Last week, GourmetPro expert Kathryn Read took us through some of the opportunities and challenges of importing to South Korea. Here is the piece, in case you missed it.

We also thought it would be a good idea for you to get to know a bit more about Kathryn and her work. She is the Founder of Kathryn Elizabeth Read Consulting and a Partner at Uniconsult-Wick & Partner.  As an international business consultant with over 25 years of experience, she specializes in export and business development and has worked across more than 150 countries in Central & Eastern Europe, North Africa, Near-East and Asia.

Kathryn’s passion lies in helping small and medium-sized enterprises succeed in their international expansion efforts. She supports the progress in international business development and tailors specific requirements to help clients.

Before starting Kathryn Elizabeth Read Consulting, Kathryn was the Head of Sales at HiPP Austria GmbH.

Read more about Kathryn’s experience here.

We had also asked Kathryn to share with us some of the tips and tricks of her trade while executing a project, and she graciously agreed. Here are some of the key insights from our conversation.

Establishing an artisanal brand across Southeast Asia

GourmetPro: Could you tell us a bit about an interesting export project you’ve worked on?

Kathryn Read: An Austrian manufacturer of Italian specialty products was looking to expand their presence in Asia. The company had a range of packaged goods like pasta, olive oil, vinegar, and Italian delicatessen products, but not meat or dairy. The company initially took over the factory where some of these foods were produced and were initially looking to produce private labels, but then decided to create their own brand. This is the brand they wanted to export into Asian markets.

GP: Why did the company choose Southeast Asia?

Kathryn: They already had a small presence in China and had done some market exploration in Korea. However, in Korea, they had trouble differentiating themselves. Korea was the first market we looked at together, and while there were a few orders, it didn't really take off. So we expanded the scope to Southeast Asia, in particular Indonesia, Singapore, and Thailand.

GP: What was the background process like in terms of entering the markets?

Kathryn: Initially, I analyzed the client’s main competitors and presented the retail landscape. The client exports a lot, with about 90% of their business being exports, but mostly to Western and Eastern Europe. For Southeast Asia, I also looked at the online landscape and various channels. This was particularly relevant for Bali, where the company aimed to gain a foothold, especially in foreign-owned hotels. 

Based on the competitor analysis, we calculated the target product price backwards from our ideal pricing scenario for each market. From that point, I handled finding potential distributors, narrowing down to a shortlist of interested parties, and selecting one distributor. This distributor had a trial contract, effectively giving them exclusivity without an official exclusive contract.

We also examined the regulatory environment, especially in Indonesia, to check for issues related to added ingredients. Singapore is relatively uncomplicated with regulations, as long as there’s no meat or dairy involved. Thailand is also straightforward for packaged goods, particularly if products are organic and have relevant certifications. And the client had all the necessary certifications because they were already experienced exporters. We analyzed the regulatory situation together because clients often have specific insider knowledge that can identify potential problems.

GP: Were there any hiccups or challenges for brands to be aware of when imported to these markets? 

Kathryn: Indonesia requires foods to be halal, even non-meat products. The halal certification was a challenging process, but the client was familiar with the process, having done it for most of their products. But it did take time to get product registrations in both Thailand and Indonesia.

For me, the key thing is ensuring I have an import partner with a good track record in registering documents and strong relationships with relevant departments. Otherwise, issues can arise. I've experienced more of these in Thailand than in Indonesia. People in positions of power might expect under-the-table gifts. The easiest way to speed things up would often be bribery. But a strong import partner should be able to manage this without negative effects, even if it means saying they can make it faster but advise against it. So, it's crucial to be on the same wavelength with the importer. 

I wouldn't recommend Southeast Asia for brand new exporters from Europe as they may not be culturally aware of these issues. It may be more advantageous for them to try markets close to home first before expanding to Southeast Asia.

GP: Are there any interesting sources you use to do your background research? 

Kathryn: One useful resource is the Austrian Overseas Chamber of Commerce, which is very active and has trade commissioners almost everywhere. They can recommend distributors and provide general regulatory information, though the quality of assistance varies.

Trade commissions for other countries also offer similar support and are a good resource in general.

I often work with a partner who has a software tool that produces a market ranking report for up to 20 markets, using basic information about the brand and products. The report is produced within a week and includes insights into the retail and social media landscapes, regulatory challenges, and political risk factors. It's a practical and cost-effective tool compared to full-blown market research. The reports can be generated in English, French, or German, which is useful for European clients.

GP: How has the reception been to the brand?

Kathryn: I would say it's slow, but progressing. In Singapore, the products are starting to make progress, but the retail situation is expensive. In Indonesia, the products are listed in several larger supermarkets and used in Italian restaurants. In Thailand, they are just rolling out, with increasing order sizes each time. 

The brand isn't expected to explode since it's not a household name, even in Europe. It's a small artisanal brand at the top end of the mass market. The biggest weakness is the lack of a strong brand story, but the products are of good quality, and the customer service is strong, which is important for Southeast Asia.

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