Growth through exports: Tips for food entrepreneurs

Despite uncertainty surrounding the North American Free Trade Agreement (NAFTA), the U.S. and Canada continue to be each other’s largest and best markets – thanks to history, geography, culture and government policy. If you are seeking to grow your business through cross-border trade, it’s a particularly important time to sharpen your strategic edge and build your brand.

Within Argyle’s agri-food practice, for example, we counsel many food brands that aim to grow through exporting, including entrepreneurs marketing favorite family recipes like hot sauces, salsas or jam.

Our experience shows that successful food exporters follow several key principles:

Domestic success: Have a sustained, profitable business model domestically first, before thinking about export markets. This means securing sales well beyond your city or region, before considering growth through exports.

Production capacity: Ensure you can expand production to accommodate demand. If you cannot produce and deliver the product, you will not be able to sustain relationships with your new export customers.

Regulatory compliance: Canada and the U.S.’s food labelling and regulatory requirements differ dramatically. To keep that export door open, take time to learn the rules and be prepared to invest in new labels and other compliance requirements.

Competitive environment: We have heard passionate business leaders and entrepreneurs describe their recipes as ‘the best’, but the market demands more. Why is it the best? What makes it unique? Establish a clear, unbiased understanding of the target export market – and your product’s position within the competitive set.

Consider all costs: Exporting is expensive. You need to factor in product and label adaptation costs, shipping, broker fees, possible listing fees and the impact of the exchange rate. When calculating your product price for export, carefully review anticipated costs, then evaluate whether your product will sell at that price point – and remember to build in a profit margin.

Exporting for the first time can be daunting. Food entrepreneurs will encounter roadblocks and sharp curves on their journey – but there are ways to make the process easier and to increase the chance of making it to the final destination: a spot on grocery store shelves.

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