Dec 15, 2021 by Mark Dingley
Are you thinking about expanding your food and/or beverage business overseas? Here we have shared our top 5 tips to help you see success.
Australian food and beverage products have quite the reputation overseas – it’s known for being clean, green, high quality and, above all else, healthy. As a result of this reputation, the market is ripe for producers who are looking to expand their reach overseas.
Many markets in neighbouring Asia are keen to open to Australian exports. Our free trade agreement with South Korea and the China-Australia Free Trade Agreement (ChAFTA) are just two examples of this. In fact, mainland China finally opened their doors to Australian stonefruit in 2016 after more than a decade of negotiations.
Whilst there are many success stories that you can look to, there are also some cautionary tales to be aware of. Overseas governments are becoming more stringent on traceability and quality standards; as such, failure to meet local regulations and customs tend to be the most common reasons for an export to fail.
To help you achieve secure, sustainable food and beverage export success (as well as to avoid mistakes that are potentially costly), here are our top 5 tips:
We cannot stress enough the importance of speaking to the experts before you start, as well as visiting potential export markets. You need to understand the local custos, consumers and the trading environment, after all.
Austrade (the Australian Government’s trade, investment, education and promotion agency) will be able to provide you with in-depth advice and support on successfully entering overseas markets.
You should also consider a possible partnership with people who already know the local market. Forging partnerships with local advisors, suppliers and others who are already on the ground, you’ll have access to in-market support from the get go. Plus, you’ll have some extra assistance should things not go entirely to plan.
At the end of the day, trust is vital. Visit the country in person and use the time to build up relationships across your whole supply chain. You need to trust the people you’re dealing with, and you need to get them to trust you and your product.
It’s essential that you comply with the local laws and regulations of the country you’re exporting to. Many of these laws are designed to protect consumers and support a greater transparency of products, the same as how it works here in Australia.
In Asian markets, traceability it becoming increasingly important. Government regulations actually demand traceability of food products from point-of-harvest to point-of-sale (or POS). By offering traceability throughout your supply chain in a way that is comprehensive, you’ll be able to gain an edge in the market. Look at Camperdown Dairy International, for example – they adopted a ground breaking platform that enabled Chinese consumers to quickly check the origin and authenticity of their products using their smartphones.
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Australia’s reputation for high food standards is well-deserved, and this is something that all food and beverage companies should leverage.
Fortunately, there’s a ready-made tool to help. The Australian Made logo can make all the difference if you’re looking to export your products overseas. Mr Harrison, the Australian Made Campaign Chief Executive, told Food & Beverage Magazine that “the iconic green-and-gold kangaroo logo has been clearly identifying Australian produce in export markets for 30 years with great success, so there is a pivotal role for the symbol to play in any ‘Brand Australia’ strategy”.
Using the logo will provide a clear indication that your products are Australian made, which can actually help to boost sales. The logo has already been registered in China, Singapore, South Korea and the United States, and there are plans for a big push into other Asian markets in order to align with our export growth.
Some of the strategies that businesses can use to minimise their TCO and maximise their ROI include:
A mounting issue for the food and beverage industry, there are some Australian industries that have long been the victims of counterfeiting. Take the “Benfolds” wine bottles, for example, which look mysteriously like the ones from Penfolds. Premium Australian meat is another popular target, with David Blackmore (the Wagyu beef king) finding this out the hard way when counterfeit beef using his brand was sold to five-star hotels in Shanghai.
Counterfeit products are not only hurtful for your profits, they can also cause serious damage to your brand as well as put consumers in danger.
If you’re looking to export, it’s important that you also look into ways to protect your brand against counterfeiters. Combining identification and inspection technologies on the production line (during serialisation) is the most effective solution. Serialisation provides each product with a unique code, which consumers can scan in order to verify its authenticity. The bonus is that you’ll be given the opportunity to undertake some direct marketing, plus the manufacturer will receive data on where/when the product is being scanned.
Take a close look at your manufacturing processes and identify ways they can be streamlined to cut costs and increase efficiencies. This is particularly important when it comes to fresh produce, as Australian producers are required to get products to their export customers in tiptop condition.
Why not take a leaf out of Frosty Boy Australia’s book? This business-to-business manufacturer is behind a variety of soft serve, frozen yoghurt and beverage powder products – which they export to 48 different countries, with customers in Asia really driving their growth. In order to keep costs down whilst still remaining competitive, Frosty Boy relies on a highly automated facility (from measuring to palletising). Even with very high output volumes, incredibly only 6 people are required per shift.
Another business that has been able to streamline its processes to allow for overseas success is Wescobee Honey. As Australia’s second largest exporter of consumer-packaged honey, they ship their products to around 21 countries. Their expansion into China and Japan has created new demands on their coding and labelling equipment, but working with Matthews has enabled them to implement a multi-lingual coding solution. This has also improved their overall efficiency and productivity, as well as allowed them to meet market needs.
At the end of the day, expanding overseas is a really big decision. It should come as no surprise that thorough research of your various export market options is an essential first step in the process.
Businesses need to look beyond their initial entry, however – the aim, after all, is to develop a sustainable business model and to plan ahead for a thriving export market (one that complements your home market). This is the real way for any business to reach food and beverage export success.
