Global Approach Assures Firms of Fresh Profits
Craig Shandler and Anthony Raissen, both executive vice presidents of a Calabasas-based breath freshener company, learned early on that you can’t just tell people in Japan that they have bad breath.
“Bad breath is something that’s more open in the United States, where you talk about bodily functions,” said Raissen of Breath Assure Inc., an erstwhile Encino start-up that now pulls in roughly $30 million in annual sales. “In Japan, we had to market it as an etiquette capsule, with an emphasis on etiquette and lifestyle.
“They were very sensitive to us coming out and telling them . . . ‘You need a breath freshener.’ ”
Like Breath Assure, which has seen its international business go from about 6% of sales just four years ago to about 15% today, more and more San Fernando Valley-based businesses are learning the lessons of international commerce, lured by the common denominator of green.
With little fanfare, Valley firms are exporting just about everything to just about everywhere: from plaque-fighting chewing gum bound for Asia, to hi-fi equipment destined for Denmark and auto parts headed to the Middle East.
Through September, businesses that are either based in the Valley or have a substantial Valley presence had shipped nearly 470,000 metric tons of pineapples, metal products, cranes and cheesecake to buyers worldwide through the ports of Los Angeles and Long Beach, according to the Port Import Export Reporting Service of the Journal of Commerce.
“There’s a very large international business community out here,” said Candice Vorhies, president of the nonprofit Valley International Trade Assn., a Woodland Hills-based volunteer group that serves as an information source for Valley firms that want to do business outside the United States. “I would say there are at least a thousand that do international trade.”
So why don’t more people know about that?
When you think of the Valley, the description “Bustling Hub of International Commerce” does not spring to mind.
Perhaps that’s because it’s not nearly as catchy as “Valley of the Stars” and doesn’t fit neatly onto a T-shirt.
Perhaps that’s because to some, the whole concept of international trade is about as sexy as empty shipping containers.
Or perhaps, as some in the trade community have conceded, the Valley needs to do more to increase both the level and visibility of international business here.
One such effort came this summer in the shape of a first-ever conference on international trade hosted by the Economic Alliance of the San Fernando Valley and co-sponsored by the Port of Los Angeles. There will be a repeat of the event next year.
In addition, the port, recognizing the potential for increased global trade from the Valley, recently began conducting a survey of Valley-based business and opinion leaders to gauge both awareness of the port and interest in global trade, according to Julia Nagano, the port’s director of public affairs.
The results, due out next month, will help the port shape a new outreach program that will serve as a model for other areas of the city.
With the world economy moving into year two of the Asian financial crisis--an economic upheaval that already has been costly to more than a few Valley firms--it might seem an odd time to be stepping up efforts to reach out across the seas.
But given that so much business in Asia--Southern California’s number one trading partner--is based on the feel of the deal and the interpersonal relationship between merchant and market, now is precisely the time to start building some bridges.
“When the Asian crisis hit, we worked with our distributors to help them weather the storm,” said Raissen, whose company was founded in 1992. “That strategy has paid off.”
“It’s important that our product continues to have a presence in the marketplace, even in a down situation,” added Shandler. “So that when the market comes around we can take advantage of the turnaround.”
To be sure, the current economic downturn in Asia, particularly Southeast Asia, has depressed more than a few bottom lines and bottom-line watchers.
“There has been a certain decrease in our business to Asia,” said an understated Shandler of the 60% dip in sales to Asia experienced at Breath Assure.
Debra Reed, vice president of the Economic Alliance on loan from the Los Angeles Economic Development Corp., said she’s seen a drop in the number of medical products being shipped out and in the number of tourists shipping in.
Vorhies noted some local firms are having difficulty getting overseas customers to pay their bills.
To no one’s surprise, the region’s No. 1 export is still entertainment, a market segment that many had seen as bulletproof. Not this time.
Jack Kyser, chief economist with the development corporation, said some independent producers are having trouble making distribution deals in Asia, which makes potential investors nervous and cuts back on available funding.
“No distribution, no financing,” said Kyser, who added that the San Fernando Valley may have been hurt less by the Asian crisis than, say, the San Gabriel Valley with its larger Asian business community.
Kyser has his own theories to explain why global commerce remains the Valley’s stealth industry.
“International trade, for most people, is not a high visibility type of activity,” Kyser said. “In the Valley, you don’t see the container trains. It’s not in your face, like a building with Toyota or Honda on it,” he said.
There’s also, Kyser said, the Valley’s long-standing image problem.
“For most people the Valley would still be quintessential suburbia,” he said, adding that many people, “really don’t recognize all the things that go on in the Valley. There is a fair amount of trade. It’s there, but people don’t recognize it. It’s hidden.”
Even before the Valley became the region most likely to secede, local movers and shakers had been trying to create an image of the area that moves beyond the grassy lawn, the pool and the barbecue grill.
It’s the northernmost outpost of the “entertainment capital.” It’s the less-sandy stretch of the “tech coast.”
And though international commerce isn’t the sexiest of labels, it’s an element of the region’s image that cannot be ignored.
As the Internet makes it ever easier to reach out and touch someone, the truly thriving economies will be global.
If the Valley wants to play ball with the big boys, it can be no exception.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
MAKING CONNECTIONS
These organizations can help Valley businesses that are interested in learning more about international trade:
* Center for International Trade Development, Glendale-Pasadena office: (818) 552-3321. Ask for a “request for counseling” form.
* Economic Alliance of the San Fernando Valley: (818) 782-7738.
* Valley International Trade Assn.: (818) 346-5620.
* World Affairs Council: (805) 449-9953.
