With UK exports of fruit and vegetables increasing in 2011 by some seven and 6.6 per cent respectively, many feel it is time to strike while the iron is hot for the fresh produce industry.
But with a global economic crisis and uncertainty on rates at home, some growers and producers will understandably be put off taking the next step and question what is the best way to go about entering the international arena.
So what makes a successful UK exporter, and what do newcomers need to know before considering sending their produce abroad?
RESEARCH
“If you don’t do the research and make sure you understand your target market, you’ve already lost,” says Gavin Willerton, technical director at Produce World Marshalls.
Exports currently make up around nine per cent of Marshalls’ business, worth around £3 million a year. “If you are selling to Germany, for example, it’s a massive market with much of a convenience-store focus, whereas somewhere like Denmark only has two or three major retail outlets.
“So you must adapt your marketing approach appropriately.”
Julian Pitts, sales director at Veg UK, echoes the view that forward planning is vital. “You hear a lot of horror stories of growers sending cauliflower or iceberg lettuce out to Scandinavia and business has broken down because produce was wet when it arrived or was the wrong size; companies can end up with a transport bill of €2,000-3,000,” he says. “If you successfully export you need to know the marketplace you are aiming for - know the varieties, volume and packaging people want. Do your homework.”
TRADE SHOW PRESENCE
The Commercial Horticultural Association (CHA) secured over £100,000 to support UK horticulture firms exhibiting at overseas trade shows, with eligible exhibitors reclaiming between £1,000 and £1,400 against their costs for exhibiting at events such as Berlin’s Fruit Logistica. Willerton explains: “By going to the likes of Fruit Logistica, you have all the different countries that could form your target market under one roof. In my experience, foreign investors are much more likely to do business with someone they have already met face-to-face.
CHA chair Pat Flynn says UK pavilions offer “an affordable platform for companies wishing to take their first steps into overseas markets as well as offering experienced exporters a higher level of exposure by being part of a co-ordinated group presence.”
PROGRAMMES
Graham Cousens, managing director of Spanish-based global fresh producer distributor Comexa Europa, has helped annual company turnover on exports approach the £10m mark and believes exclusivity is a real positive for firms and growers alike.
“Getting exclusivity with growers is key as it protects ownership of a strong brand and shields both parties from fluctuations on market prices, allowing growers to plant according to seasonal programmes,” he explains.
“We only project produce numbers based on the minimum quantity our portfolio of growers expect to produce. This means no one gets let down and if we have more volume, it is sold at an open price. Our customers are happy as they consistently get our products to schedule.”
Willerton adds that historically, export sales are driven by surplus availability in the UK, so when there is too much crop volume distress sales are made to foreign markets.
“We have moved away from fast fire sales as they lead to exploitation - you need a programme to promote genuine supplementary business,” he says.
BRAND IDENTITY
Veg UK has successfully exported brassicas to the likes of Poland and Denmark for the last two decades, and Pitts believes its strong brand identity has been pivotal. “We brand all our products with the Chefs Choice name, which protects our produce and signifies its quality. The customers are more likely to do business with you if produce is packed to a high specification.”
Willerton says Marshalls sends out all its products in branded boxes and that has enabled the company to develop a good reputation. “You must believe in your own interpretation of quality, but also bear in mind that an export customer has a different perception, so the broccoli may need to be a little bigger or the cauliflower may need to be trimmed more. You need a clear sense of branding that can maintain flexibility.”
URGENCY
The eurozone crisis could be a blessing in disguise when it comes to exports and despite the negative coverage, there is plenty of room for manoeuvre.
HSBC’s head of agriculture Allan Wilkinson explains: “The eurozone crisis adds another dimension to things.
In the last 10-12 months the pound has gradually strengthened against the euro and in isolation, that means growers can charge importers more for their products; the amount of exports we have are growing, particularly with the weaker pound.”
Cousens believes UK growers and producers need to stray from conventional business and focus on export opportunities. “The returns from the wholesale market are much lower and as a company we once conducted 80 per cent of our business in UK wholesale; we now only do 10 per cent. Our growers wouldn’t be happy with returns just from the UK markets.”
Willerton believes companies can’t fail at exporting overseas if they follow the right principles. He concludes:
“A sale is a sale. My experience of walking around retail fixtures abroad is that they are very hit and miss in terms of quality, so if a UK-based company makes a commitment to deliver a certain standard and requirement, it will succeed.” -
No comments yet