Export Connect recently hosted two Food & Beverage Exporters forums at Fine Food Australia in Sydney. Moderated by Najib Lawand, the forums showcased two panels that included successful export managers including Laurence Fazzari from McCains Australia, Kim Brown from Carman’s Fine Foods, David Malone from Simplot and Cristina Talacko from SalDoce, NSW Food & Agribusiness exporter of the year (2018). In this blog, we share Laurence and Cristina’s views on market opportunities. The last blog shared their insights on topics including buyer presentations & negotiations. And future blogs will include insights shared by Kim and David on market selection and entry strategies and building a business case for export.
Understanding your market – China
I asked Laurence for his top tips as an export manager who is active in the Chinese market.
Tip 1 – don’t extrapolate population numbers to sales potential. A large market can mean a lot of competition. For every three or four competitors you might see in the Australian market, Laurence told us that in China there are 40 – 60, or even more. It’s a highly fragmented market, which means both opportunity and competition. For Laurence, a targeted approach is essential.
Tip 2 – don’t assume a client with thousands of stores will make your dreams come true. We’re talking about the food and beverage market – fine foods, organics, and health foods. That means premium products with a use by date. Laurence says a key question to ask retailers is how many of those stores will your product actually sell in. Premium products need to be targeted to the markets where shoppers will buy them.
Tip 3 – get your business pumping at home first. China is an interesting market with good opportunities for Australian food and beverage manufacturers. It’s an export market worth considering says Laurence, as long as your business is going well in Australia. Breaking into the Chinese market will take investment and effort, and if your business isn’t doing well at home, diverting that money and energy abroad could be damaging.
Understanding your market – Indonesia and Malaysia
For Cristina’s company, exporting to Indonesia was a no-brainer due to the proximity, language and growing economy. Crucially, they felt it was the right market, with the right distributor at the right time – the company makes gluten-free foods, and Indonesia was seeing a growing middle class with an interest in health, and confidence in Australian products. Of course, like any market, Indonesia has hurdles exporters need to navigate including halal registration, other product registration, and packaging. One of Cristina’s comments I found interesting was the fact her company employed Indonesian staff in the home office during this period. Having staff who spoke the language made completing the right paperwork easier – and also flagged to the distributor that the company was serious about the country. That connects back to comments of Cristina’s that I highlighted in my last blog on the importance of building personal connections.
Like Indonesia, Malaysia is an export market on Australia’s doorstep, and it’s a market Laurence was very positive about. It’s close, the consumers appreciate a premium product, and with the right distributor, Laurence told us that it is a market companies can enter quickly, and find it punches above its weight in terms of performance compared to size.
Understanding your market – Hong Kong
Hong Kong has been in the news a lot recently due to the demonstrations and political unrest. Therefore, it’s a market that exporters might be concerned about. I asked our experts for their opinions on the situation from a business perspective.
Cristina and Laurence both agreed that Hong Kong is a potentially great market, with a westernised sensibility, sophisticated retail, and low barriers to entry – although Laurence pointed out that easy entry also means a lot of international competition. Cristina is active in the market now and reported that retail is very affected by the political situation, with smaller orders and slower market movement, although food is not impacted as badly as non-essential goods. Her company is providing their client with more promotional support – another example of building those long-term partnerships.
Understanding your market – Thailand
Thailand is another market fairly close to Australia which can get overlooked in favour of the big foreign markets such as China and the USA. And it is one Cristina was enthusiastic for – fast growing and sophisticated. Interestingly, she told us her company had initially assumed their products would be very niche in the Thai market, mainly of interest to ex-pats, but in reality they’ve found Thai consumers aware of trends and interested in Australian products.
Hopefully you’ve found this article useful to help assess market opportunities. As always, if you’ve got any questions or want to discuss export opportunities for your company, feel free to drop us a line here at Export Connect – we always love to hear from you.