Around the World with Food and Drink
Exploring the potential of international markets
On June 4 IESE’s Barcelona campus took a trip around the world to explore opportunities, business opportunities, challenges, travelers’ tales and novelties in the food and drink sector. For decades, and especially today, exports and moving into new markets have been fundamental to the industry. That was the focus of the 17th Food and Beverage Industry Meeting, held under a title “How to Sell on Five Continents.” It was led by Prof. Jaume Llopis and organized with the collaboration of Deloitte, Idom, IPMark, “la Caixa”, Tetra Pak and La Vanguardia.
Europe: most accessible and most competitive
The first continent explored was the oldest, best known and closest by. For many it is the easiest and at the same time the most competitive market. An optimistic note was struck by the representative of a giant in the European sector, Nestlé. The executive vice president and branch manager in Europe, and a regular visitor to IESE, Laurent Freixe, said “it is still possible to grow in Europe but consumer confidence has fallen a long way.” To achieve growth, Freixe recommended “focusing on the local characteristics of each region, fighting to gain market share and innovation. But in order to innovate, you have to invest.”
On the distribution side, Ricardo Currás, CEO of DIA, said that “the European market is characterized by the strong presence of local competitors and the enormous influence of the distribution brands.” In spite of the current rise of Internet sales, Currás said that he believed “clients still prefer local establishments with a better price quality ratio.” And he added: “The consumer increasingly demands healthier, fresh products, as well as specialization.”
Another supermarket with an enormous network of outlets on the continent is the German firm Lidl, which has 10,000 shops in 26 European countries. Ferran Figueras, the company’s financial managing director, discussed how the business model is based on simplifying processes and cutting costs and insisted that “there are still opportunities in Europe if you have the right partners.” “There is potential for growth if you look for new opportunities and markets,” he said. Figueras said that Lidl is an ideal platform from which manufacturers can launch their products in other countries.
One of the most famous beer brands in the world, San Miguel, has successfully entered the United Kingdom market. The group’s managing director, Alberto Rodríguez-Toquero, highlighted what has been a fruitful export project. “It has been key for us to produce locally, work for the brand in each area and find suitable partners in each instance.”
An interesting traveler at the meeting was liquid gold – olive oil. Its representative, Rosa Vañó, owner of the olive oil producer Castillo de Cañena in Jaén, said that in their case a key factor has been “to opt from the start for excellence and innovation to differentiate ourselves and to find our place in an enormously fragmented market. By being a top brand, we have preferred to create our reputation through prizes and external recognition rather than promote ourselves on our own behalf.”
Africa: the great unknown
What is Africa? How do you get in there? When? Prof. Lluís Renart used these questions to kick off a round table discussion about one of the least known zones which offers the most opportunities to the sector.
Ignasi Ricou, CEO of Gallina Blanca Star, said that his company had been selling successfully in Africa for 40 years. “The key is to have an intimate knowledge of the market, understand how Africans consume, get close to open markets, see what shops are like and, above all, bear in mind that Africa is made up of 54 countries with their own peculiarities and the citizens there want to be seen as who they are and not simply as Africans.” “You have to adapt yourself to a difficult reality and very limited infrastructure, you have to have a close relationship with local partners and bear in mind the challenges that exist in many areas, such as political instability and corruption,” he added.
Determined to dispel myths and misunderstandings, Malik Bakayoko, General Manager SBFA of Durabilis, asserted that “Africa is a market in the making, with a limited number of competitors and there’s room for everyone, but you have to go now. Of course it’s not easy to get in nor to move around but growth is spreading and the opportunity is there.”
With a clear statement that “they’re not waiting for us,” Joan Masferrer, CEO of Compass, said it was time to stop being afraid of a continent that was rapidly evolving. However, he advised studying the terrain carefully before going in, recommended offering “products of a quality suitable for the reality of families and the consumer power of the population.” “The consumer there is very brand oriented and very aware of price changes and changes in the product’s image,” he said.
America: rapidly growing
Growth on this continent, particularly in the Southern Cone, is its main attraction although it’s difficult to see if it will last over time, said Ildefonso García-Serena, president of Compact Response Group, who moderated a round table.
“You have to have a dream, and be adventurous or else it won’t happen,” said María José López de Heredia, CEO of R. López de Heredia Viña Tondonia, referring to her company’s successful exports to the United States. Alejandro Martínez Campo, managing director of IAN-Carretilla, talked about his export experiences in Chile which he said were “very positive,” and Brazil where, in spite of his success, he lamented the fact that it is “the country with the most bureaucratic problems that we’ve ever encountered.”
“You have to spend time with your partner and understand the country. If you’ve got a good product, the consumer is keen to acquire it,” said Thomas Melendez, managing director of the División Yogures/Internacional of Grupo Leche Pascual, who mainly talked about Venezuela. Roberto Servitje, president of Grupo Altex, talked about his experiences in Mexico with hydroponic cultivation, a niche market opened by the firm. “The most important thing was to promote the virtue of our products, which are mainly organic, environmentally friendly and sustainable,” he said.
Asia and Oceania: unmissable opportunity
“No one who’s talking about internationalization can ignore Asia. You may have different strategies but you’ve got to be there,” said Xavier Pagès, CEO of Grupo Codorníu. He talked about various aspects to be borne in mind about the Asian market, specifically the Japanese. “Although the market is global, it doesn’t behave like a single market,” he said.
On the other hand, Xavier Ybargüengoitia, CEO Estates & Wines of the LVMH Group, delineated keys to success in China. “You have to be prepared to respond quickly, to be seen as a Chinese company, anticipate consumer trends, adapt marketing to the local culture, be able to rely on the local team, not create any more bureaucracy than the official one and use pressure groups whenever possible.”
Carles Plana, sales director at Indulleida, talked about the advantages of selling in Australia. “It’s a demanding but accessible market, with very little bureaucracy and a tradition as an importer. English is the official language, credit risk is low and the mentality is very proactive.”
The meeting ended with the presentation of the Food & Beverage Global Award 2013, which went to Paul Polman, CEO of Unilever.