Food Processing - May 2008 - (Page 44)

Pl ant OPer atiOns Rich’s has built an international manufacturing network that includes locations in Brazil, Canada, Mexico, China, South Africa, Thailand, India and the U.K. And this month, the company will be celebrating the grand opening of a stateof-the-art non-dairy topping and icing facility in Vietnam. Because of its global plant experience, Rich’s is forming a consulting service to help other companies looking into setting up operations in foreign countries, with a focus on China. “We’ve been doing business internationally for more than a quarter century, so we’ve dealt with many of the challenges companies new to international business expansion may encounter,” Malchoff continues. “We think we can leverage our global expertise to help guide other companies as they begin to expand beyond their borders.” Avoiding cereal killers Establishing a global operation can happen without leaving North America. While most persons thinking of a foreign plant focus on Asia, it’s easy to forget the two major markets in our back – and front – yards: Mexico and Canada. One of the most recent expansions for U.K.-based Weetabix Co. (www.weetabix.com) was into Canada. The readyto-eat cereal giant had long “gone global” when it took over cereal, bar and cookie-maker Barbara’s Bakery, Petaluma, Calif. Its expansion to the U.K.’s “other colony,” Canada, posed its own challenges. “While certainly Canada has a culture much like the U.S., it also has its own consumer complexities to consider,” says Kent Spalding, vice president of marketing of Weetabix North America/Barbara’s Bakery (www.barbarasbakery. com). “We worked to understand the taste preferences, especially f lavor profiles, that are most popular.” The company then looked at both competitive and outof-category offerings to determine trends that appeared to be emerging. Ideally, Spalding explained, a company should seek a trend or functionality it already is well positioned to compete with through both its intellectual and process capabilities. “We look to expand brands that translate well emotionally, with benefits the consumer can identify with,” he says. Among the most difficult aspects of expanding internationally are understanding the regulatory differences and what is appropriate to say and claim on the package, according to Spalding. “Add translations to the mix,” he says, “and the complexities become a real challenge. We apply a very rigorous process, including both redundant legal and translation support. Imagine going into a country with language requirements and no one speaks the language in your company! “Post-9/11, the border also can become quite a challenge,” Spalding continues. “Making sure appropriate declarations are made and all paperwork has been processed and vetted prior to crossings is critical.” He notes it can be a real benefit to seek help from outside agencies specializing in international transportation. Distribution is always a challenge, Spalding points out. “Distributors are the conduit to your consumer and you must be on the shelf or it is all for naught. Pre-sell your way into new markets prior to setting it all up. Make sure once your products hit the marketplace they have a home. It’s a good idea to have multiple customer trade lined up but,” he cautions, “nothing is sure until the ink is dry.” The importance of well-constructed distribution channels is seconded by Jeff McLemore, product manager for Sunsweet Growers Inc. (wwwsunsweet.com). The majority of the com- NOtE tO thE CEO James Rice, vice president and country manager-China for tyson Foods Inc., has recommendations for companies moving into China, or anywhere outside of the U.S. for that matter. • Be ready to adjust your business model, both culturally and structurally, for the market you’re going into. you cannot copy and paste the american business model into another culture or country; U.S. companies that do this will fail. • Review your business model every year. Don’t come in with the attitude, “It’s the american way or the wrong way.” • Low cost means you have to enter a market with a value proposition relevant to the local consumer. Outside the U.S., this is generally low margin-high volume. • you must hire a local team to run the local operation. you cannot run an overseas business by remote control. • For the Chinese market, there are three key factors: speed, flexibility and low cost. these are strengths of the Chinese companies you will compete with, and is something american companies still are not naturally good at. 44 • FOOD PROCESSING May 2008 WWW.FOODPROCESSING.COM http://www.barbarasbakery.com http://www.barbarasbakery.com http://www.weetabix.com http://www.food-machinery.com http://wwwsunsweet.com http://www.food-machinery.com http://www.foodprocessing.com

Table of Contents Feed for the Digital Edition of Food Processing - May 2008

Food Processing - May 2008 Editor’s Plate NewsBites The Trends Rollout Food Biz Kids Product Developer turned Bean Counter The top-selling new products of 2007 The open road Back to the Big Easy Managing the global plant A new column with answers to your plant-fl oor questions New Supplier Products Toops Scoops

Food Processing - May 2008

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