SHOULD FOREIGN-LANGUAGE PACKAGING BE HANDLED BY YOURSELF, YOUR DISTRIBUTORS OR YOUR 3PL?

As Miss Jenny’s Pickles readied to export into China, co-owners Jenny Fulton and Ashlee Furr found that their global trade knowledge base still needed a bit of fermenting. After connecting with a Chinese distributor through an inbound trade mission sponsored by the state of North Carolina, then the ensuing reams of export documents and all the previous hurdles of marketing a digestible product just in the U.S., the gourmet pickles still had to satisfy China’s nutritional requirements before they could enter that market. And, of course, the nutritional facts had to be listed in Chinese.

“We knew our label needed work,” Fulton says, “because it wasn’t truly in compliance.” Beyond that recognition was a lot of shoulder shrugging. But there was help.

Compliance with foreign regulation—and in a foreign language—is a tough proposition for a small to midsize manufacturer that must approach every challenge of international expansion with the requisite that it can’t simultaneously expand its payroll. One international ground rule: The strong may survive, but the resourceful thrive. Fulton, a fully entrenched member of this latter category, drew on the available help and kept her foreign-language packaging in-house to the greatest of her ability.

Toward that effort, she only changed what was necessary. “Our jars have the Miss Jenny’s label on them,” Fulton says. “What [the distributor is] doing is putting a sticker over the nutritional facts in their country’s language.” By working with the North Carolina Agriculture Department, Fulton and Furr learned all about China’s requirements for nutritional labeling without hiring a consultant.

“I have a representative who I’m extremely close with,” Fulton says. “So I call Cathy: ‘Here’s what I need. What do we need to do?’ And she pulls in the resources to help get my language translated or whatever we need to do.”

Fulton also relies on Owen George, her contact in the International Department of North Carolina’s Small Business Technology and Development Center. “I will contact him and say, ‘Hey, I’ve got this order,’ or ‘I’m going to be needing this label. Can you help direct me to the right person who can help me get the correct information so it will clear customs without any problems?’”

Armed with the checklist for meeting China’s nutrition-label requirements, Fulton deploys her secret weapon: Google Translate. The free online tool helps communication with Miss Jenny’s Chinese distributor and expedites the process of getting the labels’ language correct and ready for design, which is then handled inexpensively by a freelance graphic artist.

Choosing a party to print and apply the foreign-language labels is a simple question of economy. When Miss Jenny’s Pickles filled only small orders, she had them printed by Atlantic Packaging, a local printer who could deliver labels 1,000 to a roll in seven to 10 days, and she applied them in-house. But as orders grew larger—Miss Jenny’s has now shipped 10,000 jars to China with another shipment in the works—printing and application duties shifted from the local printer and Miss Jenny’s to the company’s co-packer.

Fulton says the switch drove her price per label down significantly. “For example, one label in the very, very, very beginning cost me $0.68. I got our labels down to $0.07. It’s a big, significant difference. I think it’s because they do so much co-packing for other companies all over the world they can group the printing in there and use the volume to get the discount.”

The process by which Miss Jenny’s met label requirements for China is being repeated for the company’s exports to both Canada and the U.K. For the latter, there’s a little time to fly under the radar and get the appropriate research handled. “When you’re really small, like we are, they give you time to adjust and grow,” Fulton says.

BEING SUCH A SMALL OPERATION allows Fulton to handle Miss Jenny’s Pickles foreign-language labeling with minimal help, but for larger companies with a presence in more countries, the options are to expand your staff, rely on your foreign distributors or choose a logistics partner wisely.

NeoStrata, a producer of skin-care products with foreign-language labeling needs for Israel, France and Italy, counts on third-party logistics provider (3PL) UTi Worldwide to get its products labeled, packed and shipped. UTi has been NeoStrata’s transportation partner for more than seven years, but three years ago the 3PL presented a plan to integrate its client’s warehousing and pick-pack operation (both for components and finished goods) with document preparation and export-related services.

“Outsourcing this type of activity is best suited when it’s integrated, at least in my opinion,” says Phil Abbate, UTi’s global vice president for Pharmaceutical & Healthcare. “Because you’re not double or triple handling, you’re not adding additional transport lanes to have the product moved, labeled and then brought back.”

In July 2013, the changes were implemented. NeoStrata’s products are handled at UTi’s 290,000-square-foot facility in Edison, New Jersey, where it has two buildings and a third on the way. Set aside for NeoStrata are 20,000 square feet for processing products and another 5,000 for its inventory. Abbate says security is a must. “You’re dealing in rather high-value product, so you need the necessary CCTV set up, you need the necessary guards, you need the necessary protocols because you are touching product at the unit level, not at the case and pallet level.”

UTi’s handling of NeoStrata’s exports begins with a common inventory, which Carl Clark, the 3PL’s director of client solutions, says is key. He figures the company’s inventory covers about 1,000 SKUs—stock keeping units, or, in laymen terms, distinct products. “[NeoStrata] could produce 500,000 products, and rather than having to have packaging that’s preprinted to country specifications, they simply use labeling as a value-added to keep a common inventory,” Clark says.

By keeping its inventory non-country specific, UTi can pick the products based on expiry dates, apply foreign-language labels as necessary and ensure no product is kept beyond its shelf life.

“A lot of these labels are white with black print,” says Abbate. “They’re designed specifically to allow entry into the country.” For these, NeoStrata has its foreign distributors provide labels—which are nothing more than product instructions—for their respective countries, though it could be handled by UTi if requested.

“If we’re called upon by our client, then we will get involved in the regulatory requirements of the country, using our network,” says Abbate. “In this particularly case, they’re doing the legwork through their distributor’s network.”

THE BEST DECISION of who to handle your foreign-language packaging—yourself, a foreign distributor or 3PL—depends on your company’s size, resources, needs and partners. At the outset of your export program, you may find it best to handle it personally while you still can. As you expand into more and more markets, it may give you relief to count on your foreign distributors—and certainly you can find brilliant partnerships within this group (see our sidebar, “Puzzle Your Distributors”).

Regardless, it’s worth checking with your 3PL to find out about its capabilities, because a solution from your logistics partner will be most turnkey. UTi Worldwide applies a price-per-label model as a value-added service, and it may be well below what you calculate your own hourly rate to be when taking a DIY approach.

 PUZZLE YOUR DISTRIBUTORS

ThinkFun, maker of popular brain teasers and centerpiece of Global Trade’s “ThinkFun, Act Global” (March/April 2013), had a well-timed packaging epiphany: Distributors can be multipurpose.

When a German distributor found ThinkFun’s SpinOut game, it sought an agreement to sell the product in a catalogue planned as the European equivalent to Sharper Image. First, the distributor said, the packaging had to improve.

Bill Ritchie, ThinkFun’s co-founder, explains that the two parties “developed a friendship that basically allowed us to absorb their packaging style, their graphic. … We were being courted by Toys-R-Us to do versions of packaging that had the little kid with the smiling parents behind—sort of the classic beauty shop thing—and instead of doing that we went to a highly graphic, adult-oriented black background with high color accents. A completely different look based on these Germans.”

Best of all, the distributor handled the particulars, providing a turnkey foreign-packaging solution. The outside creativity effectively overhauled ThinkFun’s on-shelf marketing approach, aiding and abetting its big international breakout.

Andrea Barthello, ThinkFun’s other co-founder (and Mr. Ritchie’s missus), says the brand name is a constant on packaging for all countries, but game titles will occasionally change for foreign markets when they translate poorly. The company works with its distributors for these language alterations. “We try not to change the physical structure, but we’ll definitely change the artwork. More often than not it’s the distributor that will provide the artwork to us, because they know their markets better than we do.”