A passion for cricket opens trade doors
When Geoff Allott took his quest to break into the notoriously tight Indian food market to a hard-faced hotel chain executive, he had no illusions.
"This person looked extremely gruff and I had, I reckon, about five minutes in front of him to talk about my product."
But the Indian surprised him. "He looked down at my card and he looked back up and said, 'Cricket World Cup 1999, 20 wickets'. I left the room about an hour and a half later."
He could not have been more helpful, Allott says.
"He not only put me in contact with their head executive chef, who we now have dialogue with, but he talked about strategy, about how to actually get into the business."
It was an example of how cricket dominates all levels of society in India - the passion is five times that of New Zealanders for rugby, Allott reckons.
And he is counting on that passion to carry his food company QualityNZ to success. He and four other cricketing greats - Sir Richard Hadlee, Brendon McCullum, Stephen Fleming and Daniel Vettori - are shareholders and high-profile promoters of its products.
Allott believes India has the potential to be the next China for New Zealand exporters, as long as they're prepared to take a long term view.
"Three-quarters of India's consumer market in 2025 doesn't exist today. You've got to read that about 10 times to understand how big that is. That's $1.3 trillion a year in future purchases up for grabs."
The seeds of Allott's commercial venture in the subcontinent were planted when he worked for New Zealand Cricket, doing pre-tour inspections. He could not find New Zealand produce in hotels or supermarkets and believed with India developing exponentially, the time was right to change that.
After three years doing their homework, Allott and business partner Geoff Thin, along with their cricketer-shareholders, have established eight New Zealand subsidiaries and, crucially, one Indian subsidiary.
While it takes about a day to form a company online in New Zealand, in India it is more likely to be eight months.
"That company has own import permits and allowed us to control the supply chain. Effectively our export company is exporting directly to our import company and that allows us to move away from the current model there of an importer, a distributor and a wholesaler, all adding costs."
QualityNZ has offices in Christchurch, Mumbai and Bangalore. Having a presence on the ground in India, especially with high- profile cricketers, either former or current New Zealand captains, gives the business huge credibility, Allot says.
"The attitude to these guys is very positive. Lots of people, including corporates come in, spend a week, do a deal and bugger off again and they're not prepared to commit to the market. Those who stay four or five months and actually live in their society, that adds huge weight to their impression."
Like China, India is a hugely challenging market and Allott says the world's best negotiators live there.
"A little old new Zealander going in and trying to negotiate on price ain't going to work. You've got to respect their ability around that and you've got to go in with something different other than just a commodity product or you are history."
And having outstanding cricket credentials is handy too, as Allott discovered when he went into the hotel executive's office.
"I'm a nobody in terms of cricket circles but that's the degree and the point of difference that I talk about - you can actually start a conversation. Otherwise if I'd walked in there, then I guarantee first thing he would have said is, 'how much?' and it becomes a price issue straight away."
With some export company directors starting to get twitchy about their exposure to the Chinese market, India's time has come, says Allott. The issues facing exporters in China 10 years ago - corruption, market access difficulty, lack of cool storage and logistics management - have to a large extent been addressed and New Zealand now has a free trade agreement with China.
That's seen exports, not including services, grow from $2.96 billion in 2009 to $11.19b in 2014.
"We found a way to trade and growth is now exponential. I think if you go back 10 years, that's how we're now viewing India and I think that's eventually where we'll get to."
India's population is young with 65 per cent under 35 and the middle class is growing fast. Imported food was valued at US$69 million in 2012 and the segment is growing at 30 per cent a year.
By 2025, the "middle market" is forecast to grow from 250 million to 550 million people.
"[The year] 2025 looks a big number, but think about it, in 11 years we're going to have 300 million moving into that market.
"That will have huge impact; disposable income will go up, demand for western food, goods and services will go up as a result."
QualityNZ has formed an alliance with Alliance Meat to supply Pure South lamb to India and Allott says a 1.3 tonne trial shipment flown there went down well.
As the world's biggest procurer of sheep meat, Alliance can offer the quality, capacity and consistency of supply needed.
"Companies have failed in India because they haven't been able to consistently supply so to Alliance in behind is huge for us because with the growth we're expecting, we'll need it."