South African exporters need to understand the full landed cost of their products before targeting international markets, according to Brenda Wilkinson, co-owner of South African olive oil producer, Rio Largo.
Addressing the Exporters Western Cape Women’s Month breakfast in Cape Town this week, Wilkinson said government-supported outward selling missions had taken the company to markets including Russia, Canada and Peru.
Although the visits had not always resulted in immediate sales, each had provided valuable market intelligence.
“Not everyone was buying South African extra virgin olive oil, but I learned something on every mission and brought that knowledge home,” she said.
A trade mission to Peru proved particularly instructive. Instead of attending an exhibition, the South African delegation were taken to meet a prospective importer at his premises.
“He put our costs on a whiteboard, starting with the price of the product when it left South Africa. He added the cost of crossing the ocean, moving through the supply chain and eventually reaching the shelf,” Wilkinson said.
“He then delivered a blunt assessment. If anyone present could not compete at the final retail price, they should leave. We all stood up and left because none of us had a product that could land on a shelf in Peru at a competitive price.”
Although Rio Largo did not secure a sale in Peru, the company returned with a better understanding of how logistics and other export costs affected the final shelf price, she said.
Wilkinson urged exporters not to dismiss a trade mission simply because a market did not initially appear promising.
Opportunities existed for South African products abroad, but exporters needed to understand their customers and determine whether their products could reach the shelf at a competitive price, she said.
“Apply for these programmes. They are incredible. We have been around the world through them, and what I learned along the way helped us grow. Today, we export to 15 countries.”
