You Can Lead a Horse to Water

Today, I stepped out of the US Pavilion at Gulfood in Dubai to explore what the other national pavilions had to offer. I discovered olives from Greece, fruit tartlets from Switzerland, a live cooking demonstration in Germany, and chocolate from Belgium. One particular chocolate brand caught my attention; the packaging was creative and eye-catching, the brand name was clever, and the flavor combinations were unique. I decided to chat with them. It was their first year at Gulfood, and while they are a relatively new brand, they are performing well in Europe.

As an aside, I became a Middle East business advisor because I love helping others. I found something of value that I could offer and, at the same time, provide me with a living. I usually have someone on my staff accompany me to these shows because my passion for helping newcomers to the market kicks in, and I start offering free advice—information we typically charge for. During my conversation with the Belgian chocolate company, I began to share my insights on entering the food retail market here in the Arab Gulf, particularly regarding the major retail players in the UAE.

I advised the Belgian Chocolate Man (BCM) to consider that getting listed in these stores would require paying listing fees, agreeing to rebates, and covering regular promotional fees. It's a significant upfront investment, and I suggested he factor these costs into his regional pricing strategy.

However, he responded that they do not pay listing fees, rebates, or promotional fees. He insisted that they offer excellent margins and that, while retailers in Europe ask for those fees, BCM's pricing is profit enough.

I countered that in order to succeed in the Middle East, they, too, would need to have competitive pricing but would also have to pay listing fees, rebates, and promotional fees. This is not Europe, and adapting to local practices is essential for sustainable success.

Once again, he declined my advice.

Okay, what do I know? In this case, quite a bit, being someone who has been paid for the past 15+ years to advise companies on market entry strategies and has 30 years of experience in the distribution business myself.

I eventually walked away, reflecting on another stubborn European company that my distribution business had a brief relationship with. They also refused to adapt to market practices in the GCC, insisting on their approach from Germany. We provided counsel on retail market expectations and what it takes to properly price products, ensuring retailers receive the necessary margin while also paying their fees. In the end, we decided to walk away. We knew we couldn't successfully launch their brand if they refused to compromise in new market development. A distributor-vendor relationship is a partnership, and as in life, without trust, a partnership doesn't last long. They refused to trust our advice, and it was over before it began. Some horses just won’t drink.