US recession: a good time for recon

So says Kelly Duffy, New Zealand Trade and Enterprise (NZTE) trade commissioner in Los Angeles.

“Pick the brains of buyers, walk trade shows, size up the competition,” says Duffy.

“Get yourself ready for a launch when the economy starts to recover.”

Duffy, who is also NZTE’s sector lead for food and beverage in North America, says New Zealand producers are well-regarded for their adaptability.

If a buyer considers a product too sweet or too salty, a Kiwi company can work with that feedback, develop a new product and have a sample in Los Angeles in a week.

In the ultra-competitive US market, such swift reaction times are highly-valued.

Duffy advises Kiwi companies entering the US market to aim deep rather than wide.

She means producers should focus on targeting a niche slice of the retail pie in relevant cities or they should choose one city or state.

Logically, they pick one-of the medium-sized states such as Colorado, Texas or Washington.

Aim to become a big player in just that one place.

Further expansion can follow, once a business has built momentum, cashflow, reputation and solid sales on which to base future estimates.

Marketing is crucial.

Duffy says New Zealand products may formerly have been marketed as premium or luxury.

Such terms are no longer attractive to the more budget-conscious US consumer.

So marketing is now focusing on the attributes wealthier consumers are still willing to pay for: GMO-free, pasture-raised, organic and natural.

“People who know about New Zealand appreciate the country’s clean, green reputation, so use that to your advantage.”

Duffy says this is no market – and no time – for ‘me too’ products.

“Don’t come here unless you fully understand what you’re getting into.

“It’s a big, crowded market.

“The US is still the Holy Grail but this is not a time to be greedy.”

Duffy says a carefully-strategised entry to the market in coming years would be a sensible progression for many boutique Kiwi companies.

She encourages producers with innovative ideas to make contact with her office now, in preparation for a savvy launch at some point in the future.

“I’m always on the lookout for that sweet spot – a product that is good, has a sustainability or health element to it and is unique, but not priced out of the market.”

This article originally appeared as part of ‘Sweet spots’, by Keri Welham, in Bright magazine on February / March 2009. Issue 32.