Podcast Transcript: Why did the Canadian bison cross the Pacific?

Michael: At the end of our last podcast I asked, “Why did the Canadian bison cross the Pacific?”

Well, according to my next guest, it’s because there’s a market on the other side. And not just for Canadian bison.

Many Canadian food products — from beef to processed foods — have been successful in the Philippines, but my guest says it takes more than a one-way ticket across the Pacific to whet Filipino appetites.

Stick around to find out why getting there is just half the battle.

I’m Michael Mancini, Editor-in-Chief of CanadExport, the e-magazine of the Canadian Trade Commissioner Service. By the way, you can check us out online at canadexport.gc.ca.

And please take some time to write a review of our podcasts on iTunes. Use the searchword CanadExport. Tell us what you think and how we can improve. If you have story ideas, or business questions you want answered by our worldwide network of trade commissioners, let me know. Just send me an email (canad.export@international.gc.ca).

Now back to the show.

With me on the line is Butch Dela Cruz, Trade Commissioner at the Canadian Embassy in Manila. Welcome Butch.

Butch: Thank you Michael and thanks for the opportunity.

Michael: Butch, before we dig into our conversation, I just want to play a clip for you to set this all up. Earlier I spoke with Sherwin Choi, President and CEO of PTC Commercial Corporation, a Filipino importer of Canadian food products like pasta, canola oil, beef, seafood and processed food.

This is what he had to say about what he thinks of Canadian food and beverage products but also about what it will take for Canadian companies to really succeed there. Here it is.

Mr. Choi: First of all, my experience with Canadian products for the last 20 years is very good. Very good in the sense that the quality is one of the world’s best. As far as how Canadian products are doing in the local market, many times I have the feeling that we don’t have enough follow-up. The Philippines is not a very mature market and follow-up through continuous marketing is very important. I’m not sure why not enough follow-up is being done. So personally, my thought on this is really continued follow-up.

Michael: OK, there you have it Butch. He made a few good points there. Let’s start with marketing. Are Canadian companies not paying enough attention to the importance of marketing and continuous follow-up?

Butch: Well Michael, I would indeed say that it’s true. It is indeed very difficult without the right promotional support from the exporter, which, regrettably, is common among Canadian companies by the way. And regrettably, this is not the case with companies from the United States, Australia or those from most European countries. Canada is clearly disadvantaged in this regard – not by the peculiarities of the market, but more by, shall I say, its limited financial capacity to match or address the competition.

Michael: OK, but as you know – to get back to Canadian bison – the Canadian Embassy in Manila organized a friendly cook-off of all-Canadian ingredients aboard Canadian frigate HMCS Ottawa this past summer. It was a really cool event that had international chefs who are based in upscale hotels in Manila and Cebu participate. And one of those ingredients was Canadian bison. The Peninsula Hotel now has Canadian bison on the menu of its signature restaurant. So it’s on the market. So some Canadian companies are getting the message then, no?

Butch: Well, actually at this point Michael we are looking at it as an entry level product. We are not seeing any real successes yet in the market. It is in the market but it’s just the beginning so we can’t really say yet if it will be successful in the market.

We encourage those individual exporters who belong to an industry association to have the industry association itself get together and focus on targeted initiatives in the market. One clear example I can highlight to you is the Canadian pork industry.

Canada Pork International for instance took a very strategic approach to this market way back in 1996, when the Philippine market was actually still closed to imported pork. But CPI had already looked into the market and worked with us closely — the Trade Commissioner Service in Manila — to try to gain access to the market. In that respect, the research that accompanied that effort enabled their member companies to understand the market. So much so that when the market opened finally a year after in 1997, Canada was the first supplier of imported pork to the market. And Canada has dominated the market, in terms of imported pork, ever since. In fact, right now the Philippines ranks as one of Canada’s top ten markets for pork. Sometimes I find that hard to believe. The Philippines is such a small market. But in terms of the pork industry, for instance, which had a focused and strategic approach to this market, the success is unprecedented.

Michael: I want to pick up on something else that Sherwin said. He said it was “quality” that attracts him to Canadian food products. And as you know, Canadian companies can benefit from the “Quality Is In Our Nature” brand that our partners at Agriculture and Agri-food Canada are working hard on. What are some of the benefits Canadian companies can take advantage of when it comes to the “Quality is in our nature” marketing effort?

Butch: Here’s the thing. Canada is well known in the Philippine market for quality food products. That’s a given. So there is no real challenge to build up Canada’s reputation further here in terms of quality food. The challenge I think that is facing us, in government and in the private sector, is how to keep that reputation by exhibiting quality in other business elements. If we take for instance Agriculture and Agri-food Canada’s new branding strategy, they talk about a “brand promise.” These are the other business elements that pose a challenge to a market such as the Philippines. By brand promise, or other business elements, we’re talking about consistency of the product that’s being delivered. Second, I would say is reliability in delivery. Canadian exporters should not just look for a spot sale or one-time sale. The market here is ready and willing to look at long-term business and that is the way Canadian exporters should look at this market as well. Keeping the personal touch in the business relationship is another must – and that’s not confined to the Philippines but also Asia.

There are clear reasons why Canadian companies would be discouraged about even looking at the Philippines. One reason is distance. Ocean Freight out of Vancouver for instance, for a container of frozen meats from Canada would take a minimum of 28 days to land in Manila. A similar reefer container out of Australia would take a week. Another challenge for instance is, given that the Philippines is a small market, that is has small requirements so, you know, it’s hard to sell a single product here if you’re a Canadian exporter. If you are a single product exporter, the only way to get to this market is to part of a consolidated cargo of other products mixed together in a single container. This is normally done by what we call “cargo consolidators” based in either the East or West coasts of Canada, the West Coast of the United States, who actually get paid by an importer here to source different products from all across Canada, put it in a container and ship it to the Philippines.

Michael: That’s an interesting point Butch. I just want to make a quick point about that. If Canadian companies are looking to get in touch with consolidators, either in Canada or in the United States, the best place to start is to contact the Regional Offices of the Canadian Trade Commissioner Service. We have them across Canada and they’re the best first stop if that’s what you’re looking for. So Butch, how difficult is getting your product to market this way?

Butch: Very easy. In fact, that’s what’s happening now Michael. I just had a visitor here from the Eastern part of Canada. A meat-packer. The reason why he came out here half the world away was because he was surprised that they were selling his product in the Philippines without him knowing. Because it has been going through a U.S.-based consolidator or trader, so to speak. I guess that’s how Canadian product has been coming in the past and penetrating the Philippine market through consolidated containers done in the mainland United States by U.S. companies.

Michael: OK, so we’ve covered what happens on the Canadian side of the ocean. How tough is it to find the right importer in the Philippines?

Butch: OK, that actually falls under one of our four key services. And one of those key services of the Trade Commissioner Service is identifying qualified contacts in the market. We keep track of existing importers or distributor of food items. We keep track of those who import Canadian products already. We watch how their business is progressing so that if there is interest from a new exporter, or an existing Canadian exporter with a new product, then we do have a pool of qualified, potential, importer/ distributors in the Philippines with whom we can match with potential Canadian exporters.

Michael: So what should Canadian companies look for in an importer?

Butch: Track record is important. Size of the business. How long they’ve been in the import and distribution business. Scope of the market here as to whether they are just confined to metro Manila or are they distributing throughout the country. That is what Canadian exporters should look for in a potential importer but that we are in a position to provide some of that information.

Michael: Well thanks Butch, I appreciate your time.

Butch: Thank you very much Michael, again, for this opportunity.

Michael: I was speaking to Butch Dela Cruz, trade commissioner at the Canadian Embassy in Manila. If you are a Canadian entrepreneur or work for a Canadian company and you can use some of the help trade commissioners like Butch DelaCruz can provide, go to tradecommissioner.gc.ca. It’s Canada’s most comprehensive network of international business professionals and they’re at your finger tips.

Now, I’d just like to leave you with the following numbers:

Approximately 45% of Canadian domestic food and agricultural production is exported either directly as primary products or indirectly as part of processed products. In fact, last year Canada exported over $32 billion worth of food and agriculture around the world.

So if you're involved, you'll want to know more about the Canada Brand for Food and Agriculture and the slogan “Quality is in our Nature.”

On their website, you can find consumer and buyer market research from Canada’s key export markets, tools and templates, Canada brand graphics, the brand promise and much more. Just go to Canada Brand to get all the links you’ll need including the “Quality is in our Nature” site. It’s great by the way.

Now, if you liked this podcast, you can download more or on iTunes using the searchword “CanadExport.”.

Please write us (canad.export@international.gc.ca) a review and let us know what you think.

Join me for our next show when I talk to Professor George Yip, Dean of the Rotterdam School of Management, about the rise of global value chains.