How difficult is it to promote a product abroad? Does participating in trade shows help companies expand their sales geography? When does it make sense to open an office in a new market instead of working with distributors? For the answers, we turned to Alexandra Gudimova, marketing director at NovaProdukt, one of the leading producers of food products for healthy lifestyles in Russia and the CIS.
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Start by telling us a little about NovaProdukt. What does the company do, and how was it started?
NovaProdukt sells organic foods for healthy lifestyles. Eighty percent of our products contain no added refined sugar, colors, or flavoring. The company was founded 21 years ago by two families – my father and his partner.
NovaProdukt started out as a B2B supplier of ingredients like fructose, inulin, and pea protein, but six months later we began making sugar substitutes for the B2C market. After that, we added drinks for diabetics.
In 2013, we moved away from highly specialized products in favor of our Bionova brand for a wider audience. We doubled down on processed food, snacks, nutrition bars, hot cereals, and soups. Today, we have over 200 items in our catalog.
You started exporting in 2005. What countries did you start with, and where do you sell today?
We launched successfully in neighboring countries that remain our key export markets today. These are Belarus, Kazakhstan, Uzbekistan, and Azerbaijan.
Our products are currently available in over 16 regions, mainly in the CIS. NovaProdukt’s goods are also sold in Vietnam, Thailand, the United States, and Korea.
Have you had to change your formulations or packaging to appeal to the tastes of consumers in other countries?
We haven’t altered our formulations, since consumers in Russia and neighboring countries have similar tastes.
In terms of packaging, we have localized the language on our products for consumers in each country where we sell. We try to make that happen during production, but when that isn’t possible, we add stickers in the local language.
Is the healthy eating trend strong in Russia, or is it still a niche market?
The Russian market is growing fast. That’s the reality. It isn’t a trend. Our company has seen turnover increase an average of 40% over the past several years. And our competitors and companies in adjacent segments are seeing the same kind of growth.
What percentage of your sales comes from export?
That number is constantly rising. Export was 10% of our sales two years ago, but it reached 15% of sales for the first eight months of 2021. We plan to get that up to 20% soon by expanding our offerings in existing markets and launching in new markets.
Your products were featured at InterFood 2021 this past summer in Azerbaijan. Tell us about NovaProdukt’s experience at the trade show.
We love trade shows as a way to find new clients. We recently started attending industry events with the Mosprom Center, partly for the consulting support and partly for the savings, because we only have to pay for our employees’ travel and hotel. Going to a trade show can be very expensive without that connection, so we appreciate the fact that the city offers this support. The Mosprom Center helped us join a group stand for companies from Moscow.
Before InterFood, Azerbaijan was our fifth or sixth largest export market. We found new distributors at the trade show who helped us expand into new regions, and now the country is our fourth largest market.
How hard is it to promote products abroad?
It’s a little harder and takes a little longer because we have to work through our partners or launch special projects with our distributors.
We have a lot of experience in Belarus, possibly because of the closeness of our languages and the degree of economic integration with Russia. We conducted a marketing campaign with media portal TUT.BY and a number of popular bloggers on Instagram to gain recognition. That recognition generates interest in our products and drives sales.
What three things would you tell other Moscow-based companies when they consider new markets?
If you have done the research, are confident that there is demand for your product, see the potential, and have the resources, then you should definitely open an office in your target market. It takes a long time to get into a market using distributors.
Learn how to adapt quickly. You’ll need to change your packaging and get certified. Remember that your product isn’t the only one in the market, so distributors and chains are talking to more than one company. The faster you handle requests from potential partners, the less likely they are to turn to your competitors.
If you’re fast, flexible, and have the resources to open offices abroad, you’ll have a better chance of conquering new markets.
About Carson Derrow
