FMCG Growth – Smart Distributor Selection Process Explained

In the fast-moving world of FMCG, your route to market (RTM) can make or break your success - especially in emerging markets. One of the most pivotal decisions? Selecting the right distributor.

Yet, many companies still rely on a basic selection process that may not align with their long-term growth strategy. So, what’s the smarter way forward?

Let’s explore two distinct approaches to FMCG distribution—and why a more analytical path could be your competitive edge.

The smart FMCG distributor selection process

Background to Distributor Selection & Management

Before we dive into this, in overall terms, we consider the three phases of Distributor Management & Selection as follows:

These phases follow the process that we call the A-B-C of Route to Market. This model simplifies the world of RtM into a series of three steps that any RtM practitioner can execute.

So, back to out two approaches to Distributor Selection.

1. The Simple Selection Approach: Fast, but Risky

This is the traditional route many companies take:

Conduct a quick market scan
Identify a few potential distributors
Choose the one that looks best on paper

It’s fast, straightforward, and often driven by urgency. But in emerging markets - where infrastructure, consumer behaviour, and retail dynamics vary widely - this approach can lead to mismatches, underperformance, or even brand damage.

Pros:

Quick to execute
Low upfront cost

Cons:

Limited strategic alignment
Higher risk of failure
No structured evaluation of long-term fit

2. The Analysis & Selection Approach: Strategic and Scalable

This method is more rigorous - but far more rewarding. It begins with a clear RTM strategy and ends with a distributor who’s not just a partner, but a growth enabler.

Here’s how it works:

Step 1: Define Where to Compete

Segment the market by:

Channel (e.g., traditional trade, modern trade, e-commerce)
Geography (urban vs. rural, regional hubs)
Competitive strength (where your brand has an edge or needs support)

Step 2: Design the Ideal Distributor Model

What capabilities should your ideal distributor have?

Warehousing and logistics capacity
Financial strength
Sales force reach
Digital tools and reporting

Step 3: Build a Long List

Search for candidates that match your model. Cast a wide net.

Step 4: Macro Assessment

Narrow down to, for example, the top 5 based on:

Market reputation
Infrastructure
Portfolio alignment

Step 5: Micro Assessment

Deep-dive into the top 3:

Leadership quality
Route coverage
Sales capabilities
Technology adoption

Step 6: Cost-to-Serve Analysis

Compare each finalist’s cost-to-serve against market benchmarks. This ensures your margins stay healthy while maintaining service levels. For more on Cost to Serve - click here.

Step 7: Final Selection

Choose the distributor who best aligns with your RTM strategy and long-term goals.

Pros:

Strategic alignment
Scalable and repeatable
Reduces risk of failure

Cons:

Requires more time and resources upfront

Why This Matters in Emerging Markets

Emerging markets are complex. Informal trade, fragmented retail, and infrastructure gaps are common. A distributor who understands these nuances - and has the tools to navigate them -can be the difference between stagnation and exponential growth.

By investing in a structured distributor selection process, you’re not just choosing a partner. You’re building a foundation for sustainable market penetration and brand loyalty.

Final Thoughts: Choose Smart, Grow Fast

In FMCG, speed matters - but so does precision. A thoughtful, analytical approach to distributor selection may take longer, but it pays off in resilience, reach, and results.

🔍 Are you rethinking your RTM strategy or distributor network?

💬 Share your experiences or challenges in the comments.

📩 Let’s connect if you’d like to explore how to optimise your FMCG distribution strategy.