Hitting the sweet spot in the US

That’s despite the US economy hitting its lowest ebb in at least a generation.

Many New Zealand boutique food and beverage exporters aim their products at the higher end of grocery.

The potential gains are substantial among well-heeled American consumers.

While profits will certainly drop in an economic slump, they won’t totally fall away.

The favourable exchange rate will help offset any drop in sales so businesses can ride out the crisis.

And if the product is different enough to keep consumer’s attention through the recession, the following years could be boom ones.

Trevor Millar, export manager of Cowell’s Pavlova Kitchen in Dunedin, says wooing the American palate in search of an off-season market has been tough work: but not as tough as selling in Australia.

Over the Tasman, Cowell’s is up against a dozen competitors in the pavlova market.

Consumers are fiercely loyal to Aussie-made products.

In the United States, Cowell’s has very little competition.

But neither does the product have any cultural or traditional resonance with consumers.

Where do you start in a nation of 305 million people spread over 9.83 million square kilometres, with complex distribution models and supply chains?

How do you break in when the consumers don’t even know how your product is meant to be served or on what sort of occasion it’s eaten?

Millar used trade shows to break in to one of the world’s biggest consumer markets.

New Zealand Trade and Enterprise (NZTE) gave him a trade and enterprise grant for market development.

He used it to build up his profile and caught the attention of a major distributor at the National Restaurant Association Show in Chicago.

“It’s a matter of finding the right needle in the haystack,” he says.

Millar made full use of his marketing degree, delivering his pitch in accordance with the buyer’s needs.

Make it relevant

NZTE’s Los Angeles-based food and beverage sector lead is Kelly Duffy.

She says the elements that make pavlova a big-seller in New Zealand – mainly tradition and icon status – are irrelevant in the US.

That’s why Millar’s US marketing ignores the role pavlova plays in the traditional Kiwi Christmas.

Instead he promotes it as a dessert which is affordable, shelf-stable, fat-free, ready-made, and easy to dress and serve.

Millar says the unique qualities of a product are just one of three considerations.

It is also important to consider the availability of stock and the costs of delivery.

Buyers want to hear that a company has distribution in place, can quote in local dollars and can get the product to them tomorrow.

The US now accounts for 10 percent of Cowell’s total earnings, with retail sales in New York and New Jersey, and food service sales nationwide.

Cowell’s may be enjoying success in the US now, but Millar says the early months and years were very bumpy.

He found Americans notorious for overpromising and under-delivering: the polar opposite of the Kiwi tendency to undersell and overdeliver.

Early on, he was encouraged to send 63 containers of pavlova to the United States.

Luckily he hesitated.

Millar sent two containers. They didn’t even sell out: let alone 63.