A report from audit, tax and advisory firm Grant Thornton outlines common mistakes and the 10 biggest myths on entering global markets.
—Sponsored article by Grant Thornton LLP
Canada’s food and beverage sector has long been regarded as the country’s most recession-proofed industry. But as companies begin to test international jurisdictions for expansion opportunities, the risks begin to build.
Indeed, when it comes to going global, food and beverage executives begin to face some very real challenges. Geopolitical uncertainty, distribution and logistical limitations, disparate food safety regulations and wild currency fluctuations are all factors that will toss a wrench into a company’s global expansion plans.
However, with an exploding global population powering widespread growth in the retail food sector, the rewards are often worth the risk, as long as the expansion plan is creative, executable and measurable.
If your company is in the process of developing such a plan, you’re in luck. Grant Thornton, a global audit, tax and advisory firm, has developed a report that outlines some of the very good reasons to pursue international food and beverage expansion. And it’s more than an overview of the sector.
Expanding Horizons: Food and beverage looks for growth, which was authored by Jim Menzies—Toronto-based partner and global leader, food and beverage with Grant Thornton—also tackles some common myths and pitfalls associated with such a complex endeavor.
If your company’s management expects that simply following global customers into new markets will achieve profitable growth, it’s adhering to myth number two out of 10. If you are planning on devising the organizational structure once all the other elements are in place, you are living myth number five.
Deferring that exit strategy until the time comes for you to exit? Let us introduce you to myth number nine. (Scroll down for Grant Thornton’s list of 10 common misconceptions on global expansion in the food and beverage sector).
Be assured, if your company has included in its plans any of Grant Thornton’s 10 common misconceptions about global food and beverage expansion, it’s not alone. But if you’re keen to separate yourself from the competition by avoiding the common mistakes and executing a solid, dynamic and successful expansion, this report is an excellent place to start.
10 common misconceptions about global expansion in the food and beverage sector:
1) Our checklist will guide us through the process.
2) By following global customers as they go abroad, we will achieve profitable growth.
3) Find the best location and a reliable partner first.
4) Our current business model will work in every global market.
5) We will figure out the organizational structure once all the other elements are in place.
6) If we can’t predict our likely outcomes from the venture, why bother trying?
7) Capital is not an issue for us.
8) We need to do the deal now or miss the opportunity.
9) We will worry about an exit strategy if and when we need one.
10) Of course things are different. It’s just the local culture.
Source: Grant Thornton, Expanding Horizons Food and Beverage Looks for Growth