Growing a Green Business
Pines International cultivates success with wheat grass products.
From: Thinking Bigger Business Magazine – April, 2011
Eat your vegetables. How often have we all heard that advice? It sounds easy enough to do, but many people don’t always do it.
Ron Seibold and Steve Malone have an answer: supplements made from wheat grass. Their company, Pines International, is dedicated to helping people be healthier, and to keeping farmland pure. The company of today though, with its multi-building facility north of Lawrence, 25 employees and international distribution, is a far cry from its genesis more than 30 years ago.
Seeds of a Startup
In 1976, Seibold had just moved back to Kansas from a stint in Colorado. He was working in Hays helping to run a sheltered workshop.
While in Colorado, he’d worked for a housing developer and was frustrated and upset when he saw fertile farmland and native grasslands destroyed to make way for houses.
“It just really bothered me,” Seibold said.
Malone, meanwhile, was looking for a new career direction. The two met and soon discovered a shared interest. So they explored ideas for a new company.
Seibold had worked for Cerophyl Laboratories and knew the company still had a dehydrator in Lawrence. The two also built a vacuum-packing machine that they still use today. Thanks to some help from a fraternity brother of Seibold’s and a woman in Kansas City who help make the products, the two went into the wheat grass business.
So, what is wheat grass?
Wheat grass refers to the wheat plant at a specific time in its development. Generally, wheat is planted in October for harvest the next summer. Wheat grass is harvested earlier, generally around April, when the plants are 8-10 inches tall, just before jointing takes place and a stem is formed on the wheat.
The plants are full of chlorophyll and proteins at this point.
“Fifteen times more nutrition than spinach,” Seibold said.
But even with the outside help and a business plan, Seibold and Malone’s startup company had more than a few challenges.
One challenge, familiar to most startups, was money, or lack thereof. Between them, the pair had $50 to invest.
“We typed up a prospectus and went to people talking about what we wanted to do,” Seibold said. “We couldn’t pay rent. We couldn’t pay people, so we paid them in stock in the company.”
Cultivating a Market
The original idea was to model the company’s distribution on Amway and have a network of individual distributors of products.
Quickly, however, Seibold and Malone figured out that wasn’t going to work.
“We went to Colorado to find distributors and couldn’t,” Seibold said. “We sold six bottles in two weeks, if that.”
Seibold and Malone faced one of those gut-check moments many entrepreneurs experience when “plan A” doesn’t work.
Traveling through Colorado in a van without air-conditioning, low on money and enthusiasm, they walked into a Denver health food store in a last-ditch effort to sell the product.
“They knew about wheat grass,” Seibold said. “They’d never seen it in tablet form before and bought six bottles.”
Fueled with a new idea, the duo began visiting and selling products to health food stores throughout Denver.
When that proved successful, the two started road-tripping through Colorado, Kansas, Oklahoma and Texas, visiting health food stores. Sales increased, although there were tough times and tough presentations.
This was in an era before “green” and healthy living were a part of everyday life, so some locations were more open to the products than others.
“There was a difference in the consciousness between places,” Malone said. “Austin was great; Tulsa was tough.”
In the early days, they camped in the cities they visited. Things were looking up when they decided they could stay in motels, as long as the rooms didn’t cost more than $10 a night.
“I would navigate; Steve would drive,” Seibold said. “We’d sell enough product to buy gas to get to the next town.”
Growing the Business
After a year, they were successful enough to move into an office in downtown Hays and hire an office manager. That was the moment the two felt as though they really had a company and were on their way.
A minor setback occurred when the Kansas City woman who’s been tableting for them bowed out. She worked for a company that saw Pines was becoming a competitor and wouldn’t allow her to do freelance work any longer.
Seibold and Malone briefly worked with a tableting company in Nevada, but knew that long term they needed their own machines.
Banks in and around Hays weren’t accustomed to working with companies that weren’t in oil, cattle or agriculture, and despite the business plan they’d put together, Seibold and Malone couldn’t get a loan.
They had several shareholders inn Lawrence and decided to move the company there.
“It was a college town and more liberal – more into health,” Seibold said.
They met a banker willing to finance them, albeit at three points over the prime rate which, this being the 1970s was in the double digits, but they were on their way.
Armed with money, the two set out to buy tableting, filling and mixing machines and to learn the business.
Their big break came in 1987, just after they moved to their current location. A major competitor ran out of product, leaving Pines to fill the void.
Their second major break came just after that when the two were at a trade show. A distributor from Hong Kong said it wanted the exclusive rights to sell Pines products in Malaysia.
“They bought $100,000 in the first year,” Malone said.
When they traveled to the area, Malone and Seibold were treated like celebrities.
“There were 50,000 distributors of our product,” Malone said. “People wanted our autographs, to have their pictures taken with us to show their customers.”
Nearly, 60 percent of their business at that point was coming from outside the United States. In-fighting within the Asian organization has greatly reduced it though, but Pines still has a considerable presence there.
Through the years, Pines has taken on any number of competitors, usually companies making outrageous claims about what wheat grass can do. Seibold and Malone have always been careful to not make such claims.
“We don’t make any medical claims,” Malone said. “But you can’t get more nutrients from regular greens than you can get from ours. We’re also certified organic.”
The company has tried selling other products, but has always come back to the wheat grass tablets.
“We didn’t always have money to make bad decisions,” Malone said.
Malone and Seibold are glad the company didn’t borrow much money through the years.
“If something worked, we kept doing it,” Seibold said. “We didn’t take too many risks.”
Now, 35 years since they first solicited shareholders for their company, Seibold and Malone are proud of the company they’ve built and the fact that a “green” company, in every sense of the word, has survived when many others haven’t.
The company owns 2,000 acres of farmland outside of Lawrence where it grows the product each year. Wheat planted last October should be ready for harvesting this month. Pines International remains committed to the cause of saving farmland for farming – particularly land such as they have that is so good.
“In the Kaw River Valley, the soils are Class 1,” Seibold said. “There is no better anywhere.”
They’re ready to re-focus energy on their own brand in 2011. Through the years, they have sold products to other companies to distribute under their own labels, but want to get away from doing that as much.
“We still sell more wheat grass tablets than anything else,” Malone said.
Once upon a time Pines was alone in its market. Today, it had many competitors and Seibold and Malone are ready to go head-to-head with them.
“It’s time to retake the market that we’ve been sharing,” Seibold said.
Kate Leibsle is a writer for KC Small Business. //firstname.lastname@example.org