Australian macadamias crack China’s market

Friday 31 May, 2019 | By: Austrade and Ella Schalch

A family dream turned into a reality, Brookfarm has been producing homegrown macadamia products for the past 20 years. With the help of Australia’s Free Trade Agreements (FTAs), the company is sharing its passion for quality health food with overseas customers.

Brookfarm is Australia’s leading producer of gourmet macadamia products. Located in the Byron Bay hinterland, the once rundown dairy farm was transformed into a working macadamia farm by Pam and Martin Brook in 1999.

Fuelled by a dream to live in the country and a passion for quality health food, the Brooks planted over 4,000 macadamia trees and 30,000 sub-tropical rainforest trees around the farm to create a wildlife haven.

In 2000, Brookfarm began selling its first range of products at the local Bangalow Markets, offering a variety of natural and toasted mueslis. Since then, the family-run business has grown into a vibrant, regional food company, employing more than 75 staff.

Brookfarm’s product range has also expanded since the early days at the local markets to include premium mueslis, granolas, nut mixes, muesli bars and macadamia oils.

Export important for business strategy

Brookfarm currently exports to over 17 countries, including China, Japan, the United Arab Emirates, the United States and Europe.

Co-Founder of Brookfarm, Pam Brook, says exports have played a key role in the company’s business strategy since their first overseas shipment in 2002.

‘Over the past 17 years, we have worked hard to make exports a significant part of our business strategy. They have since grown to around 35 to 40 per cent of the business and we hope to increase this figure in the future, particularly in China,’ she says.

China’s rising demand for Australian products

China has been a major export market for Brookfarm in recent years, with its range of products sold in premium supermarkets and through online retailers.

Brook says China’s strong interest in premium Australian goods is helping grow the demand for Brookfarm’s products in the market.

‘China is a big market and its demand for premium Australian products continues to grow. We are constantly in talks with new distributors all over the country to continue building our market reach.’

Prior to the China-Australia Free Trade Agreement (ChAFTA), China applied some high tariffs to imported horticultural products, including 25 per cent on toasted muesli, 24 per cent on macadamia nuts and 10 per cent on mixed nuts.

Since ChAFTA entered into force in December 2015, these tariffs have been progressively reduced on exported Brookfarm products, giving the company a competitive edge in China. In January 2019, the tariffs on these exported products were eliminated, providing the company with duty free access to China.

Be aware of market regulations

Exporting products to China hasn’t always been easy for Brookfarm, with Pam admitting the journey has been full of learning curves.

‘China has very strict food regulations that change quite regularly. In the past, we’ve had to stop exporting products because they were no longer permitted,’ she says.

‘It’s been a frustrating and challenging experience, but we’ve learnt to research the current regulations on restricted ingredients before sending a shipment to China. This saves us a lot of heartache in the long run.’

Pam says Intellectual Property (IP) protection is another challenge the company has had to overcome.

‘We’ve had a few battles in China with our IP, where people have tried to trademark the brand, even before we’d started supplying to the region,’ she says.

‘To prevent further issues, we hired a trademark lawyer who knows the ins and outs of IP and can put processes in place before we enter new markets. It is an investment, but it’s important to have your trademarks and IP right.’

Overcoming cultural and language barriers

For anyone looking to start their own export journey, Pam stresses the value of using an interpreter when communicating with potential distributors in foreign markets.

‘If you’re entering a market where English is not the first language, always use an interpreter,’ she says.

‘We take a translator with us to all meetings with foreign distributors to help break down the language and communication barrier. This also allows our distributors to speak directly to someone who is fluent in their language.’

Pam says working with people who know the market well is also important for understanding its culture and customs.

‘We work closely with Southern Cross University (SCU) in Queensland and the University of New South Wales (UNSW) to offer internships to Chinese students. Bringing them into the business gives us valuable insights into the culture of China’s market and its customs. It also teaches us how to interact with potential distributors and learn their specific business processes.’

This article was originally published on Austrade

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