Purdue turns lemons into lemonade for exporters
WEST LAFAYETTE, Ind. When the Indianapolis owner of Fry & Associates, a food technology company, first tried to sell margarine in the newly opened Eastern European markets several years ago, he learned an important lesson: What worked in the United States sat unsold on the shelves in Poland.
"Quite frankly, they were used to making butter from milk that was slightly fermented, plus they strongly preferred butter and margarine with no salt," owner Dennis Fry says. "We changed our margarine to have a stronger flavor, and left out the salt, and it began to sell."
Likewise, Fry found that there are differences in a food as simple as broth. When his company received a contract to develop a Chinese-style chicken broth for a Taiwanese company, they knew that they had to prepare a different recipe than the chicken broth sold in the United States.
That's little surprise to Mike Boehlje, professor of agricultural economics at Purdue University, who says the way foods are prepared, presented and packaged can be more important than price when exporting to foreign markets.
"Some would argue thats why the Danes can compete with the United States in selling meat to Europe and Asia," Boehlje says. "They have higher production costs than livestock producers in the United States, but they have been more willing to respond to niches, and to package and present their products in ways their specific customers prefer. In spite of the fact their product costs more, they continue to be fierce competitors with the U.S. livestock producers. They often beat us in export competition. Not because of cost, but because of features."
Reaching global markets is important for even small- and medium-sized businesses. However, a critical component in competing globally is being able to create foods that people in other countries care to eat. This is especially true of Asian markets, where cultural differences are much more pronounced than with U.S. markets. And, according to Boehlje, Asia is the growth area for agricultural products.
"Most of the new product research and development activity has focused on developing foods for the United States and Western Europe, but these are relatively mature markets. Today, the growth opportunities are greater outside these regions in areas such as Mexico, South America, Eastern Europe and Asia," he says.
Boehlje says these new growth markets provide opportunities for niche products that require smaller volume production. That could be a problem for some U.S. companies looking to expand into those areas.
"The way we process and the way we package or present products is not the way they prefer to have those products in other countries," he says. "Thats really a major challenge for some companies in the United States that may not have the knowledge or volume to justify the more niche-oriented products. Some of our U.S. companies arent well positioned to do that effectively."
To help get his company's chicken broth accepted in Taiwan, Fry worked with faculty in Purdue's Food Science Department for technical assistance and received advice on packaging, heat processing and production. More than 7 million cans of the broth were produced in the United States for export to Asia during the first year of production.
"There were more than $500,000 worth of ingredients bought from Indiana producers for just this one product," Fry says.
Purdue has assisted Fry's company over the past seven years with international food and product development for markets in Argentina, Chili, China, England, France, Germany, Poland, Russia, as well as Taiwan.
Sources: Mike Boehlje, (765) 494-4222; email@example.com
Dennis Fry, (317) 253-9117; firstname.lastname@example.org
Writer: Steve Tally, (765) 494-9809; email@example.com
Purdue News Service: (765) 494-2096; firstname.lastname@example.org