Top Five tips for exporting food products from Europe to the U.S.
The U.S. food market, now approaching $100 MM in annual sales, continues to grow consistently with no signs of slowing down. The opportunity is ripe for you as a European food exporter to start or increase your food product offering to the U.S. recognising American consumers are increasingly open to new tastes and food experiences.
However, many of you, who have made the jump are finding the road is not always so smooth. Strict customs requirements, U.S. regulators such as the FDA (Food and Drug Administration), and a consolidated network of industry players are very different from Europe, creating unique challenges.
Below are our top five tips to help you avoid unnecessary delays and extra costs to your food supply chain when exporting to the U.S.
It is important to note that transport is a very different process from managing logistics within the country, which is a common mistake that logistics professionals in Europe make. That said, shipping food products to the U.S. can be a relatively easy process for you, if you choose the right carrier who can provide the best balance of service and cost.
While the logistics infrastructure in the U.S. is efficient, the country is also very big. With time at such a premium for your food goods, understanding the potential impact of long transit times and cost inside the country must be considered. Special handling, like a temperature-controlled environment, must also be considered for certain food products.
The movement of food products into the U.S. may require the involvement of up to four separate government agencies, including US Customs and Border Protection, FDA, US Fish and Wildlife Service, and US Department of Agriculture. The entry process, and potential delays, typically represent the biggest challenge during the logistics. However, the ACE (The Automated Commercial Environment), which is the government’s primary system through which it determines admissibility, helps to make the process easier.
Entering the U.S. food market is a challenging process, and not a process most companies can navigate successfully on their own. But with a sound strategy and the right partnerships, these are all challenges that can be overcome.
3. Take a Big Picture Approach
Usually, when companies export to an outside market, the focus is placed on the shipping process while cost reduction is emphasised at the expense of everything else. While costs are important, this can be a very short-sighted approach. International shipping rates are historically low right now and, while paying a competitive rate is important, the real opportunity for improving shipping is by looking at a broader end to end process for your food supply chain and creating a logistics strategy that works with all the functional areas it connects with.
4. Technology Must Support the Process
The complexity of managing rates, objectively weighing the large number of mode and carrier options, as well as the importance of real-time tracking information make technology a critical part of the process. These factors are magnified even more for time-sensitive food products.
An important benefit of technology is gaining access to data and the ability to use it. Logistics technology can provide network modelling to optimise shipping costs, account for tight lead times, and minimise time to market. Understanding other details like an item’s ‘Cost of Goods Sold’ is another potential output of detailed data analysis only made possible by technology.
The downside is that the cost of technology can be high. But, the good news is the cost models for how shippers can access technology is changing – which leads us to the third piece of advice.
5. The Right Supplier Partnerships
The complexity of the challenges between European and U.S. markets serves to emphasise the importance that solutions have to be customer and product-centric. All partners, including carriers, warehouses, customers, brokers, etc. need to be in alignment to successfully service a company’s needs.
Any company interested in selling their food product in the US is wise to find a qualified partner who can provide an independent, end to end solution. A partner who is aligned with the customer’s objectives is able to create asolution that is based on the customer’s best interests.
The right partners are one that can ensure smooth customs clearance and final customer delivery, including minimizing damage claims and chargebacks, creating opportunities for consolidation, using technology to assist with the process. The ability to navigate the stringent delivery and packaging requirements of the industry is invaluable to ensuring deliveries happen on time, damages are minimized, and chargebacks are avoided.
If you would like a more comprehensive outline to exporting food products to the USA, sign up to our White Paper, coming out on the 5th of September.