Are you driving your exports or are they driving you?

By Nicola Thomas

- Last updated on GMT

Being in control of your export plan is the key to successful expansion. Credit: Getty/thitivong
Being in control of your export plan is the key to successful expansion. Credit: Getty/thitivong

Related tags Investment Trade

Nicola Thomas, director of the Food and Drink Exporters Association (FDEA), explains why a successful export drive stems from a plan based on your internal goals and capabilities, rather than so-called external ‘opportunities’ which arise.

Many companies start exporting by accident or in an ad hoc way in response to inbound enquiries or trade show leads.  Fast forward a couple of years and they invariably have some sales on paper in a number of markets, but it’s highly unlikely that they are achieving sustained growth with these random customers and countries, or that they are with the optimum distributors to build their brand around the world.

In a post-Covid, post-Brexit world filled with domestic market pressures and global supply chain challenges, taking charge of your exports – rather than them being in charge of you – has never been so critical to building sustainable and profitable sales overseas. 

Go your own way!

Defining your export aims

Start by defining your export goal – what are the underlying reasons you want to either begin expanding overseas or put more emphasis on international sales? Maybe it is to extend your product lifecycles if your category is stagnating or maturing in the UK; you might be looking to fill excess production capacity or offset seasonality in the domestic market; are you keen to de-risk your business if sales are currently UK-centric or find bigger pools of target consumers given that the UK represents less than 1% of the total global consumer market?

What are your capabilities?

In terms of your capabilities, firstly consider your current products, pack sizes, labelling, ingredients, production processes and whether you would be prepared to alter any or all of them for overseas markets. For example, you might need to move to foreign language labels, reformulate recipes for different taste preferences, develop smaller packs for countries with lower disposable incomes to meet affordable price points or larger packs to service foodservice channels. 

Determining these parameters at the outset will not only simplify the process of assessing the attractiveness of potential export markets, but will also prevent situations in the future where you are asking your production colleagues to manufacture small runs of unique recipes in Japanese packaging! If you do have limited flexibility in terms of adapting your products and packs for export, that will also trim down your shortlist of potential target markets, which as you will see below is no bad thing.

What resources do you have?

Next, you’ll want to ask yourself what resources – human and financial – do you have to dedicate to your export drive, and how much are you prepared to invest in both? If export is a bolt-on to someone’s day job and will only get attention on a Friday afternoon, it will be impossible to get much traction or the same results as if you had a full-time resource.

Consider the costs of frequent overseas travel (which you will need to do to enter markets and build long-term sales), of appointing partners, of attending or exhibiting at trade shows and managing and motivating your distributor’s sales teams. You will also need some sort of marketing and promotional budget to support your brand in-market, maybe for listing fees if you go down the multiple retail route….and don’t forget the hidden additional costs of certification, documentation, brand protection and sending samples which you may not incur servicing your UK business. 

How many markets?

Finally, how many markets are you going to sell to? There are almost 200 countries in the world.  Think about how much time, effort and resource you are investing in the UK market and your domestic customers; if you spend a fraction of that time and those resources to get the same results overseas, you can’t be in many of those 200 countries at once and doing them justice. 

We see companies who appoint a distributor in one territory and then immediately move on to finding the next one in another country. This is a big mistake, as sales are not built by signing up with first distributor you meet at a show or who contacts you – it’s about taking the time to find the best-fit partner for your brand and managing and motivating them to maximise results.

Starting off on the right foot

Answering those very simple questions will give you the foundations of your export plan and a much more realistic view of what you can and can’t achieve as a business. If you are the person spearheading overseas sales, you will be able to build internal credibility as you can justify why you need budget to visit and pursue opportunities in a particular market. If you are a smaller company looking for investment, having a plan with your growth ambitions substantiated by hard facts is a powerful tool in your pitch kit.

It is important to involve as many functions as possible in this initial exercise to get that critical buy-in across the organisation, and to flesh out and mitigate potential barriers and risks. The companies we see succeed are those where international sales are not simply handled by one person or even a department, they have senior management and company-wide commitment to the export drive.  Our recent FDEA overseas distributor survey highlighted that this was one of the key success factors for ‘best-in-class’ suppliers – and who wouldn’t want to be one of those!

If this article interested you, you may also find on our webinar useful: Expanding into new markets for profitable growth - available to watch on-demand for free here.

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