PPP: A Family Affair
Company HistoryDavid Haeger purchased the Dundee Brick & Tile Co. in 1871, the year of the Great Chicago Fire. That historic fire, which some believe was started when a cow kicked over a kerosene lamp, consumed nearly three and a half miles of the city, leaving hundreds dead and tens of thousands homeless. Property loss was estimated at $200 million.
Haeger’s company, which he renamed Haeger Brick & Tile following the purchase, produced millions of brick and tiles to help the rebuilding effort. By 1875, most of the damaged portions of the city had been rebuilt, and Haeger’s business was booming.
After David’s death in 1900, his son, Edmund H. Haeger, succeeded him. By 1912, the company had been renamed Haeger Potteries, and the product line had been significantly expanded to include simple, unglazed flowerpots, as well as a new and growing line of glazed vases, luncheon and tea sets, figurines and later, lamp bases.
In 1938, Joseph F. Estes, Edmund’s son-in-law, was named general manager, and designer Royal Hickman joined the company. Hickman created the now-famous Royal Haeger line, which quickly grew to become highly valued among collectors of quality artware. Royal Haeger products of that time included vases, figurines, miniature animals, birds, flowers and lamps, among others. Many of these kinds of products, designed for today’s style and color, continue to be the mainstay of the company’s offerings. After Edmund’s death in 1954, Estes became president of the company and led Haeger Potteries through many decades of growth.
Lexy Haeger Estes, Joseph’s daughter, took over the reigns of the company in 1979. Today, the great-granddaughter of David Haeger presides over a company that is much different than the one he founded 130 years ago. Haeger now has two plants—one, along with the company’s headquarters, located in Dundee, Ill., and the other in Macomb, Ill. The company employs 250 people, manufactures two product lines and produces 2.5-2.6 million pieces per year. Haeger has indeed come a long way. But two things remain the same—a family atmosphere and the constant goal to provide nothing less than top quality products and customer service.
Focus on FamilyEstes believes that the key to the company’s success is its family atmosphere and commitment to its employees. “We lend our own corporate culture and personality to our body of employees,” she says. “We feel very personally connected to each of these employees and their families, and that has been the top priority for us. We’ve continually reinvested money to make machinery, equipment and jobs more efficient, more comfortable for people.”
The face of the company’s employees has changed a bit over the years, which has presented a few challenges. “For many, many years, Haeger, and our little town in general, had been composed of Germans and Italians, who were probably in those years more apt to quickly learn the English language and be assimilated into the culture,” says Estes. “Today, we find such diverse cultures; in Dundee, we probably are about 85% Hispanic-American now. They’re wonderful workers, but many of them have not been able to learn English as rapidly. We’ve addressed it very thoroughly, so that people are brought in, offered English classes, and trained so they are able to get into the corporate culture very quickly.”
The multicultural atmosphere also provides distinct advantages. “[Hispanic Americans] have such a close-knit culture that they can talk to their aunts and uncles and cousins and so on and spread the word that this is a good place to come,” explains Estes. “They address our issues—such as the benefits we provide employees and the training they will need—they speak Spanish for us, and I think we’ve made them very comfortable in coming to work for us in Dundee.” The situation at the Macomb plant is somewhat different, however. “That area has not had as much new business flavor going in, and potential employees are not as drawn to go there,” Estes says. “So we really have had a pretty steady flow of good employees and long-term employees, and we haven’t had to replace a lot of people. In the 80s I saw a lot of turnover, but now we have really stabilized again and have a lot of long-term employees.”
No matter the location, the company has not run into many problems successfully training its employees. “We are fortunate in that our process is not overly difficult,” explains Estes. “We can bring in basically untrained people and train them quite quickly, bringing them up to speed in the basic processes. Now, when you’re getting into more of the hand-applied glazes and certainly the ceramic engineer requirements, that’s obviously very much more technical. But our basic processes are fairly simply learned.”
Craig Zachrich, Estes’ husband and Haeger’s chief operating officer and corporate secretary, adds, “The other thing is just the nature of making our product—it’s a piece of art. And people like to be associated with that. You’d be surprised how many people have an artistic bent in them. Even when they’re finishing a piece or something that seems like a mundane job, it’s not. Because you really have to have an artistic feel for the piece to be able to finish it properly and keep its beauty without gouging it or wrecking it. I think people get a lot of satisfaction out of not only seeing the work progress through their station, but at the end of the line seeing what they had a hand in producing. Which is beautiful—they love it.”
Exceptional Customer ServiceAt Haeger, producing quality ware is a given. It’s the company’s ability to go the extra mile for its customers, both big and small, that really sets it apart. “We constantly work with our customers on ways to improve our delivery and order entry systems for them,” says Zachrich. “We’ve invested heavily in electronic data entry for our larger customers, like J.C. Penney or Michaels. We try to make it easier for the replenishment of their products. For example, if they’re supposed to have four or five pieces on the shelf of a certain color of a certain item, as soon as it gets to a number where they want to replenish, it automatically comes through to us in an order. And within five to seven days it’s back on their shelf—which is tremendous for them.
“We also understand the smaller customer, and we try to make it as easy as possible for them to order and get replenishment of product. We directly mail one, two, three, even 10 pieces to people. We don’t have minimums of 10s and 20s and 50s as many other companies do, and as many foreign companies do.”
Haeger also allows companies to change their initial orders in mid-stream. “We’re basically on a just-in-time ordering system,” says Zachrich. “For example, J.C. Penney might see a new trend of color coming that they had not had in their initial order from us. They might say, ‘We’d really like to go from that green to a little more blue green, or a little more yellow green.’ We have the ability to, within days, give them color samples of what they want to try to achieve. And then, secondarily, we can put it in production so the next order that comes through on a replenishment basis can tweak the color that direction.”
Such flexibility is the result of the work of Haeger’s in-house ceramic engineers, who have the ability to match color from paint chips, fabric swatches—whatever the customer supplies. “They are very, very talented people,” says Zachrich. “They have an eye and a chemistry background to be able to formulate the color and get actual product back to the customer very quickly. And that’s the name of our game—being customer-oriented and being a partner with them, as opposed to just supplying them with the product.”
Dealing with Foreign CompetitionIt has been said that imitation is the highest form of flattery. A nice thought, perhaps, if your business isn’t built on innovative design. “One of the biggest challenges we’ve had as we’ve achieved success in the marketplace is that some companies try to knock off our designs,” says Estes. “And because some of these are, of course, foreign competitors, the prices they put on these products far undercut our prices.”
Adds Zachrich, “We often get copied by foreign competition, and the fact is they can bring product into the United States at prices that are hard for us to match, because often times they’re paying their employees $.50 an hour with no benefits. Haeger is dedicated to our employees and we want to provide them a wage that they can live on, with benefits, accordingly.”
But price isn’t everything, and Haeger continues to combat foreign competition through its focus on exceptional customer service. “We don’t require letters of credit six months ahead of delivery of product,” notes Zachrich. “We can turn on a dime where our foreign competition cannot. We have a absolutely fantastic product, but I think our service and the fact that we understand what American retailers really need—that we know how to work with them to help them be successful—really puts us ahead of our foreign competition.”
Developing New DesignsOne way to combat imitations is to constantly update designs. The Haeger design team is continually studying existing and upcoming design trends from a wide variety of sources. “We get input from buyers, from our independent reps, and from our sales management, who travel quite a bit to shows throughout the United States,” says Estes. “We have some designers who go abroad and bring back trends and influences as information to us. We are also closely aligned with furniture companies and bed and bath kinds of companies that influence the different segments of what we try to design, whether it be for a bedroom, a bathroom, a living room or a kitchen.”
The design process is year-round, with the team beginning to discuss possibilities for the next year’s line as the current year’s line is being introduced. “We all get together and we just start a process where we bring pictures, colors, whatever we can bring to the table,” explains Estes. The group decides what trends to address, and Haeger’s in-house designers then draw thumbnail sketches that illustrate the direction the lines will go. From the sketches, the design team chooses which types of pieces will work best for that line. Three-dimensional drawings are then done and models are made.
Estes works with designers to make adjustments and fine-tune the models before the pieces are finally put into production. “I’m not an artist, but it’s the old saying—you know it when you see it,” laughs Estes. “So I work very closely with the designers to tweak even just the tilt of a head or the smile on the face of a figurine. It’s a wonderful work in process.”
Marketing the ProductHaeger uses a network of independent sales representatives to market its ware. “We probably are represented in Dundee by 30 independent rep groups,” says Zachrich. “When they disseminate into individual reps within those groups, there are probably 100-130 people out selling our product for Dundee, and probably a little bit less than that for the Macomb operation. We feel that independent reps are the way for us to go. Once they realize the quality of product we make and the beauty involved with it, I think they get excited. They want to see that product be distributed to more people in the country, and they’re working very hard to do that.”
The company also has a website, located at www.haegerpotteries.com. The site offers information on the company’s history, features current news items and includes catalogs for both the Royal Haeger and the Haeger Floral product lines. The site also provides information on where to buy Haeger’s products and highlights the company’s outlet store, located in Dundee, which sells seconds and discontinued items at reduced prices.
According to Zachrich, the company does not have any immediate plans to sell directly online, however. “We want to protect our existing customer base,” he explains. “They’re very loyal to us and we want to be so to them. A lot of our customers have their own interactive selling on the Internet, and we’ve taken the position that we want to supply them any way we can. If they want to get very active and possibly direct-ship, we’ll certainly consider that for them. But at this point, we don’t have any plans to sell directly on the web.”
Looking AheadA lot has changed in 130 years, but Haeger’s continual striving for improvements isn’t one of them. Estes is constantly searching for new opportunities. “We’re always looking for new markets, and we certainly aren’t covering the whole United States the way we can,” says Estes. “We know we have a lot of areas that we can address and get better sales, even to more mass merchants, with specific lines designed for them. We have a large contract line where we do private label products, so we can do a multitude of designs and pieces for these other kinds of stores. We export probably 10-15% maximum, at this point, so we know there is a broader spectrum of products that we can infuse into other countries.”
Adds Zachrich, “I think Haeger is in a unique position, being one of the last art ceramic manufacturers in the United States. With today’s uncertainties with foreign suppliers, I think we need to do a better job of presenting ourselves to our customer base and outlining the whole list of advantages that are available when doing business with Haeger. We need to help our end users really understand the whole package that Haeger provides and how that package, at the end of the day, far surpasses a price-only type of comparison.”