Exporting Asian flavours to Latin America

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Bruce Croxon (00:19): Hi and welcome back to the Export Impact Podcast, brought to you by Export Development Canada. My name's Bruce Croxon and I'm the host of the Export Impact Podcast. On today's episode, we're gonna learn more about an exciting family-owned business turn Canadian export success story in Latin American markets.

Daniel Kim is the Director of Operations at Ran Foods, Inc. A Mississauga-based business founded in 2009 by Harry Kim, built on a passion for authentic Asian flavors. Also, joining us today is Jorge Rave, EDCs regional vice president for Latin America and the Caribbean. He brings a wealth of knowledge on exporting to this important region. Jorge is a multilingual high energy business strategist with a proven record of forging strategic relationships and leading high performance teams. His experience in the banking sector includes country risk analysis, corporate lending, export support, and international trade. He's also passionate about international affairs and helping businesses succeed in emerging markets.

I’d like to begin today’s episode by acknowledging that we’re recording from my office in Toronto, which is on the traditional unceded territory of Many Nations, including the Missassaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, and the Wendat Peoples, and is now home to many diverse First Nations, Inuit and Metis. We value taking this moment to deepen the appreciation of our indigenous communities, wherever we are, and to remind ourselves of our shared debt to Canada’s First Peoples.

Daniel, I just wanna start with you. I realized in preparing for this podcast that you've got an atypical story compared to some of the recent export stories that we've covered in the past. Thought it might be helpful for our audience just to get an idea on how your business works and how it's structured. So welcome to the the podcast. Let me start by just having you explain, you are an importer of products that you then turn around food products that you then turn around and make available to global markets. I've oversimplified that, but if you could fill in some of the details that would be great.

Daniel Kim (02:33): Yeah, absolutely. Thank you so much for having me on the show. So essentially Ran Foods Inc, we're a family owned company. We started off as a sushi restaurant out in Ottawa by my parents, my mother and father. They got into wholesale through sushi and we started supplying to the metros out in Ottawa to start off. And then that's how we trickled into Costco. And funny enough, sushi is not the greatest business model at Costco because no one's gonna buy a 48 pack of California rolls on a Wednesday. So they liked working with my parents and they asked us what else can we bring to the table? And from there we started broadening our product line into what if we were to bring in products from overseas. So they made their first trip out to Vietnam. I think this was a while ago, 2008 or 9 or so and one of the first products we did was an instant udan noodle.

Essentially our business model is we bring in and we curate packaged goods and packaged Asian focused products, mainly Asian noodles, instant noodles, sauces. We're really focused on bringing the most convenient products and highest quality, easy to make Asian products and we bring it to Canada under our own brand. So if you see the Hoya line at Walmarts and Costcos, that's us. We bring them to the Canadian market.

So our goal is really trying to introduce entry level, easy to make fast food, instant noodles and Asian products that get customers into the Asian flavors to start off. And hopefully, they go to a restaurant after trying our products and broaden their horizons on Asian products. That's been our focus, bringing products over and introducing it to the market.

Bruce Croxon (04:10): Now, actually the unique part of what you've just told me is companies are tempted when they find something being produced efficiently offshore to bring it on and act more as a broker. But you guys have just taken the next step of actually onshoring production. Was that strictly an issue of margins or what went into that decision?

Daniel Kim (04:31): So we are in the process of onshoring and then with the support of EDC, it's really been accelerated. So it's been an exciting process for us. Right now, we are focused on bringing it in from overseas and the margins are always a large part of this. One thing we found during COVID was we can't rely on foreign manufacturers all the time. There is a lot of focus and a lot of prioritization that happens to other markets. So USA, they're the big fish, right? And they do get prioritized in times of need. So during COVID, one thing we found was that we were one of the few Canadian companies that were really prioritizing Canada. I mean, of course we're a smaller player, but we focused on Canada and that's really how we expanded our market share because there is a gap there.

Bruce Croxon (05:18): So I'm hearing it's control, quality, and margin obviously playing a part. And that the new news for me, even though I'm a host for this podcast is I would not have associated EDC with helping a company onshore production. So that's another attribute I guess or service that you get help from EDC that I that I wasn't aware of so thanks for clearing that.

But while we're on the topic of how you started in sushi, I know there's a lot of people that now take sushi for granted. There's one on every storefront. You've had a front row seat through this experience and your family has in the appetite for Asian food changing fairly dramatically. What have you noticed about that and how has it changed and what should I look for in a good sushi restaurant? Because there's so much choice, right?

Daniel Kim (06:08): The main word is globalization. Everyone's introduced to different countries through media, through the foods especially, which is where we're focused. But I think media attention being brought from across the world has been a big factor. Educating the market is probably the other big thing. A lot of people didn't know what sushi was when we first started. We were one of three sushi restaurants, I think, out in Ottawa, one of the first ones. And five years later after they had started their first sushi restaurant, a lot of all you can eat sushi chains started coming in. And that's where I think a lot of university students or people who didn't know what sushi was, tried it out.

Everyone starts off with that California role and that's not really sushi to its core, right? You want fish. And from there, one thing I've noticed with even my friends, people who are hesitant to try it once they've tried it, they like it, they tell their friends and now they're really getting into some crazier dishes with the unagi and the eel and and whatnot. But if you're looking for a good sushi, I'd recommend just finding the best chef there. That's the best way to pick your sushi.

Bruce Croxon (07:07): Follow him or her around, right?

Daniel Kim (07:10): Yeah, that's probably the best way to do it. Word of mouth. Yeah.

Bruce Croxon (07:13): Good advice. Jorge, what's your role at EDC and why are LATAM markets an exciting opportunity for Canadian exporters right now, would you say?

Jorge Rave (07:25): First of all, thank you for the invitation. It's a pleasure to be here. I feel very privileged to be sharing today's stage with Daniel and with a company that we know well, that we've been working with in Latin America for some time now. I would break it down into three parts. The first one is that as head of EDC for LATAM and the Caribbean, which we now call LATAC just to make sure that we include the whole Caribbean aspect of things. My role is essentially to lead a team of international affairs professionals that are located in different parts of the region where we have offices that have extensive experience in international trade and corporate lending as well.

And our LATAC team is known for two things. One is their strategic relationship management and also for their extensive market knowledge. We've had underground presence for over 20 years; first in Mexico City, then in Brazil and we've expanded into other places like Chile, Columbia, where we cover Central America and the Caribbean and obviously Monterey as well, where we have our country head for Mexico who's part of my team.

So EDC when you think about it, is one of Canada's most important international trade tools and that's something that we're very proud of. As I was listening to Daniel speak, I was just remembering that one of my favorite parts of the world that I do is actually connecting with Canadian exporters and investors across Canada so that we can actually find more opportunities for them in the region. So that's one of the things that we do. We connect, as a colleague of mine says we build bridges between Canada and the regions as well. So when we see, and when I see and experience the drive, the passion, and the love for Canada that entrepreneurs like Daniel and his family have is really inspiring to us to continue working what we do.

Bruce Croxon (09:12): So would you say that as Canadian manufacturers and exporters, we should be excited about LATAM and the Caribbean because EDC is getting better at helping us or is there something fundamental as well about the market opportunity and the growth prospects down there that you're noticing that the timings would seem particularly fortuitous?

Jorge Rave (09:32): Great segue into my second point, which is why, LATAM at this point. Definitely, we have an expertise that we've accumulated over the years. But what makes the LATAC region really exciting today for Canadian exporters is one that is the natural export market for a lot of our companies. We're in the same time zone. We have 33 countries in the whole region. The subdivided into four geographical positions. One, obviously Mexico as part of North America, the Central American from Guatemala down to Panama and the Caribbean of course that is well known to Canadians and then South America from Columbia down to Argentina.

And that actually makes it really interesting for us because we're talking about 8% of the global population in this part of the world. So 656 million inhabitants in which is less than Europe, but it's actually quite remarkable for us. Rapid expansion of a middle class that went from 15% in 2000 to 41% in 2025 and obviously that means that there's an increased spending power and 33% of a population that is under 25. So that's actually quite remarkable. The fact that Canada has nine free trade agreements in the region actually makes it a very interesting market for our Canadian companies and also for the investors.

We're negotiating also an agreement with CARICOM, all of the Caribbean community countries that again are well known entities because of tourism for a lot of Canadian companies, but also because we have a lot of interesting presence from investors. So that's actually something that we want to ensure that Canadian companies are fully aware of. And just last year we facilitated over 14 billion with a B, business in the region and that actually went 2.4 billion of those were two medium sized companies. So it's definitely a really interesting place to be in now.

In terms of sectors, and this is my third point on your question, agriculture remains the cornerstone of Latin American economies. So from raw products to processed foods and again, Daniel has probably seen that already firsthand. Places like Argentina, Brazil, Chile, Mexico, of course Peru offer really great opportunities for the Canadian companies. Second point is renewable energy that is experiencing a significant growth in the region. Countries like Brazil, Chile, Columbia, Mexico again. So investments in renewables are quite interesting and there's a lot of opportunity for our Canadian providers to play a role there.

Advanced manufacturing in countries like Mexico for example, and other places like Columbia, Brazil is actually something that we are looking at very closely. Mexico being the top seven producer of manufacturers, top eight car producer in the world, top five home appliances producer in the world.

And the final two points, which I find really interesting is one, the technological revolution that we're seeing in the region. So FinTech, EdTech, Health Tech, and definitely an increased penetration of internet and smartphone usage is quite remarkable for the telecom sector. And obviously the main thing where Canada is very, very competitive and probably one of the leading forces in the world is mining and critical in. Critical minerals are quite important for the green technology and the transition energy transition that the world is needing and where Canada definitely can play a very, very significant role. So those are the sectors and again in in terms of what makes us to be really excited about the LATAC region.

Bruce Croxon (13:04): I'm gonna circle back on on some of the recent developments driven by the US and its potential impact on what you've just said towards the end of the podcast. But back to you for a sec, Daniel. Listen, you had some initial success in Costco, which you told us about way back when, which sounds like it fueled the company's appetite to explore exporting in a different way. How was it in the beginning and what were some of the challenges? If you don't mind just include like how did you decide which markets to enter? Should I, how do I, what are the cost benefit? How do I go about thinking about it? So if you could use your own experience to enlighten our listeners, that would be awesome.

Daniel Kim (13:42): In terms of exporting and why we decided to pursue that, it was actually a conversation with EDC. I met them at one of the trade shows out in Seattle, in Canada and met up with a rep from EDC and we started the conversation. They started letting me know what options we have available, what kind of support was available from an export perspective. And it's a lot stronger in terms of support for what the government has to offer when a company decides to start exporting. That obviously really piqued our interest for the South Americas. We never would've had an opportunity to talk to Soriana without EDC initially starting that introduction.

It's funny because the whole process started in France because I was doing a trade show in France and EDC Canada brought these Soriana reps to our Canadian pavilion. Started the introduction, we started the private label conversation there on the noodles. The conversation came and went and then about half a year later in New York, I meet them in New York and then that's when we started the conversation again and that's when it really accelerated. So I don't think I actually met them in  Canada until recently. And then I have been to Monterey and I met them there and I got the conversation started there.

But in terms of the export side, EDC has been invaluable in terms of how we've decided to gear and direct our business. We spent so many years just trying to penetrate the mainstream market in Canada itself. And that process, the rate of acceleration that we've seen with the introduction of the foreign markets through EDC has been phenomenal. It's just crazy acceleration since then.

Bruce Croxon (15:15): What I'm hearing is like lean on EDC, lean on your partners but be prepared to be a road warrior too. It sounds like you lived out of a suitcase for a bit for sure. That's what you do, you're developing relationships around the world, right? And I'm glad to hear that in-person still matters and the people like to see the whites of your eyes, which is a bit old school and we tend to forget about that in the era of Zoom and trying to get everything done virtually.

What does your current export footprint look like sort of globally and in Latin America and are you targeting any new markets in the future as you continue to diversify and grow?

Daniel Kim (15:47): Yeah, absolutely. So we've done our first export experience was through Costco, USA. So we did a couple of rotations in San Francisco. Right now, the Mexico project has really taken on my time and consuming my life here. But that's been our biggest focus recently. Right now we are looking to expand into the Europe, which is we present another set of hurdles and ways for us to adapt to get into the market. So Europe and then Australia is the other market that we're currently looking at. So those are probably our biggest three or four export to targets.

Bruce Croxon (16:19): Jorge, how can EDC continue to support companies like RAN Foods, risk management solutions, financing market intelligence? I've already heard a lot about the introductions you've guys made as far down as like walking people over to booths, which is like irreplaceable. But how else can you support Ran at this stage of their development?

Jorge Rave (16:39): So it is actually quite interesting and I'll go back to what you were saying about nothing beats in person, that's reality. That's one of the reasons why EDC made the decision to have a regional vice president that is located in the region and not in Canada as we had before. That ability to connect with people and to establish those connections through our country managers but also through myself is actually something that we wanna put in favor of the Canadian companies as well.

Just going quickly back to your question. EDC, we consider ourselves to be international risk experts and that actually means that the ability to put insurance solutions in front of our companies but also financing. So we take a partnership with their approach. We try to work with the banks of our Canadian exporters in Canada. We're not here to compete with those banks, but we're here to actually create capacity for those banks. So working capital solutions for example is something that is quite important for us and for our exporters as well. So we try to guarantee in many cases the ability for those exporters and for the banks to take on more risk internationally.

We also work with a wider rate of farmers and financial institutions everywhere and that we're part of what we call the team candidates. So it's a federal partner ecosystem composed of six interconnected agencies including the trade commissioner service that is quite important partner for us but also provincial partners and so on in market and in Canada as well. Obviously in today's world, and as you mentioned, we'll chat in later on about the importance of collaboration today and that is more critical than ever.

And the second point, which goes back to what Daniel was saying, is our ability to put our knowledge and network at the disposal of our companies. In the case of Daniel and you mentioned the case of Soriana, which is one of our several clients in the what we call the business connection program. We have the ability to connect those international buyers to Canadian companies in ways to ensure that both of them can actually increase their competitiveness and grow their business. In that case specifically we help the Canadian companies like Ran Foods to expand internationally and we introduced them to high potential international buyers.

So in the case of Latin American, the Caribbean, we have several relationships, Soriana, which Daniel already mentioned, and in the case of Mexico we also have Sigma Lamento as well, a very important producer of food. We also have companies like [Sankasut?], which is a similar type of company based out of Chile that has a regional presence, alpha group of companies in Mexico as well for both advanced manufacturing and digital industries.

And obviously, in the mining sector as I mentioned, Chile is the place where we have the bulk of our investment in those countries from companies like Codelco all the way down to private companies like Escondida and others. And finally, forestry, which is also a very important part of us, of our program in the southern cone with companies like [Susanna?] in Brazil, and Impressus CMPC in Chile.

So we have an array of companies that are willing to work with Canadian companies that know about our Canadian capabilities and the importance of curating those Canadian companies so that they can be the best opportunities out there for these international buyers is key.

Bruce Croxon (20:02): It's interesting times with tariffs on tariffs offs, global economic uncertainty. And I'll start with you Jorge, and then we'll finish the podcast with Daniel's take on how you manage this. But what impact are you seeing tariffs and this global economic uncertainty having on Canadian businesses export strategies, Jorge?

Jorge Rave (20:23): So clearly Canadian exporters have been facing for the past few months significant trade uncertainties. That's a reality. So we launched what we call the trading impact program or TIP is an initiative that facilitates $5 million over two years to support eligible companies that are impacted by market volatility. And that actually is key in what we are trying to do because again, as I mentioned before, we pride ourselves for being risk mitigation experts at the end of the day.

So what we are trying to do is ensure that our comprehensive suite of solutions, including lending products, equity investment, business connection, like the ones that we did with Ran and Soriana are there for our Canadian companies but also market intelligence.

Today, partners of ours like the trade Commissioner service also play a very, very significant role in providing valuable information. So one important part to consider is the ability for those exporters to consult a lot of the resources that are available to them.

Our mission at EDC continues to be to help the Canadian companies through these challenging times. So one key aspect is diversification and that's one thing that we definitely want to continue working on. Diversification has been a long focus for EDC for many, many years, but now the idea is not to forget about the US market, that is actually to look at other ways to bring other solutions into what we are trying to do. So that's part of this podcast of course now.

Bruce Croxon (21:54): And listen from what I've heard that kinda lines up with what the Prime Minister is trying to do and the country as a whole. So it sounds like you're in the right place at the right time bringing Latin America and the Caribbean to the table. Daniel, over to you and really to finish, how have you managed to navigate inflation, supply chain pressures, businesses, largely dependent on logistics, in your ability to manage that throw in fluctuating consumer demand? It sounds like you're on top of that when we're on trend there with Asian foods, but how has the country managed to navigate all of those challenges, particularly in the last sort of 18 months?

Daniel Kim (22:33): Well, it's really forced us to take a step back, reevaluate our direction. My five-year plan last year was extremely different from my five-year plan now. Originally we were gonna target the US market and go really hard into that market. Now we've reassessed, we're looking at the Latin Americas, we're looking at the Europe, we're we're looking at Australia. And in terms of what we've had to do is we've really leaned on entities like EDC.

One thing, I guess to add on to Jorge's point about the financial tools that were available. The ARI insurance that they offered us. Without that, there's no way we would've done entry into a market like Soriana just because the amount of capital that we would've had to put in, it's just not there. So tools like that has really allowed us to grow rapidly while at a safe pace.

The other thing, this is really, again, going back into the terrace, it's made us reassess how we adapt to the situation. So onshoring has become a priority for us for some of our major products. So we have all the raw materials in Canada, why not produce in Canada has really been the motto for us for the last couple of years. So we have all the wheat available for the noodles, we have all the raw processing materials as well as the technology is available. So it's just been a matter of finding the location and really implementing it.

Innovation would be the other large thing for us. While even entering the Mexico market with Soriana, there's been a lot of adaptation and innovation in terms of what we have to offer currently. New flavor designs, new packaging designs, the branding inputs, everything has been an adaptation to the market. But I think it's been a great opportunity overall.

Bruce Croxon (24:13): Yeah, so I'm hearing for all you young entrepreneurs out there staying open-minded to change, willingness to take in new information and pivot or adapt on the fly to changing economic conditions. Don't get too locked into a certain way of doing things. Listen from a sushi restaurant in Ottawa to a global exporting food business, I just take this opportunity to congratulate you and the family on that incredible success. And it's only great for the country as we hear about onshoring manufacturing and fueling growth and working hand in hand with EDC and taking maximum advantage of what sounds like a great partnership.

So thank you both for joining us today. I look forward to hearing this one on the other side because it truly is an interesting story in innovation and managing change. Thanks for taking the time today guys.

Daniel Kim (25:03): Thank you so much.

Jorge Rave: Thank you. Thank you very much.

Bruce Croxon (25:04): Thanks for joining us today on the Export Impact Podcast. If you enjoyed today's episode, we'd love for you to subscribe, rate and leave us a review on your favorite streaming platform. Until next time.