Institutions are a minor distribution channel for AdvaCare Pharma’s veterinary product range in terms of a percentage of our total pharmaceutical sales. Most veterinary distribution channels are private and there are not nearly as many tenders or institutional buyers as there are for pharmaceuticals.
Institutions have many options for veterinary suppliers, many of which are manufacturers, which makes it more difficult for us to compete on a price basis. But we also have some advantages for our veterinary range including our USA brand and a wider product range than manufacturers.
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VETERINARY MEDICINES FOR INSTITUTIONS |
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ADVANTAGES |
DISADVANTAGES |
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Our ability to get orders from Institutions, either by winning tenders or by direct order, largely depends on our distributor’s capability and relationship with the Institution. A major deciding factor in our ability to submit for a tender depends if the tendered veterinary products require registration in the importing country or not. If so, then we would have to have our products already registered as there would not be enough time to complete the registration process. Otherwise, some tenders might not require product registration, but in this case it is more likely that such tenders would be issued by the government health agency as they would have the power to do so.
Our entire veterinary range is positioned for institutional orders, meaning we can cover most of the products that would be included in a tender or private order. Institutions can issue a tender for any veterinary products, but given that most of the products tendered will be for the livestock farmer channel, the dosage forms aligned for this channel are more likely. It is not to say that it is impossible that tendered products would be distributed through other channels, but rather most will be distributed to farmers. For example, vet clinics and vet supply stores are retail points of sale and almost always privately owned.
See:
Veterinary: Veterinary Clinics > Product Range: Which products apply to this channel and why?
Veterinary: Veterinary Supply Stores > Product Range: Which products apply to this channel and why?
As institutional orders, especially for veterinary medicines, will usually be submitted through our distributors, our distributors are our customers. However, the terms of every tender or private order will dictate the payment arrangement, meaning our distributor will most likely be the buyer of our products and then deliver to the institution, or in some cases the terms might dictate that the institution is the buyer and in such a case would have to provide a commission to the distributor, but this case is rare. Regardless, our distributor, given their role in between us and the institution, will be the primary target audience.
See:
Distribution Channels: An Overview > Distributors
The government health agency, which goes by varying names depending on the country MOA (Ministry of Agriculture), FDA (Food & Drug Administration), etc., whom our distributors sell our veterinary medicines to, are the secondary target audience - a later stage in the supply chain. The decision makers of the government agency decide which suppliers get awarded which products in the tenders, unless it is a direct order given without tendering which does occur in some countries.
In order of importance, the deciding factors for winning government tenders are:
IGOs are international or national government-related organizations that have a budget for food security or animal health initiatives in lower income countries. The larger IGOs that regularly issue tenders for veterinary medicines include World Organization for Animal Health (OIE), Food and Agriculture Organization of the United Nations (FAO), World Bank, etc. Such organizations can be more difficult to work with given their oversight, and therefore we rely on our distributor to have the necessary connections to facilitate such tenders.
In order of importance, the deciding factors for winning IGO tenders are:
NGOs are usually international organizations that animal health and food security in lower income countries. While they may not issue tenders for veterinary medicines themselves, they often work alongside governments, communities, and other stakeholders to improve animal health outcomes. These institutions are the smallest and least likely to issue tenders given budgets are smaller than IGOs and government institutions.
Livestock farmers are the end users of our veterinary products. Farmers are closer in the supply chain given they can buy from any distribution channel before them in the chain, and while through any other channel it is important to get our messaging across and provide them useful promotional materials, for tenders the farmers will care less about the brands. However, we would still want to leverage the credibility of being chosen for a tender to influence their future purchasing decisions of our brands and products.
Institutions are the third to last stage in the supply chain before the product is distributed to farmers:
API Manufacturer > Finished Manufacturer > AdvaCare > Distributor/Importer > Institution > End Consumer (farmerlivestock owner)
See:
Distribution Channels: Introduction > Understanding Supply Chains
Institutions do not advertise specific brands or products as they are not in the business of selling specific brands, but rather best allocating an assigned budget to secure pre-determined veterinary medicines that address specific objectives that are inline with an initiative.
The kind of promotional materials we produce for our distributors to provide to farmers should be based on materials that can be provided to:
The promotional materials we provide for institutions, and by proxy farmers, must meet the intended purpose:
See:
Veterinary: Veterinary Clinics > Promotional Materials: Which materials apply to this channel and why?
Veterinary: Veterinary Supply Stores > Promotional Materials: Which materials apply to this channel and why?
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