5 tips to succeed in entering a new biogas market

Entering a new biogas market can be challenging for project developers or suppliers. Where do you start if you want to offer your products and services, launch new products or participate in projects in a new international or local market? Here are some tips to help you better plan and succeed in expanding into a new market and to avoid its barriers and risks.

Why enter new international or local markets when your business is already so well established in its current one? In addition to growing your business, this decision has several benefits despite its risks and challenges.

For example, expanding into new markets would allow you to:

• Increase your sales
• Reduce your business’ vulnerability to economic cycles, such as slowdowns or seasonal fluctuations
• Strengthen your competitiveness in the industry
• Benefit from industry-friendly policies, laws, or subsidies elsewhere in the world
• Expand your network of contacts in the industry

1. Identify your goals and a realistic target market

The first step in establishing your market entry strategy in biogas industry is to identify clear and realistic goals and a targeted market. Why do you want to enter a new market? What potential clients are you targeting exactly?

To do this, you must first analyze the internal resources that you can assign to this project.

Also consider your goals and business opportunities, as well as your products and services. Ask yourself questions like:

• How much of your expertise could you assign to this project?
• What financial and human resources can you use in this project?
• Do you have sales channels, infrastructure or professional relationships already in place in certain markets?

In addition, if you are unsure of several target markets, analyze them further to narrow down your list. For example, assess their size, business and political environments, activities, and how they complement the strengths and weaknesses of your business.

According to these factors, which market has the most benefits and the least inconvenience for you? Are the target market and your goals realistic in relation to your internal resources?

2. Know the target market

Conducting a complete market study is a crucial step to take before entering  a new biogas market. Do extensive research and try to get as much information as possible about the market, country or geographical area targeted, including, for example:

• Funding offered
• Local or national laws, regulations, and policies
• Existing competitors
• Projects already established
• Characteristics of your potential customers
• Social, political and economic context of the market
• Spoken languages, culture, and local norms

The information you find will help you, for example, to better adapt your products, your services or your means of promotion in your market entry strategy. You can find what you need on the internet, at trade shows, at professional associations, local organizations, business network, etc.

3. Find reliable local partners

The business network plays a leading role in entering a new biogas market, especially internationally. That’s why finding reliable partners that complement your service offering in the target market is good for your business.

In this way, you will have access to new skills, new technologies, and contacts in the targeted market. You can also combine your marketing or distribution efforts. Be careful, however, and do your due diligence when choosing a business partner to avoid unpleasant surprises.

How can you find your next business partner? To start with, attend industry events, network with companies in the targeted market, or join industry associations.

Several entry mode strategies in a foreign market exist, including:

• Creating a partnership with a larger company from your country
• Establishing a partnership with a local company that already works in the target market
• Creating, with your partner, a 3rd company specifically for the targeted market
• Using a local agent or distributor to sell in foreign markets

Here are other foreign market entry strategies, according to TradeStart:

4. Go out into the field: attending events or trade shows

Attending industry events is a great way to succeed in entering a new foreign market in biogas by gauging it. Every year, several events around the world gather players in the biogas, bioenergy, clean technology and environmental industries.

This type of event will allow you to:

• Get several networking opportunities
• Get to know the market, its main actors and your competitors
• Find potential customers, partners, and projects
• Learn about the latest technologies

You can find a list of upcoming events in the biogas industry through professional associations, websites of local organizations and the events calendar on our website.

The Business Development Bank of Canada also offers tips for maximizing your participation in a trade show and finding potential customers.

5. Join professional associations or other local organizations

Several professional associations or local organizations exist in Canada, the United States, and Europe. They can help you expand into new markets in biogas in a number of ways.

We can count, among others:

• Canadian Biogas Association
• The Italian Biogas Consortium (CIB)
• The European Biogas Association
• The American Biogas Council

Find the association of your target market by consulting our directory.

Join these associations and get many benefits:

• Networking opportunities
• Access to an extensive network, including project developers, technology providers, consultants and engineers
• Promoting your business through the website of the organization or at industry events
• Access to various industry resources for training or other
• Industry news

Barriers to enter new biogas markets you need to consider

In general, there are several barriers and obstacles that can hinder your market entry strategy in biogas industry. You must take this into account when planning to expand into a new market to be successful and to protect your position in the market.

Barriers are defined as the benefits and costs of activities that favor competitors already established in the marketplace compared to those attempting to enter. These barriers include technologies, government policies and laws, patents, costs, access to information and licensing.

According to the CFI, the barriers may consist of, for example:

• Implementation of an economy of scale in the targeted market, i.e., the mechanism of decreasing unit costs as production progresses
• High research and development costs as competitors invest heavily in this sector
• High costs in advertising and marketing
• Customer loyalty to the brand
• Contracts, licenses, and patents already owned by another company

What are the risks of entering a new biogas market?

Entering a new international biogas market involves risks. As a project developer or supplier, you need to anticipate the risks associated with the targeted market, quantify them and establish a strategy to avoid their impacts.

According to Forbes magazine, these risks include, for example:

• Overestimating the potential of a foreign market
• Being mistaken or unprepared for sudden economic, political or regulatory fluctuations
• Poorly anticipating significant fluctuations in exchange rates
• Possible changes in transportation, financial assistance, energy and technologies in the target market
• Ignoring cultural differences

Close monitoring of developments in the targeted country or geographical area or in-depth research will help mitigate these risks.

Are you ready to go into action?

Entering  new biogas markets requires a lot of resources and commitment from project developers and suppliers. However, it is a project with high growth potential for your company.

BiogasWorld can help you realize this potential. Our list of services includes market intelligence reports that meet your needs. These contain valuable information about the specific targeted market(s), including its players, the competition and the technologies offered.

If you encounter specific problems during the development of your project or your business, we can also offer professional support. In addition, members have access to our directory of industry contacts and discounts on events and trade shows. We also promote our members on the web and at trade shows.

Contact us for more information.

To know more 

• Discover new markets, Export Development Canada
• 5-step Primer to Entering New Markets, Inc.
• 6 steps to create a winning entry strategy, Business Development Bank of Canada
• Go-to-Market Strategies for Renewable Energy Market, TEFEN