International growth can be challenging for any business in any economy, but conditions around the world—from manufacturing issues to regulatory changes to suitable capital maintenance to staying on trend and beyond—make it more difficult than ever. Can beauty manufacturing create jobs in the U.S. through this type of growth? Where is international demand for U.S. beauty products coming from, and how can brands get in front of it? And where do small- and medium-sized beauty brands go for export help? One place is the California Center for International Trade Development (CITD) in Long Beach, an organization dedicated to assisting California-based small- and medium-sized health and beauty brands grow their businesses internationally and create jobs in the state.
The organization is part of California’s involvement in the State Trade and Export Promotion (STEP) grant initiative, awarded by the U.S. Small Business Administration (SBA). The STEP program builds on President Obama’s National Export Initiative (NEI), which is aimed at doubling exports by 2014 and supporting two million jobs in the U.S. Offering export assistance and consulting, the CITD–Long Beach’s signature program includes the California: A State of Beauty Pavilion's set-up at the Cosmoprof Worldwide Bologna 2013 event in Italy, which it also participated in in 2012, and also new for 2013, it will also be involved in the Beautyworld Middle East event in Dubai.
“The health and beauty industry is a big part of California’s economy. Through the STEP program we are able to provide California-based health and beauty companies a powerful opportunity to grow their business internationally, which ultimately benefits our state and the broader economy,” says Cesar Arellanes, the CITD–Long Beach program director.
California: A State of Beauty Pavilions
In March 2012, the initial California: A State of Beauty Pavilion showcased 11 California-based beauty brands at one of the world’s largest beauty events, Cosmoprof Worldwide Bologna, which welcomed more than 200,000 attendees that year. Since that initial trade undertaking, the 11 companies who took part cumulatively generated more than $13 million in export sales, entered 27 distinct markets and created 54 jobs. The venture also led to the infusion of $4.2 million in capital for the participating businesses.
CITD–Long Beach carefully curates the brands it allows to take part in its California: A State of Beauty Pavilions display space, as the pavilion concept allows brands to take part in the some of the world’s most distinguished international trade events at a reduced rate, as well as provides travel and logistical support along with marketing, booth design and build-out. This allows companies to focus completely on selling. CITD–Long Beach also provides counseling on issues from public relations to EU compliance and financing, and coordinates with the U.S. Department of Commerce, U.S. Commercial Service and show organizers to arrange meetings for buyers to visit the pavilion to meet with the exhibiting California brands directly.
For 2013, CITD–Long Beach is expanding its California: A State of Beauty Pavilion at Cosmoprof Worldwide Bologna, taking place March 8–11, 2013, and the Beautyworld Show Dubai, happening May 28–30, 2013. “This is a once-in-a-lifetime opportunity,” comments Lincoln Lee, director of professional skin care brand Dermaesthetics, Beverly Hills Formula, Inc., which was a participant in the program in 2012 and came back again for 2013. “We received financial, media and organizational assistance. The ability to collaborate and represent California-made goods was immeasurable.”
That representation and the ability to be seen by international buyers is a good opportunity for many beauty brands. There is a distinct desire in Europe for U.S. beauty products in particular, illustrated by the fact that most of the companies that come to CITD–Long Beach have received past inquiries from European markets such as the U.K., Italy, the Netherlands and more. Growth opportunities also largely exist in the Middle East: From the 27 distinct countries entered by the 11 participants from the 2012 pavilion, the majority were Middle Eastern markets, which led to the choice of Beautyworld Dubai as the second trade show outlet for the organization to get involved in for 2013.
California Success Story: A Case Study
Diamond Wipes International, a California-based wet wipes manufacturing company that is woman- and minority-owned, overcame hardships as an entrepreneurial endeavor early on, and then struggled with how to take on international expansion once the company become more prosperous stateside. Founder Eve Yen started by supplying her wet wipes door to door to local Chinese restaurants, and later grew her base to several restaurants allowing her to open a manufacturing facility in El Monte, California. After three years, Yen decided to expand her product line into beauty and personal care products and created the brand La Fresh, which centers on offering on-the-go, eco-friendly beauty wipes.
While eventually achieving success in the domestic marketplace, Diamond Wipes/La Fresh’s interest in foreign sales increased as it continued to receive inquiries from abroad. However, like many companies, Yen and her team were leery of how to proceed with foreign transactions. A classic “accidental exporter,” as Diamond Wipes began to receive overseas inquiries for its contract manufacturing services it turned to its team to service international sales, but also looked to the staff at CITD–Long Beach to assist in facilitating its growth in international markets. When CITD introduced the STEP program to the company, Diamond Wipes’ marketing manager Moto Okawa jumped at the chance to learn where more international opportunities existed. “We wanted to go international in a much bigger way, and that is why we participated in the trade mission to Cosmoprof Bologna with the California Pavilion,” explains Okawa.
Thus, Diamond Wipes participated in the first CITD trade mission to gauge international interest in its products, services and company. With results that exceeded their expectations (exports now count as 12% of the company’s overall sales) in 2012, Diamond Wipes/La Fresh is participating again in 2013. And this time, the company feels more prepared to establish networking and new contract packaging opportunities. “The knowledge gained and sales success we had are key drivers of why we will participate again in 2013. We are also very proud to exhibit, representing the made-in-the-USA quality of our products and are excited to test new possibilities for growth,” Okawa explains. “Despite all of the aspects of international commerce, small businesses can still operate globally, especially with the help of organizations like CITD, which help to distinguish what different countries require in order to actually complete an international transaction.”
Okawa also shares why it was important to exhibit with the California Pavilion, saying, “The entrepreneurial spirit is reflected in the California Pavilion. All of the small businesses come together to display what California has to offer to the beauty industry, both domestically and internationally. If small businesses are truly the economic engine of the U.S. economy, then the California Pavilion is a great device that showcases these small businesses that, in many cases, would not otherwise be able to attend these international trade shows.”
And CITD–Long Beach continues to curate small- and medium-sized beauty brands for the international stage. Current brands participating in 2013’s California: A State of Beauty Pavilion include Biotone, CellCeuticals Skin Care, Chrislie Formulations, Daily Concepts, Dermaesthetics, Beverly Hills Formula, Inc., Diamond Wipes, Fresh N’ Fruity, Ineke Perfumes & Colognes, Ioni Cosmetics, It Factor, Johnny B Haircare, Jon Davler, Laguna Candles, La Fresh, LashEm, LASplash, Me! Bath, Millionaire, Mirabella, Nailuv, Nubar, NYX Cosmetics, Roots Organics, SeneGence International, Whet Nails, Yosh Fragrances, and Zerran Hair Care.
Five Export Tips for Going Global
Even if your company is not based in California, CITD–Long Beach offers a few helpful tips on going global with your beauty brand.
- Don’t be afraid of expanding overseas: Industry partners and government assistance exists to help businesses enter new markets successfully. Check out organizations such as the Professional Beauty Association and International Cosmetic Manufacturers and Distributors (ICMAD) to help your brand grow, the U.S. Commercial Service for buyer matchmaking, the U.S. Small Business Administration for export financing, and the CITD to help put transactions together.
- Pricing: Your foreign price should be somewhere between 10–15% of your U.S. retail price. If not, you run the risk of consumers buying directly from U.S. channels.
- Distribution: Do your due diligence. Don’t give away entire regions to one distributor without knowing how well they can service the region and represent your brand correctly. Offer your buyers promotions to move slow-selling products.
- Regulations: Educate yourself and your staff on foreign regulations for beauty product importation.
- Marketing: Create an honest brand with a superseding purpose that your customers and team can champion anywhere.