Thousands Expected At Natural Products Expo In Md.
The Daily Record of Baltimore
BALTIMORE (AP) — Thousands of vendors will crowd the Baltimore Convention Center later this week to showcase their wares. Nearly all products are welcome: household cleaners, personal care items, food and beverages, pet toys.
Artificial sweeteners and preservatives, however, need not apply.
The Natural Products Expo East, which hits Charm City on Wednesday, will bring together about 20,000 entrepreneurs, manufacturers and distributors eager to check out their competitors’ products, all of which must be 100 percent natural and organic.
Heavy-hitters in the industry will mingle with fresh faces behind startup companies for three days of networking, negotiating and nibbling at an event where — as its slogan goes — “doing business just comes naturally.”
That’s the goal, but many business owners who attended last year’s trade show, which was also held in Baltimore, said it wasn’t nearly that simple. Entrepreneurs said they had mixed results, and success depended on how well they worked the system.
Walt Himelstein, who launched his company, Pure Glass Bottle, out of his Owings Mills garage, said he won’t be returning to the expo this week after a disappointing attempt last year.
But Reggie Carey, owner of Columbia-based Very Peri Sauces, said his experience last year far exceeded his expectations. His company has been “swamped” dealing with the extra business gained from the expo, he said.
“We met so many more customers focused around our product line, it ended up being a fantastic show,” Carey said. “We knew it was going to be a lot of money, but it was a profitable decision in the long term because of the connections that we made.”
City officials tout the Natural Products Expo’s benefits to Baltimore, such as its estimated economic impact of about $11 million, according to Tom Noonan, president of Visit Baltimore, the city’s tourism agency.
City hotels have already recorded “well over 12,000 room nights,” Noonan said. A room night is calculated by multiplying the number of rooms by the number of nights they’re booked for. For example, if expo attendees book 3,000 rooms for four nights, that’s 12,000 room nights.
Many of the 20,000 expected attendees won’t need hotel rooms because they live nearby — though not necessarily within Maryland. In fact, even though event organizers have repeatedly chosen Baltimore as the host site — and Noonan said they now have a contract through 2018 — a surprisingly low number of Maryland-based companies are registered to show their wares.
Only 20 out of 1,500 exhibitors are based in this state.
There are several barriers to entry for small business owners, several said. Reserving a booth carries a high price tag — $3,600 for the typical 10-foot-by-10-foot area — and there’s no guarantee their products will be popular.
Himelstein bought the least expensive booth but said he didn’t come close to breaking even. He only makes three types of bottles, and said it’s near impossible to land deals with large buyers who aren’t familiar with his brand and prefer more options.
“When you’re a small company like myself, the cost (of registering as an exhibitor) is prohibitive unless you’re able to get large sales,” he said. And unlike other shows, he said, there were limited opportunities to sell small quantities to individuals.
Show Director Erica Stone said the expo’s expense “shouldn’t be prohibitive” to small vendors because organizers provide incentives and promotions to help them make sales.
Some vendors, such as Meg Whitlock, who runs Woodlawn-based Vanns Spices Ltd. with her husband and another family, said the Natural Products Expo East was more expensive than other shows they’ve been to, but proved more profitable in the long run. Whitlock said she also attended the Natural Products Expo West in Anaheim, Calif.
Several said it’s critical to gauge success by long-term profits, rather than instant gratification, and to pay attention to intangible benefits.
“I’m hesitant to say we broke even,” Whitlock said of her estimated $9,000 expense to show her spices. “I hope so, but we may not know for a couple years. You can’t go in thinking that in a couple months you’ll earn your money back. I think that’s unrealistic.”
Many other vendors also said patience was key.
“We didn’t get one big deal in particular at the show,” Very Peri Sauces’ Carey said, adding that he didn’t turn a profit until at least six months after the expo. “What we got was industry recognition, and that helped us solidify relationships that we had and develop new ones.”
Success at a trade expo depends on a company’s size, the quality of its product and the owner’s willingness to take risks. But the most crucial decision, several people said, is choosing a show that fits your product and target market.
The Natural Foods Expo draws an international crowd, so products must have widespread appeal, said Lee Cohen, vice president of Owings Mills-based Avenue Gourmet, a wholesale and retail distributor of a variety of food items.
But to complicate matters, items can’t be chock-full of preservatives, which makes it difficult for Maryland’s agriculture sector to participate, Cohen said.
“The show really is a national show,” he said, adding that although there will be some local producers, it’s harder for those vendors to adhere to “natural” food standards. “In order for Whole Foods to sell a sardine, whether it be canned or whatever, it has to go through all these rules and regulations. It has to be the freshest, cleanest, whatever. And they have to prove it.”
Avenue Gourmet has shelf-stable items, which Cohen said made his booth an attractive option.
So why would small vendors from, say, New England come to Baltimore for the expo, if it’s such a risky move?
“You take a shot,” Cohen said. “Just like everything else in the world, you take a chance. In the big picture, is it worth it? Probably, but it’s business. You’ve got to take a chance to make money somehow.”
A trade expo can also force business owners to take a hard look at their business practices, Carey said. He and his team ramped up efforts to get their product into the biggest stores and shifted their mindsets.
“There are lots of people trying to make hot sauce out there,” he said. “It’s not a matter of whether or not you have a great product, but are you more focused on running a business or making hot sauce? And we were primarily about business. That mental change in direction helped us pay attention to the things that are important to get the business running by itself.”
Information from: The Daily Record of Baltimore, http://www.mddailyrecord.com
(Copyright 2012 by The Associated Press. All Rights Reserved.)