October 2, 2012
The company — best known for its line of coolers — is also adding rotational molding to its in-house capabilities this year with five new manufacturing lines and 20 more employees in Katy, where it is based. Igloo currently has 85 percent of its products made in the U.S.
“Obviously, made in America is the right vibe to connect with a lot of consumers right now, but what we’ve also been able to prove is that if you have an efficient manufacturing base, you can not only build in America, you can build a product at a lower cost,” said Gary Kiedaisch, CEO and chairman, in a Sept. 17 telephone interview.
Igloo was already a familiar consumer name when private equity group JH Whitney & Co. of New Canaan, Conn., bought the firm in 2008 from Westar Capital of Costa Mesa, Calif.
The company estimates that 90 percent of U.S. homes have some kind of a cooler, and Igloo products make up 75-80 percent of them.
However, prior to the buyout, the company’s sales were flat, according to Kiedaisch. The new owners set out to change that through an emphasis on new and improved products.
While the privately owned company does not release specific sales data, official said sales were up by nearly 50 percent at the start of 2012. In 2011, workers in Katy made 19 million hard-sided coolers alone.
As those new products caught on, Kiedaisch said, Igloo needed more — and more-efficient — capacity in-house.
Executive Vice President David Thornhill has helped lead the improvements at Katy, with more-efficient equipment, better production layouts and vertical manufacturing. The company estimates its efficiency has climbed by 30 percent since 2008.
Igloo already had its own injection molding, blow molding and foam molding operations. Even more processes could come on line with the right business case, Thornhill said.
Igloo also has non-plastics operations such as cut-and-sew for soft-sided coolers and additional outdoor recreation items including chairs and tents.
Those investments in products and manufacturing came at the same time that costs were increasing outside the United States, which helped highlight the benefits of vertical manufacturing in-house
“When you look at our manufacturing strategy, it’s to bring as many processes as possible inside,” Kiedaisch said. “For us, the picture has been that near-shoring is much more favorable than it was even 18 months ago.”
Thornhill and Kiedaisch look to one of Igloo’s new products as an example of how its business outlook has developed since 2008 and is continuing to impact the company’s strategy.
Igloo introduced the Yukon Cold Locker cooler at the start of 2012. The high-end cooler is marketed at sports enthusiasts and professionals who will spend days — if not weeks — out in the woods or on a fishing expedition.
“These are the guys who will spend thousands of dollars on a gun or a thousand dollars on a scope,” Thornhill said.
The Yukon was designed with extra insulation, capable of retaining ice for up to 14 days, compared to seven for a typical cooler. That is the kind of performance needed to keep swordfish or elk fresh during a long fishing or hunting trip.
The hard plastic outer shell and heavy-duty latches and handles also stand up to rough usage. Thornhill boasts that in tests, a bear spent an hour trying to break in before it gave up.
The Yukon also sells at a premium price, retailing at more than $300 for a 50-quart container and more than $700 for the 250-quart model. By comparison, Igloo’s 50-quart MaxCold hard-sided cooler lists for $65.99
Yukon coolers are rotational molded, so when orders for the Yukon took off and tripled the expected production capacity, Igloo knew it was time to bring rotational molding in-house. It currently contracts for rotomolding from outside suppliers that use a combination of domestic and international production.
Igloo has cleared 15,000 square feet of space in Katy for rotomolding and Thornhill is looking at additional production that could use the process. There is also space for future growth, while adding rotational molding is now allowing the company to list the Yukon as “Made in America.”
“We’re tooling up for this in a big way,” Thornhill said. “We’re looking forward to getting that group up and running.”