Shoppers at the mainland China stores of exclusive French fashion brand Givenchy will soon be heading out the doors with a taste of something a bit Kiwi on their lips.
Coco's Coconut Co, a small Kiwi startup that produces a brand of coconut water called CoAqua, recently sealed a deal that sees CoAqua being offered as the 'in store drink' to shoppers in all 16 of Givenchy's stores in mainland China.
Grier Govorko set up the company in mid-2013 with his Hong Kong-based Kiwi business partner Steve Gilbert after spying a gap in the market for what he calls a 'super premium' brand of coconut water. CoAqua is now available in New Zealand, Hong Kong, Macau, the US east coast and China, and Govorko says deals like that with Givenchy are a great boost in terms of building their brand.
"In terms of making an alliance with a luxury brand like that in a market like China, I don't think we could have positioned it any better," he says. "We're positioned as a super-premium coconut water so it will be going into the hands of the consumers we're targeting."
This week in Your Business a number of small business owners share their stories of how they did deals with big-name brands offshore.
In Coco's Coconut Co's case, the founders were introduced in Hong Kong to the woman who runs Givenchy's stores in Shanghai through a mutual friend, and simply gave her some samples. Givenchy in China just happened to be on the lookout for an in store drink and CoAqua ticked all the boxes, says Govorko.
Not all deals happen so organically. Kiwi merino kids' wear brand Little Flock of Horrors is sold in a number of outlets around the world, including the famed New York department store Barneys.
Lucy Wildman, one of the founders of the brand, says she'd like to say the deal with Barneys came off effortlessly - but it didn't.
Besides Little Flock of Horrors, Wildman's also one of the folks behind export marketing business Module Marketing, which helps take New Zealand-based brands into global markets. This experience meant they could identify Barneys as a good fit for their kids' wear brand and present it in a way that would appeal to the department stores' buyers, giving them a foot in the door.
"It didn't just happen overnight though; we needed to 'prove' ourselves in the space, regularly attend trade shows in New York and display sell-through, line range and depth before she placed her initial order," says Wildman.
Patience is indeed a virtue when doing these kinds of deals.
Millie Jocelyn is the CEO of Showcase Workshop, a Wellington-based company with six employees. At the beginning of this year the firm signed a deal with Vodafone Global Enterprise, based in the UK, which was keen to access the company's technology that turns marketing materials into an app that can be distributed to a team's mobile devices.
Vodafone initially approached Showcase in mid-2012, but it took a full 18 months to sign the deal.
"As a small business person in a country like New Zealand, I've found there's not always a lot of process involved with doing deals - you can reach the decision makers quite easily here, and make things happen quite quickly," says Jocelyn. "So doing this deal taught us a lot about the patience you need to have when dealing with a big offshore corporation."
Despite such deals taking time, Jocelyn advises small businesses don't take that as a sign to go slow on their side.
"We always try to be very responsive, so when we got something that needed to be actioned, we'd action it as quickly as we possibly could. We didn't allow ourselves to get caught up in going slowly because that was just the nature of things."
Craig Armstrong, a customer director with New Zealand Trade & Enterprise, also has a couple of key pieces of advice for companies embarking on this kind of journey.
"The first is to be forever curious - walk an extra aisle, turn the corner, get out of the hotel, force yourself to meet someone new and go see things for yourself," he says. "The second is to leave something on the table. Don't do a deal that is so tight the customer can't make any money, and that doesn't allow both of you to invest."
Offshore deals with Grier Govorko, Coco's Coconut Co
Grier Govorko is director and quartermaster of Coco's Coconut Co, which produces the coconut water brand CoAqua. CoAqua is currently available in New Zealand, Hong Kong, Macau, the US east coast and China.
Can you tell me about your business?
There are two of us in the company - Steve Gilbert and I. Steve is a Kiwi, but is based in Hong Kong, and we've known each other for 20-odd years. We started the company in the middle of last year, but prior to that I'd spent 18 months researching the coconut water category. I'd decided there was space for a super-premium product in that category, which didn't exist and still doesn't - except for us - as far as I'm aware.
We then spent months researching coconut water suppliers around Southeast Asia and then convincing someone to put it in glass bottles, which we did, but it wasn't easy. So now our coconut water is sourced out of the Mekong Delta and bottled on the outskirts of Ho Chi Minh City.
You scored a deal for CoAqua to be the 'in store drink' at Givenchy stores in China. How did that come about?
It was an incredibly organic process. We met the woman who runs the Givenchy stores in Shanghai through a mutual friend in the advertising business. We met her in Hong Kong when she was visiting, and we simply gave her some samples. She said she loved the look and the taste, and that they were looking for a product to give to all their customers in their stores. There's an Italian guy that oversees the Givenchy stores in China and when we met him he said they wanted it for all 16 of their stores.
In terms of making an alliance with a luxury brand like that in a market like China, I don't think we could have positioned it any better. We're positioned as a super-premium coconut water so it will be going into the hands of the consumers we're targeting.
How long did the process take?
The process with Givenchy has been really quick. What's been slow is dealing with the regulatory stuff involved in being able to take a food product into China. It's been relatively smooth, just slow
You have to take everything you have in terms of nutrition information, certificates of analysis, labels - anything relevant to the product that's written - and get it translated into Chinese. Then it gets submitted to various government bodies. We've got a partner in China - again a friend of a friend - who's handling that and I can't imagine going through that process without a Chinese partner.
What other plans do you have in terms of growing your offshore markets?
Our first container to the US recently arrived on the east coast, in Miami, where we have a deal in train to supply the US flagship hotel in the boutique Edition chain.
But we're also in the middle of negotiations to distribute the product in Singapore and possibly Korea. Our focus is really on Asia-Pacific because that's where we're based and it makes sense from a logistics standpoint. And it's a big market.
What advice would you have for other small New Zealand businesses looking to do deals with big-name brands offshore?
The only thing I'd say is don't get caught up thinking you need to spend 10 years in New Zealand building your company up to a certain point before you make that move offshore. Just get on and do it. I think you need to get out as soon as you can and start those conversations because it all takes time and there's no reason not to put your toes in the water.
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