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Entering the Global Marketplace: Lessons Learned

Entering the Global Marketplace: Lessons Learned. David Fuhrmann President. A Snapshot of Foremost Farms USA. Established: 1995 Milk volume: 4.8 billion pounds Member-owners: 3,600 Revenues: $1.4 billion Employees: 1,487 Ranking: No. 15 ( Dairy Foods magazine) among top 100

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Entering the Global Marketplace: Lessons Learned

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  1. Entering the Global Marketplace:Lessons Learned David Fuhrmann President

  2. A Snapshot ofForemost Farms USA Established: 1995 Milk volume: 4.8 billion pounds Member-owners: 3,600 Revenues: $1.4 billion Employees: 1,487 Ranking: No. 15 (Dairy Foods magazine) among top 100 processors

  3. Procurement Area and Plants

  4. Our ProductsMarkets are grocery, foodservice, industrial and converters

  5. How we got startedin the export business: • - Acquisition of business entity in 1984 • - Have continued to grow and diversify the exports

  6. Foremost Farms USA Exports Today: • 40 million lbs./year – Whey Based Products • 5 million lbs./year – Cheese

  7. Export Destinations: • - South East Asia (China, Japan, S. Korea) • - Central & South America (Mexico, Puerto Rico, Columbia, etc.) • - Europe • - Others

  8. Export Sales to: • - Brokers • - Distributors • - Specialty company manufacturers • - Multi-national corporations

  9. Why We Export: • - Supplier to multi-national companies • - Grow our business • - Profitable business

  10. Requests from: • - Multi-national corporations • - Repeat users • - USDEC inquiries • - Website

  11. Challenges: • - Language . Shame on us: “We only know English” . Time zone differences

  12. Challenges: • - Cultural Differences . Negotiations are different in different cultures . Difficulty in understanding “tones” of e-mails . “Bribes” vs “the way business is done”

  13. Challenges: • - Negative perception of US whey products • - History of “dumping inferior product”

  14. Challenges: - Product Packaging • . Long distances . Truck, rail & sea travel . Hot, humid conditions . Complaints on 50% of shipments

  15. Challenges: • - Dealing with rejected product: . Can result in major $$ impact . Can’t bring product back to U.S. . Resell the product in that country

  16. Challenges: • - Competition from other countries . Exchange rates . “Product dumping”

  17. Challenges: - Quality . “Expectations” are not the same as product “specifications” . The customer is always right

  18. Challenges: Quality (cont.): . Testing methods may be different . Local regulations can vary . The rules change without notice

  19. Challenges: - Quality (Cont.) . International customers are concerned about the source and quality of the raw milk supply . Quality discussions are more difficult when using an intermediary

  20. Challenges: • - Documentation . Paperwork must be flawless . Papers must exactly match product . Codes on product must be totally legible

  21. The process is tedious and time consuming with “no margin for errors”

  22. Resources: • - USDEC • - USDA – Washington • - Bank

  23. Lessons Learned: • - International customers have higher expectations • - We have experienced some expensive lessons

  24. Lessons Learned: • - “Partnerships” are critical • - New communication technologies have opened the world!

  25. Lessons Learned: - International business has become more complex since September 11, 2001 - International business is not “lucrative”

  26. Lessons Learned: • - Exporting has made us much better

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