Paul Ruitenberg and Gustavo Avila are still confident they made the right decision to obtain the U.S. distribution rights to Babo, a Chinese manufacturer of bamboo paper products.
Babo produces products — including straws, bath and facial tissue, paper towels, and napkins — that are durable yet soft while still being 100% sustainable, nontoxic, chemical-free, allergen friendly and septic-safe, Ruitenberg said.
“With everyone now asking for sustainable products, we thought this was still the right time and place to start the company,” he said.
And Ruitenberg and Avila are confident a brand that is on target to do $3 billion in global sales this year can thrive in the U.S. and Canada.
That’s why the longtime business partners, with extensive backgrounds in grocery store design and distribution, founded Babo International Trade at Kearny Point last fall.
Ruitenberg and Avila said it will be the first company to import 100% unbleached bamboo paper products from China and expects Babo products to begin appearing in stores as early as next month — with a goal of being in 1,000 stores in the U.S. and Canada by the end of this year.
“Through our contacts, we feel we can make the calls and visits necessary for these products to be very well-received,” Ruitenberg said.
The only uncertainty may be the added costs resulting from the trade war the U.S. is fighting with China.
Production and manufacturing of such a premium product already adds cost. Ruitenberg said the average wholesale price for a bamboo straw is nearly 5 cents, while plastic straws cost a penny.
Then there are the tariffs.
“The talk of tariffs was certainly around before we signed on, and, once we did, we originally thought we would be hit with 10%,” Ruitenberg said. “But by the time we started pulling in containers, they rose to 25%.”
Ruitenberg said both he and Avila thought that might put the products beyond the reach of consumers.
“They already are nearly 10 to 20% higher in cost, and if we added another 25% to that, we believed they weren’t going to sell because there are not many people who would spend that just to be sustainable,” he said.
Instead, Ruitenberg said he and Avila worked with Babo to get it to absorb the 25% tariff on its end to help maintain a decent price for U.S. consumers.
“We all believe this is short-term and, within the year, things will work out between our two countries,” Ruitenberg said. “Babo sees the potential here and has agreed to absorb those tariffs for the first six months while we attempt to gain market share.”
Ruitenberg and Avila have worked together for more than 20 years, laying out and designing more than 2,000 supermarkets for clients including A&P, Whole Foods, Kings Food Markets, ShopRite, Foodtown and more, Ruitenberg said.
Ruitenberg founded Ruitenberg Displays in 1982 before merging with and eventually selling that business to a larger company in 2009. Avila, having been his creative director, returned to Colombia to work in his family’s coffee business for good.
Or so Ruitenberg thought.
“One day he’s calling me saying, ‘Let’s do this again — let’s form another company,’” Ruitenberg said.
Avila founded Origin Design Group in April 2017, and Ruitenberg became its head of sales in May 2018. The company would continue to provide interior store layouts and designs as well as graphic design services, including department and product signage.
The company was approached in October 2018 by Babo.
“They came to us with these Chinese graphics and asked us to redesign them so that they could launch in the U.S.,” Ruitenberg said. “We then talked about how they might be better able to sell their products in supermarkets.”
Nearly a month later, Ruitenberg said, the company approached them again.
“They felt as if they weren’t getting very far because they didn’t understand how exactly to go to retail in the American market,” he said. “We have very large distribution channels and there are just so many moving parts when importing goods from China to put on American supermarket shelves.
“That is why they are so successful in China, but no one really has heard of them here in the U.S.”
Ruitenberg said he and Avila were so impressed with the product that they signed a contract to obtain the U.S. distribution rights in December 2018 and helped launch Babo International Trade, an independent, Chinese-owned company designed to import and market the bamboo paper products Babo has been manufacturing since 1987.
Today, Avila and Ruitenberg’s daughter, Kaitlyn Ruitenberg, continue to run Origin Design Group, while Ruitenberg said he is more focused on Babo International Trade.
Ruitenberg knows he is taking a big risk. It’s a chance, however, he’s willing and eager to take.
“It is a huge gamble to leave a 30-year design business and jump into something I have no expertise in, but, once I saw the product and started to work with the parent company, I quickly saw the potential and the difference we could have on the planet by helping bring these products to market here,” he said.
“My father always told me that this country will offer you many different ways to make money, but will offer you far less ways to make a difference. Choose to make a difference.”
Pulped bamboo can do just that, he added.
“There are other companies that say they manufacture bamboo paper products, but, if you read carefully or do the research, they actually mix bamboo and sugar cane, which results in a cheaper, yet courser product,” he said. “These products may be less expensive and just as sustainable, but they will be scratchy if not 100% bamboo.”
Ruitenberg said Babo International Trade is off to a good start.
“We launched the product at the National Grocers Association show in San Diego and C&S Wholesale Grocers — one of the largest wholesale grocery supply companies in the U.S. — came to our booth to express interest,” he said. “They are now our key distributor and we are hoping to get in with other distributors as well.”
In addition to its offices in Kearny and its distribution center in Edison, Babo International Trade also is looking to lease a 30,000-square-foot warehouse in Edison, as well as warehouses in California and Florida.
“We also currently are working with Babo to launch wet wipes and create prototypes for bamboo fiber bags,” Ruitenberg said. “When everyone is pushing to get rid of plastic bags, we’ll have a cloth bag available that is super fine but stronger than plastic itself.”
This, of course, will result in a slight price increase, but Ruitenberg said he and the company are working to make the change-out as inexpensive and seamless as possible.
“As we grow and our sales grow, if we can get a percentage of the marketplace, our prices most certainly can come down,” Ruitenberg said. “Right now, with a president who does not believe in climate change and a 25% tariff, it’s tough for the company to give us a break on what are consumable products, even though they already to coming down close to cost.”
Demand, however, continues to rise.
“We’ve been speaking with some friends of ours in Canada, which by 2021 is banning plastic straws and bags countrywide,” Ruitenberg said. “They’re pretty excited about bamboo as an alternative.”
Still, Ruitenberg said one of Babo International Trade’s biggest challenges is educating the public on the benefits of sustainable products.
“We’d actually prefer to see our products in the natural and organic aisles of supermarkets, rather than in the traditional bath and toilet tissue aisles, as we want to continue to be able to teach the public the difference it makes for the Earth,” he said.
Then, once Babo products have become widely available in supermarkets — with Babo products in nearly 5,000 stores by 2020 — Ruitenberg said the company also plans to sell to hospitals, hotels, pharmacies, schools and more.
“All in all, it’s really about doing the right thing at the right time, with everyone wanting to purchase more sustainable products,” he said. “We have complete confidence that Babo products are going to be a big hit in the U.S.”
According to Paul Ruitenberg, co-founder of Babo International Trade, more than 95,000 acres of Canadian forest is harvested annually to manufacture toilet paper alone.
“You’re looking at decades of growth to get that back,” he said.
Babo products, however, come from a bamboo forest in China that takes only two to three years to regenerate, Gustavo Avila, the other co-founder, said.
“The forest completely regenerates on its own from the waste generated when carefully selected bamboo seedlings are harvested for the products,” Avila said.
While it takes a lot of research and higher costs to create bamboo products, Ruitenberg said bamboo is actually a highly sustainable grass that is cut down at an angle to make pulp.
“It does take a ton and a half of pulp to make a ton of paper, but the byproduct is sludgy bamboo that can then be pumped back into ponds to feed the fish, so there is no waste at all,” he said.
Reach Babo International Trade at: babous.com.