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NESTLE MILO AND SPYROS PETER GOUDAS


MILO NESTLE  The Nestles Company had no reason to remove distribution rights from Spyros Peter Goudas 

 When Nestles approached in the 1980’s Spyros Peter Goudas to distribute the product Milo into the Canadian market they did so with the knowledge that Milo was a totally unknown name to the average Canadian and that there was no demand whatsoever for the product because people did not know the product, neither did they understand what the product does, its benefits and how it is utilized.

The Nestles Company had no reason to remove distribution rights from Spyros Peter Goudas  At that time, Milo was a product familiar only to immigrants from China, India, and the Caribbean. 

The Chinese population was very minimal before 1998, and the average Chinese person resident in Canada was from Hong Kong and here for so long that they were like any other Canadian and the possibility of selling to them was almost nil.

With the influx of immigrants into Canada, there was an opportunity to introduce the product into the Canadian market with its changing population base.

However, Nestles with sales in excess of 80 billion USD according to statistics did not have the expertise or distribution capabilities to approach this particular market and sought out the best company to approach to penetrate the market. 

Spyros Peter Goudas was the leader in the ethnic market and had built up a successful relationship and distribution network with the stores and consumers of that sector.

With this in mind, Nestles apparently identified Spyros Peter Goudas as the best candidate TO CREATE A MARKET FOR MILO since only the ethnic market was receptive to this product and only Spyros Peter Goudas had the knowledge and the base to undertake this difficult task. 

It was a marriage made in heaven that would hopefully last a lifetime.

Apparently a small Jamaican company by the name Walter Rose had the distribution rights up to that point and was only successful in selling to a handful of stores went into bankruptcy.

First of all, one must understand the difference between

a) the introduction of a product,
b) the Introduction and distribution of a product.

First Scenario:  Distribution of a product:

Provided a product is well known in the market, any product, any brand, any company owning a product, once the producing company gives distributing rights to a distributor it is a straight forward task of maintaining and possibly increasing existing sales.

On the surface it is a simple transaction. 

If the producing company is unhappy with the distributor, removal of distribution rights was as simple as changing a shirt.  If the next one is no good, change again, and so on.

Second Scenario:  Introduction and Distribution of a product:

One must first understand the word Introduction:

It is similar to giving birth to a child. 

The mother has to endure all the pain of labor and birth, go through the infant years, then the school age years where the child has to be introduced to school mates.

She has to ensure that he takes the right path in life, until finally, he is no longer a baby and is a grown person and is useful to the world and his parents.

The introduction of Milo into the Canadian market by Spyros Peter Goudas came about as follows: 

One day in the 1980’s the Nestles Company represented by the Sales Manager, Michael Colangelo, had a meeting at the Spyros Peter Goudas Head Office and approached the company to distribute Milo. 
After several negotiations, Spyros Peter Goudas accepted the responsibility of distributing an unfamiliar product into the Canadian environment.  

The first steps were to get some of the product from the source, which in this instance was Jamaica, and since one or two skids were impractical through the high freight cost, a full container of the product was mandatory, more than 1,500 cases.

A cost of over $30,000.00  Mr. Goudas had to approach the bank for financing. 

There was a negative reaction from the bank to invest in an unknown product, since Nestles was insisting on full payment within 30 days, regardless.

However, with the determination of Spyros Peter Goudas and the feeling that this product would have a great future in the years to come, through its appearance, taste and flavour, the company invested the funds.

Once the product arrived in Canada, there were no clients, or maybe very few.

The first step was to meet with all the salesmen to introduce, familiarize and sample the product.

Next, the introduction and exposure to the stores was very difficult.

There were many roadblocks, except a handful of independent Caribbean stores which were familiar with the product.

Sales were very, very slow, not even sufficient enough to support paid inventory and utilize warehouse space.

However, Mr. Spyros Peter Goudas was committed to this product and took another approach – the supermarket approach.

The company therefore started soliciting appointment times with supermarket buyers to present the product for listing purposes.  

There was considerable difficulty in setting up appointment times with the buyers.

To allow you to understand how difficult it is to make an appointment with the buyer and especially with a new and unknown product, it takes sometimes two to four months to achieve an appointment date. 

On many occasions, the appointments were cancelled at the last moment by the buyer with the excuse that he has an important meeting to attend.

So in this case, a new appointment had to be set up.

The procedure for introduction was very complex.

Sending cases of the product to the Head Offices, which in turn distributed to the head office employees for evaluation and obviously there were criticisms, complaints, and eventually complements which allows the buyer to at least give us an appointment date.

Eventually, upon consideration of accepting the product for listing purposes within the data base, there was a fee, ranging from $5,000 to $25,000. 
Estimate values approximately $ 500.000.00

Let us magnify the above stages into the different areas that Goudas solicited over the years.

Some of which are the following:  Loblaw's, Dominion, IGA, Food City, Miracle Mart, A & P Supermarket, Shoppers Drug Mart, Herbies Supermarkets, Galati Food Markets, Highland Farms, Macks Milk Convenience Stores, Backers Convenience Stores, Valdi Discount Stores,  Pirris Fruit Markets, No Frills, Zehrs, Fortinos, Food Basics, Full worth, Byway, Zellers, Dollarama, Buck or 2, Elias Supermarkets Windsor, Provigo Supermarkets Quebec, Loeb Supermarket Ottawa,  Mourelatos Markets, Giant Tiger, Wal-Mart, Pussateris, Steinberg's, Bonanza Markets, Michelangelo's, Weston Produce, Mr. Grocers, Franklins frozen foods, Fiesta Farms, Ushers, Ferlisi, Woolco, Longos Bros, Sunview Food Markets, Woolworth, Kresges, Hy and Zels for chain store purposes.

Including hundreds of small independent stores and the list never ends.

WINSTON LORD SPYROS PETER GOUDAS

That means loads of samples, effort, sweating, waiting, presentations, endless hours which were sometimes progressive and sometimes, the door was completely shut.

On some occasions the buyer requests a free case for each one of his stores to test sales. 
On other occasions, a fee was requested for advertising in flyers to see who is willing to buy.

There was some success and some disappointments. 
The success part is that certain nationalities such as East Indians, Chinese and Caribbean people were familiar with the product and those were the potential customers. 
But persuading Nestles to bring products from China or other parts of the world where the product had failed because on the label declaration, the Vitamin B 13 element was prohibited in Canada. 
As a consequence the product had to be reformulated to accommodate the Canadian ingredient permitted values. 

Obviously, Nestle reformulated the product, but Spyros Peter Goudas suffered a severe loss because of the Food and Drug Administration requirements. 
The product had to be dumped $ 120.000.00 without compensation from Nestles.

However, Spyros Peter Goudas was determined to continue with this product and every possible effort was made to maintain some of the sales due to fact the Mr. Spyros Peter Goudas himself felt it was a good product and it was one of his babies.

The first years were very painful, there were many right offs for various reasons: dumping, delivery of product to the head offices for testing purposes – free of charge, free samples, etc., etc.

The next few containers were the same exercise. 
Finally there was some light at the end of the tunnel; a couple of the chain stores accepted this product into their data-bases.   And that was very happy news!

Spyros Peter Goudas was happy with the product being entered into the data-base.
However, the salesman then had to persuade the store manager and the grocery manager to accept the product into the stores and to allocate the shelf space.

Usually 99% of the time there is no real estate space in any of the supermarkets for an additional product. 
Therefore, Spyros Peter Goudas had to remove one of his existing products from his existing real estate space to accommodate his new baby.

This exercise was very painful, very persuading, very time consuming, and very educating and in most instances, a free introductory case or two had to be forwarded to the store to familiarize their personnel with the product, including receivers, cashiers, store managers and in general, all employees.  
And the case which finally arrived on the shelf, most of the time was free. 

This was stage two of the pain and the effort.

Now stage three begins.

Promoting the products by giving specials for so many dollars off per case to the head offices to be able to place the product on their flyers and to pay for the printing and distribution of them.

To familiarize the public with the product, there had to be a campaign of radio, television, newspapers, and flyer advertisement.
This includes parades, gatherings, and association events of different nationalities.

For instance the Caribana parade:  Spyros Peter Goudas personally undertook the making of  large imitation “paper cans” of Milo with individuals inside with heads, hands and legs outside, dancing in the parade to promote the product and to attract attention.

Additionally, over the years he rented tractor trailers with flat bed platforms decorated with the Nestles banner distributing free samples to the spectators at parades which can easily be viewed on www.goudasfoods.com in the Archives Section in a film compressed under the heading Caribana 1991.



All the above was done without one penny of assistance from Nestles.
It must however be noted that Peter Colangelo was always present to ensure Nestles approval of the promotion.

The list of promotional activities with respect to Milo was endless. 
Promotion information on flyers has been submitted for evaluation. 

Every year the company hoped that profit would be made some time in the future and the sales began to climb to the point that in the last year of our distribution, the sales climbed to the amount stated on the affidavit.

The road was not always a smooth ride.

On one occasion in 1997, Spyros Peter Goudas was advised by Nestles that certain codes by error contain particles of glass and it was necessary to recall and remove the product from the shelves.

That was a night mare and a massive undertaking of manual labour to visit all supermarkets remove and dumped the codes in question.
In some instances, products were dumped at the store level to avoid any possible consumer consumption, especially the children. The total value more or less $ 120.000.00

And although Spyros Peter Goudas was promised compensation for the amount of work, and to protect the Nestles name without any lawsuits being filed, Spyros Peter Goudas did not receive any compensation for the work neither did receive any replacement products.

Over the years the Nestles Company has changed sales managers for the product all of whom have been very supportive of the work done by Spyros Peter Goudas and congratulated Goudas for their efforts and for increasing sales.

Names such as:  Peter Colangelo, Gino Cantalini, Karin Hansen, Dan Neale, Phillip Shen – Executive on Specialty foods Far East, Maureen Boudhoo, Steve Sutton – Specialist in international foods promotions (Australia), to name a few.
Even Natascha Zeitler, who took management’s position, invited Mr. Spyros Peter Goudas for lunch at Pine Valley Banquet Hall to personally congratulate him and to plan the next year’s requirements.

 This was a remarkable achievement because now there was a data base to work with, a history of sales, existing accounts, existing shelf space, regular users, repeat orders, consumer awareness and the product showed that somewhere in the future it would pay back all the pain, misery, heartache, headaches and endless hours poured into this adventure. 

Spyros Peter Goudas did not make another chocolate drink in powder form under the Goudas label although its research & development department could have easily have done so, but made Milo the biggest and most identifiable name in the Chocolate Drink Category.   

Shortly after that Nestles decided out of the blue, in November 2001, to send not an official letter, not even a telephone call to Mr. Spyros Peter Goudas himself, but sent a fax to Goudas Foods advising that they were no longer the distributors for Milo.

However, it should be noted that the fax notification was received after Goudas Foods had been notified from the chain stores that they had received an official letter from Nestles advising of the change.

On the other hand, Nestles instead of them presenting and re-listing the products into the chain stores, and going through the process that Spyros Peter Goudas had endured since accepting distributorship, they advised the stores that effective immediately they were to use the existing Spyros Peter Goudas data base, with the same product UPC code and transfer the rights of distribution to the replacing party since they were aware of all the customers and chain stores that Goudas Foods distributed to.

This left Spyros Peter Goudas and  himself with the feeling that he had been kicked in the behind causing a hole the size of  a Spanish coin two inches in diameter with banks to answer, store keeper enquiries, salesmen waiting and many more side effects.  

In addition to the huge embarrassment, personal heartache and disillusionment that Mr. Spyros Peter Goudas himself endured.  

Goudas was also left with, and forced to purchase 3 or 4 containers which were in transit with no client base since Nestles advised the customers not to purchase Milo products from Goudas and that future purchases must be done through the new distributor.

When Spyros Peter Goudas accepted the distribution of the Milo beverage, it was the beginning of a whole new process in promoting the product and opening new avenues with all the above pains on which we cannot place a value for any less than we have claimed. 
In fact the amount we have claimed is meaningless compared to what Nestles would have spent to undertake this job themselves, as God is my witness. 

It is unconscionable that a multi-billion behemoth (Goliath) such as Nestles would engage in a business practice that sees them capitalizing on the sweat equity built up by a small hard working diligent company and then arbitrarily reneging and removing that asset that was built up at the expense of other products, without any consideration for the effort, costs, expenses, opportunity costs and business relationships, and without any form of penalty or compensation for this tremendous asset (a very extensive range of customers and market acceptance) that has accrued to the Milo product under the “introduction and distribution” under the direction of Spyros Peter Goudas.

In fact, we feel that Spyros Peter Goudas did all the sloughing, the cultivation, the seeding of the ground but never had the opportunity to reap the harvest.

In fact, at the time of harvest, the crop was stolen.

The Nestles Company had no reason to remove distribution rights from Spyros Peter Goudas.

 

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