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Apples to Go, Inc.
East Wenatchee

State and Local Economic Development Partners Help Central Washington Company Expand Operations

Apples To Go, Inc. (ATGI), an entrepreneurial agricultural enterprise located in East Wenatchee, is expanding its business operations thanks in part to the collaborative efforts of three Washington agencies: The Washington Technology Center, the Port of Douglas County, and the Greater Wenatchee Area Technology Alliance.

The story of ATGI is a model for how small entrepreneurial ventures can work with their state and local agencies to get the resources they need to grow their businesses.

Business Situation
Founded in 2000, ATGI was a small Wenatchee operation that had achieved brand recognition and status as a leading supplier of top quality sliced apples. However, due to the labor intensive operation process, production had been low and distribution potential had been limited in scope to a small area of Washington.

The company was operating out of the Port of Douglas County's commercial kitchen. Pat Haley, Director of the Port of Douglas County, initiated a business relationship between ATGI and Berglin Corporation (Berglin), a manufacturing engineering company that was also a commercial tenant of the Port.

With the assistance of the Port, Berglin designed and patented an automatic system to slice the apples perfectly without damaging the fruit. This automated system opened up opportunities for the company to increase volume of production, and in 2003, Berglin acquired ATGI. With production now automated, ATGI was ready to expand its market reach outside of Washington. However, the company was unsure how to best make this growth leap.

Don Stone, president of the Greater Wenatchee Area Technology Alliance (GWATA), a professional organization that promotes innovation and technology business development in the North Central region of Washington, discussed with ATGI president Scott Berglin about the company's new market potential. Stone encouraged Berglin to contact the Washington Technology Center (WTC), a statewide organization that manages public investment and provides programs and support services aimed at helping entrepreneurial companies grow or commercialize new technologies. WTC collaborates with regional organizations like GWATA to build community-based programs that encourage economic development, especially with respect to technology industries.

In April 2004, Elaine Kong, Manager of Small Business Services, the WTC program that provides business counseling to Washington companies, began working with ATGI to determine what the company's next steps should be from a strategic growth perspective. After laying out the strategic growth plan, Kong identified and applied for a U.S. Department of Agriculture (USDA) grant to support the work that needed to be done to assist ATGI.
In June 2004, WTC was awarded a Rural Business Enterprise Grant from the USDA to help ATGI expand its customer base outside of Washington, and in turn, support overall growth and competitiveness of the state's agriculture industry.

In June 2004, WTC was awarded a Rural Business Enterprise Grant from the USDA to help ATGI expand its customer base outside of Washington, and in turn, support overall growth and competitiveness of the state's agriculture industry.

"WTC's mission is to help Washington companies become successful enterprises and contribute to the state's economy," Kong explains. "We do this by encouraging support at all levels - local, state and federal - and fostering the growth of ventures, like ATGI, that make commercial sense for both the region where they operate and the state as a whole."

Washington State is the leading U.S. supplier for apples, accounting for more than 55 percent of the nation's apple production. Wenatchee and Yakima produce 75 percent of the state's total apple crop. The U.S. market for fresh sliced ready-to-eat apples is currently $600 million annually and growing. By helping ATGI to sell more of its products, this project indirectly stimulates customer demand for local top-graded U.S. apples - a positive outcome for the ailing apple industry.

The Result
The USDA funding allowed Kong and her associates to develop and implement a growth strategy for ATGI to increase its distribution channels to meet demand and capture greater market share regionally and nationally. WTC has a proven track record working with companies in the agriculture industry including Quincy Farm Chemicals, Orchard Rite and Tree Top. As a strategist, Ms. Kong has an impressive history of helping companies develop and successfully implement investment and business growth plans.

"Our goal has always been 'sell globally, spend locally,'" Berglin explains. "The assistance we received from the WTC, USDA, the Port (of Douglas) and GWATA is helping us achieve this."

Working with WTC has greatly accelerated ATGI's timeline to profitability. Since the relationship started, ATGI have seen sales increase by 50 percent and project further sales increases of 500 percent over the next year. WTC's research team identified target markets and generated qualified sales across the U.S. that the company had not previously considered.

"We were impressed with the level of professionalism and dedication given to our project by WTC," added Berglin. "Elaine and her team delivered tangible value and measurable results."

Marketing to new national clients has created greater visibility for ATGI with larger retailers. Superstores are taking notice of the company and ATGI anticipates closing a major deal in March that will double the company's annual revenue. The company recently doubled its staff in its sales and marketing division and anticipates creating 25 to 50 new production jobs over the next 12 months.

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Carbon Nanoprobes
Malvern, Pa. (formerly Seattle)

Carbon Nanoprobes in the WTC news forum

RTD Award: Phase I

Research Partner: William R. Schief Jr, Ph.D., Department of Biochemistry, University of Washington

Project Began: 2007

Carbon Nanoprobes, a startup company developing high-resolution probes for atomic force microscopy, has teamed with University of Washington's William Schief, Senior Fellow in the Department of Biochemistry, to develop a scanning probe tip useful in drug discovery. The project team will evaluate the feasibility of reliably producing small-diameter single-walled nanotube probes for the atomic force microscope. Atomic force microscopy (AFM) is a versatile tool used to create 3D molecular images and to pinpoint electrostatic, magnetic, and physical moduli on a surface. While AFM has been a popular choice among physical scientists, it has not reached the same level of usage among the life sciences community, due particularly to the current lack of resolution. The resolution of AFM, which is achieved by dragging a sharp stylus over a surface, is limited by the diameter of the stylus probe tip. The use of carbon nanotubes as probe tips should allow for single digit angstrom resolution, a 10x or greater increase in resolution over current commercial capabilities. Using HIV vaccine design as a case study, the UW research team will demonstrate that carbon nanotube probe tips will be useful in biological applications - positioning AFM as an emerging tool in modern drug discovery.

"I am thrilled to see the state of Washington positioning itself as a leader in the new economy. By helping companies such as Carbon Nanoprobes to succeed, we have the potential not only to make dramatic advances in health care, but also to provide jobs for the next generation."

State Rep. Jamie Pedersen (D-Seattle)

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EnerG2, LLC (formerly Lygan Tech.)


EnerG2 in the WTC news forum

RTD Award: Phase III

Research Partner: Guozhong Cao, Ph.D., Materials Science and Engineering, University of Washington

Project Phase Began: 2006

With today's rising gas prices, alternative fuel vehicles such as gas-electric hybrids and biodiesel are more in demand than ever. However, better energy storage technology is needed to bridge the gap between generation of power and consumption of power in these vehicles. Battery power has limited capacity; hydrogen power is still in its adolescence. High performance or "super" capacitors hold immediate promise as a solution. EnerG2 is a Seattle-based technology company dedicated to developing environmentally-conscious energy products. In 2004, EnerG2 partnered with Dr. Guozhong Cao, Associate Professor in the Materials Science and Engineering department at the University of Washington, to evaluate the properties and performance of the company's carbon-based material for a wide range of industrial, environmental, military and medical applications. The team received $240,000 in grant funding from WTC to conduct this research. In this third phase of R&D;, Dr. Cao and EnerG2 are working to further optimize the company's technology for super capacitors and develop a commercially-scalable manufacturing plan for introducing the product to market.

Research Partner: Dr. Guozhong Cao, Associate Professor, Department of Materials Science & Engineering, University of Washington

Founded in 2003, EnerG2 is focused on developing and applying advanced technologies in the global energy sector. The company has teamed with Dr. Guozhong Cao to develop a nanotechnology-based industrial gas storage solution. While methane, nitrogen and other specialty gases have long been used in a wide variety of industrial applications, media for their storage have not been improved for decades. EnerG2's carbon-based nanostructures offer safe, efficient storage at an affordable cost, with the goal of reducing the industry's current dependence on high pressures, low temperatures and inflexible canister form factors to store industrial gasses. Initial research conducted by EnerG2 and UW's Materials Science department demonstrated that these specially-designed carbon cryogels are effective as high-efficiency, high-density gas storage media. This follow on grant funding will be used to focus on the remaining challenges to be overcome in order to commercialize this technology. The most promising potential markets for this technology are compressed natural gas (CNG) and industrial gas storage. Eventually, the company hopes to use this technology to provide a solution for hydrogen storage for fuel cell powered vehicles.

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Hummingbird Scientific


Research & Technology Development (RTD) Award: Phase III

Project Title: "Development of an integrated microfluidics chamber for the transmission electron microscope"

Research Partner: Karl F. Böhringer, Ph.D., Professor, Electrical Engineering, University of Washington

Project Began: 2008

Hummingbird Scientific, a developer of microscopy products located in Lacey, Washington, is partnered with the University of Washington Department of Electrical Engineering to develop a system for nanoscale imaging of materials in fluid environments.

UW will receive $100,000 in Phase III Research and Technology Development funding from Washington Technology Center and $20,000 from Hummingbird Scientific for the project titled "Development of an integrated microfluidics chamber for the transmission electron microscope."

Research into the internal structure of evolving materials is leading to important advances in the fields of nanoscience, bioscience and materials chemistry. While current imaging technology enables nanoscale research of materials evolving under controlled temperatures, no imagery technique exists for materials evolving in fluid environments. A method for observing material changes in liquids could prove to be a core technology for a range of scientific advances, from developing efficient solar cells to targeting cancer cells.

Hummingbird Scientific and UW Professor Karl Böhringer will continue a working collaboration in this Phase III project. Using the resources of University of Washington and Washington Technology Center, the team plans to develop an imaging system for materials in liquid or gaseous environments evolving under precise temperature controls. This work should extend the team's previous developments for imaging technology that Hummingbird Scientific expects to bring to market in 2008.

"Congratulations to Hummingbird Scientific on their worthy project and on receiving this grant. The Legislature is always looking to invest in increasing Washington's commercialization capacity. Hummingbird Scientific's microscopy project represents great scientific innovation and great economic potential. It's a perfect example of research and industry working together in the Puget Sound to generate new high-tech ideas, get those ideas to market, and create 21st century jobs."

State Sen. Karen Fraser (D-Thurston County)

"The Washington Technology Center's recognition of Hummingbird Scientific's pioneering nanoscience is a wonderful example of a great partnership. This is the partnership of our private and public sectors cooperating toward advances in a wide range of scientific realms."

State Rep. Sam Hunt (D-Olympia), Chair of the House State Government & Tribal Affairs Committee

"I'm delighted to see the state and Hummingbird Scientific partner in shaping our state's economy of the future."

State Rep. Brendan Williams (D-Olympia).

RTD Award: Phase II

Project Title: "Development of a MEMS based Ultra High Temperature Heating Element for the TEM"

Research Partner: Karl Böhringer, Ph.D., Department of Electrical Engineering, University of Washington

Project Began: 2007

Hummingbird Scientific, a Lacey, Washington-based developer of microscopy solutions, has teamed with University of Washington electrical engineering researcher Karl Böhringer to develop an improved high temperature heating element for use in the transmission electron microscope - a development that will lead to scientific advancements across a range of scientific fields. The company-researcher team has received $100,000 in Research and Technology Development funding from Washington state for their project titled "Development of a MEMS-based Ultra-high Temperature Heating Element for the TEM." The most common dynamic microscopy experiments revolve around the relatively simple act of heating a sample, as temperature is often the primary thermodynamic driving force for microstructural change in materials processing. The current state of the art in heating and cooling holder design for transmission electron microscopy relies on substantially out-dated technologies, yielding significant problems in temperature control and expensive and time consuming maintenance. The development of a compact, efficient, low cost, ultra high temperature heating element is core to the advancement of high temperature materials science. Hummingbird Scientific and Karl Böhringer will take advantage of the unique resources at the University of Washington to develop an advanced heating holder technology - a technology that will add important research and development tools to the material science, bioscience and nanotechnology fields.

RTD Award: Phase I

Project Title: "Development of a MEMS based Ultra High Temperature Heating Element for the TEM"

Research Partner: Karl Böhringer, Ph.D., Department of Electrical Engineering, University of Washington

Project Began: 2006

Transmission electron microscopes (TEM) are one of the primary experimental tools used in nanotechnology and materials sciences. In order to effectively evaluate the performance of materials at the nano-scale in high temperature environments, it is necessary to observe samples at in-use temperatures. This project will be critical to achieving unprecedented high temperatures with superior resolution in the TEM. Hummingbird Scientific, a south Puget Sound company that supplies custom, cutting-edge equipment and services for electron and ion microscope applications, is working with Dr. Karl Böhringer, research professor in the University of Washington's electrical engineering department, to develop a high performance heating element for TEM experimentation. The development of new designs and manufacturing processes will strive to achieve a combination of competitive advantages including the ability to withstand ultra-high temperatures and a more efficient design conducive to cost-effective replacement and repair.

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SoilSoup, Inc.


Researcher: Dr. Lynne Carpenter-Boggs, Department of Crop and Soil Sciences, Washington State University

Year project began: 2004

The team is working on biotechnology solutions for increasing the life of liquid compost (Compost Tea). SoilSoup currently has patented aerobic compost tea brewing equipment that makes a fresh liquid compost tea and is selling in the market today under the brand name of SoilSoup. In this project, the company hopes to develop other versions of its existing products which will increase market share. In 2003, U.S. consumers spent $69 billion on do-it-yourself law and garden activities and professional services. In the past year, 110 million U.S. households purchased outdoor fertilizers or soil amendments. SoilSoup's products are gaining brand awareness as a leading chemical-free solution for lawn and garden care. The company currently sells it brewing kits direct to consumers, retailers, garden centers, schools, and commercial farmers. Liquid compost helps to decrease fertilizer use and restore natural balance to the soil ecosystem. SoilSoup's customers can now buy a home brewing unit or purchase the product by the gallon in select locations across the country. By adding new biological products, the company will increase its distribution and workforce within Washington State.

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Consulting can be key to helping small companies gain competitive edge

Söliv is a small Seattle skin care company with a breakthrough product line founded on marine biotechnology. Armed with a patented proprietary material and R&D; to back it up, the company was ready to hit the ground running. But an economic downturn threatened to cripple the company's progress. The slowdown in the financial markets motivated the company to turn its attention inward, to fine-tune its market strategy and hold tight until investment opportunities looked more promising. A consulting contract with WTC's Small Business Counseling proved to be a smart move for Söliv and provided the company with an action plan for moving forward.

Company Profile

Söliv develops, processes, and markets bio-active, anti-aging skin and body care products. It is the first company in the Northwest to develop marine-based biotechnology products. In 2001, the company completed its initial research phase through WTC's Research Grant Program, in partnership with the University of Washington's Department of Botany, to develop an advanced aquaculture system for cultivating a specific seaweed strain used in Söliv's proprietary skin and body care products. The goal was to develop a technologically feasible method for assuring that large-scale supplies of this raw material would be available for product development and sales.

The Research Project

The WTC grant, in combination with support from the National Oceanic and Atmospheric Association (NOAA), allowed Söliv to develop a successful platform for refining its aquaculture methods along with natural selection and propagation of new strains, each with different properties for skin care products. The result was a raw material base to support an $80 million to $100 million retail business with 25 products.

Business Situation

With its product line well established, Söliv turned its attention toward financing, marketing, sales, and manufacturing. The economic slowdown experienced over the past three years had made access to capital difficult, if not seemingly impossible, for small start-up businesses. Without a strong climate for going after investors, Söliv decided to focus on its internal operations and use the downtime from seeking funding to evaluate its positioning strategy for entering the market.

"This time proved valuable for us," notes Diane Boratyn, president and CEO of Söliv. "We got extremely efficient at doing what we do. We were ready to enter the market yet needed a game plan for transitioning the findings and test market maneuvers into a marketing and investment strategy. We had the elements in place, but saw the benefits of having a seasoned professional help shape our strategy for getting the 'edge' on securing funding."

Enter WTC's Manager of Small Business Counseling, Elaine Kong. In late 2003, WTC launched a new branch of its regional and technical services line, specifically targeted to assist small- and medium-sized technology companies with financing and strategic planning.

Having worked with WTC through its R&D; grant program, Söliv was familiar with WTC's services and was introduced to Kong as a resource to assist them with their business strategy.

Kong has a great deal of experience nationally and internationally in developing business and investment strategies for companies in the growth stages. Her background includes venture capital, start-up consulting, and strategic business planning.

For Söliv, the team focused on strategic planning, capitalization planning, due diligence package preparation, stock option research and compensation planning, investor advisory and sales strategies implementation.

"One of our primary objectives for Söliv was to develop a solid marketing and sales strategy," Kong explains. "For a company in their stage of growth, this is key to attracting investors. They are acutely interested in knowing how the company is preparing to move the product to market and generate revenue."

The Future

Since completing their consulting contract with WTC, Söliv has a solid sales and marketing plan in place, complete with short- and long-term goals for broadening their customer base, penetrating their target markets, and increasing sales of their product. To date, this includes adding four new full-time staff and five independent sales representatives. The sales force throughout Washington is projected to increase threefold by May 2004. The company plans to use recent capital raised to roll out its sales plan, expand its production facility, and increase manufacturing operations.

"To put it simply, WTC's Small Business Counseling services helped us overcome the 'financial paralysis' stage that a company may face when funding is tight," Boratyn says. "Elaine helped position the company to capture its strengths and accomplishments in financial terms and develop the tools needed to attract the most sophisticated groups of investors. Now we're prepared to deliver a high-quality, attractive presentation to investors, supported by a solid growth plan."

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