18 July 2018
Australians spend over $115b per year on food and beverage from retailers. But understanding how to get your product into the right places for consumers is never easy. Hear from John McWhirter, the CEO of Hellers, about the steps the company took before entering the Australian market with their pre-cooked sausages.
For John McWhirter, the CEO of Hellers, the decision to target the Australian market only came after looking elsewhere.
“We looked at a number of different countries. We actually went to China, we had a look at Singapore and a number of the Asian countries as well as Australia,” says McWhirter. “But we settled on Australia. It is a market that we felt we would understand better and it is still five times larger than New Zealand.”
But the company did not jump straight in. They tested their assumptions by checking out the local supermarkets. As McWhirter says: “We simply walked around. We tried the products, we took them back to hotels and cooked them, and we talked to the staff in the supermarkets. We took thousands and thousands of photos.”
Following that, the company invested in market research. “We carried out a significant number of focus groups in Brisbane, Sydney and Melbourne, and we did that deliberately so that we got a different population group.
“The focus groups included consumers taking the product home, cooking it and then coming back and giving us our feedback,” says McWhirter.
The company learnt a lot from the focus groups, but most powerful was the fact that they were on the right track.
“The research was valuable in that it helped us understand how our product sat in the Australian market relative to the New Zealand market.
“I thought that you would not be able to put ‘Hellers New Zealand's Butcher’ on our packaging and therefore we should remove it. And you couldn't put Australian Butcher on there because it wasn't authentic. However, one of the real insights that we got and one of the strong points that came back from the Australians was: ‘Hellers, New Zealand, and he's a butcher, a real butcher?’ And: ‘oh that's good. I'll have to buy that product!’
“So it actually changed our understanding about being open that we were New Zealanders selling in Australia, which was quite an insight and actually a massive revelation.”
Understanding the retail trade in Australia
“When we went into Australia we thought that we would be able to enter Australia relatively easy and there would be no barriers to entry. But we learnt otherwise,” says McWhirter.
The company faced non-tariff barriers, including the fact that chilled pork could not be exported from New Zealand to Australia. They worked with MPI and other agencies, but it still took four years to get that barrier removed.
And then when they engaged with retailers, it became clear the retail proposition is very different.
“The retail proposition in Australia for fresh products, that's for meat, fruit and veg, is Australian grown and Australian manufactured, which made it more difficult for us to enter with fresh products,” says McWhirter.
“So we entered the Australian market, not through the two traditional brands of Woolworths and Coles, but through Costco. They weren’t worried about Australian Grown and Australian Made and listed our product. From there we've grown each year with Costco, and that has been a great relationship. They are a very good business to deal with.”
“When we went into Australia we thought that we would be able to enter Australia relatively easy and there would be no barriers to entry. But we learnt otherwise.”
The benefits of working with NZTEIn their exporting journey so far, Hellers have worked closely with NZTE. From defining strategy, to taking part in in-store promotions and leveraging introductions, the company has built a strong relationship with NZTE which started in New Zealand.
“When we started working with NZTE, in an odd way we actually started by looking at ourselves. I think one of the good things about NZTE was they sat us down and said: ‘well, what are you doing in New Zealand?’ And so we had some self-examination around what we actually did here.”
Following that, Hellers worked with NZTE in Australia to meet with retailers and plan their market research.
“The local team in Australia that NZTE have are fantastic. Firstly, because some of them have Australian passports they understand their local country, and having and listening to that advice is absolutely essential”.
“They turned some of those cold calls into warm calls, they unlocked the door for us… and I have to say that was absolutely fantastic because without that I think we'd still be knocking on the door of Costco because it was a very difficult door to get through and Costco has proved to be very beneficial for us,” says McWhirter.
Finally, the company took part in in-store promotions to showcase their sausages through the Taste of New Zealand programme. As McWhirter says, “We've done that every year since and it's a fantastic programme”.
John McWhirter’s top tips on exporting to Australia
- Take your time. Walk around, talk to the local market, to retailers, to consumers, so you can understand the nature of the market you're getting in to.
- Be well resourced. Make sure that you're already successful in your home market. If you're not successful in New Zealand, the chances of being successful in Australia probably drop 100:1. So be resourced before jumping.
- Do the research. Take the time to understand your end consumers. The benefit you'll get from all of that will be massive.