‘Tis the Scottish way for business people to proceed with caution and to minimize risks, according to Peter Wilson, president of Great Scot International, Inc. Nevertheless, he and his son James are braving the sometimes unpredictable world of importing to bring Scottish products to a welcoming American audience.
According to the 2000 Census Report, some 11 million people claim some heritage connection to Scotland or Ireland. There is a heavy concentration of Scots and Scots-Irish in the Carolinas and neighboring states.
Great Scot International, Inc., based in Charlotte, was started in 1997 and specializes in supplying food products like shortbread, oatcakes, heather honey, candies and beverages (including the iconic Scottish soda, IRN-BRU), as well as tartan (plaid) fabrics and apparel all manufactured in Scotland.
Food items are made from all natural ingredients with no artificial flavoring or coloring. Tartans are woven from pure new wool and non-wool fibers. “We have the largest range of tartan fabric and apparel in the Charlotte region,” says Peter, “and there is one retailer we supply in Mint Hill called Near and Far Scottish.
“There is a vast market out there for Scottish products—lots of people that have a huge passion for all things Scottish, whether it’s the Highland games, music, clothing or food. There are dozens of retailers throughout the U.S. selling Scottish, Irish and Welsh merchandise and we are suppliers to a good majority of these companies.”
Great Scot—Great Products!
With a growth rate of almost 30 percent for the past couple of years, Great Scot International earned $1.1 million in revenue last year. Representing 60 percent of revenue, food products are the larger side of the business.
“The food business counts on repeat sales,” says son James, the company’s vice president. “It’s tough to get a place on the shelf in extremely competitive markets, but once you get it, it’s easier to keep it.
“The tartan business is dependent on the ‘Scottish goods’ vendors we supply across the country. However, there is a growing demand for tartan fabrics from the likes of interior designers and wedding planners. In some cases we have done custom design and weaving. We are always on the lookout for other opportunities outside the Scottish market.”
On the food side, most customers are large-scale distributors supplying stores such as Harris Teeter, Wegman’s and Publix supermarkets.
“Business generally goes through big distributors and works down to small retailers,” explains James. “We also have many independent grocery stores. It’s quite a big market that is growing through word of mouth.”
The company currently markets 15 imported food brands.
The largest customer for the company is Amazon.com, which began doing business with Great Scot International in 2010. “We accept weekly orders from Amazon and currently deliver to nine fulfillment warehouses,” says Peter. “Amazon.com started with us by ordering $200 worth of Nairn’s Oatcakes a week. It now accounts for over $200,000 in revenue per year and currently purchases over 100 SKUs. The Amazon account alone is almost a full time job,” says James.
You may not know the brand IRN-BRU, but it is Scotland’s top selling soda, Scotland being the only country in the world where Coke has not held the No.1 position.
“Latching on to the IRN-BRU product, a $400 million dollar brand in the United Kingdom, was the turning point—it moved us to a different level on the Scottish food side,” acknowledges Peter.
The soda beverage is specially formulated for the U.S. because they use a food colorant in Scotland that is prohibited in the U.S. by the FDA. Great Scot International is the sole supplier of IRN-BRU in the U.S.
Great Scot International textiles find their way to a diverse sales base including suppliers, manufacturers, retailers, universities, municipalities, and interior designers. The company is the U.S. distributor for a Scottish tartan textile company which offers over 500 tartan patterns and makes everything from neckties to throws in fine wool. Great Scot also distributes for three other woolen mills in Scotland.
“We just finished up a project where we supplied the tartan fabric for a small piece of a shoe being marketed by a well known women’s clothing store,” reveals James. “Every year there is an interesting high-number job that helps the bottom line,” adds Peter.
“We also do a lot of custom weaving of plaids that are not otherwise commercially available from any mill,” says Peter. He describes a project underway for Winthrop University, which has recently registered a new tartan design. The company has completed work on projects for UNC Greensboro, Furman University, Presbyterian College in Clinton, S.C., and the Department of Homeland Security Office of Field Services’ Honor Pipe Bands. Harley-Davidson is another well-known customer.
Many American states also have their own tartans. Over the years Great Scot has woven The Carolina tartan, Connecticut, New Hampshire, Mississippi, and Texas Bluebonnet.
Great Scot International completed a recent project for the Cypress Presbyterian Church in Vass, N.C. Tartans for the names of the founding fathers of the church— Cameron, Johnstone and Keith—were all woven into one pattern.
“Early on I saw the value of going out to the Scottish games with the tartans in tow,” says Peter, proud of his initiative. “It was a simple marketing technique—face-to-face. I’ve worked with several clans who’ve commissioned me to weave designs over the years. Pretty much every state puts on Highland games where you can find upwards of a hundred clans with different names and over 20,000 visitors. It is a very targeted audience.”
In light of the various products Great Scot offers, the company markets its products on the additional retail websites of www.IRN-BRU-usa.com, www.thescottishweaver.com; and www.thescottishgrocer.com.
James clarifies the importing process for Great Scot International: “Suppliers in the U.K. are not always knowledgeable about exporting. We have to make sure that the documentation meets with the correct format and that every item has the correct tariff code.” Containers are not released for shipment without correct documentation.
Great Scot had been using a contract warehouse in New Jersey, but three years ago moved from office premises to their current headquarters so that they could bring in shipping containers directly, says Peter.
As a small part of the business, the company offers a special import service (or co-loading) on their monthly containers as space permits. This works well for U.K. companies who may have only a pallet of product to ship. Cargo is then shipped to its final destination within one-to-two days of receiving. Some customers also load some Great Scot International products with their shipment. The logistics, for now, are handled separately by a company called Compass Imports, but the Wilsons plan to take this over in the near future.
Great Scot International pays for its goods in British sterling. Peter explains that the rate of exchange can be challenging when pricing products.
“The trouble is, you can’t keep changing prices on your customers, so you have to look a year ahead and settle on a price and a rate of exchange. With forward planning it is possible to lock-in a rate through purchasing tranches of British sterling for a 90-day window.
“My strategy is, even if the rate looks great at the time, add another 10 percent. Unless there is an astronomical monetary crisis, you should be alright.”
Working with the U.S. Food and Drug Administration (FDA) can also be tricky, according to the Wilsons. With the introduction of the Bioterrorism Act, every overseas food supplier must register with the FDA before they can export anything. The FDA also reserves the right to audit their premises.
Last year, the FDA put a ban on anything that had raspberries in it due to a certain pesticide forbidden in the U.S.
“A representative from the FDA came and witnessed us smashing up the bottles of raspberry preserves,” says Peter. “Our supplier was not aware of the ban and did refund us. Currently we are having an issue with mustards.”
This type of regulation can halt a shipment without consideration of spoilage. The full burden of proof is on the importer, according to Peter and James.
Shipped to America
During the 1970s, Peter was invited to participate in an Environmental Protection Agency program at Clemson University. He went there to be an assistant to a professor, but was also encouraged to enroll in the graduate program for environmental engineering.
There, he met his wife Suzanne, whom he took back to Scotland where she would survive 14 Scottish winters. In Scotland, Peter worked in his father’s manufacturing business which made equipment for on-line cleaning industrial boilers and heat exchangers that are fired with fossil fuels.
“I thought my future was going to be in my father’s business until he sold out to a new owner,” says Peter. But, in 1993, an opportunity came along for him to take on sales and project management in the U.S. for the business, and he chose Charlotte as a base of operation.
“I knew that I would be traveling and needed an airport that readily offered domestic and international flights. I started with a phone and a fax line in a friend’s garage until I bought a home in the SouthPark area,” remembers Peter.
“But by 1997, I was ready to do my own thing, though. The decision to start my own business was driven by the growing potential of the Internet. So, I began to put together my interests in selling Scottish food products, tartans and giftware online. Working from home I handled all the purchasing, packing and shipping orders through UPS at Office Depot. At the end of the first year, I had barely made $30,000, but it was progressing.”
Slowly but surely he built up the product lines and sales connections, as well as the Internet presence for Great Scot products. Since early 2000 the business has grown more on the wholesale side which now represents about 65 percent of its revenue.
Great Scot was fortunate to hold steady during the downturn in the economy, according to Peter. “We are addressing a niche market with both indulgent food products and ‘heritage’ tartans,” says Peter. “We measure by looking at our customers—most are vendors, and they seemed to survive themselves; sales a bit down but they did okay.”
Great Scot International finances working capital during times of increased buying, such as for the holidays, with a line of credit. The company has not had to obtain any major loans other than personal investment, says Peter.
Four full-time employees, including Peter and James, make up the small staff.
“When you work in this company, you have to be prepared to work outside of a single job description,” confirms Peter.
“My office manager, Becki, has been with me for 10 years and is greatly admired by our customers. When we moved to our warehouse over 3 years ago we hired a young man who has done a great job in running the warehouse and order fulfillment. “We are like a family.” Two other part-time workers handle IT issues and bookkeeping on a contract basis.
Peter says he doesn’t even think of retirement.
“I will be 64 this year and can sing the Beatles song,” he chuckles. “As long as health holds out, I would like to continue.
“I’ve turned a lot over to James. I used to do all the ordering of product; now he does. Becki, too, is in for the long-term,” says Peter. “We’re a team; passionate about what we do.”
Future plans include continued growth and focus on Scottish made goods and becoming America’s No. 1 source for quality tartan fabrics.
Photo by Fenix Fotography www.fenixfoto.com