The US is a very large importer of value-added foods and food ingredients. In 2011, US food imports surpassed US$ 100 billion, an increase of more-than 30 percent over two years. It is likely that the US will become increasingly reliant on Asia for its food imports over the foreseeable future, especially because Asian cuisine is thriving in American restaurants and in American homes. There is a high demand for good quality Asian ingredient food products.
The bulk of US imports is in the form of value-added foodstuffs, ranging from seafood, to fruit and vegetable ingredients, to bakery products and beverages.
Part of the attraction of the US food industry as an export destination is that American consumers are, by global standards, wealthy and willing to pay premiums for high quality foods. Consequently, it is a country able to pay premium values for quality food ingredients. On top of that, US consumers are becoming increasingly more drawn to Asian cuisine as a food preference—witness the explosion of Thai, Chinese, Japanese and Indian cuisines in the US that have entered the cultural mainstream.
According to the World Instant Noodle Association, which is based in Osaka, Japan, the US is now the fifth largest consumer of instant noodle dishes in the world.
These trends, in turn, open US markets to a plethora of opportunities for Asian food, foodservice, and food ingredient exporters. Witness the rapid proliferation of Chinese, Japanese, Korean and other Asian food product and ingredient suppliers at international expositions, such as the annual Institute of Food Technologists and Natural Products East. This is but the beginning of a long-term trend.
Having set the stage for why the US (as well as Canada and Mexico) presents such a good export destination for Asian food manufacturers and ingredients suppliers, it becomes worthwhile to consider how these manufacturers and suppliers can be more effective in penetrating US markets.
The following guidelines created are based on observations regarding business-to-business marketing cultures and the typical mistakes made by many Asian ingredient suppliers. These mistakes can lengthen by years the investments necessary to establish a meaningful and long-lasting presence in this lucrative marketplace.
What American Buyers WantPrice is important, but it is not the most important factor in making purchase decisions. The most important factor is security—job security, to be exact.
To protect his or her job, a food product developer needs to know that an ingredient will perform in a food as promised, consistently and reliably, and that technical service resources will be accessible as needed. A quality control person needs to know that the ingredient will offer consistent quality and be safe, always.
A purchasing manager needs to know that the ingredient supplier is: financially healthy; reliably there when needed; fair and consistent in pricing; that they will always deliver on time; and never be the source of interrupted production schedules. Each of these decision makers will need to be sold on the merits of your ingredient and your company.
Starting with this framework, here are six critical factors to keep in mind as you plan to sell foods and food ingredients into the North American marketplace.
1. First impressions matter
If your first impression is positive and professional, the sales process is off to a good start. If not, you will continually be swimming up-stream to correct that first impression and doomed to watch your competitors secure the contracts.
Look carefully at your company’s logo, narrative, web site, trade show presentation, the quality of your printed literature, and the communication skills of your company representatives. When you put all of these components together, do they add up to be a compelling narrative that will encourage prospective customers to inquire further into your company?
2. Strengths and weaknessesNo company, no product and no individual can be all things to all people. All have strengths and all have weaknesses. Build on your strengths and minimise your weaknesses, but do not deny them! Your customer will not be fooled.
If you acknowledge your weaknesses, you can then address them proactively to your customer’s satisfaction. For example, uncertain ingredient or product quality concerns can be addressed by adopting universally recognised quality standards (such as BRC or SQF) and submitting to audits by globally respected auditing agencies (such as AIB International).
Prospective customer supply-chain concerns can be addressed by demonstrating North America warehouse capacity and by guaranteeing locally accessible inventory to your customers. Local technical support can be guaranteed to customers by collaborating with North American-based product development laboratories.
3. Bottom-up versus top-downBusiness and sales cultures vary greatly by country and geographical region. In some countries, sales tend to be consummated ‘top-down’, meaning that the sale is made to the highest company executive possible, who then mandates sales decisions to lower-level employees.
In North America, the process is more ‘bottom-up’. Typically, ingredient sales need to be made to lower-level employees (usually product developers), who then bring in quality control and purchasing people into the decision-making process, before the sale is approved at higher levels.
I have observed several large, multinational Asian companies waste time and resources trying to get on the schedule of top food company executives while being simultaneously dismissive of lower-level product developers’ inquiries.
This is a mistake. When introducing yourself to a prospective US customer, try to simultaneously contact product developers, quality control gatekeepers and purchasing agents within that company.
In addition, the role of sales distributors is different in North America than it is in Asia or Europe. Choose carefully. Many sales are conducted through brokers, who do not take title to ingredient or product inventory, but collect commissions on consummated deliveries. The sales cycle can be long, which requires an understanding of your customers’ internal decision-making processes. Both patience and understanding are required.
4. Document your advantagesIf you make a claim for how your ingredient will benefit your customer’s product, you will need to provide proper documentation, preferably through a third party.
I recall one example of a Japanese company that sought to generate shelf stability data for one of its ingredients by replicating tests undertaken in Japan through a US university. It was not able to do so.
In addition, try to generate performance or shelf-stability data that is relevant to North American products and production practices. We once worked with a Japanese company that sought to sell a new ingredient system based on its performance in Japanese-style breads.
However, North American bakers use very different baking processes to manufacture very different products: they have very different needs. For this client, a US bakery-compatible documentation was developed.
5. Short and to the pointIf we are to generalise, German companies love to share (massive) technical detail, while French and Scandinavian companies love to project style.
American customers will want you to get to the point, clearly and quickly. Distil your sales message down to the essentials and communicate them in a way that establishes a lasting impression in the minds of your prospective customers.
First impressions matter, but they need to be reinforced with clear, short, and compelling narratives that capture the interest and imagination of your customers. Think of your first impression as designed to invite your customer to seek further inquiry. Leave the complex, turgid technical details for later.
In terms of the sales presentation itself, however, the American food business culture remains very relationship driven. Don’t expect the hard details of your products, prices, or the graphic appeal of your website to do your selling for you. You will need to take time for face to face interaction with your prospective customers.
If your potential customers spend time asking personal or other questions not directly pertinent to your company or product, it is because they are trying to assess you as a person and your company as a prospective supplier. Be patient and play along; it is a complex, cross-cultural mating dance.
6. Demonstrate reliabilityFinally, never forget that no matter how good or advantageous your ingredient may be (whether based on quality, performance, or price), no North American customer worth pursuing will do business with your company unless he or she knows that your company can be relied upon to deliver products and ingredients as economically, reliably, and predictably as needed.
They will also want to know that you can be counted on to deliver product quickly and reliably in the case of an emergency. Be prepared to share details of your quality control and food safety programs, the reliability of your raw material supplies, the strategic location of inventory in the case of transportation hick-ups, as well as your financial reliability.
In sum, the North American food industry offers great opportunities for Asia’s flourishing food ingredient and food product exporter. However, such also demands considerable investment in time, money and effort, so it behoves any prospective importer to understand the market, the needs of its customers, and to get the culture right.