The Importance Of Exporting
11th March 2018 Paul Andrews
With more than five million family firms across the UK and a large majority of them taking a long term view, it is no surprise to see them looking to export markets to secure new opportunities to grow.
Family firms that do export take the necessary steps to investigate opportunities fully prior to embarking on the decision to export, but with the current uncertainty prevailing around the brexit negotiations and potential US trade tariffs, it is likely that we will see more British family firms seeking to make the most of their opportunities overseas.
Some family firms have been exporting for many years and we spoke to a number of them to gauge the importance of exporting to their businesses.
Scotland’s largest producer of jam and marmalade, Mackays Ltd is best known for its household name brands – Mackays and Mrs. Bridges. Since humble beginnings in 1938, Mackays has remained true to making every jar of its marmalade, jam and curd in the authentic way. The taste is truly recognisable – a combination of delicious real fruit and the use of traditional techniques such as hand-stirring and the iconic copper bottom pans, which, like Mackay’s world-famous Marmalade, are Dundee-made.
Fast forward to 1995 and the business was owned by United Biscuits. After a 27-year career with United Biscuits; Paul Grant - latterly the HR Director for McVities bought the business from his employer at a the time when they employed 19 people and had no branded products but was the last remaining producer of the iconic Dundee Orange Marmalade, in the Dundee area of Scotland, the home of marmalade. This key feature was used to build the business and its brand. In 2000 the “Mackays” brand was launch and Mrs Bridges was also acquired. Since then, Paul and his son Martin have grown the business and now employ a staff base of 180 local people and produces over 25 million jars a year; soaring from a humble 10,000 in 1995.
Under the watchful eye of Managing Director, Martin Grant, the last seven years have seen the firm enjoy considerable success; both at home and abroad. With turnover increased from £6.8 million to £18.2 million since Martin took to the helm in 2012, the growth of the business shows little sign of slowing its marmalade and jam-fueled trajectory. With 30% of its sales coming from export, Mackays Ltd products are available in 80 territories worldwide, including far-flung reaches such as the Galapagos Islands and Japan.
In the last year alone, business turnover grew by 7%, including an increase of 25% in export revenues. As Paul Grant confirms, “Exporting can be a fantastic opportunity and although it will complicate your business it can also create significant sales opportunities . One thing that is for sure, having unique brand and product features like those associated with our business, are key to profitable export success.”
Another family firm with an eye on the export markets is Fracino which established in 1963 is a family owned and run business that is home to three generations of the Maxwell family. Founder Frank is the company’s chairman; his son Adrian is the MD, and his daughter Rebecca is the service support manager. Fracino is the UK’s sole manufacturer of cappuccino and espresso machines.
Since launching an export arm in 2008 to take advantage of the weak pound, award-winning espresso coffee machine manufacturer, Fracino, now exports to over 70 countries via a 40-strong distributor network. Exporting is vital to the growth strategy and sustained success of the Birmingham –based family firm which produces almost 5,000 machines annually in a market traditionally dominated by Italian and Spanish manufacturers.
International sales from distributors and global brands, including SUBWAY®, currently make up 25% of turnover and Fracino is on track for exports to constitute 50% of total sales by 2018. MD, Adrian Maxwell adds that “Our export vision has been underpinned by continued innovation and a multi-million pound investment programme which we’ve forged ahead with in spite of the uncertainties of Brexit. We’ve always looked further afield than Europe to maximise global opportunities and would urge fellow exporters to do the same. This strategy has brought 25% sales growth in the last 12 months from existing distributors in countries including Slovakia, Australia, UAE and Chile. We’re also making inroads in new countries such as South Africa and Taiwan which will help to drive our sustained success.”
Environmental Street Furniture (ESF) is a Northern Ireland based, global designer and supplier of street furniture and site furnishing products. The company was established by husband and wife, Alan and Caroline Lowry in 2012 and after servicing the local market with street furniture products, the company set upon an aggressive export campaign to establish the ESF brand globally.
Harnessing new innovation and technologies, ESF quickly gathered a reputation for offering unparalleled and never before seen expertise and with the launch of their ‘Style Collection’, a range of street furniture products for the themed experience attraction industry, the company had the opportunity to supply products to some of the world’s largest and most successful theme parks in the USA, Middle East and Europe. The themed attraction industry is now one of the company’s most successful markets.
ESF Managing Director, Alan Lowry is aware that without the ability to export, the company would not be the success it is today. Alan said, “Having the opportunity to export makes us accessible to clients globally and as a result, we have seen significant growth in terms of the products we supply to an international market. We have been fortunate enough to work with clients as far away in Australia and United States of America, the Middle East and Europe as well as in the UK.”
Alan continued, “We have received excellent support from Invest Northern Ireland and the UK Department for International Trade (DIT) to establish ourselves globally and this cements our position as a prestigious supplier to the international market. Our export sales have increased year on year and we want to continue this going forward, which is why we have a dedicated executive to lead and support our overseas export efforts.”
In 2017, ESF had successfully secured business in 22 countries across five continents and this is something the company are intent on developing for many years to come.
Some people assume that exporting is not an option for them whereas in reality, exporting is an opportunity that many family firms take up, and do very successfully, from all sorts of business sectors too. There are also some great UK family business exporters that really do help put the family business sector on the global map – take the likes of JCB, Walkers Shortbread, Macsween, Kinloch Anderson and The Morgan Motor Company to name a few. All family firms that succeed at exporting have clear strategies in place to minimise the risk and maximise the opportunities and it may sound obvious, but it is really important to do all the necessary due diligence and to seek appropriate advice before starting.