Life-hacks to successfully negotiate with a Canadian partner

In Canada sellers are fully responsible for the quality of the goods on their shelves. Therefore, Ukrainian companies that work with Canadians have to follow the regulatory and certification requirements closely.

Musthaves for exporters

To get your goods to the supermarket shelves, you have to ensure 101% compliance within the letter of the law. The requirements are quite strict in Canada. Automated Import Reference System (AIRS) may help to learn all regulatory requirements for the food products. You need to enter the product code or name and the website will automatically generate the list of requirements.

If entrepreneurs intend to supply non-food products to Canada they will have to study sector-specific legislation. No single magic portal contains all the information.

Also, there is a number of “voluntary-compulsory” certificates in Canada. In this market, sellers bear full responsibility to end consumers for the goods on their shelves.

Sellers are interested to have not simply good but the best products, which are fully certified and safe.

I, therefore, recommend exporters to start reviewing GFSI certification right away, as it includes the following certificates: BRC global standard for foods safety Issue 6; FSSC22000; SQF code 7th Edition Level 2; IFS Foods Standard Version 6; Global Aquaculture Alliance Seafood BAP Seafood Processing Standard. These are the certificates that will make your goods much more attractive for retail chain representatives. It is hard but necessary.

In addition, large Canadian supermarket chains often require their suppliers to go through a corporate social responsibility (CSO) audit before the supply of goods. Canadians are known to be “moral buyers”. Canadian business prefers the suppliers who do not violate labour, gender or human rights. Nevertheless, few Ukrainian companies can boast of something else within the CSO framework than charity campaigns or formal policies.

Veni, vidi, vici 

As a rule, Canadian companies plan their meetings well in advance and will not meet you at inconvenient time even if you need it urgently and “it will take only five minutes”. No cancellation or force majeure, unless you want to lose your partner’s trust.

Based on my practical experience, it took 5 months to organize a meeting of Ukrainian food manufacturers with a supermarket chain in Canada. The Canadian party’s timetable is booked for months to come.

In 99% of cases, the first meeting is held personally: no Skype or teleconference. If you want a result, you will have to travel to Canada. The meeting itself goes quickly and intensively. You must take product samples with you. Most likely, the importer will ask you of the possibilities to change the products: packing design, labelling, taste line, frequency of supplies.

The first meeting may last 7 to 30 minutes. The first contact is the indicator of interest. If a company manages to catch the interests of Canadians their quality and safety specialists will need to analyse the samples in detail.

After the meeting, there may be two possible case scenarios. Under the negative scenario for the Ukrainian company, it will hear of the Canadians’ decision within a month or a month and a half; a positive outcome will, most likely, be known within about a year.

First scenario: the products have been tested and they are not different from those of the existing supplier. This means there is no sense to continue negotiations. A letter on such a decision will come, as a rule, 1-1.5 months after the meeting. The answer is usually straightforward: “Thank you, but our company decided to extend its contract with the existing supplier”.

Second scenario: the partner liked your products but this is only the beginning of further work. Depending on individual Canadian food importers, the working process with supplying companies takes 2 months to one year between the discussion and negotiation and the first supply of your products to the supermarket or warehouse.

As soon as the importer confirms its intentions, you will be entered into the internal system and an individual project will be launched with a dedicated manager. Further, step by step, you will be discussing prices, mix, packing, design and batch volumes over the phone or Skype.

In addition, a schedule is mandatorily developed for provision of necessary start-up documents. For instance, a future supplier should submit a third party insurance agreement, a goods insurance agreement, a confirmation of the goods’ compliance with Canadian organic standards. It will take time and financial resources to compile and coordinate those documents. This is a part of the process, however, and one may only get the goods to the supermarket shelves upon successful passage of this phase.

Author: Olga Vergeles, Project Manager, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: Delo.ua