Thinking of international growth? Five top tips for getting exports right
Recent growth in UK manufacturing has allowed quiet optimism to seep back in to the industry. However, new research from the British Chamber of Commerce suggests Britain's manufacturing exports are 'approaching stagnation' - cause for concern for an industry that makes up 44 percent of total UK exports.
We recently spoke to senior decision makers in the industry, and found that of those UK manufacturing SMEs already trading overseas, 91 percent saw international expansion as one of the best ways to grow their business. Exporting can have a tremendous impact on small businesses, with UKTI research showing that firms who choose to export become 34 percent more productive in their first year, while those already exporting achieve 59 percent faster productivity growth than non-exporters.
Often with exporting, it’s the first step which proves the greatest hurdle. Unlike many other countries, UK businesses can be apathetic towards exporting. A recent YouGov poll revealed that well over half the sample of British businesses traded solely within the UK, 90 percent of those respondents have no ambition of pushing their produce overseas.
This is why the Government are pushing businesses to export more. UKTI’s ‘Exporting is Great’ week is the latest initiative to bring more balance to the UK’s trade account deficit, whilst the Chancellor also recently announced a £20m fund earmarked for directly assisting UK firms to export for the first time.
Exporting can be a daunting task, but for UK manufactures there is a realm of opportunity in international trade expansion. Here are my top tips for would-be manufacturing exporters.
1. Make sure your product has international reach
According to UKTI, the UK has exported £128m in cosmetics to the UAE, £120m of aluminium to India and £43m of carpets to the Netherlands in previous years. These export success stories would not have come about without savvy market research and testing; read up so you’re not flying blind.
Let consumer demand drive your strategy. What sort of consumer is likely to benefit from your product and what demographic are they likely to be in? This will enable you to narrow down key markets or tailor your products so they are suitable for export.
2. Know your target market
Assuming you can simply replicate your UK strategy for overseas success is a fool’s errand. Make sure you investigate new markets thoroughly. First, decide on the top one to three new markets with potential and then research the landscape - consider foreign competition, local customs, laws and industry structure and tweak your plans accordingly. Government advisers can help you with this, UKTI have regional teams with dedicated Language and Culture staff to assist you on your approach and plan a route to success overseas.
3. Use the resources and support available
Small firms looking to take advantage of export opportunities needn’t worry about resources. Government agencies such as UKTI and the UK Department for Business Innovation & Skills exist solely to help SMEs and small businesses thrive both domestically and abroad and have a range of tools and services to assist them on their way.
For example, the Exporting is Great website has an updated database of thousands of live opportunities for SMEs looking to export, all you need to do is type in your specialism and it will come up with a list of potential contracts.
4. Sweat the small stuff
Typically, businesses will spend days and nights perfecting your product, catering to the target market and planning for business expansions but not attach the same importance to the details like finding the right logistics partner or international payments solution.
It is just as important to spend time researching any service providers or partners who will be an important part of the exporting process. Not shopping around could end up being a costly mistake. No one wants to end up with a logistics partner that loses their goods in transit or with a bank that charges them high fees for bringing their hard earned revenue home.
5. Don’t give up
Exporting overseas is a commitment – there will be investment costs (time and money) that will require time to overcome before your plans and hard work begin to pay off. The road to becoming a master of overseas commerce won’t be an easy one, but with the right support and partner structure, you’ll soon be looking for your next international challenge.
Exporting can offer a world of opportunity, quite literally. It’s also worth remembering that the UK Government is committed to helping UK businesses to export through UKTI – this is an invaluable source of information and support. Don’t hesitate to use it.
Marca Wosoba is Head of International Development at World First
Follow @ManufacturingGL and @NellWalkerMG
Top 10 Fast-Moving Consumer Goods companies
Founded in 1919 in France, L’Oréal has grown into a multinational brand with over 82,000 employees, becoming one of the most internationally recognised FMCG companies worldwide.
Registering 498 patents in 2017, the business is focused on innovation and developing strong relationships with suppliers and partners. 100% of its strategically important suppliers will also take part in its sustainable development programme in 2020.
9. Phillip Morris
Despite various campaigns, over a billion people are set to smoke in 2025. Multinational FMCG company, Philip Morris remains a leading tobacco company, expanding its footprint into more than 180 key markets.
With 81,000 employees covering 80 languages in total, the company houses a comprehensive, agricultural supply chain; sourcing 400,000 metric tonnes of tobacco each year in partnership with 350,000+ tobacco farmers. The company has also sought to embrace the manufacture of electronic devices for heated tobacco products and e‑cigarettes.
Launched in the 1950s, global Brazilian food industry leader JBS is now home to 300 production facilities with over 10 billion-dollar brands under its umbrella., such as Seara, Swift, Friboi, Doriana, Moy Park, Pilgrim’s, Primo and more.
Serving more than 300,000 customers, it is the world’s largest company in the beef sector, with over 235,000 employees. Its Legal Supplier Programme has enabled beef suppliers to adapt to Brazil’s environmental legislation, whilst the Green Light Pact initiative has seen cattle breeding centres in Mato Grosso do Sul, Brazil improve their production practices.
7. Coca Cola
Coca-Cola’s wide-ranging distribution network, strong portfolio and exceptional marketing capabilities have made it one of the most iconic FMCG companies in the world.
Available in over 200 countries, its products are supplied through one of the world’s largest beverage distribution networks, where suppliers must adhere to its Sustainable Agriculture Guiding Principles (SAGP) and Supplier Engagement Program.
Adopting SmartLabel technology across its manufacturing operations, the business is also leading the way in the identification, implementation and sharing of best practices. Each product now houses a QR code, providing complete transparency. The company is also looking to reduce the emissions from its production processes, where 42% of energy used at its sites is sourced from renewable energy sources.
Originally established by combining three big companies: Interbrew, Ambev and Anheuser-Busch, Belgian-Brazilian beverage company AB InBev is officially the world’s largest beverage business.
Selling over 500 beer brands, such as Budweiser, Corona, Leffe and Quilmes in more than 100 countries, the company is acutely aware of its need to frequently adapt and enhance its distribution network.
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Partnering with nearly 50,000 farmers, the business is committed to sustainable sourcing, where its flagship platform, SmartBarley has utilised data analytics to support more than 5,000 enrolled farmers improve their productivity and environmental performance. AI and blockchain will also support its manufacturing capabilities.
Housing some of the most recognisable everyday brands, Unilever’s aggressive acquisition strategy and strong brand presence has seen it become a household name across 190 countries worldwide. Its R&D centres have sought to fully bolster its manufacturing operations and vast distribution network, where the business has maintained its zero non-hazardous waste-to- landfill agenda since 2017.
Additionally, a number of its initiatives have provided employment opportunities to those in rural areas. Unilever’s Sustainable Living Plan (USLP) has enabled half of the company’s agricultural raw materials, such as palm oil to become sustainably sourced. Not only that, 26 sustainable living brands are now situated under the company’s umbrella.
The main rival to Coca-Cola, PepsiCo’s beverages, as well as its food products continue to grow in popularity and demand.
Harnessing significant brand awareness, the Fortune 500 company is one of the most admired companies in the world. Its six global divisions form part of its aim to transform its products which are delivered through its extensive distribution network to meet the ever-evolving needs of customers.
Following from its acquisition of personal care company Gillette in 2005, Procter & Gamble has become one the largest FMCG companies, with operations in up to 70 countries.
Providing a range of personal and consumer health products to five billion customers, the company’s recent plans to acquire the consumer health division of Merck Group, as well as implementing a new simplified management structure will form part of its 2020 vision.
2. Johnson & Johnson
A firm family favourite, Johnson & Johnson remains one of the most influential FMCG companies. With products in three categories, Consumer Healthcare, Medical Devices and Pharmaceuticals, the business has grown at a considerate pace, with up to 250 subsidiaries under its umbrella.
The company’s complex, global distribution network and diverse supplier base has seen the business embrace new technologies across its network, as it continues to thrive in its role in delivering quality products and services at affordable prices for consumers.
1. Nestle AG
Undertaking a number of corporate acquisitions, Swiss food and beverage company, Nestle has become the largest in the world, with more than 2000 brands available in 189 countries.
Home to the world’s largest private food and nutrition research organisation, the company invested US$1.7bn in its research capabilities in 2017 alone, supporting its 30 R&D facilities worldwide. Its recent partnership with Starbucks will see the business bolster its complex distribution network.
Additionally, in alignment with UN Sustainable Development Goals, Nestle is striving for zero environmental impact across its operations. Providing clear labels across its manufacturing lines, the company provides nutritional knowledge as well as supporting local farmers who provide high quality ingredients within its sustainable sourcing efforts.