Systematic approach and innovative solutions are essential for business success
Systematic approach and innovative solutions
are essential for business success
Thinking about Tomorrow
But it is not so easy! It comes as no surprise that businesses attach great importance to the quality economic planning. In other words, immediate gains have ceased to be the top priority of businessmen who want to come to the market for the long haul. They are more interested in forecasting and strategic planning; they want to know what future holds for them. What horizons will they reach? What will be the driving force of their income? Where will they find new customers? What deals can they offer them?
These are not just idle questions. The recent price havoc stemming from the temporary difficulties at the foreign currency market has demonstrated the ability of some companies to meet any challenges and lay the groundwork for the future as well as complete helplessness of others that panic at any speculation and are ready to pass all the problems (both real and imaginary ones) on to consumers.
In these difficult times the difference between the one and the other is particularly evident. And the customer is the first one to notice it. If the price for the same product in different stores varies greatly, such a disproportion cannot be rationally explained and no economic crisis can be blamed for that. Therefore the Economy Ministry is obliged to interfere and introduce price adjustments for certain products and commodities.
Indeed, if one kilo of pears in a local store costs Br31,000 while the same sort of pears at Evroopt is Br11,000 per kilo, no currency risks can justify this situation. If one tries to sell a kilo of peaches for Br27,000 while you can buy them
they say a good economist can validate anything. Particularly, if it is something in the field of commerce – any sell and retail prices, trade increments, income, profitability, expenses, etc. today when the state has been loosening its grip on prices, the tasks of those responsible for drafting economic strategies of companies may seem to become easier – all they need to do is to put any price tags taking into consideration only the consumer ability to pay for the merchandise.
for Br10,000 or 11,000 at Evroopt the crisis has nothing to do with that. It is simply that some retailers are too greedy and ready to pass all their problems on to customers while other retailers, like Evrotorg (Evroopt chain stores), set an example of the socially-responsible business looking for smart economic solutions.
I have mentioned Evroopt for a reason. Not only because as a customer I prefer to do my grocery shopping there, but also because there are several objective indicators that make me have a closer look at this company.
According to a recent study conducted by the Sociology Institute of the National Academy of Sciences, Evroopt prices are 34.2% lower than those of their competitors!
Customers are well aware of that. In particular, a public survey conducted by the same institute has shown that 85.2% of respondents living in towns where Evroopt stores are present stated that Evroopt prices for some products are lower than in other stores. The most drastic discrepancies were noted in Gomel and Mogilev. According to sociologists, 98.7% of Gomel residents and 98% of Mogilev dwellers believe that Evroopt offers the lowest prices.
These figures speak for themselves. They testify to the fact that the Belarusian business sector has true examples of socially-responsible behavior. Evrotorg does not want to shift the burden of constantly growing prices, especially for imported goods, on their customers. The declining purchasing power should be offset not only through the government effort (adjustments of salaries, pensions, benefits, allowances and price adjustments for certain goods), but also by the private sector voluntarily agreeing to cut some of its profits.
This summer, for instance, Evroopt stores were selling some staple goods (dairy products, frankfurters, sausages, cheese) without sales markups! In the most difficult for most of us times when we all felt the impact of the growing prices Evrotorg was selling these goods virtually for free, covering all the transportation and servicing expenses.
On the other hand, it is crystal clear that private businesses cannot afford big losses. Therefore Evroopt’s low prices are not an act of charity, but careful calculation and smart economic strategy. As a matter of fact the path this company has chosen to follow is a well-known approach in the world of economics. But so far no other retailer in Belarus has applied it on such a scale and so consistently.
First of all, high turnover of the chain store allows placing bigger orders which means better delivery conditions and lower prices.
Secondly, the company’s logistics center (the largest in Belarus) and a well-thought storage and delivery system help reduce expenses and ensure that products are fresh and of high quality.
Thirdly, Evroopt buys seasonal imports, for instance, fruits and vegetables that do not grow in Belarus, directly from suppliers bypassing all intermediaries, hence keeping the prices as low as possible.
And finally Evroopt has been actively developing a line of its own brand products. These goods are cheaper by default than the competitors’ products as they go from the production facility directly to retail outlets. There is one more thing. I think everyone is familiar with the TV commercials of OGGO green peas and sweet corn or Babushkina Kukhnya pelmeni which are Evroopt brands. Every time they appear on TV, radio or in magazines Evroopt has to pay. And this money is supposed to be included into the price of a product.
Evroopt does not do that. It is clear why Evroopt prices are lower than those of its competitors by one third. But many Evroopt products are twice and trice as cheap as products sold in other supermarkets! Especially it is true for exotic fruits that do not grow in Belarus and have to be imported. So why peaches, nectarines, grapes and pears from warm countries are much cheaper in Evroopt stores? The answer is simple – thanks to the innovation approaches!
In One Bundle with Producer
When travelling in Italy’s picturesque Apulia province with its capital city Bari a Belarusian tourist is likely to be surprised by not only the generous Italian sun, delicious pasta and lovely sceneries, but also when in the midst of a peach orchard hidden by the brunches of peach trees bended under the weight of ripe fruit he will see a sign featuring a familiar blue and yellow logo with the word Evroopt written in Cyrillic! Some more kilometers away he will see a vineyard and a nectarine orchard with the same sign…
Can it be true that the Italians sold the Belarusian company their best farm lands? Can it be true that Evroopt cultivates here the fruits that the Belarusians like so much?
As a matter of fact, the Belarusian company has not bought the farmlands, orchards and vineyards. Nor will the Italians ever sell them. They are too proud of their natural wealth and every new generation preserves the traditions of their ancestors by cultivating high-quality peaches, nectarines and grapes. However the harvest in these lands does belong to Evroopt!
According to Evrotorg purchasing officer Daniel Musabyemungu, such cooperation with the Italian fruit producers allows to significantly cut the prices for fruit as the plantation owners do not have to look for customers and therefore they are ready to sell the fruits at a lower price. It goes without saying that this approach suits the Belarusians just fine.
By the way, every plantation, be it a nectarine or peach orchard, or a vineyard boasts a European quality certificate. Their framed copies decorate specially designated boards in every vineyard and orchard bearing the fruit for Evroopt. They certify that the whole cultivation process starting from tree planting, fertilizing, watering to harvesting is in conformity with the EU standards. By the way, this is a matter of principle for Evrotorg – Belarusian customers have to know for sure that the quality of fruits sold by Evroopt is truly European, says Daniel Musabyemungu.
Mr Musabyemungu has personally visited the plantation several times this year. The Belarusian party has been vigorously controlling all the stages of fruit production from shoot planting to harvesting. But the daily supervision of the cultivation process of peaches, nectarines and grapes as well as their harvesting and shipment to Belarus is executed by Evroopt’s strategic partner in Italy – Frutta Logistica slr.
By the way, fruit pickers work from 5am to 11am, not only because it is very difficult to work in the heat but also because the fruits become very vulnerable under the sunlight and easy to be damaged during transportation, Frutta Logistica slr Deputy Director Sebastiano Frazzetto says. Sebastiano is a great expert in everything what concerns this fertile land. He has a PHD in agriculture and a farm production economist diploma. I could not find a better guide to the Italian orchards.
Nectarines are stacked in huge 15- to 20-liter buckets first and then they are transferred into plastic cases that can hold from 200 to 250kg of fruit. A tractor transports the cases from the orchard to the road and loads them to a big truck. At 11am sharp the fruit pickers (residents from the neighboring villages) leave. Their work for the day is done while we are following the truck with nectarines whose journey to the Belarusian supermarkets is only beginning.
At the packaging factory the fruits are transferred to refrigerating units. Before being dispatched to the packaging line, nectarines and peaches have to be cooled down. It may be 38°C outside but here it is only 3°C.
First, fruits are washed with delicate brushes, and then dried under powerful ventilators.
At this stage all fruit importers to Russia, Belarus or Ukraine wax the fruits in order to better preserve them during transportation. The fact that waxed fruit does not breathe and that it is impossible to wash away the coating does not bother them much. The main thing for them is to preserve nectarines and peaches for as long as possible. Evroopt has a completely different approach. The company believes that Belarusian customers have the right to get fresh fruits that are not affected by the processing. Therefore unlike other importers in the CIS, Evroopt does not want its fruits to be waxed. It is thanks
to its elaborate logistics system that the company can guarantee the ultimate freshness of the fruit. Therefore the fruits sold at Evroopt supermarkets are marked with the “Fresh” label guaranteeing their high quality.
But I digress; let’s get back to nectarines. After drying up they are manually sorted out to get rid of the substandard ones. Then nectarines are placed on special trays and are sent to a special unit where with the help of laser equipment they are weighted and measured in diameter. Depending on these parameters nectarines are divided into seven categories and are sent to different packaging lines where they are inspected once again and hand-packed into boxes.
This cutting-edge packaging line operates so quickly that it takes less than 10 minutes for every nectarine to get from the refrigerator to the box.
The boxes, in turn, are put on europallets and a worker wearing a T-shirt with an Evroopt logo secures them with a special tape, attaches a consignment note having Minsk, Belarus as the final destination and supervises the loading into a reefer truck with a temperature of 3°C.
Three days later this very consignment of nectarines arrives in Minsk and six hours later Evrotorg trucks deliver the fruits to Evroopt supermarkets all around Belarus and customers are able to enjoy the high-quality Italian products at the most competitive prices.
By the way, my visit to the vineyards was no less impressive. Every summer day vineyard workers go alone the long rows of plants inspecting them and cutting off the excess foliage that blocks the sun as well as removing substandard grapes. According to Sebastiano Frazzetto, a vineyard should not waste its energy on unattractive grapes as customers should be treated to the best fruits. Since the grape is a very delicate fruit the packaging is carried out directly in the vineyard. The grapes are put in boxes, the boxes go into reefer trucks that set off to the Evroopt retail chain in Minsk.
To sum up, it takes just three or four days maximum for nectarines or grapes to get from orchards to a customer’s cart somewhere in Osipovichi, Pinsk or Minsk (by the way, they have to pass through seven or eight frontiers on the way!).
According to Evrotorg experts, at least 80 reefer trucks with peaches and nectarines arrived in Belarus in the last two months. The delivery of these fruits is still in progress while the grape season is gathering momentum.
Soon Belarus will get its share of the kiwi harvest from Latina province and a little bit later the delivery of oranges and tangerines from Cecily and Calabria will start. As for the prices… There is no need to be a foreteller to determine that a consumer will choose Evroopt supermarkets as those who can use their competitive advantages always win.