“International markets create more opportunities for Maryland producers and processors to grow their businesses, reach new consumers and provide relief when local demand decreases,” said Joe Bartenfelder, Maryland’s Secretary of Agriculture.
Bartenfelder welcomed the attendees to the Southern United States Trade Association’s Foreign Markets Briefing Seminar, held Nov. 27. Bartenfelder said that he is happy with the gains SUSTA has made for Maryland’s agriculture and aquaculture industries.
Two programs were the focus of this seminar: 50 percent CostShare and Agricultural Trade Promotion. Using federal funds, 50 percent CostShare helps small farm businesses obtain reimbursement for up to 50 percent of incurred expenses for promoting and marketing their products in foreign markets.
There are five prerequisites for eligibility in the CostShare program:
• 50 percent of the content of products must be U.S. agricultural products.
• The farm business must qualify as “small” by the rules of the Small Business Administration.
• An eligible business must earn at least $100,000 in total annual sales.
• Products’ labels must show brand name and U.S. origin.
• The farm business must be able to provide a sufficient quantity or volume of the product to new markets, usually a year’s supply.
If a product meets all these prerequisites, the farmer may be eligible for reimbursement, up to 50 percent on such things as website development, advertising, international travel expenses and exhibition expenses at international and national trade shows.
“SUSTA is organizing approximately 40 events world-wide in 2019 to introduce U.S. products to international markets,” said Danielle Viguerie Coco, SUSTA director of marketing. “We’ll hold your hand, walk you through every step of the process to help get your product to markets around the world.”
Another important SUSTA program is the Agricultural Trade Promotion. This program from the USDA was created to mitigate the damage done to farmers due to tariff-trade retaliation by foreign nations. $200 million is available for the ATP program through Foreign Agricultural Services. SUSTA has applied for a portion of that budget to assist its 15 member states. The actual amount of money available to SUSTA has yet to be announced.
Using ATP and 50 percent CostShare funds, SUSTA is making plans to help farmers and agricultural businesses diversify their markets. They have identified seven world markets they are encouraging agricultural businesses to cultivate including Central America, Israel, Jordan, Malaysia, Northern Europe, the Philippines and Scandinavia.
Cost-sharing and ATP could reimburse up to 50 percent for marketing activities involved in entering these new markets. Examples of marketing efforts include in-store tastings of Maryland oysters or point-of-sale brochures in regional languages for Maryland’s beers and wines.
To help stimulate thinking on approaches to marketing to foreign countries, SUSTA brought in five contract marketing and consulting representatives from established world markets — Devna Khanna from India, Victor Phaff from the European Union, Heidi Kim from Canada, Robin Way from China, and Debby Sin from Hong Kong.
Each presenter reviewed areas of concern when one plans an international marketing strategy, modeling what agricultural businesses need to do before jumping into a new foreign market. Those issues of concern include population and major metropolitan areas of the country, languages, population divisions by income and social classes, and dietary customs.
Each speaker offered suggestions on food groups that could gain a strong following in the specific country, as well as those foods that were already firmly under local production.
Devna Khanna emphasized the growing interest in health foods in India. She reminded everyone that there is no market for dairy or beef there. Victor Phaff pointed out that German’s buy in small quantities and prefer products to be sold that way, while the French buy in bulk, stocking up and preferring supersize items.
Each presenter touched upon prickly issues such as labeling items as well as the choices of distribution methods, which are pivotal to the success of breaking into a foreign market.
Heidi Kim pointed out that Canada has a strong supply system in place. Food brokers and distributors make their money by a percentage fee or discount buying, respectively. They may expect suppliers to bring the product to their warehouses. India, on the other hand, has four basic types of loosely organized distribution: big retailers, small retailers, distributors and importers, each with its own set of arrangements for imports.
The China, Hong Kong and Macau markets may be less accessible now due to trade wars between the U.S. and China. However, mainland China consumers, Robin Way noted, look favorably at U.S. products, particularly snacks such as nuts and dried fruit. Debby Sin pointed out that Macau imports almost everything through Hong Kong, and the consumers there customarily buy through small, local shops. Hong Kong, in contrast, relies on supermarket chains as primary points of sale. Restaurant dining is a growing market in Hong Kong, and “directly shipped” imported seafood is in demand.