Stay or Go? Export: Which Market, How & Why

Posted on May 22, 2018

When it comes to selecting the right export market, there are many ins and outs, and it can be tough to decipher which considerations apply. At the recent Food & Beverage Exporters Forum we held in Sydney, three international buyers from three distinctly different markets shared how, why and when to stock in their stores.

United Kingdom

“We’re a small retailer,” said Buying Director, Planet Organic UK, Al Overton. “Our role is a first-to-market retailer; I’ve got seven stores. Our advantage for a supplier is to be a launch partner for a brand that wants to enter the UK market. I spend a lot of my time at new brand incubator events. I like to work with these companies when they’re young because then in two and a half years when they’re ready to launch, we will be their partner of choice.

“For a new brand entering the UK market for the first time, we are the retailer of choice for most of those new brands because we are ahead of the curve. Suppliers will go to independent health stores across the country and they’ll say, ‘Well, it’s stocked by Planet Organic,’ as being an assurance of quality.

“There is essentially a three way conversation between the brand, the retailer (Planet Organic), and the UK wholesaler. We don’t import directly. I’m not in a position to say, ‘Love the product, send me a pallet.’ I have no central warehouse or backstock space. Rent in central London is expensive, and so all the stock we own is on the shelf, and our supply base relies on singles delivered daily from our main wholesalers. So even though we have huge numbers of supplies and fresh foods etc, in terms of ambient grocery products or supplements, it’s coming from UK-based wholesalers.

“So, as Australian suppliers, you need to want to be there, and if you want to be there, then I can help. I’m looking for products that I don’t already sell. You might be a market leader here, but I’ve probably already got a market leader in the UK. Unless there is a unique USP to the product, which doesn’t currently exist within the UK, then we’re probably not interested. If it is a unique product that doesn’t exist anywhere else in the world, apart from Australia, then I’m definitely interested.

“The challenge is, how much is it going to retail for by the time it gets there? The best recent example of that is our work with Loving Earth chocolate; the raw chocolate brand, love it. We launched it in our stores two years ago; they’re now doing pretty big business within the UK generally, and it’s our second biggest chocolate brand. They came with a willingness to be in the UK; they worked with us well in terms of launching their product within the UK; and then broadened out through other retailers. We helped them with the right wholesalers, and the right way to market, and the right pricing structure, and all the rest of it.

“Some of the UK wholesalers import, and some of the wholesalers would look to buy from a UK based importer. For us, we are retailers – that’s what we’re good at. Give us a good product and we will sell it well.”

Malaysia

“I love importing,” shared Senior Manager of Grocery, Euniece Quek, from Ben’s Independent Grocer & Village Grocer Malaysia. “We try to import every two months from Australia, and we usually go through consolidators. I do have a few on hand which I use to compare prices because there’s always a price war when it comes to things like this.

“While we are a premium supermarket; we want to get that value and give it back to our consumers. We don’t like any Minimum Order Quantities (MOQs) because we like to trial many products, and some of these are so new to our market that they don’t move quickly off the shelf at first. And if these new products are well-received by our customers, we’d be happy to order in pallet-quantities, as long as the product is a fast-moving item.

“Generally in Malaysia, we prefer products that have a longer shelf life. Although, I know Australia and the UK prefer a shorter shelf life as it gives the perception of being a more natural product. We do things differently. While we prefer the product to have a longer shelf life, we’ll also order more regularly so that the product is always fresh. We like that kind of flexibility in Malaysia.”

United Arab Emirates

“In the UAE,” said Kirti Meghnani, Group Procurement Manager at Choithrams UAE, “we have been in this business for 25 years. We have a lot of SKUs that are from Australia. The challenge is how do we get even more new products from Australia, when many suppliers are reluctant to meet the labeling requirements, date coding requirements, and lower MOQs.

“On the MOQ point, many suppliers say that 200 cases is the minimum because they need to transport it from Brisbane to Melbourne or Sydney – and unfortunately, that’s where many of the discussions end.

“Another consideration is that oil prices are at a low at the moment. Most of the GDP in our region actually depends on oil prices, meaning disposable income has now tightened, and so we’re having to be very competitive with our pricing.  

“A challenge that many niche Australian brands face is how to compete against multinational brands. Just to give you an example in relation to chocolates: Mars and Nestle highly incentivise Choithrams with rebates and display agreements. As a result, they demand more space, displays and sampling opportunities. So if I’m going to sell a new chocolate brand, I have to review the benefit of having diversity in our store, with profits potentially lost. We are confident that Australian products don’t have all those nasty E-colors, because you are known to make more natural and cleaner products. Yet we still have to go through that process.”

The route to market is complex and varied, and without these kinds of discussions many suppliers would be left in the dark. It’s important to connect with the right buyers in each market. Export Connect always engages our buyer network when working on client projects, because this is the best way to know whether to stay or go.