There’s no getting away from it: we live in a global marketplace. Despite some questioning the notion that globalisation is always for the common good, the vast majority of businesses will continue to look beyond their borders to grow revenues in line with their ambitions.
Once the preserve of big corporations, international trade is now so much more accessible, thanks to better communications, improved supply chains, faster payment infrastructures and, of course, the advent of e-commerce.
So it’s a particularly exciting time for SMEs who, almost from the get-go, can start branching out and sell products overseas. However, increased opportunities like this usually come with increased challenges and risks. This is, perhaps, especially true for smaller companies which may not be as well prepared as their more established counterparts.
Meanwhile, large companies face challenges and risks of their own- including increased competition from SMEs. As a result, companies both large and small must be able to manage these challenges effectively.
One such challenge is complying with the varied demands of food packaging regulations in all your target markets.
Big appetites for British food products
2016 was a bumper year for exports: figures released by the Food & Drink Federation show exports topping £20bn for the first time with a jump of over 10% over the previous year. In 2017, that figure rose again, to £22bn.
Yes, some of this may be down to the recent fall in the value of the pound. Yet there’s clearly a strong demand for UK food products overseas. Larger companies depend on this demand to allow them to expand even further. Meanwhile, many SMEs in the sector, with their more flexible structures and entrepreneurial flair, are looking to capitalise on this game-changing opportunity.
Packaging is key
For any brand, product packaging is critically important: it is one of the key means of communicating with the customer.
- As businesses adapt to life outside their traditional bricks and mortar stores, packaging becomes even more significant as it takes over the role of answering customers’ queries – previously the domain of the in-store assistant.
- Packaging provides a cost-effective way to directly communicate important details about your products to new consumers at the point of sale and beyond.
- To provide the kind of multi-channel experiences consumers now expect, firms need a strong brand message delivered consistently. Again, packaging plays a part in that.
- It may well be easier now than ever to develop cross-border trade. However, that doesn’t mean your organisation should rush into new markets without adequate preparation. By focusing sufficient time and expert resources on getting your packaging right prior to launch, you will save valuable time and money later on. This is a critical step that should not be rushed!
The cost of getting it wrong
A little while back, we produced a light-hearted article about the funny side of packaging translation errors. But the more serious message we were highlighting with this piece is that, as well as getting the wording and terminology right, you need to consider the different cultural settings into which your product is being placed. This becomes even more important when there are multiple languages on the pack as the connotations of words will vary from culture to culture.
Packaging is sometimes called the ‘silent salesperson’. If a customer has a bad experience with it, then that has a knock-on effect on their perception of the brand.
Plus, if a label is incorrect and showing the wrong information, then in today’s digital world, the error can be compounded and spread like wildfire across multiple markets. Consider what the impact on your brand might be if the error were concerning the Food Information Regulation (FIR) or to a different local law that you were unaware of…
To succeed across all markets, brands need consumers to trust that they will deliver on what they promise. It takes a long time to build that implicit trust with consumers new to the brand. However, it can be destroyed in no time at all if the packaging is not right.
In addition to the reputational damage that comes from providing non-compliant packaging, there could also be regulatory or legal ramifications. Fines, trading restrictions and litigation are some of the courses of action open for authorities to take if they believe the firm to have neglected its responsibilities with regards to its packaging. And the authorities will most likely have been alerted by your competitors, whether that’s a large company on the lookout for any opportunity to scupper your chances of taking their market share or a scrappy newcomer looking to knock down a larger rival!
For SMEs, unexpected costs like these are a huge burden. They can even call into question the long-term viability of the business. That said, even large organisations can face significant repercussions.
This is a serious consequence of incorrect packaging. It’s especially serious when a food item has been marked up with erroneous allergen information. In fact, most food producers now have a product recall insurance policy in place to manage the immediate cost implications. But, like most insurance policies, they generally only cover the tangible costs associated with the recall itself. You could be left picking up the costs of the PR fallout. This includes but is not limited to:
- Any redistribution.
- Loss of sales from other products being rejected.
- The fees incurred in identifying the cause of the issue.
Managing the risks
In theory, as guidelines on the mandatory requirements become clearer, it should be easier for firms to produce and translate their own labels and packaging.
However, with tighter guidelines come stricter penalties. Ignorance of the rules is not considered a viable defence. It might be easier for consumers to compare products. However, it is not necessarily easier for food producers to get it right.
No matter what, don’t trust Google Translate! Online translation tools have come a long way in recent years. However, they are still not reliable enough when it comes to packaging.
They cannot take into account the key determinant that is context, and there is almost nothing so critical to achieving accurate pack copy for each market targeted.
So, unless you have the expertise in-house to complete it to the standards and laws required in each destination country, is DIY export packaging really a risk worth taking?
Peace of mind
For SMEs, knowing that your packaging is fully compliant will give you the confidence to go out there and make the international sales you want.
In addition to keeping you on the right side of the law, compliant food packaging will also help you connect with your audience in a more meaningful way. As your consumers start to develop trust in the brand, you’ll be able to present your marketing messages to them in a way that resonates harmoniously with their cultural identity.
When you harness the right support from the outset, much of the stress and worry which comes with stepping into the unknown disappears. You can then focus on core business functions which require your input at a pivotal moment for the business.
For larger organisations, consider this. How long did it take to grow your business and your brand into what it is today? Why would you risk damaging consumer confidence with a recall or other compliance nightmare? Remember, you have plenty of smaller competitors waiting in the wings. It’s never been easier for them to take advantage of your missteps.
At K International, we have a wealth of experience in helping organisations of all sizes get their export packaging right the first time. We also offer consultancy services. Not sure how to get started? Trying to improve your existing processes? Either way, our experts are here to guide you. For more details, contact us today!