Introduction

For businesses that are eager to expand operations to foreign markets in today's interconnected world, the availability of timely and correct trade statistics may be the difference-maker. In this case, we consider the example of how one company used the data on imports and exports when it began to grow rapidly in several countries.

About the Company

Specialty Foods Inc. is a packaged foods company formed in 1992 in Los Angeles, California focusing on gourmet and organic products. This company's products are snack foods, biscuits, seasonings, meat jerky and many other related products. Specialty Foods experienced the same pattern in domestic sales for its first years, but international expansion provided the most dramatic increase in revenue. 

Using Trade Data Strategically 

As with most Specialty Foods' management team, they had very little insight into the global appetite for gourmet American food products. Big companies even had their analysts; however, Specialty Foods had to plan, improvise, and act wisely with the limited staff. They agreed to choose detailed import and export trade data that one can access through paid databases from the US Department of Agriculture and the US Census Bureau.

By analyzing this data, Specialty Foods could identify:By analyzing this data, Specialty Foods could identify:

  • To what extent did importing countries of similar American food products differ?
  • The manner, volume, and importance of those imports over time
  • In addition taxes or levies placed on those products
  • Telephone and fax numbers and addresses of the Companies importing and distributing the Apparels.

With the provided data, Specialty Foods could reduce uncertainty and identify potential export markets without relying on guesswork and thus reducing risk.

Entering Canada 

The United States identified Canada as the first export market quickly since it is in the neighboring country and has the market for gourmet foods from America. As Specialty Foods expanded in the years following, detailed trade data continued guiding important decisions like:As Specialty Foods expanded in the years following, detailed trade data continued guiding important decisions like:

  • From where to target and to market the products effectively in Canadian provinces and cities 
  • How to select the appropriate distributors, importers, and retailers to approach
  • Practical strategies which included import duties and exchange rates on prices for the products.
  • Estimating sales possibilities in accordance with the current percent of imports

Specialty Foods was able to establish a successful Canadian market for itself which further boosted the companies morale and also provided them with the much needed financial resources to venture further.

The internationalization of the company was anticipated by expanding to Europe and Asia.

In the subsequent decade, a relative newcomer to the specialty food business, Specialty Foods, used the import/export data to expand in Europe and Asia, to determine the optimal places to enter markets. Overseas sales have become a significant contributing source of the company's revenue and by 2016, overseas sales constituted 60 % of the company's total revenues.

Even though cultural differences and adaptation were crucial, having readily available detailed trade information provided Specialty Foods with a competitive advantage against other companies who might be making mistakes due to a lack of data. To some extent, they were able to determine if a market was growing, declining, or in stasis regarding imported food markets. Such insights made international development more systematic rather than mere guesswork.

Key Takeaways

Specialty Foods serves as an inspirational model for small yet ambitious businesses:Specialty Foods serves as an inspirational model for small yet ambitious businesses:

  • Freight can overcome shortages in staff, finances, or information Freight can overcome shortages of staff, money, and information 
  • It reduces assumption by underpinning expansion plans with market data
  • In this regard, startups can flex their muscles and stand their ground and even go a notch higher than their counterparts globally using data.  

Of course, this case is only typical of many companies, but at the same time, it is possible to extrapolate some conclusions from it. But it demonstrates the importance of accurate trade data in helping businesses grow globally – free from the risk of overdependence on imports. In the context of any company planning on expanding to foreign markets, it is imperative that the company uses these information sources.