Expanding into international markets is an exciting yet challenging venture for any startup. The process demands more than just a great product—it requires careful planning, a deep understanding of target markets, and the ability to adapt quickly. To shed light on these challenges, we had an insightful conversation with Pedro Castro, the General Director of International Markets – Europe.
With his extensive experience helping brands scale internationally, Pedro shared his key strategies for startups aiming to succeed on the global stage. From mastering your investment strategy to finding the right distribution partners, here are his expert tips for navigating international expansion.
Building a Solid Brand, Not Just a Great Product
Expanding internationally goes far beyond just having a great product—it’s about creating a brand that truly stands out. In today’s highly competitive landscape, particularly for startups with limited budgets, visibility and a strong brand presence are critical. Before embarking on an international journey, it’s essential to ensure that your brand has a solid foundation and an engaged community in your local market. This not only helps with negotiating better conditions with international retailers but also leverages social proof to give your brand credibility when entering new markets.
Finding the Right Market
A key factor in successful international growth is choosing the right markets with the highest potential. Pedro Castro emphasized this while discussing the Delta Ventures-backed Why Not Craft Soda brand. Strategic market selection was crucial, and Belgium and the Netherlands emerged as strong candidates due to their demand for healthier alternatives, higher purchasing power, and readiness for innovative products. The focus on these markets allowed Why Not to avoid more traditional coffee-driven regions like Portugal and Spain, which didn’t align with the brand’s modern, health-conscious image.
Mastering Your Investment Strategy
One of the biggest questions startups face is whether to invest in on-trade or off-trade channels first. According to Pedro, building an on-trade strategy first (focusing on bars, cafés, and restaurants) is often a smart move for early-stage brands. This approach helps build brand momentum before entering the retail space, offering valuable qualitative data and insights. Without a large budget for market studies, on-trade success can serve as tangible proof to retailers that your product has traction and is ready for the shelves.
Choosing the Right Distribution Partner
Once you’ve identified the best markets and channels, it’s time to find a local distribution partner. Pedro underscored the importance of selecting a distributor that already works with similar products to ensure logistical optimization and a smoother market entry. In the case of Why Not, the decision to partner with a distributor in the Benelux market who had experience with comparable products made the entry process much easier. This meant fewer barriers to entry, such as listing fees and activation costs, and the distributor’s connections acted as a valuable ambassador for the brand.
Speed and Long-Term Value Creation
Pedro also highlighted that international expansion isn’t just about entering new markets quickly—it’s about creating long-term value. Startups need to scale and penetrate broader market segments once they gain traction with early adopters. If a brand isn’t quick to adapt and grow, competitors will fill the gaps. This is why it’s essential to stay agile and focused on delivering value to the consumer, consistently refining both your product and your market approach.
Key Takeaways for Startups
- Be Patient: Success doesn’t happen overnight. Focus on steady, sustainable growth and don’t rush the process.
- Create a Standout Product Experience: Ensure your product delivers an exceptional experience that keeps customers coming back.
- Be Crystal Clear on Value: Your brand’s value proposition should be instantly understood, whether it’s on your Instagram profile or your product’s packaging.
By applying these principles, startups can navigate the complexities of international expansion, positioning themselves for long-term growth in diverse markets.