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Are You Export Ready? A Strategic Export Plan Is a Staple Ingredient for Success

03/10/2017


​​This article was previously published in the 2017 Fall issue of Western Food Processors Magazine and has been reproduced with permission.​​​

Is exporting part of your food and beverage business’s strategic plan? As the liberalization of global commerce continues, more Canadian companies are joining the international market every year— should you? Many Canadian agriculture and food and beverage businesses do this well already. Did you know that Canada is the fifth largest exporter of agricultural, and food and beverage products in the world after the EU, U.S., Brazil, and China?1 Most Canadian exporters are small- and medium-size enterprises that make up 90 per cent of Canadian exporters.2

Exporting can be an effective strategy for businesses that are seeking new growth opportunities. They also generate higher sales, pre-tax profit margins and returns on assets, compared with non-exporters.

If you decide to export, how do you become successful at it and define a clear and realistic strategy? Once you have validated your business’ export readiness, building an export plan is critical. An export plan will help you navigate uncertainties and provide a clear guideline to start exporting.3

How to Develop a Successful Export Plan

Each food and beverage processing business is different in terms of the number and types of products, the competitive landscape and the unique value proposition. The following steps can be a useful guideline to ensure you are covering the key areas of a successful export plan as they relate to your unique business:

  • Define the capacity and capability of your business. Exporting will place additional pressures on your business. Therefore, an export plan should clearly outline the capability and capacity of your business today. This in turn, will help you identify the skills and resources required to scale up your operation and tackle the difficulties of exporting.
  • Define your products and services. An export plan should outline your products / services and why your international customer will buy from you.
  • Identify your short, medium, and long-term export goals. Your export plan should outline what your business wants to achieve in the next 12 months, one to three years, and three to five years and how you plan to achieve these goals. Your export goals should be specific, realistic, and quantifiable.
  • Identify your target market(s). Using market research, you can narrow down the top markets for exporting your products and services. This involves gathering demographic characteristics, spending patterns, and consumption trends in foreign markets. Once you have identified target markets, you will need to research the market sizes and key trends as well as the macro-economic factors in the selected markets. A few examples of these would be economics, political and legal environments, cultural and business practices, and tariff and non-tariff barriers. Your export plan should also outline evidence for a significant demand for your products/services in the selected markets.
  • Identify your market entry strategy. This involves identifying which products or services you will sell, as well as any alterations that might need to be made for your products or services to enter your target market(s). Consider thinking about shelf-life, cultural differences, and language. Your market entry strategy should also cover your target market segments along with a strategy on how you will reach them, distribution strategy, and pricing strategy.
  • Understand your competition. An export plan should analyse your main competitors as well as their strengths and weaknesses and identify how your business plans to compete against them.
  • Identify the resources required to achieve your export goals. Finally, a successful export plan should outline the human, marketing, operational, and financial resources required to reach your export goals.

Once your have completed your export plan, you should have a clear guide on which markets you want to reach, along with the steps you will need to take to be successful in international markets.

Developing an export plan may seem like a daunting, time-consuming task, but it’s better to be prepared when it comes to exporting to foreign markets. Many companies turn to the services of an experienced consultant that can help your business evaluate its export readiness and prepare a detailed export plan. In addition to consultants, there are many government agencies that offer export-related support, including Innovation, Science and Economic Development Canada, Export Development Canada, and the Canadian Trade Commissioner Service.

Maria Gonzalez, MFRE, and Nina Jauernig, MBA are Managers in MNP’s Economic and Research and Food and Ag Manufacturing Practices. Contact Maria at [email protected] / 604.637.1508 or Nina at [email protected]​ / 604.637.1583.

 

1 Canadian Agri-Food Trade Alliance, Agri-Food Exports, http://cafta.org/agri-food-exports/.
2 Innovation, Science and Economic Development Canada, SME Profile: Canadian Exporters (January 2015), https://www.ic.gc.ca/eic/site/061.nsf/eng/h_02925.html.
3 Ibid.​