Airfreight Exporting Case Study - Shelton’s Coffee
Ximena Shelton is the Director of Leicester based Shelton’s Coffee. She spoke to David James about how this startup is already exporting around the world thanks to air freight and e-commerce.
Listen to this interview as a podcast using the player below:
Well we specialise in 100% single origin Colombian coffee. We've got traditional coffee such as beans and ground, but we have also created a completely innovative product which is our flavoured coffee hearts.
So tell me a little bit about the flavoured coffee hearts. What are they? How do they work? What's clever about them?
Well it's a premium quality coffee to enjoy whenever and wherever, that's our promise. It's a little heart individually sealed for freshness and all you need to prepare it is hot water, stir it and it's ready to enjoy.
Now there's a story behind these coffee hearts isn't there because they're quite unique and it's not actually that simple to take a really good quality coffee and a compress it into a solid form is it?
No we spent two years in research and development. We had three universities involved and some Innovation Centres as well, helping us with all the manipulation of the product. We had to make it 100% natural without any additional additives, to compress it and make it work. So there is lots of science behind it.
How important is it for a business like yours to engage with universities to get that innovative edge?
Oh it's vital really because we can have the more clever ideas but to materialise them and to get all the legislation involved in the development of a product is something very, very important. And also they help you to guarantee that you are releasing a really quality product with the latest in technology and science that is available.
Okay so you've got this innovative product and you've launched the company, how long have you been going and where are you on your journey so far?
Well we are doing brilliantly really because we released the product in April 2016 so we have just completed two years with the release of the product. But so far we have won an award, for the best Coffee Convenience Innovation from Mintel. We've won an award for product of the year from the Guild of Fine Foods. And also we were awarded a few months ago by the Chamber of Commerce Excellence in International Trade. We are now stocked in some incredible places like Harrods and Selfridge's and another hundred independent delis and food halls in the UK and we are exporting to 3 new markets abroad. So we cannot complain.
So tell me about that as a very new company you've embraced international trade very early on. What was your thinking behind that?
Well definitely it was Brexit. At the moment it is undeniable that the UK market has uncertainty and luxury products like ours are sometimes hit badly by that kind of uncertainty. So as we are small company and we have the flexibility to look quickly at new routes to market so that's what we did. And we are now in three markets that are not within the EU. To try to plant seeds for more steady and bright future for the company.
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So where are you trading to at the moment?
At the moment we are trading with Canada; we are developing a distributor there. We are trading with the Middle East, they have been with us since the beginning. So for nearly 2 years they have been purchasing the product repeatedly. And we launched this year in Hong Kong with a very fantastic retailer, so we are looking to develop that great opportunity further.
What was your first step to getting into international markets. What did you do first?
Well we did a launch for our products in a trade fair. A specialty fine food fair in London, so that was our first shot. And since then we've done lots of social media marketing and we do direct marketing as well, visiting our customers. We work very closely with the Department for International trade and so far we have been doing trade missions with them. Next month I'm going to Ireland for another trade mission and hopefully developing new sales there.
So tell me a little bit about the kind of help that the Department for International trade have been able to offer so far. Has it been useful for you?
Very much. Very much. Because they have given us the opportunity to be in front of customers that if they weren't sitting behind us these customers wouldn't receive us, really! So they have helped us to organise an agenda, international agendas and they are helping us with contacts to develop new markets.
And you are also members of the East Midlands Chamber of Commerce. How has the Chamber been able to help on your export journey?
It has been very supportive as well, the international trade unit of the chamber has invited us to every event that they have for international trade. In fact the trade mission next month is with them.
Part of the way you are exporting is by air. Tell me about that.
Well for trade customers in Canada, we are shipping all or consignments by air, because they are not huge quantities. So that gives them the flexibility to buy small amounts and to send it to their customers to test. But also we do it with individuals because we sell online on our website and we get enquiries from all around the world. And I ship them easily through the Royal mail or UPS.
So just tell me about that a little bit more because there must be lots of businesses reading this who have a small business to consumer operation. Perhaps they have an online business but haven't even thought about exporting. If you were to offer a few words of advice or encouragement to them what would you say?
I would say it's very easy and to be honest for our online sales when we do it internationally they are bigger than nationally, because they make it worth it. It is something very easy to do and they shouldn't be missing the opportunity to do it.
And what about getting the e-commerce platform how difficult was that for you? Did you have some expertise yourself or did you get some outside help?
We did get outside help. We used an agency, a marketing agency to develop our website. We wanted to do it in a proper manner because at the end of the day that's the main exposure that you have for your business if you are not selling direct to the public in a shop. So we did it in a proper manner with an agency and so far it has been working very well.
So if someone places an order from somewhere else in the world what do you actually do that uses this airfreight to get it to them? How simple is that? It sounds like it might be complicated.
It's not complicated at all they get to our website, currently our website is not improved to facilitate international delivery so all the delivery costs are for the UK. So if somebody buys from Australia for example, which is something that happened just now, they placed the order and I write them back to say really sorry but our system only provides delivery costs to the UK. We have found the quantity of product that you wanted and to ship them to Australia by air is this amount, do you want to continue with your purchase or not? And in 100% of the cases all the customers agreed to continue the purchase. So they say yes please. We send a PayPal request, they pay us in advance and we just make them here and take me to the Post Office like as if it was a national sale.
Some of the way that you export is via airfreight. Tell me about The process how are easy is it?
It's very easy for us it's just a single courier. UPS is extremely simple, we just call them and they collect from here. Even the extra paperwork that an international sale has like customs clearance they are ready when you are doing the label with them they've already worked it out for you, so you just have to attach the label to your consignment they collect it and it goes. You don't know anything about it until two or three days later you email the customer to find out if they receive the products and they are always happily enjoying it already so it's fine for us.
What difference does it make to be able to use airfreight in terms of response time? Because it means that a customer in Australia for example, like you've received today, might be sitting drinking your coffee in a matter of just a few days.
Absolutely, it's fantastic! To be honest it’s more rewarding than waiting for sea freight. When we send goods to Hong Kong we sent that order in December, the middle of December and we had to wait until the end of January to know that the products have arrived in customs. We are still waiting now to find out when the products are going to be put on the shelves so that we can start the promotion. That is a hassle that you completely avoid with airfreight because you have it instantly, so it's really good.
What would you say to businesses in the Midlands that could be exporting that aren't?
Well if they're not doing it at the moment they are missing a great sales opportunity. Because it is not complicated to do it, nowadays the Royal Mail or the independent couriers provide this service in a very friendly and easy manner, that is exactly the same as shipping locally in the UK. So I don't see the point in missing a sale really.
If you're selling food products abroad though on the additional regulations that you need to be aware of the different countries or import export duties? How do you deal with any regulations and paperwork? Because that's what scares people.
When we sell to the trade most of our customers already have a logistics company in place. So all our prices, the prices that we give are from our depot. If we have to ship it to the logistics company it has to be local in the UK. If they want us to do all the exportation process we just call a logistics company and asked them how much will it be to to collect this and ship it to this country and get it there. And they give us the extra cost for it and we discuss it with the customer.
But in our particular case, 100% of the cases, the trade customers already have the logistics in place. So for us despite the fact that the goods might be going to Hong Kong or the Middle East it's just like you're selling locally because we are sending the products to a depot here in the UK.
So where next for Shelton's coffee? What's your ambition?
We are definitely working for a global brand. Definitely. That's where we are focused and that's the aim of the company. We are expecting that this year we will gain three more international markets to help us be strong and buoyant in the market.
So in a nutshell how important is exporting to the future of Shelton's coffee?
Well we are predicting that nearly 60% of our sales are going to come from international trade and 40% from national customers.
Any last words for businesses that should be out there exporting?
It's the way. It's the way. Because the world is definitely bigger than the UK and if you're not exporting you are definitely missing a great opportunity.
David James is a specialist in business and strategic communications and the producer of the UK Export Advice podcast. This article was produced with the support of East Midlands Airport, the UK’s busiest pure freight airport.