Specialty Food: What to Consider Before Deciding to Export

This article was contributed by Laurance Milner, President of Something South African

Allow me to try and simplify the decision making process an export company, SA or otherwise, should go through before using its resources to sell to the US. Have you set out and can explain to potential trade partners your expectations for your export initiative/program, have you heard the importers expectations, and are you both on the same page?

E.g.: I want to introduce 3 new items in the first 24 months, with sales in x markets (or to y retailers) that could create $....dollars in sales over the next two years for my company and my importer. In order to make this statement of expectations, ask yourself

1. Why the US - is there a need /niche for my product in the marketplace ( what is unique about what I am offering the importer and their buyers)? Am I prepared to modify or indeed redesign my packaging/labels to comply with US regs?

2. What "soft" costs can I bare: - samples, brochures, web site links, Facebook presence to support my brand and my importers sales efforts.

3. What "hard" costs can I bare: staff to come to the US to help with sales presentations ( not only at 1 trade show per year), pack redesigns, consignment stock in the early stage, terms 30 to 60 days from shipment and exchange rate risks?

4. Do I understand the price/cost model for the market -how does a R10 product land up at $4.99 on the shelf in the US? What can I do to make the price as competitive as possible but keep a margin that allows me to participate in 3/ and 4/ above.

5. Does the product have sufficient shelf life for the market -at least 12 -15 months for most unproven brands/ items on arrival in the US?

6. Have I spent enough time to try and understand the competitive environment in the US - this can be done inexpensively online many times, but on the ground visits to the marketplace are invaluable ( not just being at trade shows)?

7. Do I understand the language of business in the US and the channels that are available to my product so I can have intelligent discussions with my US counterparts?

I hope this exercise is of value -new products are the lifeblood of the specialty industry but there is no substitute for preparation before committing valuable financial and human resources to this task.

Laurance Milner
Founder
Laurance Milner Holdings
Issaquah WA USA
T: 425-313-1993
F: 425-427-0709
E:laurance.milner@comcast.net
www.biscottea.net / www.somethingsouthafrican.com

Laurance Milner has been successfully growing and marketing innovative specialty foods in South Africa and the U.S. for over thirty years. Laurance started Silverpride Smoked Salmon and expanded into thirteen export markets, with brand leadership in both Australia and South Africa. From 2001 to the present, Laurance’s company, Something South African, has been a pioneer for South African specialty food in North America. In 2007, he launched BISCOTTEA, a company dedicated to the creation of bakery recipes showcasing world teas and coffees. Laurance also sits on the board of the Harvest Bread Company, and has frequently represented the specialty food industry in the media.