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Case study: Smartfoods bringing breakfast to the world

Kiwi cereal maker Smartfoods is in a bowl of its own with its unique formulations, ongoing product development and speed to market.

Smartfoods is in a bowl of its own with its unique formulations, ongoing product development and speed to market.

Smartfoods founders Justin Hall and Vicky Hall credit New Zealand Trade and Enterprise for helping their business grow, expand, and connect with other Kiwi exporters.Learning from those who have already trodden the same path is a great way to sidestep the pitfalls of business. It’s helped Smartfoods owners Vicky Taylor and Justin Hall, particularly as they move their cereal manufacturing business into the exporting phase.

“It’s great that you can call people and ask them about their experiences and mistakes, and they’re happy to share what they know,” says Taylor. “There’s that real generosity of spirit. It’s a pretty big pie out there and it’s not often we’re all competing for the same slice. New Zealand exporters operating more co-operatively can only increase the size of the pie for all of us.”

It’s through Smartfoods’ involvement with New Zealand Trade and Enterprise (NZTE) that the company has connected with other Kiwi exporters, and it’s helping Smartfoods in other ways as it broadens its business horizons.

Like most New Zealand startups, Smartfoods began small and lean. In 2003, it was marketing breakfast cereal manufactured by Vogels, having acquired the licensing rights to the brand (except for bread) in New Zealand. Contract manufacturers produced the product, using formulations, packaging and branding developed by Smartfoods.

“It was just me and a contract food technologist working out of a spare bedroom at home,” says Hall. “The real value for us was to own that key IP around product development, and establish what we had to do to be successful and what we could get someone else to do for us.”

In 2006, Smartfoods began manufacturing its own cereals, both branded and private label, for retail outlets in Australasia, the USA and Asia. It now employs 30 staff. From its second year, Smartfoods began fielding product inquiries from overseas but only started to seriously investigate export markets two years ago. Today, with help from NZTE, Asia is its big exporting focus, and with consumers there developing more Westernised habits, the potential for business growth is significant.

“Asian consumers are very interested in food from New Zealand,” says Taylor. “Our clean, green image is fundamental to our position as a food exporting nation, and certainly for our brand and how we position it. We deliberately include certain ingredients because of the story they enable us to tell.”

Starting with a big export market like China was daunting, so Smartfoods chose to launch its whole market management strategy in Singapore. Taylor says it’s a relatively small market with a couple of big retailers and some great channels to communicate through. “If we focus on that we can improve our performance there relatively quickly. And the support from NZTE is important. Whatever investment we put into that market, NZTE can help us accelerate it.”

She says NZTE has added real value to Smartfoods’ business through in-market personnel.

“Winston Ong in the NZTE Singapore office has an FMCG background so he knows our sector inside out. He’s enthusiastic, positive and well networked. For us, it’s like having someone in the market on the Smartfoods team.”

That local expertise and knowledge has resulted in significant traction in the Singapore market in a very short time. Ong recently facilitated a tour that brought in-market buyers from a major Singapore supermarket chain down to view Smartfoods’ Auckland factory.

“That’s really valuable to us,” says Hall. “NZTE has also organised meetings with buyers in our category who look after large retailers. These buyers get 20 calls a day from people trying to sell them stuff, so to be able to leverage relationships that cut through and turn them into meetings is invaluable.”

In Auckland, Barry Cowen is Smartfoods’ NZTE contact. He’s worked with Hall and Taylor to devise objectives for different export markets. With its access to large international data bases and staff around the world, NZTE can extract reports on trends in specific areas, and carry out analysis to pinpoint the best export markets to focus on. Cowen is impressed by the way Smartfoods works so closely with retailers and maintains those relationships once they’re established.

“They focus their marketing so it’s cost-effective but still reaching the masses,” he says. “As a smaller company, they can turn around new products quickly and identify niche areas that stand them apart, such as their use of stevia as a sweetener, which makes it appropriate for the diabetes market. With their ongoing research and focus on product differentiation, I know they’ll continue to go from strength to strength.”

Contact
New Zealand Trade and Enterprise
www.nzte.govt.nz