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Kodas soars towards large Chinese market

Few people are aware that ‘kodas’ means ‘eagle’ in the Võro dialect. However, many have heard of restaurant Kodas located in the hilly countryside of Southern Estonia. The restaurant itself started under the name Siidrikoda and manufactured cider. With Enterprise Estonia’s support, the Estonian cider manufacturer is taking its first momentous steps towards the Chinese market.

 

The story of Kodas begins at the start of the 21st century. When Sulev Nõmmann was still living in Finland, he decided to participate in a year-long course in the alcoholic beverage training field, which ultimately led to his first cider attempt. The Nõmmann family wished to return to their roots in Southern Estonia, where they planted their first apple trees in 2006. In 2011, the trees bore fruit for the first time and the first commercial cider shipments were completed from those fruits in 2015. There was no time to doubt their chosen path, as in the following two years, the company named Siidrikoda at the time won two silver medals and a gold medal in the International Cider Challenge.

Innovation guides export progress

Ingrid Grünvald, B2B Export Sales Manager at KODAS, said that after the company won those distinguished awards, a systemic approach in regard to innovation became even more important for them. “In addition to developing new products, we focused on collaboration with TFTAK (Centre of Food and Fermentation Technologies) to determine which types of yeast and apple are the best fit,” Grünvald explains the innovation happening in the cider company. Collaboration with the Centre of Food and Fermentation Technologies is ongoing today, but Grünvald wishes to play her cards close to her chest.“From the cider by-products, we are developing a new functional product which affects a person’s microbiome and has a beneficial health effect,” Grünvald reveals a little about what’s behind the curtain.

International recognition and uninterrupted development urged the Kodas team to look beyond Estonia and spot potential export markets in locations not noticeable at first glance. The Estonia-Asia Trade Agency also played a key role here. “Their project manager brought our attention to the fact that cider is a relatively unknown product in China, but its consumption has become more popular and is certainly on an upwards trend. Competent support and accurate advice from Enterprise Estonia provided us with the courage to focus our efforts on the Chinese market,” Grünvald notes.

 

A well-laid plan towards China and Germany

Immensely specific and elaborate activities ensued, beginning with participating in the ‘Systemic export’ Chinese workshop as well as taking part in trade fairs and export plan counselling courses offered by Enterprise Estonia’s experts. In the beginning, one unavoidable step before delving into the Chinese market was trademark protection, a rather long process for Kodas that is ongoing. They found a contact in China with a consulting office thanks to the Estonia-Asia Trade Agency, which aided them with local activities. “In January, we took part in virtual B2B meetings with potential partners; in May, we participated in the world’s biggest food and drink trade fair in Shanghai,” Grünvald recalls the rather busy six months.

Taking part in the SIAL trade fair led to the first large order

“The contracts have been signed for an extended collaboration, and we will help our Chinese partner in preparing the required marketing materials,” Grünvald acknowledges that they are used to a faster pace in regard to business in Europe, but it is normal for things to take time in China. “Another matter which made us apprehensive was the local distributor’s wish to procure exclusive right of representation. We will observe their activities and successes in the next six months and at that point we will renegotiate.”

Besides China, another important market that Kodas has set their sights on is Germany, where the company has also used all of Enterprise Estonia’s services regarding entering the German market. Especially in the search for contacts, participating in training events, organising B2B meetings and participating in joint stands. “Collaboration with Enterprise Estonia is more frequent and constructive than ever – Enterprise Estonia is basically a solid extension of our team,” Grünvald is content, adding that Kodas would not have achieved this level of success this quickly without Enterprise Estonia.

Estonia-Asia Trade Agency Project Manager Rafael Jimenez believes that Kodas is a brilliant example of what Enterprise Estonia wants to see more of. “We love the fact that Kodas operates outside big cities and is a job provider in rural areas. Additionally, their product uses flavours from the clean Estonian environment and strikes that particular emerging trend in China,” Jimenez explains, adding that the Estonia-Asia Trade Agency wants to see long-term possibilities in China as opposed to short-term profit. “Estonian food products provide a unique opportunity in China because they value organic production there extremely highly and Estonia is a European Union member state which is well-versed in organic farming, with around one-quarter of all harvests being organic,” adds Jimenez.

Experts at the Estonia-Asia Trade Agency are fully equipped to help Estonian companies from various sectors break into Asian markets, starting with the collection and analysis of market data and ending with the preparation of particular programmes.

Rafael Jimenez
Estonia-Asia Trade Agency
Project Manager
E-mail: rafael.jimenez@eas.ee

The publication of this article is financed by the European Regional Development Fund (ERDF).

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