In partnership with Scottish Enterprise.
Breaking into new markets can be challenging for any business looking for its product to succeed on a global scale. Subdued international demand and the low oil price has taken its toll on some sectors with figures from the quarterly Index of Manufacturing Exports revealing a drop of 0.5 per cent in manufactured exports compared to the final quarter in 2015.
But it’s food and drink that’s bucking the trend with a 3.3 per cent increase in the first quarter of 2016.
Scotland’s top export market is the US but according to manufacturers launching your product stateside is no easy feat.
James Taylor, commercial director at Perthshire-based crisp manufacturer Mackie’s at Taypack, says advice from Scottish Development International (SDI) helped them make an impact in the North American market.
“The US was one of the first markets that we started exporting crisps to and it was initially through an agent out there,” says Taylor.
“We invested quite a bit of money with this agent without necessarily having a guarantee that there would be sales out of it.
“You get quite excited as a business when the US approaches you and an agent promises the world but they’re not always able to deliver. When we first went out there it was quite a tough learning curve.”
Taylor continues: “We have had a lot of success in Canada. There seems to be an affinity with the Canadians and the Scots.
“SDI put us in touch with an agent there and we gained a listing with the distributor who has done really well getting the crisps distributed around Canada.
“That quickly became a big market for us and it’s one we are still looking to grow significantly over the coming years.”
Gin is unquestionably the spirit of the moment in the UK but Marcus Pickering, director and co-founder of Edinburgh-based Pickering’s gin, says that when it comes to exporting it the “big boys” of the drinks industry have created a challenging environment for small businesses.
“We are working on the American market at the moment but the market is hard and the big boys pay big money to rule the roost,” Pickering says.
“America’s a hard egg to crack but it’s also the best egg to crack so we will continue trying to get our gin into America.”
Thanks to the support of Scottish Enterprise and SDI, Pickering and his business partner Matthew Gammell were able to get the export ball rolling in early 2015, a year earlier than planned.
Their relationship with the Edinburgh Military Tattoo – Pickering’s is the official gin of the event – opens doors to a new market every year when it travels to different countries around the world.
Pickering explains: “Last year it went to Australia and New Zealand so we went across three months in advance and said ‘Tattoo’s coming, we’re the official gin, would you like to buy some’. They said ‘absolutely’.
“Our sales to Australia and New Zealand have become very good off the back of our relationship with the Tattoo. We have sent them just under 3,000 bottles so far.”
Pickering’s first export deal came when he was approached by German importer Haromex. He says meeting a distributor in person is vital to ensure they are the right fit for your brand.
“I literally went over to Germany for a two-hour meeting with Haromex,” Pickering explains.
“It meant that I knew them and they knew me and I almost decided as I went through the door that I would like to export with them. Nine times out of ten my instincts are correct.
“I’m a face-to-face person and don’t like email. If you can afford [to get there], shake hands with the people you want to export with. The biggest thing for me is meeting people.”
China, India and Japan are some of the markets emerging as key targets for producers. For Mackie’s, China is already its most successful market.
“We were put in touch with a distributor in Shanghai through SDI,” says Taylor.
“The language barrier makes doing business with China quite difficult so they have been able to help.
“In China there’s a massive demand for Western goods and premium goods and the crisps have really taken off there. We send out around five containers a month which is about £50,000 per month.”
Of the 20 countries Mackie’s exports to, China is where the big opportunity lies. Mackie’s predicts £500,000 of sales to China this year and it has already invested in Chinese packaging.
Crisps destined for Canada have the Saltire on the label to promote the Scottish connection to a receptive market but Taylor says the Scottish tag isn’t as important to Asian customers: “In China our feedback is that they understand Great Britain but Scotland doesn’t mean so much to them. The Scottish flag wouldn’t necessarily have the same impact as it does in a market like Canada.”
When it comes to gin, Pickering says they are selling on flavour rather than its Edinburgh origins.
“Being a Scottish product definitely adds kudos but when we are selling overseas it’s always on flavour,” Pickering explains.
“I think if it were a whisky it would be very different. It would be difficult for anyone to say they want an English whisky over Scottish.
“70 per cent of gin manufacturing in Britain is done in Scotland but people still think it’s an English thing – like Pimms which is thought of as very English but is actually made in Fife.”
Whisky does have a part to play in the Pickering’s process which has helped sales in Japan.
“Japan hasn’t really discovered gin,” says Pickering. “Whisky is their thing, but we have put our gin in whisky casks and we are not ageing it but blending the flavour of the whisky with the gin.
“We sent some samples to Japan and they ordered every bottle of our first batch.”
Sweet-toothed Chinese customers have led to demand for Mackie’s to branch out into more unusual flavours, with soft fruits beating salt and vinegar hands down.
“They are constantly asking us to look at innovative new flavours and send them examples of banana-flavoured crisps and strawberry, raspberry and blueberry,” says Taylor.
“If it’s a big enough market and the products are going out in container loads each month, it’s definitely something you have to consider even just for that specific market.”
According to both Taylor and Pickering, knowing your market is the key to export success.
“Take your time and really study your market,” Taylor says. “Make use of Scottish Enterprise and SDI and use their knowledge and expertise to understand whether a market is fit for purpose for your product.
“It’s not something that takes off overnight. It takes a bit of perseverance – even your first order can take months – but stick with it and eventually you will reap the rewards.”
Fast track your business abroad
The global appetite for Scotland’s products and services is on the up. If your business is growing successfully in the UK, then the chances are it will do well in international markets.
If you want to identify the markets that are right for your products or services, then Get Connected 2016 – Scotland’s largest international trade networking event – is the place to find help to fast track your business abroad.
If you’re new to exporting or already trading overseas, this event, led by Scottish Enterprise and Highlands and Islands Enterprise, will help you grasp fresh opportunities and guide you through potential challenges.
Scottish Enterprise has a truly global presence. With staff based in 14 offices in the UK and a further 29 overseas, it can help introduce you to potential partners, distributors and agents in your chosen market, while connecting you with up-to-date market intelligence.
At Get Connected 2016, thanks to Scottish Enterprise and Highlands and Islands Enterprise’s partner network you will be able to explore specific markets, get help with your market research, or make a success of real-time export opportunities.
Export advisers will be on hand with advice and guidance on licensing, product or leadership development, or funding.
To sharpen your exporting know-how, throughout the day, there will be free seminars with inspiring speakers on topics from e-commerce solutions and market entry to cultural intelligence.