Exporters carry fight to Brits

By BRONWEN SELL

LONDON - A demented fly from New Zealand is getting into people's faces in the London Underground.

You can't walk into a tube station without being bombarded from posters by its crazed grin, as it carries the energy drink V into the lucrative but tough British market.

So far, Frucor's all-out marketing assault has worked. By August, a year after it was launched, V was Britain's second most popular energy drink, ahead of dozens of others, but still trailing arch rival Red Bull.

Another New Zealand product is also getting mileage from the packed underground, but its promotion is almost accidental.

On any train there is usually at least one young New Zealander, and there is a good chance he or she is inadvertently a walking billboard for outdoor products brand Macpac.

The people behind both products say their success is due to their points of difference with European competitors.

Macpac sales manager John Pearce cites his product's durability and quality.

Frucor's British managing director, Ray Nicholls, says V is one of the few energy drinks on the market that does not ride on the coat tails of Red Bull.

"If you look around the shops here, it's all Red Devil, Red Alert, Red Rooster, American Bull. V is unique."

The companies have taken a different approach to the same task - bringing a successful New Zealand product into a market notoriously resistant to change.

Macpac's approach is subtle. It is vying for the top end of the backpack and tent market, appealing to professionals and quietly letting its products sell themselves.

The company has no offices in Europe. It deals directly with 64 British retailers and others in Holland, Germany, Switzerland and, to a lesser extent, other European countries from its headquarters in Christchurch.

That is an unusual tactic for a company which makes 70 per cent of its sales outside New Zealand. The traditional route is to set up sales offices in the export market and/or to appoint a distributor.

"A lot of people said it was just not going to work," says Mr Pearce. "There was an amazing amount of scepticism, because it hadn't been done before."

But retailers liked the novelty and simplicity of dealing with a manufacturer which delivered right to the shop door, even from across the world.

Seven years after tentatively entering the British market, Britain accounts for about a quarter of Macpac's sales. The rest of Europe accounts for one-third.

V took a conventional approach, appealing to the mass market with a high-profile advertising and promotions campaign.

It set up an office of six people, with a further 25 in the field. As well as the tube posters, V was advertised on television and radio, and free samples were handed out in city centres.

The key was getting on board prominent supermarket chains such as Tesco and Sainsbury's and petrol chain BP, followed by smaller foodmarkets and corner stores.

It was not easy to enter such a saturated market and the costs in London, says Mr Nicholls, "are absolutely breathtakingly high".

Few other barriers stood in the way of entering the market, but that meant that anyone could - and did - bring in more and more products. Luckily for V, they were mostly copies of Red Bull.

V's prominence is an exception among a new generation of New Zealand exports to Europe.

Several companies few people have heard of, even in their homeland, are dominating niche information markets in technology and electronics.

Auckland's Keystone Solutions is providing software systems for some of the world's largest legal firms. Christchurch-based Pulse Data is among the world's leading manufacturers of computer equipment for blind people.

Auckland-based Software of Excellence is the leading provider of software to the British dental profession. Tait Electronics is a well-established wireless communications dealer.

Most are venturing into the rest of Europe to a lesser degree.

Pulse Data, a market leader in Britain, will launch itself on the European mainland this month.

Its managing director for Europe, Pedro Polson, says the market is small and that enables the company to keep a personal touch.

Its New Zealand roots help. "Kiwis are traditionally known as hard working and honest, with good business ethics, so our people are well respected."

In the consumer market, exporters are tending to focus narrowly on one or two flagship products rather than entire ranges.

Aunt Betty's Old Fashioned Foods, which began in Marlborough about seven years ago, is concentrating on a twin pack of steamed puddings.

"I've been down the track where you handle too many products and do nothing well," says Peter Cooney, its British managing director, who has been selling New Zealand products on the British market for almost three decades.

It was not easy to persuade suppliers to take on a single product. They preferred to deal with a manufacturer which could provide 10 products, and thus generate less paperwork.

But, like V and Macpac, Aunty's cashed in on being different. There were plenty of steamed puddings on the market but they were all sold in cans or were chilled or frozen.

Aunty's was the first to sit on the shelf, packaged in paper and plastic.

It was a simple distinction which caught on. After two years, Aunty's had gained 20 per cent of the market. Sales have exceeded 2 million.

It is hard to compare the value of the new exports with the traditional primary produce, which still dominates New Zealand's export figures.

Trade New Zealand's Europe region manager, John Waugh, estimates that New Zealand's software export sales are in the tens of millions, and that more than $50 million of electrical and electronic goods are sold in Britain each year.

He calculates that Britain would have been a top-10 market for New Zealand last year, even without lamb, butter, kiwifruit, apples and wool.

Sheepmeat, wool, butter and kiwifruit are still by far the most lucrative exports to the European Union, but more sophisticated products are starting to appear on the lists of top 20 exports.

Medical and veterinarian instruments and boards, panels and consoles have crept into 19th and 20th spots in the top 20 Europe merchandise tables, below raw hides and skins.

Yacht sales to the European Union more than doubled last financial year to $38 million, making yachts our 17th most valuable export to the region.

Exporters the Herald spoke to said success did not come easily.

Frucor's Mr Nicholls says: "New Zealanders are hungry for change.

"We don't find that here. There's a lot of comfort in, and acceptance of, the way things are.

"In New Zealand, no matter what your industry, you hop up with a good idea and you get a hungry response.

"Here it can be like swimming in a tar pit."