Igloo aims for coolness in coolers

Juan Hernandez does his part on a production line at Igloo's 1.3-million-square-foot manufacturing and warehouse operation in Katy. It employs about 700 full-time workers. Juan Hernandez does his part on a production line at Igloo's 1.3-million-square-foot manufacturing and warehouse operation in Katy. It employs about 700 full-time workers. Photo: James Nielsen Photo: James Nielsen Image 1 of / 29 Caption Close Igloo aims for coolness in coolers 1 / 29 Back to Gallery

Igloo is giving the humble ice chest a corporate makeover.

After being purchased by a private-equity firm 3½ years ago, Katy-headquartered Igloo Products Corp. has invested $18 million in its local plant, raised salaries and hired new full-time staff.

It also has expanded into tents, camp chairs and other new products and revamped its core lineup of coolers by adding sizes, colors and features designed to make life easier on the soccer field and more fashionable at the grocery store. It's jumped, too, into the burgeoning segment of high-priced, high-performance chests.

Company executives say aggressive innovation in hard- and soft-sided products has boosted sales by upward of 40 percent since 2008, including a 100 percent jump internationally. Its share of the U.S. cooler market has grown to 45 percent, up from 38 percent two years ago.

"This is a really interesting company," said Jeffrey Cartwright, who arrived in December as president and chief operations officer.

Executives of the privately run company declined to put a dollar figure on sales and profits, but they are clearly pleased with the results.

"We're coming out with innovation," Cartwright said. "There's a reason for the customer to come out and meet with us."

An evolving company

More Information Igloo at a glance Founded: 1947. Headquarters: Katy. Employees: Around 700 full-time. Ownership: Connecticut-based J.H. Whitney & Co. purchased the company in 2008 from Westar Capital. Previous owners include Coca-Cola and Quaker. Share of U.S. cooler market: 45 percent, up from 38.1 percent in 2010. Past glory: Igloo introduced the Playmate personal cooler in 1972. It first put wheels on a cooler in 1994. New in 2012: Yukon Cold Locker line of premium ice chests; Duo line of insulated totes targeting fashion-conscious women; tents and camp chairs marketed as Igloo Outdoors. Source: Igloo Products Corp.

Igloo was founded on the prairie west of Houston in 1947 and began manufacturing metal water cans for oil field hands and other outdoor workers. Its first rectangular ice chests - metal, with plastic linings - came out in 1960. Within a few years, the outer shells were plastic, too.

Over the following decades, Igloo would become one of those companies, like Kleenex and Xerox, whose name is synonymous with its product. Besides being a powerful brand, it made something that just about everybody purchases at some point.

Its biggest customer today is the retail giant Wal-Mart Stores, and Igloo is carried exclusively in some 41,000 storefronts.

But Gary Kiedaisch, chairman and CEO of Igloo, says by 2008 coolers had become just another commodity and Igloo was complacent. That October, he said, it was an attractive acquisition for the New England-based J.H. Whitney & Co.

Kiedaisch, a former CEO of Coleman, brought in David Thornhill, with whom he had worked there, to jump-start product development. Soon, Igloo's familiar red-and-white and blue-and-white chests were available in myriad colors and designs; a model emblazoned with a U.S. flag became a best-seller.

There were ergonomic changes and new features as well. Five-gallon barrel-shaped coolers got wheels and telescoping handles and plastic risers on the bottom so they don't sit directly on the hot ground. Half-gallon beverage coolers now are available with hooks so they can hang on chain-link fences at the Little League field.

Paul Busch, a veteran marketing professor at Texas A&M University, said that kind of thoughtful product development is challenging - "Innovation is very difficult," he said - but critical to meeting the demands of retailers and consumers.

He cited as a successful example the decision to put wheels on coolers, which Igloo did in 1994.

"Now," Busch said, "it's pretty ubiquitous."

In its most recent push, Igloo also has moved aggressively into soft-sided coolers. By expanding styles and sizes and adding colors and designs, it boosted soft-sided sales by 150 percent - and not just in lunch bags for the back-to-school set.

For example, the new Duo totes and insulated bags, some made of canvas with leather accents, are designed for fashion-conscious women to sling over their shoulders en route to the gym, the beach or the grocery store.

Also new for 2012 is a line of tents and chairs for camping. Kiedaisch said the extension makes sense.

"We looked at every activity that happens within 50 feet of a cooler," he said.

The high end

They also looked westward, to the Texas Hill Country, at another opportunity.

This spring, 65-year-old Igloo is paying attention to an ambitious Austin-based company called Yeti that since its founding in 2006 has built a devoted following selling high-endurance, premium-priced coolers to serious hunters and anglers.

By Igloo's own figures, Yeti is the only other player in the cooler market to increase its share since 2010. Though it accounts for just 5 percent of sales, Yeti enjoys a cultlike status with its line of "bear-resistant" ice chests made with the same rotational-molding technology used in the manufacture of white-water kayaks.

That more expensive production process is part of what gives Yetis such a hefty price tag - coolers in the Tundra series range from $259.99 to $1,149.99, depending on size - but the company also boasts a five-year guarantee, an array of "Yeti gear" that goes far beyond hats and T-shirts, and a muscular social media presence that gives its 44,000-plus Facebook fans a forum to share photos from their hunting and fishing exploits.

"There's a whole lot of brand cachet behind the product," vice president for marketing Rick Wittenbraker said. "Once (customers) take the leap into Yeti, they won't settle for anything else."

Kiedaisch also commended Yeti for creating a new product category and proving there is demand for coolers that cost hundreds of dollars. He applauded the company's successful "guerrilla marketing."

But Kiedaisch and other executives say that after the changes they have implemented, their company is well-positioned to compete in the premium niche. Igloo may trail Yeti by more than 4-to-1 in Facebook fans, but it has a larger research and development budget and broader distribution network.

Igloo introduced its Yukon Cold Locker line last October at the Outdoor Retailers Show in Salt Lake City, and the coolers began arriving on shelves at such outlets as Academy Sports + Outdoors and Bass Pro Shops earlier this year. The Yukons also carry a five-year warranty and are roto-molded and equipped with such upgrades as stronger latches and oversized drain plugs.

Both lines also boast a masculine design that, like a Range Rover vehicle, adds to the allure.

Yukons start at $329.99 and promise to "outhaul, outlast, outchill anyone." Bargain hunters shouldn't look for a price war anytime soon.

Made by the millions

Igloo's 1.3-million-square-foot manufacturing/warehouse facility off Interstate 10 in Katy is a three-shift-a-day, seven-day-a-week operation with about 700 full-time employees. Last year, the plant churned out 19 million hard-sided coolers.

Teams of workers run a combination of injection- and blow-molded production lines. They pull down plastic shells and shave off the rough edges; they feed the shells onto conveyors, where they are filled with insulating foam and then fitted with linings.

The only hard-sides not made locally are the Yukons, but Kiedaisch said the plant is renovating a 50,000-square-foot section for roto-molding. By the fall, he said, the Yukons will be locally made.

He and Cartwright say the company also is committed to bringing other jobs now in Asia to Katy or at least to countries closer to U.S. shores.

While the required sewing skills for Igloo's soft-sided work - currently about 15 percent of its total - aren't readily available in the U.S., Cartwright said, the company is looking at "near-shoring" some of that work to Latin America in response to rising labor and other costs in Asia.

Plus, he said, having production a two-day trip from Houston, as opposed to 28 days from China, will let the company respond more quickly to market changes.

Meanwhile, locally, Igloo has been dealing with a sharp rise in the cost of resins used in the hard-sided production process. Kiedaisch said it cost $6 million more to produce the same volume last year than it did in 2010 - and the costs continue to rise.

So far, Thornhill said, the company has avoided passing the price increases on to consumers by squeezing more efficiency out of its plant.

ronnie.crocker@chron.com

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