In the current retail environment, food manufacturers often face an existing challenge: the notable presence of large retailers and multinational corporations that hold a significant share of market influence.
These power giants, with their indomitable appetite for bigger margins, are putting firm pressure on family producers. The result is that everything is in function of being as cheap as possible, making product quality and authenticity less important, necessitating higher investments, to which are added rising energy and personnel costs and the demands of big retail. The direct result of this is smaller to negative profit margins and this often without long-term agreements between both parties.
The harsh reality is that in the relentless battle for the lowest price, these small operators risk losing out. At the same time, we are seeing a trend of large food distributors joining forces. But is this really a boon for manufacturers and retailers to reduce their costs, or is it just a strategy of the big ones to maximize their profits? In this complex playing field, KairosFood introduces itself as a potential game-changer, with the ambition to return manufacturers and retailers to their rightful place in the market.
Interested in our risk-free approach to sell more?
Book a personal interview with one of our KairosFood success managers
A forced relationship with major retailers
Kurt Mortier had as a producer with Creative Spreads, a company that produced savory spreads based on meat, fish, and vegetables. As the company grew steadily, exported abroad, and invested heavily in further growth, Kurt became increasingly aware of the pressures exerted by large retailers.
The invisible cost of large scale
The relationship with large retailers turned out not to be as lucrative as it seemed at first glance. Despite the large sales they generated, they also brought enormous costs. Significant investment was required in terms of personnel, resources and logistics to meet the demands of these retailers. Moreover, frequent price negotiations led to constant price pressure, completely eroding profit margins.
The 80/20 rule: An all-important insight
It was during an in-depth review of the business model that Kurt and his team began to see the 80/20 rule in practice. Although the major retailers generated a significant 80% of sales, they generated only 20% of profits. The last 20% of sales, from smaller customers, provided 80% of total profits. The smaller customers, often even regarded as a ballast standing in the way of growth, provided the profitability of the business.
Pursuing growth against the rational
Kurt came to a crucial realization, which led to a profound choice. He made a conscious decision to quit major retailers, reduce production lines and reduce his debt, which meant a significant shrinkage for his company. He moved away from the race for the largest market share possible and focused on what they did best: working with the smaller profitable customers. This emphasis on independence and autonomy allowed them to regain control of their business strategy. Upon further researching the challenges of the independent retailer, Kurt realized that he was not the only manufacturer experiencing these challenges and that food retailers also face similar problems.
KairosFood: Together, grow your own way!
This inspired Kurt to take on a new role: that of facilitator. With his platform KairosFood, he wants to inspire, support and directly connect independent retailers and producers. So that they can exercise a collective power, without losing themselves in the exhausting battle with big players. A battle that cannot be won anyway.
Under the motto "Together, grow your own way! ", KairosFood wants to help entrepreneurs choose their own path and grow in a healthy way, thus making a difference together. "You shouldn't participate in a battle you can't win. Especially not when there is another path that lets you keep your individuality and stay in control."
By inspiring, guiding and connecting retailers and producers, KairosFood aims to make them more profitable and independent, based on Kurt Mortier's experience and willpower. Want to stay up to date on our KairosFood initiatives?
Interested in our risk-free approach to sell more?
Book a personal interview with one of our KairosFood success managers