As part of our services related to the internationalization of business, we have spent a lot of time in recent years researching and collecting information on the possibilities of exporting food products and beverages to other European markets, especially to the English and Irish markets. In particular,
the English market is recognizable as one of the world markets (even as the world market No. 1) for food products.
A large consumer base with good purchasing power (e.g. around 65 million people in the UK, who spend an average of 11% of the family budget* on food and beverages) and at the same time a great reference or starting point for entering the US, Arab and Asian markets convince a high number of producers from all over the world to make every effort to enter the English and consequently also the Irish market. Both markets are very demanding, both due to the large number of competitors and due to the customers requirements in terms of quality, less processed, natural or even organic products, new flavors, packaging design, innovative marketing approaches, fast delivery when ordering online etc. Sales channels are also very demanding, being traditional (e.g. distributors) or online and larger or smaller once. It is very helpful if producers have obtained one of the more demanding standards, such as BRC, IFS or ISO22000 and/or if they have already checked the quality and desirability of the products through various competitions and received an award or recognition for one or more of their products.
In recent years, both in the UK and in other markets, there has been a trend towards increasing sales of branded products by those who sell the product in each market, rather than by those who manufacture the product. Own brands are being launched by traditional (e.g. Harrods) and online retailers (e.g. Amazon itself and also Amazon sellers) as well as famous persons (e.g. Jamie Oliver). This means that producers who are willing to grant their own brand to others have more opportunities to sell in foreign markets in larger volumes than those who would like to keep their own brand, but do not have the know-how and/or resources to develop the strong brand on their own as well as not the excellent marketing strategy that would be needed in such a case. This is due to the fact that the service part of the product offering (e.g. promotion, marketing, sales, delivery) is becoming as or even more important than the product itself, and the level of costs in the total price of the product is already tending towards the service side. This forces producers to reduce production costs on the one hand and increase resources for promotion, marketing and sales on the other. From all these reasons, for example, a large number of cooperatives operate in the English market, with smaller producers in particular who are forming cooperatives to reduce costs. Co-operatives develop common brands and carry out promotion, marketing and sales. Producers also form cooperatives or other forms of association to reduce the cost of raw materials (joint purchasing) and production costs (common production line, common warehouse, etc.).
The same as in other sectors, innovations are also important in the food sector. Innovations position a producer ahead of its competitors, at least for a certain period of time, and at the same time enable the development and visibility of the producer’s own brand. Innovations can be, for example, (a) new recipes, (b) old, forgotten recipes but new business, marketing and sales models, (c) new multifunctional packaging, (d) etc. If sectoral collaboration is important for cost reduction, innovation is about cross-sectoral collaboration and the cooperation of different, even very different fields (e.g. IT, tourism, creative industries, marketing, etc.), products and services into a single product or offer.
All of the above requires manufacturers to be well prepared, having a good foreign entry strategy, a good marketing and sales channel mix and enough attractive business models.
There are many more strategies and combinations of approaches to foreign market entry than I can outline in this article. There are also many opportunities for all food and beverage product groups and for both large and small producers. Much of the above also applies to other challenging markets, other sectors and other consumer product groups. At WOTRA, we have developed a range of services and established partnerships that can help you to enter foreign markets.
Do not hesitate to contact us for more details.
* Food statistics in your pocket (last updates)
* Food Statistics Pocketbook 2016