Sausage and Artificial Intelligence: How Ukrprompostach Builds its Retail Network

Monday, July 6, 2021
Sausage and Artificial Intelligence: How Ukrprompostach Builds its Retail Network

Oleksii Prokhorenko, the CEO of GT Invest and manager of the Ukrprompostach brand network, talks about how the company develops its retail and IT infrastructure, optimizes business processes and makes new demands on its employees

The vertically integrated holding Ukrprompostach has existed for 24 years, during which time it has created a closed cycle of production of sausages and meat products. Eight years ago, a new team led by Oleksii Prokhorenko, which headed sales, joined the business. 

In particular, to sell more than 100 items of sausages, meat delicacies, and fresh meat, the holding is developing its own network of branded trade. The modern buyer wants not only to get high-quality products but also in a convenient way. To keep up with the times, the company, which produces up to 20 tons of products daily, has adopted modern technology. 

From production to retail 

- Why did the manufacturer decide to engage in retail? 

- To provide consumers with a quality product, you need a full and closed cycle of production and sales. From raw materials harvested in-house, to feed production, animal husbandry, meat processing and sales. This is a fairly common practice: money remains inside the vertical holding company, without leaving its borders, which ensures their rapid turnover: no payment delays, any delays, etc.

- When did you decide to create your own branded retail network?

- In 2011.

 - And how much did you manage to increase the size of the network during this time? 

- Under my leadership, there are 11 points in Kyiv, there are also 3 more that belong to another unit — in Pereyaslav. 

- What, in your opinion, is the advantage of the manufacturer's branded retail in comparison with retail chains?

- We have an opportunity to deliver a fresher product from the factory, and we guarantee higher manufacturability of process. In addition, our vertical integration allows us to ensure consistently high quality of all products. The main competitive advantage is the daily supply of raw meat and perishable products. That's why customers don't ask the seller "Is the meat fresh?" — they ask "Is there a product or not?"

- In terms of geographical coverage — why are you concentrated in Kyiv and the region, do you plan to move on? 

- We are a regional manufacturer. Our raw meat can be found only in Kyiv and Pereyaslav. Of course, we supply long-term storage products — sausages, dried meat, and so on — to all the largest retail chains throughout Ukraine. 

- Do you consider selling related products in your stores? 

- We have several partners with whom we cooperate in this direction. For example, fresh craft bread, confectionery, organic milk, sauces from Yevhen Klopotenko… We do not charge an entrance fee, for a place on the shelf. The most important thing for us: trust through product quality and intrinsic values. If we find other manufacturers who share our views and offer quality natural products, we will consider selling their products. 

- How do you promote branded retail? What are the marketing activities? 

- Only at the stage of opening a new store — ads, flyers, billboards, announcements, etc. And globally, our marketing strategy is that we play for a long time. We carry out explanatory work, explain why it is worth buying natural, what is the difference between different types of meat and sausages. We have over 60,000 followers on Facebook — a very good result for a specialized network!

Everyone takes part in filling the page in the social network: not only the SMM-specialist but, if necessary, also the production technologist, the network manager, accounting, managers. In this way, the subscriber can quickly receive a qualified response, rather than an unsubscribe from the SMM. 

- What are the key indicators for assessing the effectiveness of the branded retail network? 

- CLV — customer lifetime value — how much the customer will bring for the entire period of cooperation with our company. We do not chase instant results, we play for a long time, so we try to keep the client with us for as many years as possible. 

- What does the average buyer expect now and what do you attract him with? 

- We often have to face the prejudices of buyers. People do not believe that sausage can be of high quality. They are understandable because the shops sell a variety of meat products. Sometimes it seems that the goal of some manufacturers is to make, sell and run away quickly so as not to catch up. 

We offer goods that others do not have — for example, elite cured sausages. Also, some items of our products can be found only in our branded outlets in Kyiv and the region.

Implementation of technologies 

- What technological innovations have you introduced in your sales service? 

- From what we already have — modern scales with a touchpad, which are connected to each other via the COM port, with an accuracy of weighing up to a thousand grams and a delay of four seconds. It is physically impossible to weigh down with such equipment. Of course, such scales are more expensive than usual, but it is more important for us to be honest, to be sure of the accuracy of the process. 

- Now a lot is said about the robotization of trade, in particular, the disappearance of sellers as such. What are you doing in this direction? 

- Now our former sales accounting system no longer copes with the requirements for it. We change it — we launch a modern software package that works on artificial intelligence. The program was written to order by my friends from the IT-sphere: they took into account our pains. There are no ready-made solutions on the market that would suit us so accurately. There will be not only real-time sales statistics but also analytics — more complex and valuable indicators.

- What will it give in practice? 

- First, the new system will be able to forecast product demand for the next three days. We will be able to increase the accuracy of orders because now our sellers are doing it. Secondly, it will greatly simplify the recalculation. Now it is held by sellers once a week, and it happens that people are wrong. For example, after long calculations, enter the data in the wrong column, and in the end, the accountant and analyst can not summarize. We lose a day to find and correct all the mistakes. 

Thanks to the program, the inventory will be much faster. Reports in the program will be displayed on the principle of traffic lights: green marks for positions at which the balances and sales converge. Yellow — when there is a problem, but the seller sees it and can fix it quickly. And red — when there is a significant deviation from the availability of goods.

- Do the requirements for sellers change after the introduction of new technologies? 

- No matter how perfect the technology is, the main thing is people. The program just helps them work faster, better. So it is the personal qualities of the employee that are important. When you come to a branded store, you entrust your choice to a specific person. So, for example, the seller Valya — the most important in the whole holding, its face. And it is important for us that it be positive and honest. Both relations with clients and comfort in collective depend on it.

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