Case | HBS Case Collection | 1994 (Revised from original version)

Food Distribution in Russia: The Harris Group and the LUX Store

by David E. Bell, Walter J. Salmon and Dinny Starr

Abstract

Discusses the challenges facing businesses entering the Russian business environment, especially focusing on food retailing and distribution in that country. Highlights one small, entrepreneurial company, The Harris Group, which, with the help of both Russian partners and the SuperValu Corp., has entered the Russian food retailing industry.

Keywords: Business Ventures; Marketing Strategy; Market Entry and Exit; Distribution; Partners and Partnerships; Expansion; Food and Beverage Industry; Retail Industry; Russia;

Format: Print

20 pages

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Citation:

Bell, David E., Walter J. Salmon, and Dinny Starr. "Food Distribution in Russia: The Harris Group and the LUX Store." Harvard Business School Case 594-059, September 1994. (Revised from original November 1993 version.)

Patrick Coveney, CEO of Greencore, one of the top producers of private label prepared foods sold through UK grocery retailers, was assessing Greencore's growth options. Growth potential was limited in the UK, a mature market in which retailers were unlikely to grant much greater market share to Greencore or any of its competitors. In the U.S., where Greencore had struggled to gain traction since its initial entry in 2008, the market for fresh, chilled prepared foods was far less developed. Can Greencore translate its success in the UK to the U.S.? Should Coveney focus on developing the U.S. market or on maximizing Greencore's position in the UK?

In mid-2011, the management of Brasil Foods, a leading Brazilian branded foods producer and protein exporter, is evaluating strategies for international and domestic growth. The team has just received approval from Brazil's antitrust authorities to complete the merger of Perdigao and Sadia, the two massive food producers that had combined to form Brasil Foods in 2009. Now, the team is free to focus on their ambitious plan to double revenues by 2015. Domestically, the plan calls for Brasil Foods to maintain its allowed retail market share and expand its presence in the fast-growing food service sector. Internationally, the plan sets out a vision of Brasil Foods evolving from an exporter to a true multinational. The team believes their operational expertise and scale combined with Brazil's booming economy and vast agricultural resources form the ideal platform for achieving their vision. Yet, amid a wealth of possibilities, they face tough choices, such as which emerging markets to pursue first. They also face serious personnel issues, including integrating employees from Perdigao and Sadia—longtime industry rivals—and developing an international team that understands foreign markets.

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Food Distribution in Russia: The Harris Group and the LUX Store

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