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Food and agri-food sector: when exporting pays off

28 November 2019 by National Bank of Canada
Food and agri-food sector: when exporting pays off

Exporting abroad sometimes leads to problems. Is the risk greater for food or agri-food products? Jean-Pierre Senneville, President of Quebec Wild Blueberries Inc. and Normand D’Arcy, Senior Manager, International Services at National Bank, will provide an update on the situation.

While Quebec Wild Blueberries has been exporting for over 45 years (now to 35 countries), "it's not immune to the problems that can occur at any time," says its president, Jean-Pierre Senneville. Mother Nature raged at sea recently and one of the company's containers was damaged on its way to Japan. A new shipment of blueberries was then redirected to its planned destination, with marine transport insurance covering the financial loss caused by this misfortune.

Contrary to popular belief, exporting is not that complicated, even in the case of food products. "It's not more difficult than shipping within Canada." It's often during transit, when goods are on the water for two to three weeks, that incidents occur," he says. That's why marine transport insurance, mentioned previously, is essential. "It's similar to your home insurance: you hope you won't need it but you still pay the premium."

1. Knowing what clients need

It was the stronger-than-expected demand for wild Canadian blueberries in the 1970s that led Mr. Senneville's father to export his fruit to Europe. "Our wild blueberries, which were less expensive and had a new flavour, carved out a niche in this market over time."

Today, this wholesaler has more than 600 employees and distributes nearly 70 million pounds of wild blueberries per year. To ensure their successful growth internationally, entrepreneurs must be able to count on partners abroad. "On our end, to cover Europe, a representative is based in Zurich and another is in Hamburg, Germany. We also have a representative in Japan and do business with a few brokerage firms in the United States."

These representatives promote products and visit clients' premises. "Even though there's an intermediary between you and your client, it's imperative that you have a good understanding of the final user of your product. A juice manufacturer may be satisfied with a grade C blueberry, whereas a muffin manufacturer will want nice, firm berries to be able to add more of them per unit."

2. Be well informed and rigorous

Entrepreneurs who want to export must pay attention to detail and be very meticulous. "Everything we eat is obviously closely monitored by the proper authorities," says Mr. Senneville. Plant inspections, external audits and paperwork are some of the requirements you'll face. "Whether it be for a quality standard, an existing law or a customs or security obligation, check everything that's involved beforehand."

3. Risks of non-payment

Are you reluctant to export your products out of fear that a client in a foreign country will disappear after receiving your bill? "This is one of the psychological barriers we often come across in exporting," says Normand D’Arcy, Senior Manager, International Services at National Bank. Keep in mind that the risk of not getting paid can be easily managed.

"National Bank offers several financial tools and services for entrepreneurs who want to export. Our expertise includes guaranteeing accounts receivable, making sure you receive your money quickly and collecting accounts receivable," added Mr. D’Arcy.

The risks of non-payment should not prevent you from pursuing your international ambitions. The role of your financial partner is also to help you navigate export markets. "Continue to actively develop your activities and we'll make sure you reap the benefits." Whether it be for documentary collection or a letter of guarantee, we'll also assess your needs in order to mitigate the risks."

 

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