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A Snapshot ofForemost Farms USA
Established: 1995
Milk volume: 4.8 billion pounds
Member-owners: 3,600
Revenues: $1.4 billion
Employees: 1,487
Ranking: No. 15 (Dairy Foods
magazine) among top 100
processors
Cheese54%
Butter2%
Packaged milk
products16%
Liquid & condensed
milk products
21%
Juice products
1%
Whey products
6%
How we got startedin the export business:
• - Acquisition of business entity in 1984
• - Have continued to grow and diversify the exports
Foremost Farms USA Exports Today:
• 40 million lbs./year – Whey Based Products
• 5 million lbs./year – Cheese
Export Destinations:
• - South East Asia (China, Japan, S. Korea)
• - Central & South America (Mexico, Puerto Rico, Columbia, etc.)
• - Europe• - Others
Export Sales to:
• - Brokers
• - Distributors
• - Specialty company manufacturers
• - Multi-national corporations
Why We Export:
• - Supplier to multi-national companies
• - Grow our business
• - Profitable business
Challenges:
• - Cultural Differences. Negotiations are different in
different
cultures
. Difficulty in understanding “tones” of
e-mails
. “Bribes” vs “the way business is done”
Challenges:
- Product Packaging
• . Long distances
. Truck, rail & sea travel
. Hot, humid conditions
. Complaints on 50% of shipments
Challenges:
• - Dealing with rejected product:
. Can result in major $$ impact
. Can’t bring product back to U.S.
. Resell the product in that country
Challenges:
- Quality
. “Expectations” are not the same as product “specifications”
. The customer is always right
Challenges:
Quality (cont.):
. Testing methods may be different
. Local regulations can vary
. The rules change without notice
Challenges:
- Quality (Cont.)
. International customers are
concerned about the source and quality
of the raw milk supply
. Quality discussions are more difficult when using an intermediary
Challenges:
• - Documentation. Paperwork must be flawless
. Papers must exactly match product
. Codes on product must be totally legible
Lessons Learned:
• - International customers have higher expectations
• - We have experienced some expensive
lessons
Lessons Learned:
• - “Partnerships” are critical
• - New communication technologies have
opened the world!
Lessons Learned:
- International business has become more
complex since September 11, 2001
- International business is not “lucrative”