At a time when producers are clamouring to get a slice of the massive business opportunities in China, one Wanganui company has managed to pull off a major coup.
Natureze Ltd is a locally-based company marketing baby formula into one of the world's most populous countries and, in doing so is one of just 94 of 2000 producers worldwide to secure that sort of access.
Company spokesman Bernie Reuters is better known as the face of Devon Homes in Wanganui but it was his business contacts in China which sowed the seeds of this new venture which eventually got off the ground about three years ago.
His initial contact with Chinese producers was on the back of his building business importing product from that country. Mr Reuters and his business partner were regular travellers to China and said they were always looking for other opportunities. "When you visit a country with 1.5 billion people and we're living in a country of just 4.5 million, you start thinking what can we supply to them," he said.
They did some homework and struck on the idea of the baby food. What followed was research and more consultation and a realisation it was possible. "Three years ago we started this and it's taken a while but we've just sent another four container loads of the canned infant formula to our distributor there."
He's coy to talk about precise volumes but in the next 12 months said they expect to deliver more than 30 container-loads of formula.
Mr Reuters said Natureze was lucky in forming a relationship with a very good distributor. "He's got an excellent distribution network through the Chinese provinces and has just purchased a building in an industrial park in Beijing dedicated solely to our brand. He's obviously very serious about what we're doing," he said. That distributor was also setting up outlets in Hong Kong and Macau. Meanwhile, the New Zealand end of the business has been working on marketing and branding.
"It's taken a long time but now we're starting to see the rewards come through," Mr Reuters said. The baby formula is sourced in New Zealand with the supplier producing and canning the product for Natureze Ltd. "We work very closely them because our major concern is the health of the babies who will be using our product," Mr Reuters said.
He said the benefits for his company was that the product was New Zealand-made, produced and packaged here. And their brand got significant help from the "NZ Inc" brand which has a huge standing in the Chinese market.
The company has staff in the Wanganui office dedicated to the marketing and one vital area was keeping up to speed with China's customs regulations which tended to be a moving target with changing rules. "The success of our business is that ability to adapt to the new regulations. If you can adapt quickly and do everything correctly you should stay in business."
He said it was essential to have a good network in place in China and that came down to having someone there absolutely committed to the product.
Regulatory changes demanded companies achieve registration and while that hurt some, it worked in Natureze's favour. "There were 2000 milk companies exporting to China from around the world and all had to be registered. Of those 2000, only 94 have been accredited by the Chinese authorities so to have our brand as one of the 94 means we're very, very lucky."
Why was Natureze among the lucky ones? "Being a new company in China we've got a clean slate which is a big advantage. The audits which they have done on our manufacturer were clean and that's a huge plus. And I think the relationship with our distributor in China counts for an awful lot. If we didn't have the relationships we have built up with the Chinese over the past few years I don't think we would be able to do what we're doing if we were starting now," Mr Reuters said.
At this stage Natureze is only exporting baby formula but that could change. Once the Purecountry formula was established, he said the company could look at other dairy exports such as yoghurt, icecream and cheese. "We've been approached by other people over there and we'll certainly be looking at that. We know our distributor would like us to look at bringing in other products," he said.
Purecountry is 100 per cent NZ pure and the company has a Waitotara dairy farmer as one of its shareholders. "We've had Chinese distributors come out here to inspect the farm because they want to have confidence in our suppliers and manufacturers. We're talking about getting the product into a massive market. If you got even 0.1 per cent of that market it's huge. When you talk about going into secondary cities in China you're talking about cities with populations greater than NZ.
"The problem NZ has is it's population base. Everybody's doing much the same business but selling to a small population. So why keep bashing our heads against a brick wall when we could look and see what China would take from us," Mr Reuters said.