At AUSPACK 2015, it was clear that export to Asia is a major trend for Australia’s small and medium-sized businesses. For food and beverage manufacturers especially, getting products onto supermarket shelves is highly competitive and, even when successful, may not always be the most profitable option. So how can SMEs get ready to tap into opportunities for Asian export growth? Or export growth to any destination?
Asia is hungry for Australia’s products. China is currently Australia’s largest trading partner, with $100.8 billion of exports in 2013/14. In fact, the Australian goods trade to China has grown a staggering 81.9% since 2010/11. And with the recent signing of the China Australia Free Trade Agreement, this is only going to grow. (See here for a run down of the ChAFTA). The FTA means that, over time, tariffs will be eliminated on exports of dairy products such as milk, cream, yoghurt and cheese, as well as beef, wine, and wool.
Now India is set to become a more important market for Australian exports too, with experts at the Global Food Forum predicting it will take over from China within 15 years. After all, there will be an extra 170 million mouths to feed.
While Asia’s ever-growing appetite for high quality Australian products is an exciting prospect, navigating the complexity, red tape and costs can be daunting for SMEs. The first step is to ready your business and ensure you are best placed to take up the potential growth opportunities.
To help, here are 7 steps you need to consider:
- Have a clear strategy
Those with a clear business strategy are the most successful. This means understanding the export market, the opportunities, challenges and requirements — and then working out the best way to move forward. Once you have a clear strategy, make sure it is shared with everyone in the business. A shared, unified sense of purpose is key to success.
- Know your market
What do you need to do to market and sell your product overseas? Can you export it as is? Or will it need modifications to make it acceptable to different cultures and regulations? For example, research shows Chinese consumers are particularly attracted to packaging styles that communicate history, prestige and heritage. In wine, they often prefer cork over screw caps, and aged-paper-style labels. These might only be small modifications, but they can make a huge difference to your profits.
- Improve your processes
Look closely at your existing production line and where you can improve. Automating certain processes is an effective way to increase productivity, improve quality and reduce waste. Identify which processes will have the greatest impact if automated or even semi-automated, so you can ensure the greatest return on investment (ROI) in the long run. For example, semi-automatic labelling systems can remove total reliance on manual labour, increase output and ensure a consistent, professional look on your products. And because they are easy to set up and use, you can increase output from the start.
- Lease technology
New technologies provide opportunities for manufacturers, but the up-front cost of equipment can be a barrier for many small manufacturers. Leasing reduces the cap-ex on coding equipment, so small businesses can take advantage of up-to-date technology. Plus, you have the option to upgrade to the latest models at the end of the lease term.
- Understand and use industry standards
Take some time to understand the export regulations clearly and how they will impact your product and processes. Look at ways to not only comply with the standards, but also use them to enhance the value chain. Take serialisation, for example. The more complex and global the supply chain becomes, the more difficult it is to obtain real-time transparency. But by applying the GS1 Standards, you can use serialisation codes to provide visibility, which can in turn reduce counterfeiting, protect your brand and gain consumer trust.
- Improve leadership
Focusing on improving your leadership capabilities can have a huge impact on your business growth and employee retention. Peter Gahan, Director of the Centre for Workplace Leadership (CWL), says research has shown businesses that implement high performance work practices improve their profits by 13%.
- Get support
There are a huge number of initiatives out there designed especially to help small businesses reach their potential — especially when it comes to export. For example, the NSW Business Chamber has launched the Export Growth China program to help small and medium-sized Australian businesses take advantage of significant new growth opportunities in China. But the Austrade website is a great place to start — you’ll find country and industry profiles to help identify export opportunities, such as the one on China. Be sure to also tap into the expertise of your suppliers, such as Matthews Australasia, along the way. Many hands make light work.
Exporting your product to overseas marketing is an exciting time. And by following these simple tips, you can ensure your business is ready to take full advantage of all the benefits and opportunities it brings. Remember, it’s a marathon, not a sprint!