Transcript Entering the Global Marketplace: Lessons Learned

Entering the Global Marketplace:
Lessons Learned
David Fuhrmann
President
A Snapshot of
Foremost Farms USA
Established:
Milk volume:
Member-owners:
Revenues:
Employees:
Ranking:
1995
4.8 billion pounds
3,600
$1.4 billion
1,487
No. 15 (Dairy Foods
magazine) among top 100
processors
Procurement
Area and Plants
Liquid &
condensed
milk
products
21%
Packaged
milk
products
16%
Juice
Whey
products products
1%
6%
Cheese
54%
Butter
2%
Our Products
Markets are grocery, foodservice, industrial
and converters
How we got started
in the export business:
• • -
Acquisition of business entity in 1984
Have continued to grow and diversify
the exports
Foremost Farms USA
Exports Today:
• 40 million lbs./year – Whey Based Products
• 5 million lbs./year – Cheese
Export Destinations:
• • • • -
South East Asia (China, Japan, S. Korea)
Central & South America (Mexico, Puerto
Rico, Columbia, etc.)
Europe
Others
Export Sales to:
•
•
•
•
-
Brokers
Distributors
Specialty company manufacturers
Multi-national corporations
Why We Export:
• • • -
Supplier to multi-national companies
Grow our business
Profitable business
Requests from:
•
•
•
•
-
Multi-national corporations
Repeat users
USDEC inquiries
Website
Challenges:
• -
Language
.
Shame on us:
“We only know English”
.
Time zone differences
Challenges:
• -
Cultural Differences
.
.
.
Negotiations are different in different
cultures
Difficulty in understanding “tones” of
e-mails
“Bribes” vs “the way business is done”
Challenges:
• -
• -
Negative perception of US whey
products
History of “dumping inferior product”
Challenges:
•
Product Packaging
.
Long distances
.
Truck, rail & sea travel
.
Hot, humid conditions
.
Complaints on 50% of shipments
Challenges:
• -
Dealing with rejected product:
.
Can result in major $$ impact
.
Can’t bring product back to U.S.
.
Resell the product in that country
Challenges:
• -
Competition from other countries
.
Exchange rates
.
“Product dumping”
Challenges:
- Quality
.
“Expectations” are not the same as
product “specifications”
.
The customer is always right
Challenges:
Quality (cont.):
.
Testing methods may be
different
.
Local regulations can vary
.
The rules change without notice
Challenges:
-
Quality (Cont.)
.
International customers are
concerned about the source and quality
of the raw milk supply
.
Quality discussions are more difficult
when using an intermediary
Challenges:
• -
Documentation
.
.
.
Paperwork must be flawless
Papers must exactly match product
Codes on product must be totally legible
• The process is tedious and time consuming
with “no margin for errors”
Resources:
• • • -
USDEC
USDA – Washington
Bank
Lessons Learned:
• -
• -
International customers have higher
expectations
We have experienced some expensive
lessons
Lessons Learned:
• • -
“Partnerships” are critical
New communication technologies have
opened the world!
Lessons Learned:
-
-
International business has become more
complex since September 11, 2001
International business is not “lucrative”
Lessons Learned:
• -
Exporting has made us much better