ExporTech Program Fine Tunes Sea Foam’s Export Plan

This episode of Export Nation is part of a series that highlights the ExporTech program, a joint effort between the U.S. Commercial Service and the Manufacturing Extension Partnership (MEP) to accelerate the growth of export ready manufacturers via the development of a structured export strategy.

Relevant Links

Company Information: Sea Foam - www.seafoamworks.com
Office: U.S. Commercial Service Fargo
Director: Heather Ranck - Heather.Ranck@trade.gov
ExporTech Program Information - www.nist.gov/exportech

Podcast Transcript

[00:00:00] Host: This episode of Export Nation is part of a series that highlights the ExporTech program, a joint effort between the U.S. Commercial Service, and the Manufacturing Extension Partnership MEP to accelerate the growth of export-ready manufacturers via the development of a structured export strategy. MEP is a program within the U.S. Department of Commerce, focused on helping small and medium-sized manufacturers with business services in every U.S. state and Puerto Rico. On this episode, we speak to Sea Foam International’s CEO, Michael Wagner, and to U.S. Commercial Service, Fargo Director and Global Rural team leader, Heather Ranck. Thank you for joining us today. It’s a pleasure to have you on Export Nation podcast.

If you could start by maybe just telling us a little bit about yourself and your company [crosstalk].

[00:00:51] Michael: I’m a born and raised Midwestern North Dakota boy. Grew up in Northwestern, North Dakota, which is a oil country, and grew up in a small town grocery store and got a lot of business education right off the bat from my parents who purchased a grocery store. When I was in fifth grade, I learned how to run a till and manually count back change to people. That was my first experience getting involved in business besides a paper out delivering the various paper out of a red wagon. That’s what started my business career, and always been involved in business ventures. Sophomore in high school, I decided I wanted to be a lawyer, and so I went to a lawyer in our small town and I said, “What does it take to be a lawyer?” Because I had no idea. He started his own practice right out of law school, and he said, “Take as many accounting classes as you can.” He said, “That’s my best advice to you.” With that, I ended up getting a degree in accounting for an undergraduate and then went on to law school right after that. Practiced law for about 22 years and did a lot of mergers and acquisitions and business liquidations and things like that, and very much enjoyed it.

Then just recently, within the last several years, joined Sea Foam. Sea Foam is a company— Let me back up just a second to tell you my Sea Foam story. That is in 1988, I bought a 1983 Honda Silver Wing motorcycle. Great motorcycle, ran great for several years, and then I started having trouble with the carburetor. It was coughing and spitting. It wasn’t running just right. This was in 1992. I went into a motorcycle shop and told them that my motorcycle’s coughing and spitting, then he said, “Well, run a couple of cans of Seafoam through there and if that doesn’t work, you need a carb job. I said, “Sea what?” Just the name was strange and didn’t really

He went over to the shelf and he pulled off this can of Seafoam and he showed it to me. He said, “Here. There’s half a can and you’ll take that and then you’ll go buy yourself a couple of cans.” I did that. Ran a couple of cans of Seafoam through my gas tank, started running a little bit better little by little. By the time I ran through a second tank, that motorcycle was running as smooth as could be. That was in 1992. Been using Seafoam ever since. Fantastic product. It’s 2021, I still have that exact same motorcycle. I use Seafoam every year and have since 1992, starts up every spring, and I just got to go in here about a month ago and pulled it out of storage and it started right up, and I attribute a lot of that to Seafoam. I’ve never done a carb job on the thing.

That’s my little Seafoam story. In 1992 is when I got exposed to the product. In 2015, is when I got exposed to the business side of the company where that’s where I joined Sea Foam as the CEO of Sea Foam International. The company actually started back in 1942 in the Minnesota area, and has been in business ever since then. The US company is growing to be one of the leading sellers of fuel additives in North America. In 2015, we started a company specifically designed to go into international markets and that’s called Sea Foam International, which is headquartered in Bismarck, North Dakota.

[00:04:46] Derrick: What was the impetus for going international?

[00:04:53] Michael: Good question. We’re always looking for markets, no matter what kind of business we’re in. We want to expand but not expand too fast, and always looking for something new. In 2004, some of the folks at the US company wanted to expand in Canada, so they started the whole Sea Foam International experience by going into Canada just looking for new markets and grew that to be what’s been a very successful operation up to today, and then of course beyond. In 2015, that’s when we started getting serious about looking at other markets simply just to expand our territory. The world keeps getting smaller and smaller from a virtual and travel standpoint. It’s easier to do business across borders, and so we put together a team to do exactly that.

[00:05:55] Derrick: Perfect. I understand you went through— or your company went through the ExporTech program. Is that correct?

[00:06:02] Michael: Yes.

[00:06:04] Derrick: Maybe tell us what that experience was like and how you were introduced to that.

[00:06:09] Michael: Sure. Fantastic experience. We’re at a international trade show in Fargo, North Dakota, and that’s where I met Heather Ranck from the Commercial Service. Keep in mind, I did not grow up in international markets at all, and so we were trying to figure out what resources are available out there, who can we turn to for help? We ended up going to this conference in Fargo, North Dakota, met Heather Ranck who turned out just to be a huge blessing to us. She’s with the US Commercial Service. Got introduced to the Commercial Service and all the programs that the Commercial Service provides and specifically ExporTech. That was our launching point with the Commercial Service being a fantastic resource for us.

They helped us design a business plan and helped execute that plan. The ExporTech was really— If you’re just getting started in international markets, that’s the starting point. Get involved in ExporTech program and go through that because it allows you to draw a lot clearer picture of where you need to go.

[00:07:31] Derrick: That’s good to know. Would you say that it helped formulate your plan or you had an idea, and then ExporTech helped you just maybe organize that idea a little more around research? What would you say the program actually helped you foster?

[00:07:51] Michael: We had a pretty decent start on formulating a plan and what ExporT did was really helped us articulate it much better, fine-tune it to get us what’s actually executable. It’s one thing to sit down and try to map out a plan. It’s another thing to execute on that plan. ExporTech really helped us make that transition from conceptually, “How is all of this going to work?” to, “This is how it’s going to work. Here’s step one, here’s step two, here’s step three.”

[00:08:23] Derrick: I don’t know how the ExporTech program is managed in North Dakota because everywhere does manage the ExporTech a little bit differently. Maybe could you tell me a little bit about how the program is managed or run in your area?

[00:08:40] Heather: Something that was very interesting in this ExporTech here is our emphasis on market research, and that has been a big takeaway of the program. In fact, we spun a new program off of what we learned from ExporTech. That Rural Export Center that’s now doing research projects for companies around the nation was actually a lot of the learning that we did on what companies need for research, came out of the ExporTech program, and working with companies like Mike to figure out Sea Foam International, “What is the most needed market research? What data tools do we need?” so that companies aren’t forming their plan based on just speculation or prior assumptions, than confirming information with solid data. Out of that, grew a national program geared toward rural companies to do research as a standalone service.

[00:09:46] Derrick: Oh, wow. Could you tell us a little bit more about the Rural Export Center?

[00:09:51] Heather: The Rural Export Center does in-depth research reports for any rural company from the whole United States and so a lot of companies have a theoretical interest in exporting, but don’t know which countries would be the easiest to enter. They don’t necessarily know which steps to take to avoid risky or counterproductive partnerships or entry strategies. We mainly are doing research on the most appropriate markets based on the very unique characteristics of each company that participate in the program.

Then we also, working with our overseas colleagues, we connect and make sure that the recommendations we provide are rooted in the current, on-the-ground realities in that country, so that out of the research emerges an action plan or a network of people who can bring in that plan to reality. Then that’s when it’s backed by research, it just gives companies a lot more confidence, knowledge, and connections, instead of stumble into exporting, confidently, move into exporting.

[00:11:10] Michael: If I can jump in and just expound on that a little bit. Hi, Heather, great to talk to you.

[00:11:16] Heather: Hi, Mike.

[00:11:17] Michael: … and I have been wanting to make a trip to see you some time just to touch base, have a cup of coffee. To that point about the research, Derrick, that was absolutely crucial to us because in what we’re talking about here is that, when we were trying to explore what countries to go into and what are the markets like there, and what’s our market entry strategy for these countries? Number one, which countries should we enter and why? I’m big on writing a big why on the whiteboard to say, “Why are we doing what we’re doing?” That’s what this research really helped us do.

For example, for our company, we have a hazardous product, a fuel additive. I should have expounded on that a little bit more when I told you about the company, but so this fuel additive, you add it to your gas, you add it to her oil and it helps the engine to run better and last longer. As a hazardous chemical for transportation purposes, it’s got an HTS code, a Harmonized Tariff System Code. What Heather and the whole team did was to do the research to say, “All right. Let’s take a look at that code that basically identifies your product, and let’s see what the imports are in other countries to say, ‘What kind of demand is there for this product and who’s importing? Not necessarily who but how much of this type of product is being important, because that allows us to see what the size of the market is.’”

Through the research that Heather and the rest of the team did for us, we actually prioritized all of these different countries to say, “All right, here’s the size of the market in Germany, here’s the size of the market in China, here’s the size of the market in Mexico.” That allowed us to very strategically decide the order that we are going to enter which countries, and the order that we’re going to enter them in. Heather, to this day, we’re still following that same roadmap that you guys helped put together for us a few years ago.

[00:13:27] Heather: Well, Mike is an attorney and very close attention to detail and making sure you think before you jump type of thing. For us, it was really wonderful because if you find a company that values that type of data and research, it’s like a match made in heaven because sometimes we’ll do a research project and it’s like, “Okay, that’s cool,” and they chuck it to the side. But Mike and Sea Foam, they really used the information to the maximum and they acted upon it quickly. We actually have a little success story writeup that we published with Mike’s permission about some successes they had out of ExporTech and out of the research that actually bore fruit for them right before the pandemic.

[00:14:30] Derrick: Did the pandemic have a huge impact on your company?

[00:14:37] Michael: It did as far as halting our activities physically going to other countries. We can’t travel to China anymore. Can’t even get to Canada anymore, other than ship our product, but as far as sales and meetings and things like that, everything’s been moved to virtual is still is that way. Yes, it’s had a big impact on the day-to-day activities. It’s stifled our new growth. It’s probably had just the opposite effect on our existing growth and that is Canada. We are just up phenomenally over the last two years in Canada. It’s just been actually unbelievable.

[00:15:25] Heather: Is that because people are using their outdoor— like boats and snowmobiles, [crosstalk] things like that?

[00:15:32] Michael: Recreational vehicles. Yes. People were getting out and camping and going boating and so forth. That’s where our product really shines, is whether you’re out on the highway running your car or on the water running your boat, or in the Hills running your ATVs and so forth, that’s where Seafoam gets used. A lot of people are out, doing those things.

[00:15:53] Derrick: That’s great. That’s great to hear. You had all this research, right? Did you find that you still faced maybe some hurdles in other countries and maybe how did you overcome those challenges?

[00:16:08] Michael: Another good question, Derrick, and that is, the research helped us identify what countries would probably be the best potential for getting into, and set the order that we go into those countries. Now we need to figure out how to actually get into those countries. “These are the countries we need. The data—” By the way, one of my favorite quotes is, “In God we trust, everybody else bring data,” and we’ve lived by that. We look at the data to say, “Okay, this data tells us we should be going into China, and Mexico, and Australia, and UK, and Germany.” That’s the order that we follow.

“Okay, now we’re going to go to these countries. Now, how do we design the strategy and execute the strategy to actually get into those countries and to penetrate the markets?” That’s where ExporTech was a huge help because it really helped us, like I said earlier, fine-tune what that strategy was gonna look like. That’s everywhere from, I call it company compliance, product compliance. There’s all these compliance things that you need to deal with, with each country, but how do you get your product in? Again, we’ve got a dangerous good because it’s flammable, there’s a lot of regulations and they all vary country by country so we got to look at each country and figure out, “Okay, what do we need to do with respect to the hazardous regulations in China, for example, and hazardous regulations, Australia?” That’s a big part of this whole thing, is just figuring out how you can get the flow of the product into the country, how it gets imported, where it gets stored, and then how it gets sold and transported, what we call the final mile, getting from a warehouse in China, for example, to an actual place that sells it on the shelf.

[00:18:07] Heather: Soon after Mike did ExporTech and we did the research, we actually set up calls with different offices in China, US Commercial Service offices, and had a lot of really interesting discussions about some of these challenges and then the distribution market. There’s people who specialize in automotive supplies or aftermarket products, and so we connected Mike and Sea Foam with those staff and set up a call and that helped lead to some meetings. We did the same in Mexico and plant the seed and that really laid a lot of groundwork. That would be who you could lean on for the next step as well.

[00:18:57] Michael: Great point, Heather. I was going to say that same thing is that, “Okay, ExporTech, you sit down and you study, you get the data put together, you come up with a plan and now you got to execute on that plan.” We’re getting ready to go into China. Well, US Commercial Service has a number of offices in China. Again, with Heather’s help, she put us in contact with the offices in China. 

Lisa Ouyang at the US Commercial Service in China lined us up with several companies, and so we went over to Shanghai and Lisa met us there. She lined up these meetings with several different companies. In fact, one of them was Alibaba, and a lot of us in the United States are getting to be a little bit more familiar with who Alibaba is, but it’s this huge online company. We’re proud to say, along with the US Commercial Services, that with the help of the Commercial Service, we were the first US company to meet with Alibaba through the US Commercial Service. At least that’s what we were told back at the time. It was a fantastic meeting. Again, Lisa helped shepherd us all over. In fact, I think we went to several different companies and Alibaba was just one of them and everywhere from Shanghai to Beijing.

[00:20:32] Derrick: Heather, I would hate to not touch on this. Maybe you could speak. I just was talking to a company from South Dakota the other day. Maybe you could speak on unique opportunities that North Dakota offers for exporters or what potential companies looking to export from North Dakota should expect, and any differences you may have picked up on between your area and other areas around the country.

[00:21:03] Heather: In general companies in more rural States have much better access to support agencies like export assistance, elected officials. We have a tremendous amount of support in this area, for example, from our elected officials, and like the state trade office, It’s in a more rural state, you’re one or two phone calls from getting anything done. [laughs] It’s hard to quantify the value of something like that, but it’s a real benefit of being in a more rural state. We have you’re very close— There’s the state trade office and my office collaborate very closely. ExporTech we also had the MEP partner. Impact Dakota was also part of the ExporTech program. It outweighs the challenges of being more isolated in a lot of ways.

We are the farthest in North Dakota from the seaports than anywhere in the nation. Transportation and shipping is a big challenge, a big cost, and we’re not right by any huge container loading areas. That’s definitely a big challenge to overcome, but we have enough examples of companies who do manage through that. We have a very proactive District Export Council here. It’s a little more challenging in many ways, but I think those things are overcomeable. [laughs] Maybe Mike could disagree with me on that, but the benefits outweigh the challenges.

[00:23:07] Michael: No I completely agree. Absolutely. To Heather’s point that’s one thing nice about having a small rural state is that, yes, it is very easy to communicate with people. We’ve got a great community here both from the business standpoint and the government programs that are available, just like Heather. Heather has just been so helpful since day one, that we met her with all this stuff. Here we sit in Bismark, North Dakota, which is— and I tell people we live in Bismarck, North Dakota, which is 180 miles due north of Toronto, Canada, and people scratch their heads, but we actually are [crosstalk] north of Toronto from the north-south standpoint. We’re fairly isolated in terms of, like transportation is a big deal. I’ll tell you what? Everything else we absolutely love because we got easy access to people and resources. It truly is a blessing.

[00:24:16] Heather: There’s just a general attitude of helpfulness when you get to states that are— In huge urban areas, you can’t possibly be buddies with everybody you see because there’s too many people, [laughs] but in a more rural state, there’s just a general demeanor of friendliness, helpfulness, and the default mode is trust and kindness that type of thing. It makes it a very pleasant environment. It’s not this like harsh, urban jungle reality

[00:24:54] Michael: In all of that said though, you guys, and obviously you’ve got a lot bigger audience in your podcast out in the Midwest, but these resources are available to everybody across the country. Yes, we’ve got a smaller population pool in the Midwest and there’s maybe easier to access things, but this access is available to anybody across the country. For example, if you’re some company in California or Maine looking to go to China, those same resources are available to those people to get some connections and set up some meetings in China, or set up some meetings in Mexico and so forth. I’ll tell you what? it was a huge eye-opener for me to realize that the US Commercial Service exists. I had no idea years ago when I started getting involved in the international business, that the resources that our federal and state governments provide to help private businesses get into foreign markets. You’d be a fool if you’re a businessperson not to take advantage of those resources.

[00:26:05] Derrick: Thank you. That’s great to hear. On that note, though, what pieces of advice would you give to small and medium-sized manufacturers in the initial stages of formulating an international strategy?

[00:26:22] Michael: Go to export.gov and start reading, and then start making some phone calls. I’m being dead serious about that because that website helped provide me with so much education on what resources that our government provides to private companies.

[00:26:44] Derrick: I appreciate that. I do want to say it’s trade.gov now, but it was definitely export.gov at one point.

[00:26:50] Heather: They’re migrating everything over to a new platform, trade.gov.

[00:26:54] Derrick: I Didn’t mean to cut you, Mike. I didn’t mean it. Go ahead. Sorry.

[00:26:57] Michael: No, go take a look at trade.gov then, because that gets you into resources for doing market research that we talked about earlier, resources for helping to get set up with some meetings in some other countries. I don’t speak Chinese. Five years ago, I certainly didn’t know the culture, got a lot more educated since then, but didn’t have a good education on this market that we’re going to be going into. You go read on the website and there’s different resources there on different countries and get educated there, and then start making some phone calls to people like Heather or Heather’s counterparts in whatever state that you live in or region, and then just march through the process from getting educated, to help putting a plan together, to actually making some contacts and setting up some meetings. That’s what it boils down to, is setting up some meetings, getting to know some people in these countries that you can sell to.

[00:28:06] Derrick: Perfect. Before we start closing here, any future exports, deals currently in the pipeline that you could talk about, of course?

[00:28:17] Michael: Yes, we have several. in fact, we’ve been meeting this week. We are about to sign with another company in China which is an existing deal. Then other stuff that are in the pipeline, I mentioned earlier through the research that US Commercial Service helped us with, we’re marching into these other countries. Yes, we’ve set up some meetings with folks in Australia. I met earlier this week with some folks from UK, so we’ve got a lot of stuff in the pipeline.

Our problem right now is people power. We’ve got all these projects going, and that’s a good point to make too, is that you can get yourself spread real thin real fast. I will just encourage people to pick one, two, three countries and focus on those. Don’t say, “We’re going to go into 10 countries in the first couple of years,” because you’ll be an absolute genius if you did that successfully I think. Pick one or two countries, three the absolute most and work on those. If you’re a smaller manufacturer or business, I would say one or two at the most.

[00:29:34] Derrick: Perfect. Heather, before I get Michael’s information, is there anything coming up for the Rural Export Center in I didn’t know September or so that you want to highlight?

[00:29:49] Heather: We have in the past done a lot of seminars. We have done trainings on market research skills and website globalization that had thousands of participants over the past year. Due to the success of that program, we got inundated with requests for research, and our staffing isn’t at a level to be able to accommodate all that. Right now we’re trying to work down the backlog [chuckles]. It’s really a good problem to have and we’re staffing up. We have a lot of internships, and because of your national audience, and because of teleworking, we can hire students from anywhere in the country and we have. We have hired students from all over the country, who can get a paid internship. Really they’ll be working as a part-time contractor.

That will be something really interesting that you could maybe help get the word out on, is that there’s periodically job openings. We have one right now actually for a part-time 20-hour-a-week contractor that will be ideal for students. Not a lot of people are aware of it and most of our students have been more local to this region, but really we can hire students from anywhere. We do the website globalization reviews, so if a company wants to check how globally friendly their website is, we can do an analysis on that and provide a report. If the local US Commercial Service office doesn’t offer that, we can serve as a backup for rural companies. I’ll also send you a link to the Rural Export Center because if somebody is interested in research, they can sign up and we’ll put them in the queue.

[00:31:44] Derrick: Okay. Yes, please do that and I’ll include it when we send out the episodes to our public, our subscribers. Michael, any last words before we go, and maybe after those last words you can tell people how they can get in contact with you or your company for whatever reason?

[00:32:05] Michael: Sure. I think we had all the highlights, Derrick. Like I said, what I call the irreducible minimum advice to people, you break it down to make it short and sweet. Don’t go into too many countries at the same time, take advantage of the resources that the Commercial Service provides because there’s a lot of them that will help you through every stage of the process. If people want to get a hold of us, info@seaformi.com is the best email address to use, so feel free to drop us an email.

[00:32:40] Derrick: This podcast is intended to provide information that may be of assistant to US companies. Statements made by Export Nation podcast guests reflect the views and opinions of that individual. This podcast does not constitute an endorsement by the US Commercial Service of the individual, his or her employer, or affiliated entity. The specific information provided, resources mentioned, or products or services endorsed or offered by that individual and his or her employer, or affiliated entity. The US Commercial Service assumes no responsibility for the accuracy, completeness, or timeliness of the information provided by the guest’ or for the decisions made and reliance on any information provided by the guest in this podcast. The information provided in this podcast does not constitute legal advice. Thank you for listening to this episode of Export Nation, brought to you by the US Commercial Service. For more information on how you can get started exporting, please www.trade.gov.

[00:33:43] [END OF AUDIO]