When Chinese President Xi Jinping was seen enjoying a beer with former Prime Minister David Cameron in 2015, the demand for British beer increased exports by 500% to the Chinese market.
Now this is some incredible press! In fact, British beer, including craft beers and ales, saw a £84m rise in exports during 2016, with traditional export markets like Scandinavia and Spain still contributing to this increase, but unexpected markets such as China and India also had a big part to play in beer exports too. Beer is now the third largest contributor to the UK’s total food and drink exports so British brewers would be mad not to take advantage of this demand.
I checked in with one of our International Trade Advisers, Ben Leonard, and he gave me 6 sure-fire tips for any brewer in the South West considering exporting. Ben is based in Cornwall and currently works with a number of small brewers to get their products sold in various markets all over the world.
1. Firstly look at what the world is asking for.
There is a huge variety in terms of what overseas markets want; from craft beers in the USA to fruit beers in South Korea so whichever kind of beer you produce, do your research so that you find a market that fits the demand for your beer style and taste. Don’t try and take on the whole world; one or two markets to start with is feasible! Start by researching the export opportunities at www.great.gov.uk. You’ll see the sheer number of requests for beer there are from overseas buyers and the type of beer they are looking for – craft ales with funky branding, high quality lagers, fruit beers etc. Once you have identified a market, understand its dynamics; economics, politics, lifestyle, climate and competitor brands for both domestic beers and imports.
2. Find the best distributor for you and your beer.
It’s important when looking for a distributor in a market that you look at the size of the distribution and what the distributor’s business plan is. It’s also imperative that you look at your competitors so that you are able to secure a good profitable market share. Visiting the market and having great face to face meetings to build relationships is key to any business growth; you would visit a potential buyer in London, so it’s just as important to visit a potential buyer in Paris or Prague too.
3. Don’t offer credit up front.
When you receive your first order in a new market, make sure you don’t offer credit up front. Ensure you have done your research to make sure the business you are dealing with is a real business and has the money to pay you. It’s good to adhere to the market’s usual payment terms (German businesses usually operate on a 90 day payment cycle) but ask for the money up front for the first order.
4. Get your pricing right
In markets such as the US, Australia and Scandinavia you can charge a premium for your craft beers because the in-market demographics, disposable income and demand is high enough. However you will need to consider your USP for other markets as your beer will be more expensive than domestic competition as its imported, so make sure people have disposable income to pay the premium for your unique product.
5. Join a brewer’s association
There won’t be a question that they haven’t answered before and with the large number of independent brewers out there these days it pays to collaborate to share costs and resources. Check out the Brewers Association for resources and your first line market research. You’ll see they have an export development program too: https://www.brewersassociation.org/business-tools/exporting-beer/join-th…
They will also be able to help you squash the barriers to trade such as issues with taxation, tariffs, product testing and labelling.
6. Seek advice and opportunities via your local Department for International Trade
Get in contact with the local Department for International Trade here in the South West who works alongside Export Growth to bring food and drink producers in the region a bespoke support package called the Great British Food Programme. We work to find buyers all over the world and bring them to the region to order for them to meet with our local producers. This contact opens doors that small brewers otherwise may not have the opportunity to meet!