Empowering Small Retailers at Scale
Latin America is an important region for SABMiller’s growth strategy. Small-scale retailers, called “tenderos,” are critical to our business there. These retailers are located close to their customers in environments that are difficult for “big box” stores to serve. They let customers with low and unpredictable incomes, no transportation, and no storage space at home visit frequently, purchasing small quantities when they have the money. Because they know their customers well, they can sometimes let them buy on credit. These retailers account for approximately 40% of SABMiller’s Latin American sales, and more in some markets, like Colombia, where the percentage is closer to 60%.
Our sales organization has always supported small-scale retailers by providing posters and signs, helping them acquire assets like refrigerators, and making modest store upgrades, like painting the outside. But we realized that many of these retailers faced more fundamental barriers. Most have had no formal business training. They have difficulty accessing credit and other financial services. They can be unaware of ordinances and regulations that affect them.
In 2009, the sales team at our subsidiary Industrias La Constancia in El Salvador approached the corporate affairs team asking for help to improve small-scale retailers’ business skills. In 2012, SABMiller Latin America and our subsidiaries in six countries decided to build their efforts out into a regional corporate social investment program linked to the value chain in Colombia, Peru, Ecuador, Panama, Honduras, and El Salvador.
Launched in late 2013, our program, called 4e Path to Progress, provides four phases of training and in-store coaching designed to empower participating retailers as business owners, heads of household, and potential agents of change in their communities. We are also trying to strengthen the enabling environment for participants’ business success by building linkages that enhance their access to financial services and technology. Our initial goal was to reach 40,000 small-scale retailers, but we have scaled that up to nearly 190,000 by 2020.
From my perspective in sales, the 4e program creates business value in two ways. First, organizations with purpose that goes beyond profit are happier, more engaged, and more productive, and I see that playing out in my sales force. They visit their retailers in some cases every week. And when we have sales conventions, we bring 4e retailers who tell us stories about their lives, how their businesses have developed as a result of the program, and the impact it has had on their families and communities.
Second, there is an uplift in sales for the tenderos participating in the program. These retailers are getting the business basics. And beyond the basics, the world of consumer goods is becoming more complex for a company to operate in. Consumers are more demanding, there is huge competition and media clutter. The more sophisticated store owners are, and the stronger your relationships with them, the more you can work together and do more creative things to push your business strategy.
The 4e program was born in Corporate Affairs, but to maximize scale and impact, I see its future being in Sales as well. This will not happen overnight, but we are working to integrate the program on several fronts.
Our sales people, who know these retailers well, already play a critical role already in recruiting them to the program and providing the follow-up that helps keep them there until they graduate. This is just the starting point. We have great talent in our sales force, and I see them getting involved in the provision of training – which in some cases, they already are. We have to create space for this in their daily routines, and we will continue to explore how to make this a reality. It is challenging because productivity is a key performance indicator in sales. Sales people can be measured down to the minute of how they spend their time, so we have to be careful, but in the end I believe carving space for our sales people to engage in the 4e program will actually improve their performance. They will be more engaged, be more productive, and of course be dealing with store owners who are more qualified.
Our Sales Technology team is working on mobile solutions for sales people, distributors, and store owners. 4e has started using technology to train our tenderos. Thus, there is an opportunity for their efforts to converge. There will be a lot of synergy there. Not only are we training them; we are also bringing them the future in the form of digital tools to learn and run their businesses.
And finally, we are working closely with the director of the 4e program to strengthen the teamwork and partnership between Corporate Affairs and Sales, so we will have a bigger chance of scaling up 4e faster and with greater conviction.
We have relied on partnership – especially with FUNDES and the Multilateral Investment Fund of the Inter-American Development Bank – to get us where we are today. And even as we integrate 4e more closely into our core business, we know we will need to partner more to reach our goal of empowering nearly 190,000 small-scale retailers in Latin America by 2020. We know SABMiller is not alone in the importance we place on these retailers. They account for more than 50% of all food, beverage, and consumer product sales in some Latin American markets. We are very open to collaborating with others to maximize our collective scale and impact for society.