LIFE DURING AND AFTER
COVID-19

LIFE DURING AND AFTER COVID-19

AVAILABILITY, AFFORDABILITY, BUSINESS AND VALUE CHAIN REENGINEERING

Covid-19 has changed the consumer landscape significantly, and as a result, many businesses are confronted with decisions on how to reposition products to the consumer. Three elements of repositioning, namely necessity, availability and affordability are high on the agenda.

WHAT CAN BE DONE FROM A PRIVATE SECTOR PERSPECTIVE TO ADDRESS AFFORDABILITY AND AVAILABILITY?

1. Rethink necessity (What will my customer really need and why?)

2. Rethink availability (Where and how will my customer buy?)

3. Rethink affordability (What can my customer afford?)

  1. Rethink necessity (What will my customer really need and why?)

  2. Rethink availability (Where and how will my customer buy?)

  3. Rethink affordability (What can my customer afford?)

RETHINK NECESSITY (WHAT WILL MY CUSTOMER REALLY NEED AND WHY?)

A necessity yesterday, is not a necessity tomorrow. Food and beverage suppliers have to go back to basics – rethink product portfolio and positioning. Who is my customer and what do they really need? It is likely to be the same person who bought your product in the past, but they think and buy very differently.

RETHINK AVAILABILITY (WHERE AND
HOW WILL MY CUSTOMER BUY?)

Two key parts of delivery are supply and route to market.

Firstly, in a number of instances long and complex import supply chains were severely disrupted during the various Covid-19 related lockdown events. The value of local sourcing and simplified business continuity planning are therefore redefined through this event, whether it be from a cost, sustainability, affordability or a business continuity perspective – local sourcing has gained renewed respect and value.

Secondly, route to market has to be redefined. Due to financial pressures, consumers have less money to pay for transport and are forced to buy less product at a time. Many consumers, who previously bought at shopping malls or retail shops some distance away from their homes, may (or will) now have to buy from spaza shops or street vendors who are closer and more affordable. Getting the products to those street vendors, or rural and township depots and shops, in an affordable way, will be crucial. It is time to seriously redesign planning and route-to-market functions within your business. In this instance, many lessons can be learned from African markets where these routes to markets represent the majority of product and economic flows. Quick and effective assessment of aspects such as storage and processing capacities, utilisation, gross margin and risk distribution as well as demand visibility are key issues to address in such value chains.

SOUTHERN AFRICA POINTERS

SOUTH AFRICAN HOUSEHOLD SIZE, PROVINCE, URBAN, RURAL

What was affordable yesterday, will not be affordable tomorrow. Along with necessity, affordability will have to be redefined implying that products have to be redesigned and value chains reengineered to ensure that these products can be produced and delivered to consumers, BUT in a more affordable and sustainable manner. This holds for any consumer product, whether it be a bag of mealie meal, bread, a packet of sugar, cooking oil or even pet food.