Cherries to China
“They’ve been able to help me in keeping my costs low as I start up,” said Parker, adding that Varnum’s legal assistance through its new MiSpringboard program is “going to deliver the right results” when Parker Products begins shipping products to China.
MiSpringboard is a statewide program unveiled by Varnum and state officials in Lansing in June, designed to remove some of the barriers associated with starting and growing a business by providing free legal services to new business initiatives. It is Varnum’s way of helping Michigan entrepreneurs and growing companies more effectively put their bright ideas to work and help grow the state’s economy.
Gov. Rick Snyder praised Varnum at the announcement event as a “great firm” for stepping forward to set up MiSpringboard as one of the tools needed to help rejuvenate the Michigan economy. Through MiSpringboard, Varnum will invest up to $1 million in free legal services over the next five years to businesses referred by various economic development and other organizations across the state.
Varnum, which has offices in Grand Rapids, Novi, Kalamazoo, Grand Haven and Lansing, will also contribute to programs designed to help entrepreneurs.
Participants in MiSpringboard will receive a minimum of $2,500 in legal services tailored to their particular needs, which might include help with how a business is structured, counseling on financing matters, contract drafting or review, or employment law advice.
“How you structure your organization is fundamental, and I can tell you that when you do the list of people you need help from, having the best legal counsel is one of the most critical steps you can have,” said Snyder.
Snyder was executive vice president and president of PC-maker Gateway from 1991 to 1997, which had sales of more than $5 billion in his last full year at the helm. Later, the company suffered from intense competition, and Gateway’s American jobs were cut dramatically. It was eventually bought out by Acer Inc., a worldwide company based in Taiwan.
Now the trade pendulum may be poised to reverse direction, if entrepreneurs like Tim Parker are successful.
Harvey Koning, a partner at Varnum and one of about eight Varnum attorneys actively involved with the MiSpringboard program, said the firm is doing work for about 16 companies and there are about eight or 10 others in various stages of application for help, or being considered as MiSpringboard candidates.
Parker had been with Bissell for 18 years when he left that company last October, the last eight years as vice president of global product development.
Parker said that at age 42, he decided to “see what else I could do in the second phase of my career.” Of course, that involved starting a company, which is now just slightly more than two months old.
The basic strategy of Parker Products, he said, is to find “great Western brands and products made in America — ones that are not sold in Asia today. Our first country is China; I consider that to be the biggest nut to crack. If I can crack that one, I’m pretty sure I can do the others.”
Parker isn’t learning the Chinese market from scratch; he has been there about 70 times over the years, by his estimate.
Parker Products will concentrate on exporting food and household cleaning products to China. He already has lined up exclusive agreements with seven companies to export their products to the Chinese market, and most of them are Michigan companies. Two of the companies don’t want to be identified yet, he said, but they are a West Michigan beer brand and a food company.
A third is Cherry Central, a growers’ cooperative in Traverse City, which has agreed to supply dried fruits and juices to Parker Products. Cherry Central, which owns the Indian Summer brand of juice and the Traverse Bay Fruit Co., was named the Michigan Agricultural Exporter of the Year in June by the Michigan Department of Agriculture.
Parker said Cherry Central is a unique company because it owns the product from the farm to the consumer, which offers excellent quality control.
Koeze Co., well-known in this region for its nuts, coffee, candy and other gourmet foods, will also export to China through Parker Products, he said, as will Mind Essential, a California company that produces “nutritional beverages” from flower extracts.
Home cleaning brands signed up by Parker Products are Naturally It’s Clean of Bloomfield Hills and a Maine company that makes products for restoring and protecting cabinets and granite countertops. Naturally It’s Clean uses enzymes to “clean the same way nature does,” according to its website.
The emphasis on natural products should work well in China, Parker believes, because “they’re very into natural remedies,” as well as natural foods with a perceived health benefit beyond the norm — such as the widely touted capability of cherries to counter ailments such as arthritis.
“By 2020, there will be 600 million middle-class Chinese people just in the tier one and tier two cities in China,” said Parker, adding that there are 15 to 20 such cities in China.
“As that middle class grows in China, they’re going to look for middle-class products. And you just don’t see those today; you see a lot of your lower-end, lower-priced products and then you see a lot of premium products, but not a lot in the middle. So we’re targeting that middle-class consumer base that is just burgeoning right now,” added Parker.
Parker concedes that dried tart cherries are a relatively expensive snack food, but he reiterates that the Chinese middle class “is growing exponentially, so they’re starting to have disposable incomes, and they really aspire (to buy Western products).” The Chinese are particularly interested in American foods and cleaning products because “they know they have high quality and excellent food safety. They’re willing to pay for those brands,” he added.
Beijing and Shanghai will be the first two cities where Parker plans to ship exports. He recently returned from a trip to China where he met with about 10 key retail companies that he described as regional entities comparable to Meijer in scope. Now he is going back to his suppliers with lists of product details that Chinese retailers want. In-store demonstrations will be a key element in the marketing of his exports in China, he said.
Parker said all the brands he plans to begin exporting first are “smaller companies that don’t have the resources to think beyond the U.S. today, so we’re coming in as their international leg and representing them in Asia.” However, he said he plans to eventually acquire product lines that will be exported under the Parker Products brand.
“It may be a couple of years from now, but eventually we’ll be working on products under the Parker Products brand. So the name of the company to me was very important, looking at the long-term and what we’ll be doing,” said Parker.
That’s where MiSpringboard comes in. Parker was familiar with Varnum from his years at Bissell, so he went there to inquire about developing registered trademarks. The firm quickly saw that Parker was a good fit for the MiSpringboard program.
Most referrals to the program, however, come from the Michigan Economic Development Corp. via Pure Michigan Business Connect. Other referral sources will be announced as they are added. Interested entrepreneurs or companies can sign up to receive notices of program updates and information on the MiSpringboard website, and it also can be followed on Twitter and Facebook.
According to MiSpringboard.com, good candidates will have a written business plan and a genuine need for legal assistance. MiSpringboard is not limited to any one industry or type of business.
Koning said many of the companies that have been accepted into the MiSpringboard program are in the early stages of organization and some just started. “Some have been around a while and just need some help getting to the next stage,” said Koning.
Varnum evaluates applicants on a case-by-case basis, he said.
“We meet with a client, assess their needs, and then develop a package of deliverables that will be of value to them — and, in some cases, it’s more than (a value of ) $2,500,” Koning said.
“We’re really just pleased with the success of the program, with the quality of the companies that have come to our attention, and it’s really a lot of fun to roll up the sleeves and … help somebody accomplish something while being able to devote their resources to all the other expenses they have in starting up a business.”