In the current climate of slow population growth and an aging
population, with a corresponding decrease in consumption,
businesses in the food & beverage manufacturing sector must not
only adapt their product to this new reality, but also turn to
other markets if they hope to see significant growth in
More than ever, businesses looking for growth have to do business
internationally. To promote trade, Canada has already signed nine
free trade agreements, including one with Europe and more recently,
South Korea. About a dozen more are under negotiation1.
By reducing customs duties in particular, these agreements are most
timely. By making it possible for businesses to be more
competitive, they will clearly facilitate business
Historically, the United States and the rest of Canada have been
natural development targets for most businesses. The choice was
justified by the advantages of proximity, market size and
similarities in terms of consumption and business culture. Things
are no different today and the improvement in the American economic
climate is currently raising a lot of hopes. On the other hand, to
find other markets that are already very large or are experiencing
the strongest growth, we need to look to the East. Europe has 500
million people, the population of Africa is expected to triple over
the next 50 years, and that of China should increase from 1.2 to
1.5 billion people. The new agreement with South Korea is therefore
strategic, as that country often serves as the port of entry for
Asian markets totalling 4 billion people. A good understanding is
needed to take advantage of emerging markets. Even big companies
get caught by not focussing enough on properly identifying customer
attitudes and consumer needs. But they can change direction without
sustaining much damage as they have room to manoeuvre, which is not
the case for SMEs.
"Understanding the marketplace remains the HARDEST
McDonald's tried to expand to India before discovering that
40% of East Indians are vegetarian, that most of them have an
aversion to beef and pork, that they are very resistant to frozen
products and that they have a particular liking for strongly
flavoured foods. The company therefore had to adapt its products.
Tesco, a U.K. company and the second largest food retailer in the
world, operating in 12 countries, struggled in mainland China for
nine years – a very costly venture – before signing an
agreement with a local company that had in-depth knowledge of the
market and the infrastructure across the country. In addition to
failing in the United States and Japan, Tesco lost market share in
its domestic market as a result of concentrating its efforts in
If the industry hopes to experience growth and generate wealth, it
must turn its attention to foreign markets and make the most of
them. An analysis of the external environment must be undertaken to
mitigate the risks. That analysis must provide an overview of all
the factors listed in the diagram below. Often neglected factors
such as an extensive knowledge of consumer behaviour and a thorough
understanding of industry dynamics deserve our utmost attention. To
manage these challenges, you have to carry out on-site visits,
observe, analyse, ask questions, try things out, substantiate your
understanding and develop a broad base of knowledge of the target
clientele's needs, leaving nothing to chance.
Understanding the marketplace remains the hardest step because the
specific information needed is not written down since it varies by
product. All this may seem tedious to an entrepreneur in search of
results, but it is definitely the best way forward for those who
cannot afford to burn through large sums of money and, in the end,
waste time and other good opportunities.
1 For more information, please visit the Department of
Foreign Affairs and International Trade website at:
N.B. This article was originally published in the magazine
L'actualité ALIMENTAIRE (Volume 11,
Number 2) and has been reproduced with permission.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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