At a major international trade show last year, the representative of one Pacific Island company that was displaying and sampling its wares for the first time at such a level was ‘gobsmacked’ at the overwhelming response to their product. I clearly recall their words: “If even if a fraction of these enquiries turn into orders, we will have to scale up our production at least tenfold.”
This company was not alone. At least two others from different island nations expressed similar surprise. For all of them it was the first time that they had exposed their products at an international platform. They had modest expectations of finding an interested potential buyer or two – not businesspeople who would offer them an advance and ask them if they could supply many times more than what they imagined they could ever supply.
One of the participants said they didn’t know whether to celebrate or become worried. Their predicament is completely understandable: how does one deal with a situation like this, where the potential demand for what one is producing appears to be far higher than the production or growing capacity (as some of these items were natural products). These are questions with no easy answers and each company will have to find different answers going by what they produce and how they do it.
But then there are a few factors that are common to most small Pacific Island businesses. One of these is scale. It is difficult for these businesses to scale up in the face of a potential increase in orders. This may be because of a variety of reasons from limited available raw material or growing capacity, limited manufacturing capacity, inadequate skilled human capacity, financial constraints, environmental and seasonal reasons besides others.
While some of these like manufacturing and financial constraints can be addressed fairly easily, other factors are relatively difficult to deal with. For instance, the company that was surprised with a flood of orders at last year’s show is limited by growing constraints around its natural products. If it tries to expand without the right approach to producing the quality product it already grows, it runs the risk of greatly compromising on quality. If it takes that tack, its business will go nowhere. There is no merit in expanding for the sake of expanding.
Scale will always be a problem for Pacific Island producers, especially when it comes to global markets. There is no point in going after volumes, especially for niche, natural products that might be greatly valued in specific, well-identified markets. ‘Niche’ and ‘natural’ are two of a few other attributes that Pacific Island producers must use to their great advantage. Pacific Island businesses need to generate more bang for their buck from these attributes. Revenue and profit must come from quality and uniqueness rather than volumes. Leave the volumes to businesses in cutthroat markets where price sensitivity is valued much more than quality and uniqueness.
Pacific Island producers need to better leverage the range of the region’s well-known attributes. Uniqueness, pristine, natural environments, traditions, people and so on need to be better packaged into their value propositions. In a world of mass produced tat, these attributes have increasing value. They stand out. Customers are paying more attention to this and valuing it more. Products that can demonstrate these attributes, therefore, have the potential to deliver more bang for the buck, if promoted astutely.
Niche product marketing is all about the backstory. The Pacific Islands and peoples of the Pacific have plenty going for them in terms of building neat backstories for their products. Actually, it’s a marketer’s dream: there are huge dollops of exotica, there are enduring pictures of pristinely pure environments in consumers’ collective mind’s eye, there is the knowledge of natural traditions of an ancient people – and so much more. These are powerful elements in any backstory and have been used to great effect by businesses in other parts of the world. No reason why more Pacific businesses should not put this rather successful formula to better use.
In fact, the Pacific Islands tourism industry has used these elements well. Fiji, the Cook Islands, Samoa, Vanuatu have all successfully used these elements to promote themselves while at the same time differentiating themselves from one another. Small Pacific Island producers with big export ambitions need to emulate these instances. Niche, if portrayed well, can not only sell better, but also deliver much better value and generate demand. A few Pacific products have achieved this with great success. Bottled water and vanilla are two that come to mind immediately.
There are a few encouraging examples of success in the making, too. A boutique New Zealand chocolate manufacturer is creating an engaging backstory around chocolate that it is making from naturally organic cocoa grown on the island of Bougainville. It has successfully built similar stories from several faraway exotic places in Africa, South America and Asia. Quite naturally, the product sells on the basis of its backstory and delivers better prices than famous factory made brands. If successful, this backstory has the potential to build a whole cocoa growing initiative in Bougainville, bringing much needed incomes to local people.
This niche product will never ever match the volumes of branded, mass produced chocolate. But it will deliver better profit per unit sold, while creating warm fuzzies in the hearts and minds of the customer who buys into its backstory. That feel good factor is what growing numbers of discerning customers are after.
But then the backstory is only half the story. While it will create a platform for the a sought after niche product, the backstory will have to be backed up by consistent quality and production volumes, timely deliveries, alluring packaging and requisite technology to seamlessly blend in with global supply chain requirements such as barcoding. These can all be put in place by following sound business practices with the right kind of mentoring.
It is time Pacific Island producers and manufacturers seriously took on board the growing importance customers are according to ‘country of origin’ and exotic but credible backstories while making their buying choices, relegating the price factor to the background. Never underestimate what great stuff a good backstory can deliver – as long as it is credible and the product around which it is built delivers on its promise. The proof of the pudding is in the eating – backstory or not.
Dev Nadkarni is Stakeholder Relationships Advisor at Pacific Islands Trade & Invest based in Auckland, New Zealand.
First appeared in Islands Business Magazine, March 2015