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[Music] think take away civil engagement lives here Aloha this is Rob hack with my new show exporting from Hawaii in today's installment I have John Holman he's director of the Pacific for the US commercial service and the US Department of Commerce so welcome John thank you very much for being here you've been in Hawaii and in this position how long now over ten years Wow and thanks for having me around of course tell me about the US commercial service how that fits into the US Department of Commerce what is the hierarchy there so the US commercial service is a federal agency within the US Department of Commerce and what we do is we have offices in 80 countries around the world and 108 offices in the United States including our office here in Honolulu and our mission is to help us companies to sell their products and services in countries around the globe are you the only person here that's right I'm a one-person office it's called a standalone and I run the office covering the entire state of Hawaii as well as the US Pacific territories Wow so anybody who has a question about exporting and getting US government help they contact you that's right they can call my office and we'll help them out at the end of the show today I'll put up a slide that has your contact information email address and telephone number where is your office my office is located downtown at the Hawaii Foreign Trade Zone which is right across from restaurant row or waterfront Plaza here to that main Federal Building right right across the street at pier 2 correct okay great um let me clear up one other thing whenever I go to the export.gov website or trade gov and I'm looking for information on US exports I find something called the international trade administration what is that and how does that fit a sure so the international trade administration is a federal agency that's basically our umbrella over the US commercial service and two of our sister agencies one of those mr. agency's handles imports and the other does industry and analysis and those industries are based on I'm sorry those sister agencies are only based in Washington whereas the commercial service we have offices worldwide to help promote US exports got it so you consider well as a federal employee your mothership is in Washington DC but really you're communicating with people all over the globe counterparts if you will in embassies around the world so as you know most of our companies in Hawaii would be first and foremost interested in Japan so you would work with counterparts at the Embassy in Tokyo and how many are there do you know we have quite a few in Tokyo in terms of colleagues there we also have an office in Osaka and the way our overseas offices work is we have American commercial officers that run the offices and they're typically posted overseas in that country for about four years at a time and then we also hire locally engaged staff so these are foreign nationals that work for the US government that speak the language that have local contacts that specialize in industries in that country and then they really dig in and help our US companies to find partners to navigate customs and logistics and understand regulatory issues and enable them to enter six markets successfully that's great I've met many of those people in my career and let's just stay with Japan for example in the Japan office I know that they have specialists who are for example in automotive or specialists in commercial products such as shampoos and creams I mean they can get extremely specific depending on I suppose your Naik's code and your H is coded something like that now increasingly I'm contacted and I would assume your office is contacted by agricultural companies here who are interested in sending their agricultural based products and that could be raw plants it could be beef it could be a processed cookie product or something like that so how do you handle that and do you work with Department of Agriculture the US Department of Agriculture yeah great question so I'm here I'm US tax dollars at work I'm your tax dollars dalip dollars at work so what I say is how many offices do you have worldwide and for any business out there that the answer is 250 offices in 80 countries around the world these are your tax dollars at work and resources for you the only requirements we have is that you have to be a US company and the products or services you're exporting have to be at least 51% us content by volume or value so if you're agriculture products meet that 51 percent criteria then we can certainly help them to export now we have offices in 80 countries around the world the US Department of Agriculture has offices in 25 countries around the world and where we overlap Japan is one of those markets Canada is one of those markets Korea China if an agriculture company comes to me and they have a product they want to sell overseas I can help them figure out their strategy help them to navigate some logistics or customs requirements for that particular market but then what we do is we'd hand them over to the US Department a Greco for an Ag office in that country to help them find distributors or partners in in market where there is no foreign AG office that's something the US commercial service my agency would do from the beginning to end it's really interesting then locally here in Hawaii there's a Hawaii State Department of Agriculture do you know do they have any interaction with US Department of Agriculture folks how to know where they do I'm not sure what their level of engagement is but they also put on a lot of programs here locally for agriculture companies and sometimes they facilitate inbound missions of buyers coming to Hawaii so if you're an ad company definitely get connected with the Hawaii Department of Agriculture and some of their programs they also facilitate the wisata program or the western US agricultural trade program which brings in those buyer delegations and also has grant monies that local businesses can apply for and then use to go overseas to a trade show to do a gold key service with our agency which helps them find distributors or buyers and that's a tremendous resource let's talk about these other resources because it's my opinion you feel free to disagree with me if you like but it's my opinion that in Hawaii we have a very strong ecosystem of support for exporters especially compared to some other states for a small state like Hawaii out here in the middle of the ocean I think we have some really good strong supportive organizations trying to help these exporters that's d bet that's SBDC people like you can you address your opinion how does that ecosystem work and how does the US commercial service fit into that local ecosystem with the many players there yeah great question we're really fortunate here in Hawaii because all of these partners that you mentioned including the Hawaii Pacific Export Council the small business development centers SBA Small Business Administration we're able to work very closely together so that we can route businesses to the agency or the resources that are best suited for them and we work really well together that's not always the case in some other states where they're either a really large state or there are many other partners in the ecosystem and so what we did I'd say about seven or eight years ago and this was kind of the impetus was the step grant which we can talk about if we have time but what it did is it forced us as a trade community to look at where are the pookas where companies are not being served and so that kind of forces to say how can we route companies to the best resources for them regardless of their level of expertise or their access to resources at this time and so now companies can get export mentoring they can get training on how to develop an international strategy they can get access to financing and they can also get access to our services and we're really the international arm some of the partners like D bet for example do some international trade shows and so they'll help promote Hawaii businesses at those shows but even their resources are limited and so we partner together so we can leverage our international network to help companies go even further afield and then personalize the access to resources that they need in order to be successful in growing their business let's continue with the stuff grant step is an acronym for a state trade expansion program and that's a program by SBA Small Business Administration in Washington SBA is under Department of actually SB as a standard so yes stand alone and Congress authorizes funds for SBA to administer via the step grant all the states and territories compete each year for access to those monies Hawaii has been very fortunate and that we've gotten pretty significant awards especially compared to our population relative to other states over the last 7 years or so and D bed is the grantee receiving those funds and they've done a wonderful job of putting together a program that companies can plug into depending on their level of expertise whether there's never exported before or they're already exporting to 3 or 5 countries and they want to go to 10 and there's resources for companies of all sizes that they can get involved in in order to grow their business internationally and we're here to help them with export mentoring or strategy and then also connecting in market when they're ready to go overseas one of the things I I know through the step grant process that companies could use funding for is the gold key service which i think is really interesting and a lot of people don't know about it can you talk about the gold key service for a minute right so one of the I'd say there are three keys to being successful internationally I've been doing this a few years and the first is motivation and I've seen businesses that have a mediocre product but when I say mediocre maybe not super outstanding but if they go to the market and they put the time in the effort in in order to meet with new contacts in order to really promote their business and put it out there in the marketplace they can be successful when we see many companies do that on the other hand companies that have a great product but they're not really willing to get out there into the marketplace and invest in building the business internationally and it does too time and money they don't have as much success so motivations really key another key to being successful internationally is identifying the path of least resistance so what markets can you get into in the least amount of time with the least amount of cost energy and effort and then generate the greatest return then you reinvest that revenue stream into new markets and that experience you accumulate and that allows you to be successful some companies they just say hey I went on vacation to this country and I had a great time I want to do business there that doesn't necessarily mean it's the path of least resistance in social we want to encourage companies to identify that path for them and then three is finding great partners in country so when you have a business you know how important it is to find customers that you can rely on that are gonna pay you when you have someone representing your business for inside it definitely you want to make sure that they're representing your brand in the best way possible and they're promoting your products in the best way for you to be successful those are the three keys motivation path of least resistance and great partners and one of the things we do at the commercial service that's really critical is we help US businesses in our case Hawaii businesses to make those connections with pre-screened qualified partners on the foreign side a lot of companies they'll go to a trade show and they'll collect a bunch of business cards but after that trade shows over what do you do with those cards and how do you know if those people that you met at the show are gonna be well suited for you in Japan or Korea or South Africa or Brazil or wherever they come from you really don't have any idea what we can do at the US commercial service is we can do background checks on firms so we can look at their legal standing their financial standing sometimes we even send someone from the embassy out to their place of business to validate how good they would be to or the business that's called an international company profile now finding a distributor or joint venture partner or maybe you sell the whole foods here in the state and you want to find the whole foods equivalent in Canada or in Japan or wherever we can do that through the gold key service so you tell us what kind of partner you're looking for and then my colleagues in that country will contact partners that meet your criteria the we've pre-screened so we know they're legitimate qualified firm we tell them about the product or service and promote it to them and those that are interested we arranged one-to-one meetings for the Hawaii business and those interested partners we arranged the venue the transportation the translator if necessary so the Hawaii business just has to show up and they have all these meetings with pre-screened qualified partners ready who are interested to learn more about their business and that's called the gold key service and it's a tremendous value for businesses looking to find qualified partners in country and because we're the US government it tends to shake out less legitimate partners before inside and it also gives the Hawaii business immediate credibility in their eyes I have a little story about that a few years ago we had a company on the North Shore of Oahu come to us and they said we want to sell we think that there's a market for our product with Nestle Corporation in Switzerland and we want to know if we can meet with them and so through the gold key service we set up an introductory meeting for this small business on the North Shore in Switzerland with Nestle Corporation and the CEO of the local company when he went there to Switzerland he said he went into this boardroom and he saw all these Swiss business men in dark suits and they all stood up when he entered the room and he thought wow look at me I'm just this small-time guy from the North Shore and the VP of the company said mr. gray it's a pleasure to meet you I got a call on my personal cell phone telling me that you wanted to meet with me my wife doesn't even have that number so I'm really glad that you're here and so he felt so important and it was great this is a meeting he probably wouldn't have been able to secure on his own and we did this through the gold key service and that company's been doing business with Nestle Corporation ever since so that can be the power of our resource in our network to open doors and help companies get connected that's a great service so what does that cost for a small company small company it is nine hundred and fifty dollars for one day of meetings and that covers all the things we talked about if there's a translator sometimes there's an additional cost for that depending on the mark now companies can do something it's kind of like halfway to a gold key to see if a gold key would be suited for them that's called an initial market check so for 350 dollars we can do all the initial upfront contacting of partners to gauge interest and if there is interest then we can at we can convert that to a gold key by applying the 350 to the 950 so it's kind of a way to test the waters and get a gauge on how much interest there is in the market and then we can set up meetings for but still it's a very reasonable cost either way because a company especially a small company could spend a heck of a lot more money over nine hundred and fifty dollars trying to figure this information out and just to reiterate that if a company qualifies for the high step program they could use some of that funding to pay for this gold q sir absolutely in fact the Small Business Administration Congress encouraged them explicitly to use our services because they know how useful they can be for small businesses okay great let's take a short break right now and when we come back we're going to talk about some of the ex ort data that John has recently compiled [Music] [Music] mina-san konnichiwa big stick how I got home got it to the consider konichiwa Hawaii no hongo also no crosstalk initially yukari yes a cashew gets you a be known easy kara port of the cache dmoz the Hongo community how I know any hongo community need Wendy no that's qjo home news not all guests all Monica stay out of the castle Pam permit us cognate your hi Chuck still not get Co be miss dakara the heaviness emitted a sign post on Akane stay you carried esta Aloha welcome back to exporting from Hawaii I'm Rob hackin we have John Holman with us from the US commercial service and what I'd like to do if we could is bring up slide number one and we're going to talk about Hawaii's top product exports and there's slide number two which will be service exports but maybe very briefly you'd like to describe the difference between product and service if you okay well a product is it good and something physical that we create and ship manufacture and a services and intangible right so financial services or education services and what's interesting is that Hawaii as a state has been exporting we know as far back as 1805 well when Hawaii started exporting sandalwood to China so Hawaii has a long history of exporting more so than many other states even before they join the Union so that what I think is interesting about this list is that this is done by you and some people at the state of Hawaii right but if you look at the official numbers Hawaii is often listed as exporting aircraft and some other things and maybe you can explain that sure to the lathe so when you look at the u.s. census data that tracks the movement of goods and you just google Hawaii exports and what pops up is anything that's come through Hawaii so that list will often say that Hawaii stuff exports our aircraft automobiles petroleum these are things that we know we do not manufacture here but what happens is if they pass through Hawaii on their way to another foreign destination they'll get counted as Hawaii exports so for instance if Boeing sells a plane to Qantas in Australia and it stops to refuel here because it's the last point of it departure from the US it would get counted as a Hawaii export so what we have to do is we have to manually look at all of the numbers and then take out the categories that we know are not Hawaii exports and then we're left with the list that we just shared shared a moment ago and these are the actual Hawaii product exports but doesn't say stay with the Boeing example doesn't the state of Washington get a little excited about that because we shouldn't they feel like they did 99.9% right working washing yeah that possible and it's also possible they're not aware of this issue I think Hawaii is you see the numbers it's a more dramatic difference because we see categories at the top that we know are certainly not manufactured here let's look at the list again if we kind of go through this for a second I think this is important for our audience to understand that these are the products that are really being shipped by local people here working on these products and manufacturing these things and then shipping them overseas so we don't have to get into the hyper specifics of the numbers and what-have-you but we are talking about bottled water chocolate of course shrimp is number one when I've told people this everybody's very surprised because shrimp is number one but they don't the local market doesn't absorb a lot of shrimp we don't eat a lot of shrimp in right and this particular type of shrimp is unique and that the shrimp that's exported from Hawaii is not directly for consumption its breeding shrimp so the shrimp that's grown here or raised here is then exported to other markets where people can then breed the shrimp for local consumption just putting the shrimp out to stud then where where would that be roughly where are they sending all these all over the world really yeah oftentimes in places in Asia because what makes Hawaii unique in this category is that because we're so geographically isolated there are the shrimp farms are not subject to some of the pathogens and environmental pollution where they're raising the shrimp and so when they export them they're perfectly primed for reproduction and producing healthy shrimp for consumption whereas in some farms in places like Asia environmental pollution is an issue or pathogens or an issue bioterrorism could be an issue as well and how about our chocolate where's the chocolate going chocolate I think is a combination of chocolate chocolate and also chocolate-covered macadamia nuts so we'd have to dig into that a little bit more but I think at least a certain percentage of those numbers or chocolate-covered magnets I I think if you ask the average person on the street in Honolulu what is the number one export from Hawaii most people would say pineapples but that doesn't seem to be the case at all well it's funny because pineapples doesn't come even close so that list we just saw of products comprise less than 2% of all Hawaii exports 98% plus of Hawaii's exports are in services we'll get to that in just a second bring the list up again for us so coffee is this mostly coming from the Big Island its Kona coffee mostly from the Big Island Maui has a coffee industry Molokai has a small coffee industry also Kauai coffee but most of it probably from the bigger the top fruit is papaya mhm mine apples not even on here right that's very interesting information to me and then we're getting more I see lots of bees and lots of honey products are coming online I think consumers in Asia Canada also are very interested in organic products from why I think organic is getting more and more popular around the world and so at least in in my business and at the Hawaii Pacific export council I think we're seeing a lot more requests for information about shipping that type of product abalone I think is really interesting export because most people would assume that Mexico has a lock on that market but especially in Japan and other types of seasonal markets for abalone absolutely Mexico does really well but that's great that Hawaii companies are out there doing this of course musical instruments and uh Khalil is that's a great business now ice cream where is our ice cream going that's a good question what we'd have to do is we'd have to look at that category specifically and then look to see where it's going to so we we haven't done that for all of these on the list mmm Japan is our number one trading partner and I know that we've seen some interest from Japan and why ice cream in particular excuse me okay let's go to the slide number two and talk about service exports because this to me is really interesting and and these numbers actually as you alluded to earlier these numbers completely make the product exports look tiny right and product exports are important and we probably spend more time with products because there's more dynamics to getting a product from Hawaii to an international market and through customs but just in terms of pure dollar volume traveling tourism service is far and away number one and what this means is when we have foreign visitors come to Hawaii from Japan Korea China Canada Australia and they spend money here they go on tours or they go shopping those are service exports those are forms of service exports mmm and that's the largest category by far and then we see the others there in the list architecture and engineering services Hawaii has some of the best architecture and engineering firms specifically in terms of designing tourism related resort infrastructure and hospitality wonderful companies here absolutely and then you see their international education exports is something that the state and governor EJ have been really working hard on promoting more of so when we have foreign students come to Hawaii and bring revenue into the state via tuition and books those are international education exports oh that's wonderful and then we get down into legal film all these things I think that we have to be more supportive of these and recognize that these counties exports you know I think the average consumer out there in the market doesn't really understand that these count is exports and support a lot of jobs and paying jobs here locally can we go to slide number three with Jon's contact information please this is how you can find John Holman his email address and telephone number is here I would also encourage everybody to look at the website export.gov there's a tremendous amount of information there on individual markets around the world lots and lots of data but easily digestible data not just numbers but market specific information depending on the type of product or service you're looking at exporting there's a wealth of information there hours and hours of information you could peruse so with that I would like to wrap up today's show of exporting from Hawaii thank you again John Holden from the US commercial service for being here thanks ray and look for us again in two weeks with another exporting from Hawaii episode thank you and Mahalo [Music] [Music]