Additionally, they should not only persevere when trying to diversify, but be quick to respond to market cues and take advantage of opportunities.
That was the view expressed by Mike Tristram, CEO of Australian company Trisco Foods, at the recent Healthy Ageing APAC Summit in Singapore, organised by NutraIngredients-Asia and FoodNavigator-Asia.
Trisco, which traditionally specialised in sweeteners and syrups, began focusing on the aged care market several years ago in bid to diversify its business and remain profitable.
While the company had long been present in Asian countries such as Singapore, Hong Kong, China, Malaysia, Japan, the Philippines and Taiwan, it chose to first focus on its native Australia for this new phase.
Going on the hunt
Tristram said: "In 2007, we'd just moved into a new building and spent a lot of money, and we were struggling. We were used to getting into new sub-sectors of the industry in food, because we’d started in food service and grew into other sectors.
"You have to (be able to do that), because in Australia, there are only 23 million people. To do business effectively, you have to be nimble. And we're an SME, so we've had to play in a lot of different spaces.
"But between 2008 and 2010, we were facing a lot of market saturation, so we needed to find a new sector — preferably in Australia — with some significant growth opportunity. We wanted to use what we had, but in a different space, so we went on the hunt.
"We needed to find a place where we could look in (from the) external, and hunt down markets first instead of saying, 'Hey, we've got this great product we can sell' and find a market for it."
From there, Trisco identified the most lucrative areas of the market, and ended up with pharmaceuticals and aged care as the two sectors with the most potential.
They eventually decided against entering the pharmaceutical business, as they perceived its decision-making process to be too decentralised to match the quicker pace at which they preferred to proceed.
Perseverance is paramount
After a market research investigation, a technical feasibility study and a financial feasibility assessment, they embarked on extensive R&D and developed several prototypes for testing.
Tristram revealed: "One facility in Queensland where we'd trialled some of our dessert-based products came back to us with good feedback, but asked if we had a liquid neutral thickener (similar to the one used in the tested products).
"I said we actually did but they wouldn't want it. They said they'd like to have a look at it but we said 'no'. All the new powders, and (things like) xanthan gum were great. They were fast and dispersed easily, while we were still having lumping problems with ours."
The facility offered a liquid technology that, according to Tristram, "didn't taste very good or thicken very quickly". However, he decided to take up the offer.
He said, "All the disadvantages we had were okay. We had one advantage: the way we used (the product) and its ease of use. We fixed all those issues. It doesn't taste bad anymore, and we're now the fastest in the world for thickening any kind of liquid. The point is don't give up."
Let the market speak to you
He added: "Sometimes, strategy can be really emergent, and you need to respond cues from the market and continue to develop your product. We had no preconceived ideas when we entered the market, so we figured it out along the way."
When it comes to APAC in particular, he holds an optimistic perspective of aged care in the region, thanks to the myriad growth opportunities Trisco has had in this sector.
"I'm always astounded by how well people look after their elderly in Asia. There is a massive health focus across countries and generations, and it's our responsibility to take it to the next level.
"There's a lot of growth in Asia. This is really important as it provides a lot more ability to provide options and results. Expanding wealth means today, two people can afford some of these solutions, and tomorrow, 10 people (can afford them)."
Trisco has been steadily expanding in the aged care sector. Since entering the market in Australia, the firm has launched a line of liquid thickeners called Precise Thick-N INSTANT for elderly consumers dealing with dysphagia.
Last year, the firm acquired the brands Enprocal and Prime Nutrition from Warrnambool Butter and Cheese Co. to produce dietary supplements for seniors, with New Zealand, Hong Kong, Malaysia and China as its initial markets outside Australia.
Tristram also highlighted China as an especially important market for Australian companies trying to enter the country's aged care market.
At the summit, he said, "In October last year, we bought a nutritional business from Saputo — they wanted to get out of this space and we wanted to get into it. We were about to launch a product on the market, and this opportunity sort of fell in my lap."
He concluded that it was impossible to have all the answers beforehand, making it imperative for businesses to take risks and invest in external engagements and partnerships.