“Exporting is a fantastic opportunity for a company of our size,” says Joe Polo, founder and owner of Original Juan Specialty Foods.
Kansas food processor Original Juan Specialty Foods participated in its first trade missions in 2012, and this year it added a fourth trade mission. The company has been exporting some 40 products (about a quarter of their hot sauces, salsas, BBQ sauces, marinades, dips and spreads, pasta sauces, wing sauces, and seasonings/rubs) to 13 countries for a dozen years.
Original Juan is a good example of what a small U.S. company — 42 employees at a 60,000 square-foot facility in Kansas City — can achieve with big thinking and no borders in their marketing and sales strategy. Management at the 33-year-old company (rebranded from Calido Chile to Original Juan in 1998) is always exploring new markets, as recent activity attests.
Juan Does Mexico
In 2013, the company participated in its fourth trade mission — a six-day tour of business opportunities in Mexico City and Cancun, Mexico. That included retail store tours in both cities, one-on-one meetings with foodservice buyers/importers, participation in table-top food shows, and market presentations at the U.S. Embassy in Mexico.
Joe Polo, founder and owner of Original Juan, has participated in all the trade missions. “Exporting is a fantastic opportunity for a company of our size,” says Polo. “We understand how important it is to meet with buyers in person. To have the opportunity to travel around the world to sell our products is simply amazing.”
The intent of the trade missions, according to the USDA, is “bringing an American-made success story… to nations demanding the highest-quality, American-grown products.” Focused on smaller to mid-sized American food companies, all the missions include a formal application process with various government agencies such as USDA, Kansas Department of Agriculture, and Food Export Midwest. The application must include which state and national trade associations the company belongs to, relevance of their business line to mission goals and market sector, and fewer than 500 employees.
U.S. companies can expect to have some of their travel costs covered by the government bodies. For example, Original Juan received 75 percent reimbursement from the Kansas Department of Agriculture State Trade and Export Program (STEP) funds for both the Russia and India trade missions. For the Russia trade mission, the Kansas Department of Agriculture bought Original Juan a $1,200 plane ticket using STEP funds. Again, a STEP grant was accessed from the U.S. Small Business Administration, with an average $1,000 travel stipend given to each company, for the Germany/Switzerland trade mission. “We are blessed to have the support… to help make these trips happen,” says Polo.
Down the BRIC Road
Russia: “Ready-to-Go Market”
Brazil, Russia, India and China (BRIC) are recognized as the four fastest-rising emerging markets, and while “neither Russia nor India were markets we had on our immediate radar,” says Greg Dennis, Vice President of Sales for Original Juan Specialty. “When we got the opportunity to join trade missions going there, it really opened up my eyes as to what it could be for us.”
The Under Secretary for Farm and Foreign Agricultural Services, Michael Scuse, led a 2012 trade mission to Russia that included Original Juan and 20 other American producers of meat and poultry, fruit and nuts, and specialty foods. Russia had recently joined the World Trade Organization (WTO), bringing more commitment to reducing and binding import tariffs on agricultural goods. “Culturally and as far as being a ready-to-go market, Russia is a very exciting market for us,” notes Dennis. “It is much more European, so what we sell translates better culturally there” than in some other emerging world markets.
“Best Price Modern Wholesale”: India’s Walmart
The 2012 trade mission to India involved Original Juan and other America businesses — all of them working in food or food ingredients. They spent a couple of days at Food India, the component of AAHAR International Food & Hospitality Fair that focuses on processed food and beverages. The entire event attracted 13,800 business visitors with 500+ exhibitors. The Kansas companies exhibited in the Food Export Midwest booth, which was paid for by the U.S. Food Export Association.
The AAHAR show was followed by a couple of days of pre-arranged meetings with qualified buyers, as well as retail tours in New Delhi and Mumbai food stores. “We saw what Walmart [renamed Best Price Modern Wholesale] looks like in India, as well as a hyper-market, a local market, and smaller specialty stores,” says Dennis. Since the Indian government began allowing foreign direct investment in retail in 2009, many Western big-brand stores, also including Starbucks, and the UK chain, Tesco — are popping up all over the major Indian cities.
The Importance of Importer Partners
“Having a trustworthy, knowledgeable importer partner is critical,” says Dennis. “That’s why we usually have just one importer in each country.” The exception is in Germany, where the company works with three importers. Germany is Original Juan’s largest international market, and they also do some private labeling in the German hot sauce and BBQ sauce market.
Importers can help U.S. food companies negotiate the sometimes-confusing retail and consumer markets, and deal with legislation around food labeling. For example, Original Juan product has German labeling for product information such as ingredients, as required by EU legislation, while retaining ‘Americanisms’ — slang, brand names and sometimes stories behind the brand — in English.
Importers, as well as retail contacts, in an international market can also help a U.S. exporter identify emerging trends in food and beverage. For example, Mexican restaurants are in the top three most popular eateries in Germany right now, says Dennis, which bodes well for a sauce producer specializing in Tex/Mex themes and flavors. And the barbecuing trend is emerging in Europe — in the north and east, even in Russia. Since many of these nations have always consumed a lot of meat, it is expected that the BBQ phenomenon will have staying power.
Size is No Barrier
According to the U.S. Department of Commerce, less than 1 percent of American companies export — significantly lower than in all other developed nations. Of those, 58 percent of exporting companies sell to only a single foreign country.
If you think company size is a barrier to exporting, think again — the U.S. government says “smaller companies have vast untapped exporting potential.” In fact, according to the Small Business Administration, small and medium-sized companies account for 98 percent of U.S. exporters. Impressive, although the products of small to mid-sized businesses represent less than a third of the known export value of U.S. goods’ exports. That means there’s lots of room for growth — and the government wants to support smaller businesses to get their exports up.
Original Juan Specialty Foods is clearly ahead of the smaller food business pack in exporting, with more than a decade’s experience and soon to be 15 countries where they sell their sauces. The company shipped their first order to Russia less than one month back from the trade mission there, says Dennis, and they just got their first order from India in 2013 from an importer they met at the AAHAR food show in New Delhi.
“The vision I had for our business on Day One was to build a globally successful brand,” says Polo. “I feel we are now making that a reality. To continue to grow at this pace, and be able to accomplish this kind of success, it means so much.”
Heather Angus-Lee, a former trade journalist including a long stint as editor of a manufacturing magazine, now writes for IndustryBuilt. She can be reached at [email protected].