Q I own a small premium branded food business and I’m looking at export opportunities. I’ve been approached by distributors in France, Germany and Spain. What do I need to watch out for?
It’s good to hear you have international ambitions. The UK food industry leads the world, is our largest manufacturing sector and yet there is a lack of international ambition in many companies, which really frustrates me.
As a premium business, I would target cities, not countries. Food habits are very different in London and the South East to the rest of the UK and the same is true everywhere else. So, think about Paris, Berlin, and perhaps even New York, Hong Kong and Sydney. Then find a way of accessing those markets. Isn’t this how fashion and cosmetics brands behave?
Paris is a good example. We started selling Gü at La Grande Epicerie de Paris (an Aladdin’s cave of lovely food) and it turned into our biggest single retail outlet. What La Grande Epicerie do is followed closely by French mainstream supermarkets and I was soon at buyers’ desks in Auchan, Carrefour and Monoprix.
I am always wary of going through distributors, having had my fingers burnt. We all know margins in food aren’t that flash and if you want to hit a competitive price point I believe you need to sell direct to the retailer. If you do end up going with a distributor, make sure you go to all the key meetings. The French love it when you speak in their language - and remember, they are also very hierarchical and like dealing with the big cheese. And think about your exit plan with distributors. In a number of markets, local law is very protective of them - so be careful with your legal contracts.
The key for a small company is going step-by-step. Get success in Paris (which I think is the best place to start). But don’t make the mistake of rolling out to the rest of the country. A city-focused strategy is much more single-minded and that’s where the affluent customers are.
We ended up launching in Sydney, Melbourne and Auckland, too. There are some major compensations with following an international strategy - it’s much more fun than slogging around Swansea, for a start!