Tarlton Beetroot Business Plan — Customer and Channel Analysis

Fresh produce market agents, retail programmes and processors, and what each channel pays and demands.

Section 9 of 37

Customer and Channel Analysis

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Four buyer types with different economics, different payment behaviour and different switching costs — and the plan depends on winning the hardest one.

Table 12 Customer segment assessment

Segment

Buying behaviour

Net R/kg

Payment days

What it takes to win them

Formal retail, private label

Seasonal supply agreement, audited specification

9.80

32

GLOBALG.A.P., consistent weekly volume, a category buyer relationship and a successful trial. Two to three years of work.

Municipal market agents

Daily auction, no relationship required

6.30

14

A market agent mandate and consignments that grade well. Achievable in weeks, which is why Year 1 depends on it.

Informal and township wholesale

Cash at farm gate, bulk pockets

5.20

2

Reliability and a fair price. Low margin but zero receivable risk and no certification requirement.

Processors and juicers

Contracted outgrade volume, delivered

2.40

30

A relationship with a processor. Absorbs Class 2 and outgrade product that would otherwise be waste.

The commercial architecture follows from this table. The informal channel provides immediate cash and requires nothing the Company does not already have, so it is held at 17 to 20 per cent throughout as a stabiliser. The municipal market provides volume absorption without relationship investment, so it carries Year 1 and is then deliberately reduced. The processing channel converts waste into revenue at low margin. The retail channel is where the plan is won or lost.

The customer acquisition funnel for retail

Table 13 Retail channel acquisition funnel, Years 2 to 4

Stage

Target

Expected conversion

Basis

Category buyers identified

12

—

Major chains, regional chains and two wholesale groups operating in Gauteng

Initial engagement meetings

9

75%

Warm introduction through market agents and industry bodies

Supplier assessment initiated

5

56%

Requires certification in progress and a credible volume forecast

Paid trial consignments

3

60%

Small volumes at own cost; the Company must fund the trial

Seasonal supply agreements

2

67%

Two agreements are sufficient to carry the Year 5 retail volume

Two agreements at approximately 470 tonnes each carry the 46 per cent Year 5 retail share. Concentration on two counterparties is itself a risk, addressed as R7 in the risk register.

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