Produkty Pitania Company: “There will always be middle men between manufacturing and retail sales”
— 2005-10-12 —

Any company looking to achieve a prominent position in the Russian market should deliver highly competitive goods at affordable prices.  And since price hinges on the number of links in the supply chain, the only way to reduce costs is to shorten the sales period. According to Damir Imamovic, Produkty Pitania’s Vice-President, logistics holds the key. In fact, by lowering the number of intermediaries in the supply chain, we can speed up the sales process, thereby boosting turnover and reducing costs to the consumer.  But as Imamovic puts it, “There will always be middle men between manufacturing and retail sales.”

Produkty Pitania began its Russian operation by importing chicken legs, and in 1996 turned its attention to production, setting up its first plant in Kaliningrad. At the time, most businesses thought of logistics as merely transportation and warehousing; but we saw it as a systematic approach to business processes – or in other words, an essential tool for efficient management. Today, we owe our decade of successful operation and market leadership in large part to a competitive logistics department.

Initially, we relied on our own delivery networks, taking into account the low-quality services offered by local operators.  And at that time, local storage facilities were equipped with inadequate refrigerators.  So we purchased our equipment from the best western suppliers.  Now our company operates three distribution centers located in Kaliningrad, Brukhovetskaya village (in the Krasnodar territory) and Staraya Kupavna village (in the Moscow region), all of which are close to major railways.  What’s more, we will soon open two new distribution centers in Novosibirsk and Yekaterinburg.

To mount a successful logistics program, companies must first choose from one of two approaches - to set up its own logistics network – which may be out of the question for smaller operations - or to use one of many independent logistics services.  And although Produkty Pitania has chosen the first approach, we also have a number of distribution partners. With that in mind, we use our own facilities to deliver goods to cities with populations of a million plus; while using exclusive distribution partners in smaller cities and towns.  Because our partners work directly with us, the manufacturer, they are well-versed in every aspect of our product line, making it much easier for them to promote it among local retailers. 

I am convinced that it is impossible to be a market leader in two different areas; and for this reason, we have concentrated on cultivating our own niche in the convenience foods market. As for the Russian logistics arena, we expect western operators to come into this country at an increasing rate – which is why it is crucial for Russian-owned companies to be as competitive as possible, while meeting consumer demands for high quality and low cost.