It can be daunting for a small business to enter international markets. But for PMD Beauty, a 30-employee premium beauty device company based in Draper, Utah, the benefits far outweighed the challenges.
The company is now selling in 36 countries with international accounts totaling about 10 to 15 percent of the business, according to Mike Alexander, VP of sales. PMD is currently manufacturing in China, Korea and Vietnam, and just opened its first international office in London.
Alexander attributes the ease in achieving that growth to help from World Trade Center Utah (WTC Utah), a Salt Lake City-based nonprofit that believes “doing business around the world should be as easy as doing business across the street.”
The crossroads of the West
In 2020, PMD products were being sold in every retailer in the U.S. that the company wanted to be in, Alexander explains. The team wanted to focus on growing an international presence, but they had a lot of concerns. “Going international is a lot of work,” Alexander continues. “There are a lot of complexities, and it’s expensive.”
The PMD team had questions galore about import-export, tax, compliance and legal, as well as questions about sanctioned countries.
“You need someone who really understands how to [expand international markets], or you’re going to make some mistakes,” Alexander says.
For PMD, WTC Utah was that necessary resource. The WTC Utah team reviewed PMD’s distribution strategy, provided consulting services and made introductions in some of the markets where PMD didn’t have contacts—all as part of the WTC Utah mission to make the Beehive State “the crossroads of the world.”
“We are fortunate to call Utah’s biggest brands our clients and partners, and we’re keenly focused on promoting Utah on the world stage as our economy continues to flourish in the state,” says Julia Pappas, senior director of brand at WTC Utah. “We’re very good conveners. We had 72 official [inbound] engagements last year with foreign dignitaries and businesses…and we led 15 international trips outbound.”
To make moves this big, WTC Utah takes advantage of the state’s many visitors.
“We have so many people visiting the state of Utah for so many reasons,” Pappas says. “When [dignitaries] come through, we’re brought in the loop to be the connection to the businesses here. We try to give these visiting dignitaries the rockstar welcome and treatment they deserve. It’s a big deal, and it’s pretty cool the people that you have coming through our office on any given Tuesday.”
These influential connections pay off. In 2022, WTC Utah served 398 Utah companies, provided 1,322 services and stirred up $152.3 million in new trade opportunities (NTO), according to its 2022 annual report (NTO is calculated by adding actual sales, prospective sales and actual investments resulting from trade and/or investment activity, as reported in client impact statements).
Opportunities to travel
In addition to hosting business trips to foreign countries, WTC Utah offers an array of advisory services to help companies make the international leap or help those who are already global solve various problems—be they regulatory, legal, supply chain or language barriers, Pappas says. WTC Utah also attends numerous trade shows each year and operates a large pavilion focused on Utah businesses.
“Participating Utah companies each have their own display within the pavilion where they can meet new customers, sell product and make connections that will enable that next step into a global business,” Pappas says.
Last year, Gov. Spencer Cox led a WTC Utah trip to Mexico with 19 Utah participants that resulted in $26.3 million in NTO and $6.1 million in new projected manufacturing and sourcing partnerships, an internal WTC Utah report says. Trips slated for the remainder of 2023 will include Saudi Arabia, Ghana, France, Germany, the United Arab Emirates and Mexico.Other World Trade Center organizations exist in states across the country, but Utah’s is somewhat unique in that it became a contracted partner with the state in 2017. This brings along the added benefit of federal grant opportunities to provide companies with resources for travel, as well as bringing to bear the influence of the Governor’s Office of Economic Opportunity, according to Dustin Daugherty, managing director of global business services at WTC Utah.
This fiscal year, the state of Utah received $1 million in State Trade Expansion Program (STEP) grant funding from the Small Business Administration (SBA) to be capped at $15,000 per recipient—the average being about $5,000—for various eligible international business activities for the award year, Daugherty says. There are also other federal resources available, including a USDA rural business development grant for companies located in particular rural Utah counties.
To qualify for a STEP grant, a company must have a yearly revenue of under $1 billion and fewer than 500 employees, Daugherty says. The company must also be headquartered in Utah or have most of its employees in Utah, be established for at least one year and have an exportable product that’s at least 51 percent U.S.-originated.
“Almost every company we work with can meet that criteria for a grant based on at least one of their products,” Daugherty says.
Personalized market advice
Daugherty’s team works primarily with small- to mid-sized companies as well as some of the biggest businesses in the state, he says. The team provides free public trade promotion services to Utah companies interested in going global. For a fee, they also provide complex consulting services to companies that would like more help with identifying high priority international markets that fit their business plans and want assistance in building out a strategy to enter those markets. Pathfinding, WTC Utah’s research product, uses an algorithm to assess global markets and entry possibilities unique to a Utah company.
“The U.S. is a great market…but it’s less than 5 percent of the world’s population at this point,” Daugherty says. “Companies that weather recessions well are the ones that have diversified sales throughout the world. There are a lot of parts of the world that are growing extremely fast and can offer sales growth that the U.S. simply cannot offer. The U.S. is saturated in terms of competition and more stagnant in population and income growth.”
WTC Utah offers market research for stakeholders within the state and for individual companies. The team visits a lot of companies to understand their businesses better and works with foreign partners, governments, private industry, trade associations and others to advocate on behalf of Utah companies and to look for fruitful opportunities for them, Daugherty says.
What companies are saying
Traeger Grills, a multi-million-dollar, Salt Lake City-based wood pellet grill company, is currently in 30 countries under the leadership of Jeremy Andrus, a veteran of global deals. Andrus’ former consumer electronics brand, Skullcandy, was sold in 80 countries around the world.
“How you source, where you source and how you build a brand internationally—they’re very different capabilities,” Andrus says.
It was sourcing complexities at Traeger that pushed Andrus to get involved with WTC Utah. For the last 20 years, China was the only place to source consumer durables, providing a lot of infrastructure and low labor costs—and Traeger relied on it, according to Andrus. But the pandemic changed all that, bringing difficult supply chain issues. Traeger needed to access raw materials, components and chipsets from China for its connected grill that uses an IoT microprocessor. These were suddenly in short supply and suffered a huge jump in shipping costs, Andrus says.
“There was a moment about a year ago where the cost to transport from China to the U.S. went up literally by 10 times over a six-month period,” Andrus says. “It was really scary and frustrating. We just needed to not be 100 percent beholden to shipping products from China.”
With the help of WTC Utah, Traeger set up new manufacturing and supply chains in Vietnam and Mexico. Andrus says he found it invaluable to rely on WTC Utah’s expertise in guiding him through the pitfalls before and during this transition.
“Although I had been sourcing for 17 years in China, I knew very little about Vietnam and Mexico," Andrus says. “When you’re a small business, you have limited resources to understand these things. You only know what you know, and there’s probably a lot that you’re going to learn in the process, some of which may be risky to your business. To be able to sit with WTC Utah and say, ‘Can you connect me with a half dozen Utah companies that have moved manufacturing to Vietnam so I can interview them and learn from their experiences?’ It’s this knowledge base from companies and WTC Utah that’s so valuable."
Another Salt Lake City-based company, Kaddas Enterprises Inc, is a second-generation, family-owned business of 83 employees that manufactures heavy gauge, thermoform plastic products primarily used by the power utility industry to cover and protect infrastructure from wildlife.
CEO Natalie Kaddas says Kaddas Enterprises had a contract in the Middle East prior to her taking the helm of the company in 2008. She knew there were more opportunities outside of the U.S., but it didn’t know exactly how to go about acquiring them until she got involved with the WTC Utah in 2013 and went on her first trade mission to Israel with then-Gov. Gary Herbert. She partially funded the trip with a STEP grant.
“I don’t have the marketing reach that other larger companies do, but when I was able to travel with government leaders who opened the doors in a more effective way, it gave our organization a level of marketing credibility that typically only larger companies have,” Kaddas says.
Since then, Kaddas has gone on several trade missions with WTC Utah and recently won a multi-year, multi-million dollar contract with the Israeli Electric Company. She attributes this “substantial” contract, in part, to WTC Utah for helping her analyze the move based on the market research and analytics. “The World Trade Center helps alleviate a lot of the fear, so you aren’t sidelined by the fear factor,” Kaddas says.
Currently, Kaddas Enterprises is exporting into 15 countries and exploring an additional
opportunity in Kenya. The company is selling in the Philippines, Central America, South America, Canada, Norway and Costa Rica and grew by 250 percent in 2021, Kaddas says.
When other Utah small businesses ask Kaddas for advice on going global, she tells them, “Go on a trade mission. You’ll learn a lot. Just get engaged, get involved.”
Next stop: the world
According to Daugherty, WTC Utah has a standing relationship with roughly 120 countries. These relationships have been built because of a great ecosystem of partners that provide a welcoming atmosphere for dignitaries who visit Utah partly because the state has a fast-growing tech sector and a great economy. Visitors are also often interested or involved in the Church of Jesus Christ of Latter-day Saints. “[The Church is] extremely welcoming of foreign dignitaries, and they’re an international organization as well,” Daugherty says.
Working with foreign governments is much easier for an organization like WTC Utah than it is for an individual company or for a for-profit consulting firm, Daugherty says. WTC Utah leverages these relationships to help U.S. companies navigate regulations in other countries, often utilizing government officials abroad to point WTC Utah in the right direction if Daugherty and his team can’t find an answer.
“[These officials] are extremely helpful in opening doors on behalf of companies when we travel,” he says. “I think it’s because they see that we have the power of the state of Utah behind us. It’s an important network for the state and its businesses, and we treat it like that. We treat it like a living, breathing asset.”