A referral by UK Trade & Investment (UKTI) team in Korea has resulted in a lucrative partnership worth £7.4 million over the next 10 years.
The first Neal’s Yard Remedies (NYR) store opened in Covent Garden in 1981. Today, NYR has 43 stores across the UK. The company’s range has grown to 450 products, of which 350 are exported.
It also sells over 300 dried herbs and tinctures in its UK stores and other markets where possible. Its turnover is £30 million and its top export markets are Japan, where it has 30 stores, and the US.
NYR’s business in Japan dates back to the mid 1980s, and the company is still working with the same partner. When it comes to identifying new overseas markets, it either responds to enquiries that it receives or looks for market trends that show that acceptance of organic products is on the rise.
In February 2013, UKTI in Korea was approached by a local business, Starluxe, which was looking to partner with a British supplier of organic health and beauty products. UKTI thought of NYR and forwarded on the details. The timing was spot on – the company already had a small distributor in Korea who was selling its products online and was looking to change partners.
UKTI sent Starluxe’s proposal to NYR for consideration. It looked promising and the company contacted Starluxe directly for initial discussions.
We’ve only ever had positive introductions from UKTI,
says Calum Mackay, Director of International Sales at Neal’s Yard Remedies.
We get approached several times a week by people who want to partner with us in their home markets. We can’t follow up with them all, but when this referral came from UKTI it sparked our interest. UKTI is a respected entity, and if they recommend someone to us, it’s certainly worth investigating.
New store in Korea
Calum flew to Korea to meet Starluxe in person in September 2013, and Starluxe visited NYR in Dorset the following month. A 10 year franchise agreement was then signed which will deliver £7.4 million of new business for NYR.
The first NYR store in Korea opened in April 2014 and there plans for a further 20. UKTI has a good, close relationship with Starluxe and has promoted its business and this new partnership. For example, UKTI arranged for NYR to be featured on SBS, one of Korea’s main TV channels, in a short story on British home remedies.
Meanwhile, UKTI continues to support NYR in other markets. When the company was in discussions with retailers in Thailand, Calum contacted the local UKTI team for guidance. They introduced him to an alternative potential partner there and NYR hopes to appoint someone shortly.
The company also joined a 41 strong UK delegation to the first GREAT week in Mexico in November 2013, taking part in a series of high profile events showcasing the UK as innovative, creative, exciting and a leading provider of quality goods.
As an exporting British business, you can’t underestimate the value of getting to know your target market,
It takes time and money to visit, but it is so important to see for yourself the lay of the land and build personal relationships with your local partners. UKTI can give you an insight into who are the key players and make qualified introductions to people that you need to meet.
They can also offer practical advice about relevant regulatory matters and help you to overcome barriers to entry. This type of support is critical to your success.
|Company||Neal’s Yard Remedies|
|Target Market||South Korea|
|UKTI Services||Advice & Guidance; Significant Assistance|