What you’ll learn:
Dansons has seen massive growth in the last 5 years, scaling the company from 12 to 200 people. On today’s episode, we learn about Dansons speed-to-store product development process along with the aggressive expansion of distribution centers in anticipation of a push for more online sales.
About our guest:
Jeff Thiessen is the President of Dansons, the manufacturer of Louisiana Grills, Pit Boss, Wood Pellet and Kamado Charcoal Grills. Jeff has worked along-side his father and brother to take Dansons from a 12-person company to a 200 employee, international powerhouse. Dansons offers the broadest product offering in the industry and continually launches innovative products into the marketplace.
Key takeaways from this episode:
- How Dansons evolved into what it is today—2:45
- The brand and channel strategy behind Dansons continued growth—5:24
- Dansons stats (distribution, warehouses, employees, etc.)—9:20
- The secret to Dansons aggressive growth in the past 5 years—10:56
- How trust, faith, and execution are the foundations of Dansons’ ability to scale quickly—13:37
- Dansons in store strategies for Walmart, Lowe’s and other big box retailers—16:27
- Percentage of online vs in store sales + 2020 online sales strategy—19:14
- New Dansons product line in 2020 + Dansons massive SKU count—25:51
- Product development: forecasting trends, collaborating with retailers, & listening to customers—27:03
- The 3-pronged distribution strategy behind a push for online sales expansion—30:29
- 3 key takeaways for growing a winning organization—35:41
- 2019 company recap: Dansons’ biggest win—41:06
Announcer: Welcome to the Page One Podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies, to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big box retailers, or what we call rCommerce. Now, here’s your host, Luke Peters.
Luke Peters: Thanks for joining us on the Page One Podcast. I am your host, Luke Peters. This is the podcast where I bring you the best and brightest leaders to share consumer, product, sales and marketing strategies that will help you grow your business. I’m the CEO and founder of NewAir Appliances, where I cut my teeth selling products online, and now started Retail Band, where I hope to help other brands succeed in product launches, influencer marketing and B2B online sales strategy. Right now, I am offering free evaluation of your online sale strategy. If you’re interested, find me on LinkedIn or Luke@RetailBand.com. Let’s get into the podcast. In this episode, you’re going to learn from Jeff Thiessen, President of Dansons, which is a manufacturer of Louisiana Grills, Pit Boss, Wood Pellet and Kamado Charcoal Grills. Thanks for joining me, Jeff.
Jeff Thiessen: Happy to be here. Thank you.
Luke Peters: Cool. Jeff, I looked up a little bit about your past, EY Entrepreneur of the Year, Pit Boss was a National Hardware Retailer Choice Award winner, so congratulations on those awards. That’s awesome. I know you have a unique story as a family business, are you able to fill in some of the gaps there?
Jeff Thiessen: Sure. Dansons is Dan and then sons, so Dan is my dad, and-
Luke Peters: I didn’t even think of that.
Jeff Thiessen: Yeah, I’m one of the sons, and my younger brother is the other son that’s involved in the business currently. I’ve actually been working with my dad for 20 years under the Dansons banner here. We started the business together September of ’99, and just a lot of answered prayers from where God’s brought the business. Very excited to still have my dad onboard with the business, at 69, he’s not slowing down, he’s speeding up. He’s still our CEO, he heads up our product development side of the business, and just tons of creative energy with him and his team there. It’s been lots of fun, a real blessing to be able to work with my dad so long.
Luke Peters: Yeah, that’s great. I come from a family business of donut shops, so I was flipping donuts with my dad at an early age. Are you able to talk briefly about your early years, and what drove you and your dad, Dan, to start the business?
Jeff Thiessen: Sure. We started working 20 years ago with wood sawmill plans, trying to get rid of their wood waste and trying to find different value add projects. That led us into bagging wood shavings for horse bedding, of all things, was one of our first projects, and then that eventually morphed into also doing wood pellet fuel for heating stoves. From that, we got into actually manufacturing wood pellet stoves, which looks just like a wood stove, except it’s different internal components that burn compressed wood pellets. Then in the off season, my dad’s like, “We’ve got to do something with all this equipment in the off season, why don’t we make pellet barbecues?”
Jeff Thiessen: At the time, there was only one other manufacturer, or maybe two in the whole US that did such wood pellet grills, and it was a small business. Then as things grew up over the years, then the recession hit and the housing crisis started, and our partners in the sawmills wanted to divest of all the non-core businesses that we were doing with them. We did the management buyout back in 2007, and then that was pretty much right in time to get ready for the recession in 2009.
Luke Peters: Yeah, yeah.
Jeff Thiessen: The business for pellet heating, for pellet stoves, which was our core business by that point, just fell right apart. We ended up selling the pellet stove business to a much larger company called Heart and Home Technologies at the time. Then all we were left with was this little pellet grill business, and that was such a blessing. We looked back and said, “God works in mysterious ways,” but it really helped us focus our business at that point. We went to Asia in 2013 to augment our manufacturing, because we were doing everything in North America at that time, and the business has just been on an absolute rocket ship ever since.
Jeff Thiessen: We feel very blessed, a lot of answered prayers. Our Pit Boss brand was born in 2013 or ’14, Louisiana Grills is much older, it’s been around a lot longer, and both brands continue to grow in notoriety. We really try to focus on providing the best value proposition within the marketplace with whatever brand that we’re presenting. That’s really resonating with our customers, which we feel very blessed with.
Luke Peters: Yeah, thanks for that background, Jeff. Why don’t we, before we get more into the company, we’re talking grills here, but if you could just briefly describe the products, so that the audience understands the business a little bit better. You have a few different brands, and why don’t we start there?
Jeff Thiessen: We have a good, better, best brand strategy, so we introduced our country smoker brand recently, which is an opening price point focused primarily around wood pellets, but you’ll see some other offerings in the gas area as well here in the next year. Our main brand is Pit Boss, which is our better brand, it probably … Well, we know it’s the best value proposition within the pellet grilling industry by far. Our brand growth presence tracked through TraQline data, which is a third party data provider, is showing unbelievable growth within that brand in the last year.
Jeff Thiessen: Then our Louisiana Grills is really our upper end brand, some other stuff, your retailer brand. It has kind of tip of the spear as far as product development and feature benefits. With that three-brand strategy, we’re able to really attack all areas of the grilling marketplace. Now, wood pellet is our core within each of them. That said, we also do ceramic charcoal grills under both Pit Boss and Louisiana Grills brands, and then we also manufacture some different gas appliances, whether it be gas/charcoal smoker mixes, we have not just grills, we also have vertical smokers both in pellet and in gas and in electric.
Jeff Thiessen: We probably have the broadest product offering of anybody in the grilling business, I’d say. It’s a bold statement, but I’d say it’d be very close, if not the broadest. The reason we do that, and you were probably going to ask the question, but I’ll tell you why, the reason why is because we really try and build programs that are specific to our retail partners, and they have different needs for different areas and different retailers. It’s just through listening to what our retailers really need instead of telling them what they need, we ask them what they need and we respond that way, and we develop to what their needs are. That’s been just very, very key to our success the last number of years.
Luke Peters: Yeah, that makes sense. I guess that would be your channel strategy, as you’re listening to them and developing different products for different retailers, and that solves any channel issues?
Jeff Thiessen: Yeah. It’s neat to see how God’s developed that for us. We are a Christian company, and you’ll hear me refer to a lot of answered prayers and lessons.
Luke Peters: Yeah, I think it’s great.
Jeff Thiessen: We truly believe that in the last number of years. If we look back and we say, “Hey, we had this channel strategy from the beginning,” that wouldn’t be the truth. The truth is, it really has developed, and we really think it’s a God thing. It’s just been such a blessing to be along for the ride, it’s been unbelievable.
Luke Peters: Yeah, that’s a great message, and cool to hear that about the company’s story. Tell me about, so you mentioned something really quick, I was going to go more into the business, but I want to stop here because you mentioned something about some sort of brand tracker. What are you utilizing to understand the strength of the brand and where it’s going, what was that software or product?
Jeff Thiessen: It’s called TraQline, TraQline’s a third party data provider that actually goes out and assesses the market quarter by quarter, and they do it in a number of different industries, Just in barbecue, that’s one of the most well-cited sources for strong data as far as industry trends, brand growth, brand share, and we tapped into it a few years ago and it really helps to keep a scorecard that you’re achieving the goals that you want to within the industry itself. It’s not directly off point of sale, it’s more off end consumer data, but certainly it’s directionally accurate for how you’re ranking within the industry.
Luke Peters: Yeah, that’s great, I’m going to look it up afterwards. It’s always as companies are working on their brands, sometimes they don’t have line of sight to how they’re doing in the industry and how they’re doing compared to their competition. It sounds like this might be a tool that can help there. We’re in the middle of actually working, I forget the name of it, but we’re just getting into another one, so we’ll look up this one as well. It’s called TraQline, is what you said.
Jeff Thiessen: Yep, TraQline.
Luke Peters: All right, cool. Jeff, why don’t we continue here, tell me, just talking about company scale and size, are you able to share total number of employees, and maybe how you guys set up your distribution, size of buildings, warehouses? Do you do it yourself, do you 3PL? How do you guys look there?
Jeff Thiessen: We’re over 200 people within the operation. We sell worldwide, we’re in a number of countries, and it’s drawing all the time. We’re a Costco vendor, so they start with about nine countries there, and then we’re probably in, I’d say, north of 20 countries at least right now, and growing. We have product distribution in several points in the US, Washington state is our largest distribution point. We have three different warehouses, two of them are company or leased warehouses, and then we do use 3PL to augment if we have flex that we need throughout the year, but that’s not a large part of what we do. 3PL is not our core way of dealing with warehousing and distribution.
Jeff Thiessen: We really do handle it internally, we’re blessed with a really strong warehousing distribution team and leadership that’s really helped us to grow. We have a distribution point, and where we started actually was Edmonton, Alberta, so we have a distribution point in Canada in west, and then like I said, three of them right currently in Washington, and we have another one in Minnesota as well. We’re looking to expand out aggressively this next year, we have one that should be active in the first quarter in Arizona, and you’ll see us probably look to populate something in the southeast, and then possibly the Texas market as well in the next 18 months. There’s a lot going on on the distribution side, as the company continues to grow in leaps and bounds.
Luke Peters: You might be able to share or not, but how are you guys able to grow so quickly? You have 200 people, all these different distribution centers, that’s got to require a lot of capital. Just, it sounds like, five years ago, you were a shell of the company that you are right now, so you guys have had some dramatic growth, how’ve you done it?
Jeff Thiessen: That’s accurate. A lot of answered prayers. I look at the growth and I’d say it is miraculous how we’ve been able to get the support that we need from our manufacturing partners overseas, and we’ve been able to scale aggressively there, been able to scale aggressively in warehousing with great people and a strong organization. Financially, we’ve had great support from JP Morgan, who’s been a great partner of ours as we’ve grown. We do not have any venture capital or outside money, for the most part. We had some smaller partners, that we’re actually taking their ownership back into the company now, back to the family hands.
Jeff Thiessen: We’ve used very, very, very little outside money. Interestingly enough, with just the way that we’re financed and with the support that we’ve had, in Asia we’ve been able to grow aggressively. A big part of that is, my dad is meticulous about paying vendors on time or before time, and that’s helped us grow our reputation and actually our ability to get more and more manufacturing support in Asia with terms that make sense. There’s a lot of things that play together, I wouldn’t say it’s … The only one thing I could tell you, the answered prayers, the rest of it, it’s been phenomenal with every part coming together to allow us to grow.
Jeff Thiessen: We’re poised to grow aggressively again this year. We had strong growth last year, even in the tariff environment, we still posted double-digit growth, and we feel very blessed to have had experience to do that. We’re poised to have a huge growth year this year, we have a lot of new product development and product launches this year. We’re in anywhere from 12 to 15,000 retail locations around the company, depending on the products that we sell.
Luke Peters: That’s just amazing, to be able to grow that quick and the capital that’s needed, because you’re filling up warehouses with inventory, so obviously it sounds, JPM is a great partner, we work with them, and it sounds like you’re getting good terms from the manufacturers and that helps with the cashflow. It takes more than that, so you guys are doing a lot of things right to be able to grow that quickly. You have 200 people on the team, probably a large team of warehouse and distribution, but how about, on the departments I’m sure you guys have the typical and required departments like the sales and the marketing and the finance, but is there a special sauce in your team, is it the product development or the marketing? Or if you are able to describe maybe one department in your company and how it’s put together, that’d be interesting to hear.
Jeff Thiessen: I think what makes us, I think, very special is that we are family owned and operated still, but we were able to scale to a national brand size very quickly. We haven’t lost that within the business still, as far as the family feel to everything that we do. My dad heads up product development, like I said, but he has a very strong team of leaders with him. Then I work more on the sales side of the business with our sales department, but we have excellent leadership there. Then on the warehousing, my brother is our chief operating officer, so the one thing that’s interesting and we’ve noticed as the company grows, the trust that’s needed in order to scale quickly within the operation.
Jeff Thiessen: With three of us really focusing on different areas and having different lanes that we’re probably gifted in, hopefully, certainly that’s helped an awful lot, so that we have a high level of trust between each of us, and we’re able to make a lot of decisions probably a lot quicker than others, without having to go out to outside money or to a committee or the bank. Because we are well-financed and we have a lot of faith in what we’re doing, so it’s the type of situation that our speed to execution has been absolutely pivotal in our ability to grow this business.
Jeff Thiessen: Then when we talk to customers, we can put it from concept to retail shelf in a year. A lot of our competitors simply can’t do that. We look at business in the long term, everything is long term the way we look at things and when we look at this business, so we don’t make decisions for the next quarter, we don’t make decisions because we’re looking at an event. My dad tells people, “The event within this company happened 20 years ago, when we partnered together,” so success was already built into this business, and my dad’s very happy and comfortable with that. Jordan and I are very significant owners, and I think that trust level and that ability to operate a big company with a small company mentality in some ways, there’s some maturity that’s had to be forced on the business over time, but it certainly has been really critical, and the three of us all believe it’s guided the business, we’re very united in that.
Jeff Thiessen: It just makes a huge difference in how we approach every decision and every situation, every opportunity, and every obstacle that comes along. We pray about this business, and we’re blessed.
Luke Peters: That’s a great story. It’s like the family dynamic has made you guys stronger, and your faith along with that. Man, I can feel the energy, so this is going to be a good interview, I can feel it already.
Jeff Thiessen: Thank you.
Luke Peters: One thing you talked about was, we haven’t talked about Channel Mix, I wanted to get into that, but you said you were in 12,000 retailers’ stores, you’re in Costco. Before we get into that, when did you first get in store? Because we’re talking about how quickly the brand’s growing, it takes awhile sometimes to get into stores. Was that prior to 2008, or was that more recent as well where you’re getting in store?
Jeff Thiessen: Back in 2001, I believe, we started dealing with Menard’s for the heating appliances for the pellet stoves, and so that was our first exposure to a box store, and there’s a lot of learning that came along with that. Eventually going to, I think, Aubuchon Hardware, Home Depot Canada, we dabbled with Lowe’s a little bit, but it’s a very small niche when it comes to the heating side in comparison to the barbecue. It taught us a lot of lessons back then, how to deal and how to program, how to service larger customers, even though we weren’t a big vendor at the time.
Jeff Thiessen: It certainly was a great learning for us. Then when we got out of the heating side, we had already had some of that experience already. Menard’s was our first major box customer, then we expanded pretty aggressively, Wal-Mart, Lowe’s. Lowe’s came on I think slightly before Wal-Mart, and then Wal-Mart came on, and they were looking for a national brand to handle pellet. They’ve been a phenomenal retail partner of ours, just as Lowe’s has been, just as Menard’s has been. Academy Sports, we deal with a lot of different hardware channels on one level or another and depending on the product mix, we deal with a number of buying groups like Mid-State’s buying group.
Jeff Thiessen: It’s been, door after door has opened up. Certainly the Pit Boss brand, the value proposition, it’s just superior to anything in the marketplace right now. It just resonated with our customers, and it resonated with box stores looking for quality products. Then we also boast one of the best warranties in the industry, we have a five-year warranty which is one of, if not the best in the pellet grill industry. As a family, we stand behind the product and really care. We also set up some very extended customer service hours with our customer service center that we set up in Oregon in the last few years.
Jeff Thiessen: It’s one thing selling products, it’s another thing keeping products sold, and most importantly, keeping customers happy. That’s something we just take very seriously and we take it to heart, and so all those things play together to help us not just get into these box stores and grow the retail presence, but maintain it and then grow this deal offering within it. I don’t know that there’s anything super novel about what I can tell you about our business, it’s just that we just truly care about it and we pray about it.
Luke Peters: No, it is. Every business is unique, and that’s actually the most fun part of my job here. I’m taking notes here, kind of understanding the channel. What is your percentage of online to in store sales? It sounds like you guys are heavily skewed towards in store, would that be correct?
Jeff Thiessen: Yeah, heavily in store, we do less than 20% of our business currently, is online, but that is also one of the key initiatives, our goal initiatives for this next few years. We have spent a lot of time and money and effort around the social media aspect of the business building up the brand, and now I just see us focus aggressively on expanding our online retailers and some direct to consumer play as well, that doesn’t conflict with our mass business or our specialty business. We want to support both of them, but make sure that online shoppers have the ability to obtain our products as well.
Luke Peters: It sounds like, like you said, under 20% online but growing, and then as far as your major partners, Costco, Wal-Mart, Lowe’s, Menard’s, Academy Sports, buying groups, hardware. Of those, of the smaller ones, and I’m sure you guys probably do a lot of business with mid-majors or companies … There’s a lot of, in the Midwestern states, a lot of home and hardware brands. Who is someone just that surprised you, or a name you weren’t sure the business was going to be as strong as it actually ended up being, anybody stand out there?
Jeff Thiessen: Boy, I can’t say that one of them necessarily stood out ahead of another one. The rapid growth of the space, actually is the thing that surprised us overall, and then success where very often, if it’s a slow, steady growth area, you’ll have winners and losers. We don’t have losers with our retailers, we provide them with unique product offerings even though they’re the same brand. Very often with Pit Boss we try very carefully to provide unique SKUs and to have different value propositions, and that’s helped us an awful lot. That’s why they’re all winning, I can’t point at one that was way, way ahead of the other ones. They’re all very strong, for the most part.
Jeff Thiessen: There’ll be certain SKUs from time to time that don’t do as well, depending on geographic location and what type of store. You don’t want to have huge grills in a downtown store location, that’s just it, that people don’t have houses, they have apartments. You’ve just got to be careful with some of that stuff, but yeah, overall I’d say the category has surprised us how it continues to expand rapidly. The pellet grill category is estimated at about 12% of the total grill marketplace, while I’d say two years ago, someone would’ve said probably it’s more like four or five, at the very most.
Jeff Thiessen: We’ve had an awful lot of expansion, and anybody you talk to that’s cooked on a pellet grill, you’d be hard pressed to find anyone that would say negative, whether it’s our product or somebody else’s. The experience of cooking with wood but with the convenience of gas, it’s a one touch, you touch it, dial in your temperature, and away you go, the value proposition that comes with pellet grilling is amazing. Then the quality of the food that you’re taking off is really what it’s all about, and you can grill like an expert griller with that real rich smoke flavor, but you can just be a novice. If you can run an oven, you can run a pellet grill and produce some of the best barbecue in the world.
Luke Peters: In talking about the product, earlier you alluded to supply chain and how you guys are mostly based in Asia, what tariff bracket are you guys in? Are you guys getting hit by the 25%, or is it a lower bracket?
Jeff Thiessen: Certainly, our gas products are tariff-ed at 25%, our pellet products are not currently.
Luke Peters: That’s nice.
Jeff Thiessen: God willing, that stays that way.
Luke Peters: Yeah, that’s tough. I was going to ask, and that’s obviously probably disrupted those product lines for the whole industry, right, on the gas side?
Jeff Thiessen: I would say it actually has disrupted the entire industry, in terms of the pending tariff would’ve affected us. We’re seeing major retailers with major retail point of sale dollar increases, but with reduced inventories that’s in the previous year. That I would say is probably across many, many, many industries. If the truth be known about actual retail inventory dollars in the US right now, I’d say it’s probably way down because of the tariffs.
Luke Peters: Meaning they’re holding out and hoping they go away, because they’ve got to buy the product if it’s getting sold, so they’re just running leaner inventory and faster turns, so that when the tariffs do go away, they’re not stuck with a bunch of overpriced inventory?
Jeff Thiessen: That’s 100%, I think that’s exactly … Through the recession, it was a little different, it was dollars weren’t available for inventory. It’s not that dollars aren’t available, everyone’s afraid of having high priced inventory, and then obviously having a quarter or two of massively reduced margins. I don’t blame retailers for being skittish on inventory, they’ve been fairly upfront with us on that, but over time you can only get so efficient on inventory when you have to re-buy. The nice part is, looking at the tariffs, at least on our products, or the core of our business, that being pellet, hopefully don’t get applied ever, so that’s been a real blessing for us.
Luke Peters: Jeff, so it sounds like you guys are directly affected, and like you said, blessed by being in a great category that’s growing quite a bit, as you mentioned, from, say, 4% of total grills to 12% right now in the pellet category. Is there a secret sauce, or what is something that makes your brand unique that you think is giving you this advantage in the marketplace?
Jeff Thiessen: Value proposition. We can comp up with anybody in this marketplace, and if you look at the dollars per selling features, our units are bigger, hotter, and heavier than almost all our competitors’, and we’re selling them for anywhere from 20 to 40% less, if you want to mark them up by square inch. There’s a few small exceptions with that, but overall, our total value proposition within our breadth of product, nobody’s been able to match us on that. A big part of that is because we don’t have outside influences, we don’t have outside money in the business.
Jeff Thiessen: We make a fair margin that keeps the business healthy, and we’re feel very blessed, but the reality is, we don’t have to have massive margins in order to support massive debt loads. Those are the realities of business, when you have a lot of debt, someone’s got to pay for it. We’re just not debt laden, and that’s made a huge difference in our ability to provide that best value proposition, and we’re very thankful for that. We’re very keenly aware that being a family business and able to make your own decisions and not being influenced by outside money has been a huge blessing for us, and it’s allowed us a huge market advantage.
Luke Peters: Wow. Are you able to share, so how many SKUs do you guys have total?
Jeff Thiessen: SKUs? Hundreds, and that’s not just barbecues. We do barbecues both in pellet, gas, and charcoal, but we also do spices, we do accessories, our accessory programs are expanding rapidly with Lowe’s, Academy Sports, Menard’s, a number of different retailers are picking up our accessories program. We look at grilling, the entire outside grilling atmosphere. Some people want to stay in their lane, only in their lane, and that’s good. I respect that, I respect sticking to your knitting. At the same time, we are passionate about outside cooking in general, so for us, we’re launching a brand new line of griddles coming up here.
Jeff Thiessen: They are propane griddles, but we see that as a great market expansion this next year, and we already have some products that we’ll be hitting the shelves the next few weeks on. We look at all different trends, and what we try to go back to is providing a superior value proposition to our consumers. Pit Boss is known for providing a better product for a more economical price. For us, and it’s our family standing behind it, we truly care about what we’re putting in the marketplace.
Luke Peters: It sounds like you guys are obviously moving quick on all fronts and the company is strong all around, but it sounds like it especially must be on the product development side, because I can see through these conversations how quickly you guys are launching SKUs and listening to the buyers and innovating in the market. Obviously your dad’s involved on that side, is there a team in China that is working alongside of him, or what does that team look like that makes it so effective and innovative?
Jeff Thiessen: Certainly that’s critical, having engineering on both sides of the ocean. The core of our ideation in product development is here in Phoenix, we have a phenomenal team that my dad leads, and we have over 100 different items within product development right now. Ideation and product development comes in several forms, number one is from the customer. When we have a collaborative relationship with our retail partners, they know their end consumer. A good buyer knows their end consumer and they know where the holes are, they know what questions are being asked, what products are being asked for, we just try to ask the right questions and respond quickly.
Jeff Thiessen: When we look at our business, you’re absolutely right, that’s one thing that’s been absolutely critical. If we weren’t willing to invest large amounts of money in tooling and in personnel to keep the product development cycle very short and very lively and very exciting … One of the questions we get asked all the time is, “Is this patented? Is this trademarked?” For the most part, yes, we are patenting and trademarking a lot of things these days, but at the same time, pretty hard for our competitors to react if we’re constantly bringing out new products.
Jeff Thiessen: Now, that’s not a popular thing to do on the economic side, because yes, we do carry more inventory than others, we have more money in tooling than others. Once again, we’re not about just a short term gain, we look at things in the long game, we look at things, how do we build relationships with our customers, how do we listen and respond to their needs, and how do we invest in the long term? When they see us leading in investing and seeing other companies that are not willing to do that, that’s what sets us apart in a lot of ways from other competitors of ours.
Jeff Thiessen: I’m not trying to be hard the competitors, there are great competitors in this industry and it’s a wonderful industry to be part of, when there’s outside influences and outside money, there’s different types of decisions that are made. It’s just a blessing for us to be able not to have to respond differently in product development, that’s where we lean in heavy and spend a huge amount of money, which we’re happy to do because it’s coming back to us.
Luke Peters: A lot of paraphrasing, that’s a great answer, you get ideas from the customer, and then like you said, you have to get those from your buyers. Having that buyer relationship and just being curious and listening, and that’s where it starts. Also what I thought was interesting is, you talked about you’re okay to have some more tools that are paid for, meaning more dollars sunk into tooling and more inventory, because that allows you to be more innovative and bring in more products. I know that’s always a back and forth of working with contract manufacturers or really being involved in the product development, but if you’re not doing that, then it’s going to be hard for you to have these innovative products. You have to invest there, and it’s great to understand how you guys think about that.
Luke Peters: Cool. Let’s talk about operation, because that seems to be another struggle. You guys have, I stopped counting, but you guys are over five distribution centers, it sounds like, and more to come?
Jeff Thiessen: Yes.
Luke Peters: You don’t need to have that many, or do you? Or maybe it’s because of the size of these products, because they’re going on pallets, is that why in your business it’s needed to have more distribution centers, or what’s the purpose of all of those?
Jeff Thiessen: We have some large competitors that also use 3PL. We like to control the products, as the end consumer experience is extremely important to us, and when you have it in house, you can control a lot of that process a lot more. With our focus on online expansion, you have to carry inventory to a large degree, and so we want to make sure that we have that available when a customer wants it. That’s why we have a lot of distribution, I wouldn’t call it an industry specific type of need, but certainly we just view it a bit differently than some of our competitors do. There’s a lot of competitors that have their own variety as well, it’s not that unique within our space.
Jeff Thiessen: We also have product in Europe and a warehouse in Europe, and that’ll be expanded this next year as well as we attack that market. It’s just a way for us to keep a control on something internally and provide a superior service experience to our customers. I should probably mention, we do a lot of, our customers also pick up product from our factories in Asia as well, so it’s a hybrid. We don’t run everything through our distribution points.
Luke Peters: Right, you’re going to have some DI. I’m just saying, I’m with you, we have a pretty big warehouse as well, but what I thought was unique is that it seems like you have a lot of different distribution points. I guess that cuts down shipping time to your customers, but in this case, most of the customers are going to be the retail stores. Yeah, that’s going to be a big advantage once you do go online, because then you’re going to have shorter shipping times and less damages.
Jeff Thiessen: It’s really three-pronged, because I think everyone would agree that the online consumer is growing and growing and growing, I think it’d be crazy not to think that. You need to consider the freight factors from each region, and it’s something that’s top of mind these days around here as we continue to expand those programs. We need to make sure that we’re closer to markets, have product relatively close to markets whenever possible, being aggressive in our freight negotiation is extremely important. It’s not a one size fits all, where you just plug into something to handle direct to consumer shipments, whether that be for our online sales ourselves or through our online retailers, because not all of them have their own logistics programs either.
Jeff Thiessen: Freight is just such a critical part of what we’re doing in today’s retail landscape, especially on online retail. Then we get into, retail right now in store is our big portion, but you have to be able to support them as well in the online. That’s really where that need comes from, I think, to a large degree. Like I said, I don’t think it’s specific to our industry though.
Luke Peters: I love it, that’s important ops, but you guys have hit that critical mass on the shipping. It’s interesting, when companies are smaller, it’s tough because sending product to the east coast, if they were, say, a west coast and they’re working out of port of Long Beach, and then they see 70% of their product is shipped to the east coast, so they want to put up a warehouse over there, but the problem is that it costs a lot more to get a container there. Then it’s going to cost a lot more to store it there if it’s not their building. Yeah, you guys have that critical mass, there has to be a certain amount of volume, and when you hit that critical mass that a larger company like yours is at, then it’s a no brainer to have the different satellite warehouses, because you’re going to save on the UPS or FedEx freight.
Luke Peters: Makes total sense, and I think that’s what I was looking for. That’s the answer, it’s dollars and cents on shipping. Is a lot of your stuff, are you grills going LTL, or are a lot of them able to ship small parcel?
Jeff Thiessen: It’s depending on the size. We have such a range within products that some are UPS-able, and some are LTL. I’d say what you’ll see from more of us is more UPS designed products as we move forward, as that landscape continues to demand more and more and more, so you’ll see that. Right now, 150 pounds is that threshold. I wouldn’t be surprised if that changes slightly as the delivery networks change and adapt. What an advantage it would be for some of these guys to move that up, and that’d give them a definite advantage on the freight side if it was 160 or 165. I think you’re going to see how products are delivered change a lot over the next 10 years.
Luke Peters: Totally agree, especially with the news on FedEx. We’re having this interview in late December 2019 right now, and FedEx has been in the news, Amazon dropped them. We use FedEx, I love FedEx, but they’ve had some challenges. Yeah, that is an excellent point you bring up, I wouldn’t be surprised at all if to become more competitive, UPS and FedEx change some of those requirements, try to get some of that larger parcel business. It wouldn’t surprise me a bit. Hey Jeff, you built a winning organization obviously with your family, and what are maybe three pieces of advice that you would give other leaders? From your learnings in building Dansons, are there maybe three pieces of advice that stand out as far as what helped you and how you think?
Jeff Thiessen: How I think is that you pray about everything, that’s where we start and where we finish everything. Number two is trusting, you’re trusting your people, so you’ve got to have good people. I can’t tell you enough good things about my dad or my brother, and how much I love working with them, and not just them, the team that we’ve been blessed with. We trust these people to make good decisions, and we support them. We could not do it alone, we couldn’t do it, number one, like I said, without God, number two, without good people. There’s nothing novel about those approaches to business.
Jeff Thiessen: Everyone talks about you have to have good product, you have to have sales, you have to have good financing, you have to have good warehousing. All these things have to play together. One thing I would say, one of the things we’ve learned is you can’t ignore any one of those as you’re growing a business. Then also, honestly, when we pray about everything, it keeps a pretty relaxed atmosphere, for the most part. Some people love dealing with high stress and high pressure all the time, we don’t. We have a very family atmosphere here, we care about our people, care about our customers, and I think that really rings true, going back to the people. We have great people that want to be around, we have a high level of retention around those people, and we’re very thankful for that. It’s such a blessing to us.
Jeff Thiessen: I don’t know, I’m not exactly a good MBA case, that’s not the way we look at our business. There’s a lot of guys that think they’re real smart. We’re maybe guys that aren’t that smart, but are blessed with a phenomenal opportunity and a great business, and that’s with God doing it, and we’re happy to say it.
Luke Peters: You’re obviously humble, because you’ve grown a company really good, so you guys are doing something right. Summarizing that up, you guys pray about everything, you trust good people, and you guys have a relaxed atmosphere, which kind of goes into point number two about trusting good, good people that you’ve brought onto the team. You’ve got to have that when you’re growing that fast, and on that point, you guys are 200 people now. Move the business back five or 10 years when you were smaller, I’m guessing about the number of people, but let’s say 20 or 30, I have no idea.
Jeff Thiessen: Let’s say 12.
Luke Peters: Okay, let’s say 12, so 12, less than 10 years. What is the main thing that had to change in the company? Because you did say that, the company’s grown up, you still have the family atmosphere, but you guys had to get more disciplined, so what happened between 12 and 200? What are the different types of hires or people you needed or processes you had to put in place?
Jeff Thiessen: Procedure, process and procedure are pretty key in that. The beauty of how we’re set up is, my brother is our chief operating officer, so there was a high level of trust immediately when we had to make moves of maturity in product development with my dad or product fulfillment with warehousing. One thing we do on a regular basis is to pray for our team, and we’ve been blessed with a great team. Our team, our people have come with a lot of experience, not necessarily in our industry, but certainly within whether it be warehousing or sales or finance.
Jeff Thiessen: We’re just blessed with great people that have a higher level of aptitude and excellence around. It moved from, the big changes, it used to be three of us making absolutely every decision, to having a team of high functioning professionals that are making good decisions and supporting them. That is a very big culture shift internally, because interestingly enough, like I said earlier, we retained a lot of the small company mentality at the same time because we care so deeply for our people. My dad and brother and I can still have lunch and launch a new product line for our new division, and that happens sometimes, and which is lots of fun. But at the same time, now we have a mechanism, a machine here that can execute on a lot of that vision, that we’re not pulling all those levers ourselves.
Jeff Thiessen: That’s been a huge difference, like when you have that infrastructure and that size and that critical mass to be able to vision and execute so much faster with good, solid people, it is a game changer for us, it has been. It’s been so much fun, it’s been such a blessing.
Luke Peters: You sound a lot like Dave Ramsey, have you ever been to any of his events?
Jeff Thiessen: No, I-
Luke Peters: You and Dave must be brothers.
Jeff Thiessen: I do admire the man in some ways. Dave Ramsey is not necessarily an entrepreneur’s kind of guy though either, because to get to the size that we have been, you have to use bank money. That’s not a Dave Ramsey thing at all.
Luke Peters: I agree 100%, yeah.
Jeff Thiessen: But certainly I do respect his fiscal approach to many things. I’ve enjoyed listening to him over the years.
Luke Peters: That’s funny. You guys went from 12 to 200 people during this period that we talked about, and like you said, you were three people making the decisions, and now you’ve built out a team. You joked around, you don’t have an MBA but you’ve learned a heck of a lot over that time period. Looking back at the business over the past year, what do you think your biggest win has been in business?
Jeff Thiessen: That’s a good question. I think retention. We’ve had a lot of growth the last two years, retention, I think, of our faith and our attitude. We have moved into a different level size-wise, economics-wise, we’re probably in the top five in the barbecue industry, if not higher than that, without saying too much, and it’s the type of thing that we’ve still been able to retain that family feel to what we do. I think that’s a huge win, and our customers feel it, and that allows us to grow more, because they have a lot more faith that these people that they’re dealing with are the same people today as they were 10 years ago even when we were tiny, and they’re going to be in 10 years when we move forward.
Jeff Thiessen: I’m still in my mid-40s and I have, hopefully, lots of time left, and I’m having a ball. I absolutely love the team we have, I love the family aspect of working together, and I think that comes through in preserving our culture.
Luke Peters: Cool. Jeff, do you happen to have a favorite book that’s inspired you, or whatever book you might recommend?
Jeff Thiessen: I’m going to start with The Bible.
Luke Peters: That’s great.
Jeff Thiessen: I read into it again, and I don’t mean that in a glib way, because if you just take a little bit of time and slow down and think about the lessons, the lessons that are taught in that are just, when I read management books, which I do, I read leadership books, which I do, recently a book by Chuck Swindoll Hand Me Another Brick, it was a great leadership book of principles, but I just find it very interesting when I read management books how a lot of the principles that suddenly people think are novel, they’re not novel at all.
Jeff Thiessen: Caring about people, having ethics in your business, working hard and providing an example, these are all things that are very Biblical in nature. That might not be politically correct, but that’s just how we live our lives. Not that we’re perfect, boy do we make lots of mistakes, but certainly it helped guide us and get us back on track again and again.
Luke Peters: That’s a great message. The passion in your voice I think has made this an engaging interview, so thanks for sharing all of those details about the family business, your faith, and how you guys think about business, and where Dansons has grown, from 10 or so years ago to where it is now. How can listeners find more about you and learn more about your business?
Jeff Thiessen: Dansons.com is our main site, they’re going to want pitboss-grills.com, both of them. One thing I would like to mention, when we talk about our culture, and it’s something that we actually struggled with but it’s helped with our culture an awful lot the last few years, is we tithe 10% of our profits to Christian charities through our foundation. We’ve recently started sharing that with our staff, and I think that means an awful lot, I know it means an awful lot to them. Because no matter what faith they’re supporting, what we try and do is get behind organizations that have women at risk or young kids that need support. We also do some stuff around the breast cancer foundation, things like that.
Jeff Thiessen: When people feel like they’re part of something bigger than themselves, not just enriching somebody or some organization, that plays a pivotal role in how they feel about what they’re doing and the effort that they put in. We started sharing that the last few years with our staff, and we’re not looking for any thank yous, except that they need to know that they’re part of something bigger than themselves. It’s been transformative, there’s no rule that we have here, we just want to be very welcoming and very loving, but we want to be very sharing in what God’s put on our hearts at the same time, and honest. That’s been pretty critical for us the last few years, and something that has changed, as it comes to mind.
Luke Peters: That’s amazing that you guys were able to give 10% of your profits to charity, I could definitely see how that is going to pull the company together on that point.
Jeff Thiessen: It’s a blessing just being part of it, so we just feel it truly is a blessing, being able to give back.
Luke Peters: Yeah, and Jeff, that’s amazing that you guys give 10% of your profits to charity. I think so many companies wish they could be doing that, but you guys are doing it, so I think it’s a great way to complete this interview.
Jeff Thiessen: I certainly enjoy the conversations with our bankers when we first meet them, and let them know that that is something that’s non-negotiable, no matter how they want to write their covenant. It’s interesting, because at first you see kind of a negative look, but then very quickly they understand the culture of the business that we’re part of, and they really learn to appreciate it too. It’s been an interesting part of our business, but certainly that’s a fundamental my dad has instilled in each of us, and that’s certainly his legacy that will live on. We’re just glad to be part of it.
Luke Peters: I’m sure with your growth rate, and JPM is lucky and happy to have you guys … Listen Jeff, I want to thank you again for being on the Page One Podcast, appreciate all of your insights, and I’m sure the audience is better now than they were before this interview. Also, just a quick reminder to the audience, that I’m offering a free evaluation of your online sales strategy. If you guys need help launching products or improving your sales on Home Depot, Wayfair, or any of those other digital channels, find me on LinkedIn or Luke@retailband.com. Again, thank y’all for joining us on the Page One Podcast, have a wonderful day.
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