By Hope Belli Tinney, Washington SBDC
TACOMA, Wash. – Farm Breeze International, a specialty crop export company headquartered in Tacoma, did $7.5 million in revenue in its first year selling tree nuts and fruit concentrate to China. In its second year, 2016, it shipped 15 million pounds of tree nuts and revenue more than tripled.
“It’s a start,” said Carol Ye, the CEO of Farm Breeze.
Born and raised in China, Ye said she has always been interested in food. She got her first degree in agricultural economics at China Agricultural University, a master’s degree in agricultural economics from McGill University in Montreal, and an MBA from Stanford University. Along the way she also worked in agribusiness doing market research, risk management, commodity trading and private equity investment.
Bud of an idea blossoms
Her interest in specialty crops started when she was a student at Stanford and she and her classmates organized a field trip to California’s Central Valley. She met family farmers and saw acres and acres and acres of almond, walnut and pecan trees.
“Maybe I could help reduce the U.S. trade deficit with China a little by working with those farmers,” she joked to her classmates. The more she thought about it, the more serious she became. In fact, Ye said, she knew there was a rising demand for healthy specialty crops in China, but small domestic farmers rarely had the marketing or risk management expertise to reach those markets.
After working for large companies such as Cargill and Bunge, Ye said, her goal was to create something for herself, a company she could start and grow from the ground up.
Navigating government agencies
When she moved to Washington with her husband in 2014, she began meeting with Sharon Sappington, an export advisor with the Washington Small Business Development Center (SBDC).
The Washington SBDC (https://www.wsbdc.org) is a network of more than two dozen certified business advisors who work with small business owners across the state to help them start, grow or transition their business. The Washington SBDC is hosted by Washington State University and receives funding from the U.S. Small Business Administration (SBA) and other institutions of higher education and economic development.
Sappington is one of two SBDC international trade specialists in the Washington SBDC network who have advanced expertise and training to support and advise business owners who want to start or expand export sales.
Ye and Sappington spent several advising sessions discussing how to set up Ye’s business and which documents she would need to file with the state or federal government. Sappington walked Ye through the various agencies or organizations involved in agricultural exports – such as the U.S. departments of Commerce and Agriculture, the Export-Import Bank of the U.S., and others – and then made introductions to key people at those organizations.
Communicating vision while monitoring details
“My job was to get connected with people,” Ye said, and Sappington helped her do that. In addition to what Sappington could help with in Washington, Ye traveled across the country and around the world to meet with people at conferences, trade shows, at their farms or in their corporate offices.
“It was very hard at the beginning,” she said. “It was like knock, knock, knock” on a lot of closed doors.
Sappington said she had no doubt that Ye would be successful with Farm Breeze International (http://www.farmbreeze.com).
“She’s a smart business woman, she does her homework and she had a clear vision for what she wanted to do,” Sappington said. While Ye could see the big picture, Sappington helped her fill in the missing pieces and ensure that she was not tripped up by small details that could have become big headaches.
In preparation for Ye’s meeting with potential investors, Sappington and Ye discussed important talking points and how to respond to likely questions or concerns.
“From the very beginning, Carol had a clear vision of how her company would benefit both U.S. suppliers and Chinese buyers,” Sappington said, “so we just had to make sure she communicated that vision effectively, which she did.”
Helping growers negotiate China culture
Ye also needed to win over growers, which took a little more time, she said, because they either had existing sales channels or didn’t know about the China market. But she convinced them that China offered incredible opportunity and that she could get them there.
If they tried to sell to China on their own, they’d be negotiating in a culture they didn’t understand and bearing the potential risk of customer default, she said. In case of a default or dispute, courts and arbitrators couldn’t help as their decisions cannot be enforced overseas.
“It’s always easier to deal with us,” she said. “We are a U.S. company.”
To minimize Farm Breeze’s risk as much as possible, Ye said she is constantly doing market research and is very selective about who she works with.
“We want to work with professional people,” she said, people who take the long view rather than go for short-term windfalls.
She said she looks forward to working with Sappington and the other business professionals at the SBDC as she continues to grow her company.