eBusiness Weekly
Business Writer
The challenging operating environment has meant businesses have had to be innovative and come up with products that meet the needs and pockets of the constrained consumer. Business models have had to be changed while new products have been introduced as producers and manufacturers come up with lower-priced products targeted at the low income earners.
One such company that has had to think outside the box and come up with products that meet the consumers’ pockets is Nestle Zimbabwe, which has since introduced sachet products that are not only convenient, but can be afforded by low income earners. In the ghetto such products are called “tsaona” literately translated as “emergency products.”
These are products that are packaged in very small quantities than the usual packs. It’s not a surprise to find 1kg packets of maize meal, or 100 grammes packets of sugar on sale.
This is the same concept that Nestle has since adopted as it tries to accommodate all levels of income earners into the consumption of its products. The smaller and lower-priced line products retailing at $0,40 cents comprise Cremora 40g, Cerevita 30g, Cerevita Flakes with Milk 45g Everyday Milky Tea 25g.
At the launch of the “sachet products” at the start of the second quarter, Nestle Zimbabwe managing director Ben Ndiaye, said his company had realised that most Zimbabweans could barely afford its products, leading to the launch of the new lower-priced line. But as much as these products are affordable and convenient to the constrained consumer, Nestle will still look for a return for its investment as pointed out by Ndiaye at the launch of the products.
“The sachet products are anticipated to contribute to the group’s bottom-line going forward, following a $2 million equipment upgrade to facilitate for the new lines, Ndiaye said.
“This year, we want the new lines to be 10 percent of the total volume and also contribute 10 percent to our revenue,” he said back in April. But how has this fared since the launch?
Responding to questions by Business Weekly, Ndiaye said the company was seeing a growing acceptance of the product by the consumers.
“We are very proud of the performance of our products in the market so far. The preference of our affordable range continues to grow and we are excited to continue producing and enhancing their market reach.”
At the launch of the products, Ndiaye also pointed out that the Nestle was targeting the regional market with these products.
Exports to Zambia and Malawi have already started with Ndiaye saying the group had recorded significant growth in that space.
“In general, versus last year, our exports have increased by 50 percent and we are putting all necessary efforts to make these exports more prominent.
“We are also continuing to work with relevant stakeholders in developing our export market thus playing our role in bringing in foreign currency and contributing towards a positive balance of payment,” he said.
Apart from meeting the needs of the low income earners, Ndiaye said the products were also making a positive impact on the SME sector.
“The introduction of these products has also helped create business linkages and enhance impact on SMEs.
“We appointed new distributors to sell these products as well as a local merchandising company and as a result helped create employment in this sector.”
