Export story: Alara Wholefoods
Founder Alex Smith explains how exporting has created opportunities among the logistical challenges.
In 1975 Alex Smith launched Alara Wholefoods by selling leftover fruit and vegetables from Covent Garden market using a borrowed Morris Minor for deliveries. Convinced there was a market for whole food produce in the UK, Smith began to look at ways to import and distribute dried fruit and nuts.
The popularity of muesli and organic produce grew significantly in the UK during the 1980s and Alara’s production increased rapidly to meet demand, shifting operations to a larger industrial premise in Kings Cross in 1985.
As the customer base expanded to include most of the natural food wholesalers and retailers in the UK, Smith had to look abroad for expansion opportunities. Products proved popular in Europe and Asia and he saw the export side of his business begin to flourish.
Today, Alara imports and exports extensively worldwide and around 25% of Alara’s £4.8m turnover comes from exports to at least 25 different countries throughout Europe, Canada and Asia. Alara first started doing business in Japan 15 years ago, and Smith recalls the how the difference in cultural attitudes provided both challenges and advantages: “One of our biggest markets is Japan and they have very high requirements. Meeting these then introduces this culture and procedures across the company.”
“We more or less make products specific to our markets so we change ingredients, packaging language, payment terms etc. and we work with distributors in each country. With some we work on marketing and set a budget from sales, with others we give product promotions.”
Imports come directly from Germany, Austria, Turkey, Chile, Peru and Australia, although Alara tries to source from UK producers in a bid to keep carbon emissions to a minimum.
“However we have bought goji berries and strawberries from China, dried fruit from Turkey, cacao, macca, yacon and lacuma from Peru and cereals from the continent,” says Smith.
Importing has brought challenges, including delays in shipment and quality, Smith explains. “For instance we currently have some fairtrade dried pineapple in from Togo, (from a Swiss importer), as far as we know this is the only fairtrade pineapple available and our technical team found some string mixed in the product. We have had to set up a hand picking operation in the factory to sort this out.”
In order to secure the best deals, Alara negotiates on price and service – in particular for rarer products. “We have, for instance, bought a year’s supply of fairtrade Brazil nuts – about 50% of the world’s supply,” says Smith.
The transfer of physical goods is done by truck to the continent and shipped by boat elsewhere as Alara works to be “sustainable and environmentally friendly”, in line with its ‘zero waste’ policy. However, the economic climate has had an impact: “Our main challenge at the moment is the dramatic increase in cost of raw materials and the difficulty of passing these increases on.”
Alara has established trading partnerships with UKTI, the British Embassy and a variety of trade missions. Generally the fact that the business does not insure by default against UK customers is unproblematic, however as a consequence of two new customers’ failure to pay last year, Alara lost around £20,000. This led Smith to introduce a new cash before shipment policy for first orders.
Still, it appears Alara has the resilience to weather financial and logistical challenges as it hits its 20th year of trading with a view to increasing the number of product lines it exports.