UK Food Exports

When Is The Right Time To Start Thinking About UK Food Export?

For any food start up the idea of becoming a successful international Food Exporter as well as UK business is an alluring prospect. The opportunity to add incremental sales in market after market to grow the overall business: EU markets close to home, the USA… and what about China – predicted soon to become the world’s leading market – India, the Middle East, and other markets with an increasing appetite for Western products?

But before we get carried away, let’s give some thought to when is the right time to start the process of exporting food from the UK and how to go about it.

Exchange Rates

First up, when isn’t the right time? Just when exchange rates are favourable. That’s not to say that if you’ve taken the necessary steps to prepare the approach, and then a decision to start exporting when rates are good, that this is necessarily a bad time.

But if the only motivation to start selling internationally is a window of opportunity that makes your products acceptably, or more competitively priced, this really isn’t a recipe for developing a sustainable long-term business.

Just look at the Euro. A few months pre the Brexit referendum the exchange rate with the £ reached a level of €1.43. Today it’s getting on for 20% lower at around €1.17 (January 2020) – and it has been below €1.10. UK products are that much more attractive to European buyers at today’s rates, sure, but be wary of currency experts’ forecasts of likely future rate ranges. If the £ were to strengthen significantly vs the €, would your range still make an appealing proposition vs the local competition, albeit returning you perhaps a lower margin?

Your Business Today

Perhaps the single most important factor in deciding when to start exporting from the UK is the current state of your business and where you are in your business plan. The approach you have taken in the UK might give you useful lessons for how to go about tackling international markets. Perhaps you seeded your brand in selective locations where your influencer target market will find your products, proved the concept and built a strong following before then approaching larger customers, with a stronger story to tell. Step by step.

Green Seed recommends building strong foundations and a stable core business is key before thinking about new food and drink markets. If your immediate priority is winning your first multiple listing with Waitrose, you could do without the distraction of chasing business with customers you know less well in other markets.

Credentials

Not only that, the experience of handling business with major customers will be invaluable when starting to deal with international customers (or distributors). And if you are approaching a Delhaize in Belgium or Albert Heijn in the Netherlands the fact that you’ve successfully managed and grown your business with one or more major customers in the UK – retailers they admire, especially in identifying innovation – will be an important factor in their decision-making.

Alternative Approaches For Start Up Brands

Delhaize Retail Innovation Show

Delhaize is one of the leading supermarket chains in Belgium, with a market share of ca 23%, and recently merged with Albert Heijn. Its customer base is similar to that of Waitrose. They have been long time admirers (and followers) of UK retailers and the category and brand innovation they see in our stores.
To try out a new way of introducing new brands to a major retailer, Green Seed set up a private Retail Innovation Show at their HQ, showcasing exciting 50+ new product concepts (ambient, chilled and frozen) identified from the UK, the rest of Europe, Israel, the US and elsewhere. Delhaize buyers across all categories visited the show (their CEO even spent 45 mins).
After following up with the buying teams, 20 meetings with inspiring suppliers were requested by the buyers, resulting in several new confirmed listings for UK exporters and many more still in discussion.

Resources

Have you got the right resources – human, financial and marketing– in place?

Is your team able to take on food and drink exports? Many start-ups take a little time before they expand their team beyond the one or two founders. Green Seed agrees with this strategy to keep overheads to a minimum. Making those first hires with the right values and skill sets is a challenging process.

Don’t underestimate the time it will absorb to find and manage international customers. A lot of companies make the mistake of thinking that by merely appointing distributors to handle different markets, that their international business will grow and require a lot less time than they will spend on their UK customers.

Being responsive, sending samples, focusing on food pr, quotations and visiting the market regularly, being the face of the business to a customer are all just as important when dealing with Albert Heijn in Amsterdam as they are with Waitrose in Bracknell.

Green Seed recommends thinking about how you will manage the process. Will it be the founder/CEO who takes the lead? A team member? Will you outsource the process?

Who Leads The UK Food Exports Process?

Examples:

When start-up brand New Covent Garden Soup, now part of Hain Celestial, started exporting, it was their CEO William Kendall who decided he would lead the process himself. The brand had established listings with UK mults and, with some local support to open doors in markets, he was the one who communicated his vision to build an international business with customers, starting in Belgium and the Netherlands. He slept on friends’ floors, made sure he was available to attend every exhibition and buyer meeting himself and personally ensured his London based team responded to every retailer request.

And this created a very positive impression on international customers, who would often complain about the slow response of some of the better known larger UK players to whom food and drink export seemed sometimes to be viewed as a production and logistical headache!

Fullgreen, a recent start-up best known for its Cauli Rice range and now producer of a range of vegi low carb rice alternatives in microwaveable packaging, has taken a different approach. The brand went straight into UK multiples within months of launch and established a strong and growing business. After exhibiting at trade shows in the UK and Europe, where they established interest from a number of markets, they established some trials in a couple of European territories and investigated the US market.

They then took the decision to focus their efforts on the US opportunity rather than try to handle a number of smaller markets closer to home. After outsourcing local sales and establishing commitments for orders from a number of national and regional US retailers over the past few months, they have now taken the plunge to establish local production which will come on stream in September this year and successfully raised further investment to fund their international expansion.

Financial Resources

Next to your team, do you have the financial resources to take on UK food export? If you’re intending to run the entire export process out of your company travel budget (a complaint made by some Export Managers in medium-sized businesses and above), then perhaps now wouldn’t be the right time.

Just as with UK customers, Green Seed recommends supporting international businesses with some marketing funds – demos and tastings, social media, focused PR etc – will be necessary to raise awareness, build engagement and win the trial.

Market understanding

And of course information. Understanding how different markets operate, any legislative and regulatory issues (for instance even while we are still part of the EU there are still some differences here despite common standards and labelling), supply chain, category trends, competition, pricing and margins in the local market.

Where to start?

www.greenseedgroup.com
www.opentoexport.com an online community helping UK businesses get ready to sell overseas.
www.great.gov.uk for access to Dept International Trade services. Useful for orientation, export readiness and links to events and seminars.
www.ukfdea.com/events for links to international food and drink trade shows and other events. Exhibitions can be a useful tool to put your toe in the water, check out international trends and competitors, and to form a first assessment of international demand and establish initial contacts.