow is not created by Food Lover's Market and if we can assist, we do," said senior executive for marketing and buying, Travis Coppin.
Pick n Pay
Pick n Pay says it is always looking for more small suppliers who have innovative and unique offerings.
ESD, which also has an app, helps small suppliers become part of the economy by providing them with the tools and training required to become successful and sustainable suppliers to the retail market.
The Pick n Pay small business incubator aims to:
- Increase local procurement by accelerating small suppliers into the supply chain
- Improve and develop great quality and range of local products at competitive prices
- Provide small producers a national platform by increasing access to national and regional markets.
Small business owners can also download the Supplier's Toolkit which has tons of business advice.
In terms of pricing, Pick n Pay works closely with suppliers to price goods competitively to ensure affordability.
"We do not impose any strict minimum. We work with small suppliers to understand customer demand, balancing that with their production capacity," said spokesperson for Pick n Pay Tamra Veley.
"Small suppliers can deliver directly to stores or work with our third-party logistics partners to ensure products are delivered efficiently and conveniently," Veley said.
To get your products on the shelves of Massmart supermarkets such as Makro, Game, and Builders Warehouse, you can approach the retailer directly.
The most important consideration is that there must be customer demand for the product and it must be a product that the retailer would typically sell in its stores.
Once that's out the way, the product needs to be competitively priced, and it must comply with regulatory requirements that govern quality and safety of the product.
According to the company spokesperson, "this includes regulations about minimum product standards, product labelling and packaging. It is also important to have actual product versus an idea for product."
Product pricing should be similar to and preferably better than other similar products sold by competitors – after markup.
In terms of minimum unit orders, Massmart typically starts small (two to three stores) with high potential small suppliers with the aim of growing their supply over time.
The faster the product sells or the higher the demand for the product the higher the number of units that will be ordered.
In terms of payments, Massmart generally provides preferential payment terms to small suppliers who are often challenged by cash flow constraints – and focuses on ensuring payment as soon as possible after receiving delivery.
A key consideration for small businesses, however, is to ensure that their notes and invoicing are correct, and that the quantity of their delivered product matches back to the delivery note and the invoice.
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