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Selling overseas can transform the growth prospects for many food producers. But it’s not something they can do alone: they’ll need a distributor to turn opportunity into reality.
For any food company, once an export market has been identified as having the right profile to represent a growth opportunity, another question arises: precisely how do you identify and partner with the right distributor for the market you are going after?
Lee Fisher, head of export for Thatchers Cider, which has registered dramatic growth in the UK and overseas in the past five years, describes the challenge in these terms.
“At the start of our export journey, we knew that finding the right partner to represent our brand was essential.
“With Australia in our sights, we spent time talking widely and used UK Trade & Investment as a valuable resource. Ultimately we secured a ten-year contract with Coopers Brewery in Australia – the largest independent brewer in that country – which meant we were working with our number-one choice of partner.
“It was not the fact that they were a market leader that sold it, however. It was their culture, ownership and history that matched ours. We just felt like we were bringing together two like-minded businesses.”
How can you tell if a distributor is right for your business? By meeting and talking for as long as it takes, casting the net wide to gather in the views of others and, says Fisher, by drilling down into the mechanics of how such a partnership can work in practice.
"The commercial viability and financial structure of any partnership matters a great deal. You need confidence in the ability of a partner to fulfil their part of the contract in terms of market reach, market resources and volume capability. But if you can secure all of this with a company that shares the same values and culture as your business, that counts for a lot,” he adds.
In finding and choosing a distributor, most companies will be looking for a potential long-term partner, with the same aspirations and long-term view of where the products and brands under discussion fit in the market.
“In our case, Thatchers Cider and Coopers Brewery are fourth and fifth generation, family-owned businesses striving to make high-quality products with the the best ingredients, produced the right way, without cutting corners,” says Fisher. “That kind of fit means we can trust Coopers as custodians of our brands – and they can trust the quality of our cider.”
Devon cheesemaker Quicke’s has been farming in the county for 14 generations. Its cheese is sold to wholesalers and the independent market, as well as to export markets including the US and Australia. It sells through Neal’s Yard Dairy, Somerdale, Coombe Castle, Singletons and the Fine Cheese Company, and export makes up a third of its revenue.
Tom Chatfield, sales and marketing manager for the business, says the US market poses a distinct challenge for any food producer, because it is such a huge territory effectively containing 50 different markets.
“The US is so large that there are few national distributors. Those that do operate at this level tend to be supplying the multiples, which isn’t an environment where Quicke’s fits. Instead our distributor partners tend to work on a regional basis, with a focus on more esoteric independent retailers and fine-dining restaurants.”
Even though its cheese is available through the US national retailer Wholefoods, it is still distributed regionally, adds Chatfield.
“For example, our goat’s-milk cheese is popular in California but isn’t available on the Atlantic north-east coast. It’s easy to think of the US as one homogenous culture but there is incredible regional diversity. It pays dividends to understand these variations.”
One way to unlock opportunity in any overseas market is to work at developing the profile of the brand. In Quick’s case, the company’s brand is represented very effectively by Mary Quicke, who has built up profile and reputation with the American Cheese Society while also networking at events like the Fancy Food Show.
“Maintaining our profile has been hugely beneficial for nurturing new distributor relationships. In the past couple of years we have invested resources in spending real time on the ground – looking at where our cheese ends up, who sells it and why.
“This involves participating in distributor ‘ride alongs’: in other words, a whole campaign of activity that involved tastings, sampling and educational talks in our key territories. Showing this level of commitment to your distributors obviously has a two-way benefit,” says Chatfield.
What’s Chatfield’s key piece of advice on export and distribution?
“Number one would be not to underestimate people’s passion for quality food! A lot can be gained from facilitating that desire to learn about your product’s provenance. We sell cheese from a specific place, with a unique story. We sell that whole package. So you need to find the right people, who are capable of telling your story – as convincingly and passionately as you do.”
For Quicke’s, that has meant working with a disproportionate number of smaller distributors – which between them generate most of the company’s turnover in the US.
This, says Chatfield, is down to the fact that the smaller players understand what Quicke’s represents.
“I think this fundamental level of understanding is key to building a solid distribution network. And the same factors influence the whole supply chain – from us the producer, through our exporter, distributors, retailer, right down to the consumer who is prepared to put a ‘dollar value’ on hearing more about our story.”
Quick’s and Thatchers are established players, of course. What is the best advice for smaller food producers on the distributor challenge?
Here, some great advice comes from Granny Gothards, which makes ice cream from its headquarters on a farm in Somerset. It’s a relatively small outfit, with under £1m turnover, but recently took an opportunity to export to the United Arab Emirates.
Founder Amanda Stansfield sets the scene: “Timing was everything for our first move selling overseas. We got talking to a distributor that was working with a major new hotels group with a long list of procurement requirements. One of the items of the list was premium ice cream and we were in position to deliver in the volumes that were needed.”
Where does the power lie when you are newcomer to a market? Stansfield has this strong message: as a newcomer, you should remember that you are always equal partners when you work with a distributor.
“You might feel when you start off that you need the distributor you choose more than they need you, but that’s not the case. If you have products that are distinctive, or even unique, there should be a lot for the distributor to gain from the representing your product and company.”
Stansfield also says you can start by trying to learn about a distributor online.
“Check out the website and you will usually see the companies represented and look at social media activity too. Who is the distributor following and retweeting? What other kinds of engagement can you see? Does all the activity you can find put the distributor in a good light?”
When Granny Gothards were looking for a UAE distributor, Stansfield says she could see the one the business ultimately picked was reputable, but that wasn’t enough in itself.
“Our distributors represents Unilever and some other big players. But you need to know that the fit is right for your product. Will it be prioritised? Will it get the attention you want? Every distributor you meet will claim to have the best networks and want exclusivity. And they can’t all be right! So challenge them on what they mean and find out all that you can – only then should you enter a partnership or sign anything.”