Taste Success by exporting your Artisan Food Product
Being export ready and launching into the export market , will take as much time as you spent launching your product(s) into the Australian market. It’s not something you can rush - as you are liable to make costly mistakes and misread the needs of your export market customers.
As part of The Business of Food’s “A Taste of Success” sessions in 2020, we chatted with Najib Lawand, the owner of Export Connect; Tatiana Kuzovova, Founder of Granny’s Food in 2012; and Anna Plotkin a food lover and lawyer from Fortrade. It was a jam-packed discussion with lots of practical advice.
Export markets have significantly changed since the Pandemic and ongoing shutdowns domestically and internationally in 2021 are raising new challenges, however the basics of how to get started as an exporter remain the same so read on for some very strategic and practical advice.
For those just starting to think about getting into the export market, Najib recommends:
understand why you want to export. Is it to grow your business / diversify / you have a vision for export sales to be a defined % of your business. When you understand your reason - you can focus your approach to the export market best suited to your product(s) and your business goals
know which market (country) you want to export to. Why does your particular product(s) suit that market? As with selling into the domestic market you need a unique selling point (USP) and to understand how your product will meet your customers needs
check your business is ready to export. You need a well-resourced team running the business; and financing available to fund the export growth that does not restrict your existing business operations
when ready - you will need an entry strategy. Do you plan to start sales direct to retailers, or to distributors or maybe through e-commerce channels. You will also need a pitch deck (usually about ten slides) that is matched to the export market you want to enter.
Tatiana remembers when she first started to look at the export market, she was the bottle washer and cook and book keeper - so a big stretch for her new business that she wasn’t fully prepared for. Based on her experience her advice is:
do a lot of research into how other countries are making their product (ingredients / production facilities / their USP / price point / packaging etc) so your product/product range is different to local suppliers or other imported products
consider an easier market. For example Granny’s Food started exporting to New Zealand which didn’t require a meat export license so it saved time and money. However, New Zealand is a fixed market size with minimal growth - one of Najib’s top tips is also to understand your business goals for entering the export market
having arrangements in place that ensure delivery of a high quality product to the customer is a key part of exporting. Some of these arrangement will cover storing your product in Australia, freight arrangements and the storage/distribution overseas - particularly tricky if your product is frozen dumplings!
When you are negotiating with distributors, Najib advice includes:
list the retailers and sales channels you want
be clear of the timings for the channels to be established and any exclusivity factors
have key performance indicators that suit your business, not just the distributors tasks they are getting paid for
use a buyer selection criteria to rank the distributors you are considering; and then convert those criteria into the contract with the chosen distributor.
Both Najib and Anna recommend getting a lawyer to check over any contracts, especially if you don’t have the relevant experience or knowledge. Anna also recommended:
to break up the aspects of your supply chain into the details of A-B-C with everyone you are dealing with along the way so you can identify what might happen at each point and how you would manage when things go wrong
every customer has their own approach to business, different financing situation and different product(s) which must be reflected in your contract with any distributor. For example, if you don’t include details about goods staying refrigerated or frozen during shipping you may unintentionally compromise your shelf life
knowing this level of detail will assist you with your discussions when seeking a distributor and be confident to negotiate contractual terms
know your risks and develop a risk management strategy that aims to protect your core business operations within Australia from any adverse outcomes of entering the export market.
Najib is often contacted by businesses wanting to export before they are quite ready. He has found that clients who follow advice he provides at this first contact are usually ready for exporting 18 months later when they have actioned the necessary steps and Export Connect can then assist them in the next steps.
A unique selling proposition (USP) is critical for your food product to stand out on the shelf. Export Connect’s approach to launching Australian producers into the export market is based on understanding the USP of your product and matching it to the most suitable market.
Just as you have researched your ideal customer, Export Connect undertake extensive research to compile solid data relevant to food product sales / trends / wholesale price comparisons / customer needs, etc. of the overseas market. They then pitch a relevant Australian supplier to a specific overseas buyer identified through the research. A big part of what they deliver is built on good relationships.
To hear more detail about Export Connect’s approach and how they assist their customer listen to the video from 4.28 minutes until the ten minute mark. You can hear Tatiana share her experiences and more tips from 15 minutes in until just after the twenty two minute mark of the video. Or hear Najib explain the difference between a distributors and consolidators from 31.40 minutes in until the thirty eight minute mark.
As Najib recommends, it’s important that your desire to export is part of your overall business plan. If you need assistance setting strategic and achievable business goals or identifying new market opportunities for your product(s), get in touch for a strategic coaching session.