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Famous Brands On The Way Out

ZIMBABWE’S collapsing economy is threatening key product brands that local and international companies have built and developed over years.

As the economic crisis worsens companies are increasingly uncertain about their survival and the quality of their brands.

With an industry capacity utilisation of below 10%, companies are struggling to maintain the visibility of their brands on the market.

Their survival too is on the line.

Big companies like Olivine, Unilever and Natfoods have stopped making some of their popular brands because of lack of raw materials.

Brands like Buttercup (Olivine), Geisha (Unilever) and Redseal (Natfoods) have vitually disappeared from the market.

Blue Ribbon’s products – especially those made from flour – are also not available on the market.

Marketing expert, Douglas Mamvura, said the main challenge for most companies was not only about their own survival but also keeping their brands alive.

“It’s a huge challenge not only for those servicing the local market but also those that are exporting,” Mamvura said.

“There is a crisis in the marketing sector.

The question is how you keep manufacturing the same quality product under the same brand with the current pricing regime and the lack of raw materials?”

Companies that have already started experiencing the problem include those that hold international franchises that have high standards of quality.

International franchising companies are not only interested in the franchise fees but also the level of brand representation in specific countries.

“The idea of a franchise is to create uniformity in terms of the quality of services and product quality.

These must be the same everywhere,” said a branding expert with a local advertising company.  

The Wimpy brand which is owned by

Famous Brands of South Africa has been damaged in Zimbabwe as the local franchise holders try to expand their business in order to survive.

Wimpy is known for its burgers but the local franchise holders have expanded the menu to include what they call “traditional food”.

The Steers franchise held by Innscor in Zimbabwe but also owned by Famous Brands is also struggling. The menu has shrunk over the past few months as Innscor battles to secure key raw materials that meet the Steers brand standards. 

There are neither starters nor children’s dishes on the menu.

Every Steers in the world has them.

The menu which is supposed to have more than 10 dishes has shrunk to less that four at any given time.

The local quality has also deteriorated. The brand was developed over 48 years.
It’s dying in Zimbabwe.

Officials at the company said they cannot make some of the dishes because of the lack of raw material and pricing structure that has been implemented by the National Incomes and Pricing Commission (NIPC).

Nandos – a South African brand with a Portuguese theme – is also reeling in Zimbabwe because of the economic crisis.

Nandos specialises in chicken dishes with either lemon or herb.

Internationally its menus are varied but in Zimbabwe the local franchise holders have failed to keep a wide selection of dishes.

At most they have three dishes on offer at any time.  The problem again is the economy and NIPC.

Clothing companies, Edgars and Truworths, are also facing the same problem.

Edgars Zimbabwe which is controlled by South Africa’s Edgars is struggling to maintain quality stock because of the pricing system.

The company has been the victim of NIPC’s unsustainable pricing models.

“The owners know the situation in Zimbabwe but they are now concerned that the local subsidiary is no longer representing the brand,” said a senior Edgars official.

Edgars no longer has the wide range of cosmetics and perfumes it used to sell. The variety of merchandise has been severely reduced.

Truworths also controlled by South Africans also faces the same predicament: They can’t maintain quality merchandise in the current environment.

The top-end brands like Gucci and Hugo Boss that they used to sell at Truworths Men have virtually disappeared.

They have no foreign currency to import any. The approved prices are also too low.

“Even if we have them who would afford a suit for $80 billion,” said one salesman at one of the shops along First Street.

The Bata shoes company which is headquartered in Lausanne, Switzerland, is also in trouble.

The brand which has been developed since 1894 is being compromised locally because of the crisis.

International brands like Marie Claire (for women) and Bubblegummers (for kids) are not found in Bata shops in Zimbabwe. 

Other brands like Debonairs, Woolworths, CNA and Discom have packed their bags.

The problem is also affecting even local companies. The quality of Lobels’ bread for instance has deteriorated.

Mamvura said there will be huge problems when the economy turns around.

“Those that let their brand lie dormant or compromise on quality now will pay heavily when things turn around.”    

OK Zimbabwe and TM, the largest retail shops in Zimbabwe, have never been the same since the price blitz.

Makro and Jaggers no longer represent their wholesale structures.

Products at all shops have become fewer.

By Shakeman Mugari

 

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