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‘Bias toward yes’ proves lucrative for some new Wal-Mart suppliers

story by Kim Souza
ksouza@thecitywire.com

Editor’s note: The Supply Side section of The City Wire focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by The City Wire and sponsored by Propak Logistics.

One million taco plates. And potentially more local jobs. That was the order and the impact Wal-Mart handed to Hugh Jarratt of Fayetteville and his local manufacturer PolyTech Moldings in Prairie Grove during a 30-minute meeting at the retailer’s “Open Call” event held in Bentonville on Tuesday (July 8). 

Jarratt, founder of Jarratt Industries, described the experience as surreal and said the meeting itself went incredibly smooth thanks to John McCutcheon, one of the owners of PolyTech Moldings.

“I would not have gotten this order without PolyTech. They have been with me from the beginning. When Wal-Mart asked how quickly I could supply them with the product, John stepped up and assured them it could be done in short order,” Jarratt told The City Wire.

He said the buyers had done their homework before his 11:15 a.m. meeting. The biggest question was product lead time given the large order. The Jarratt Industries “taco plate should be on Walmart.com within 30 days and in-stores soon thereafter, Jarratt said.

“We are slated to have a follow-up meeting on the logistics of it all in the next couple of weeks. I will know more after that,” he said. “One unexpected moment for me was when Bill Simon (CEO of Walmart U.S.) opened the door on our meeting to congratulate me on the order. I was not expecting that.”

PLASTICS JOBS
McCutcheon said he and his partner Jim Benton purchased PolyTech Moldings about 18 months ago just before Wal-Mart announced its U.S. Manufacturing initiative. Since the Wal-Mart U.S. push, McCutcheon said PolyTech’s business has taken off and continues to get new business from Wal-Mart suppliers looking to onshore their plastics product manufacturing.

“Before this big order from Wal-Mart today, we were already making product for Smith’s Consumer Products of Conway, a longtime Wal-Mart supplier. They moved production from China to us in line with Wal-Mart’s announcement. We make knife sharpeners for Smith’s,” McCutcheon told The City Wire.

He said PolyTech also makes fitness products for Nautilus sold at Wal-Mart, and this business was also onshored from China in the last year. McCutcheon was reluctant to give other names but said there are more companies PolyTech is working with who plan to sell or already sell to Wal-Mart Stores. 

This uptick in business has prompted the Prairie Grove plastics manufacturer to expand. McCutcheon said PolyTech is working with the Arkansas Economic Development Commission, as they have planned to add 20 new jobs in the next year, purchase new equipment and expand the schedule to six production days from five. The new jobs are a 40% gain to PolyTech’s employee count of 50.

Grant Tennille, executive director of AEDC, told The City Wire that plastics injection molding was a “sweet spot” for the region. He echoed the fact that suppliers are looking at Northwest Arkansas and surrounding regions of Mountain Home, Conway and Fort Smith for the plastics molding services. Tennille said there will be two new NWA announcements related to Wal-Mart’s U.S. manufacturing made by summer’s end, and the state continues to pitch Arkansas to any manufacturer or component supplier looking for a new home closer to Wal-Mart’s front door.

TRASH BAGS AND HOLDERS
John Cundy of Detroit, Mi., inventer of Trash-Ease, a device that turns trash bags into portable trash cans, was smiling from ear to ear after his meeting with Wal-Mart buyers Tuesday.

“Three years ago me and other parents had to pick up trash at our kids’ track meet and I thought I don’t want to that do again. I went home and crafted a device that could clamp to a ledge surface like a bleacher, countertop or tailgate and hold up to a 30-gallon trash bag,” Cundy said.

Cundy is a clay sculptor of model cars for General Motors, but in his spare time he is CEO of Trash-Ease, a company he pitched to producers of Shark Tank last year. He outsources the manufacturing to a company in northern Michigan, his home state with an annual capacity of one million items per year.

In the first year, Cundy said he sold 5,000 units to Ace Hardware. In his second year he sold 20,000 units through Lowe’s. This year until Tuesday, Cundy said sales were at 42,000, but Wal-Mart doubled that with an order for 50,000 units.

“Wal-Mart made the year and more, with the biggest order of my life,” Cundy said.

Joseph Rosenberg, second generation business owner of Aluf Plastics from Orangeburg, N.Y., pitched trash bags to Wal-Mart at his first supplier meeting on Tuesday. When The City Wire caught up with Rosenberg he was hopeful his “Harmonyx” bag would be a hit because of its innovative packaging and three-ply, yet aesthetic, reversible colors of black and white.

After his meeting, Rosenberg told The City Wire that Wal-Mart loved the patented packaging of Harmonyx, but it was another product that garnered the most attention, the UltraSac bags which are made from 90% recycled materials.

“We are thrilled that Wal-Mart wants our product. We are going to sell them our branded UltraSac bags. This order from Wal-Mart is a testament to our family business that is now in its second generation,” Rosenberg said. 

He said the Hamonyx product was deemed a little too “premium” for Wal-Mart’s core customer, but the patented cylinder packaging that requires less shelf space, is something they might expand to other products.

BUYER MINDSET
Bill Simon, CEO of Walmart U.S., said last week top management had a meeting with its buyer merchants to lay down the ground rules for Tuesday’s open call event. He said while the buyers have the responsibility to select products that will sell, helping supplier and retailer alike, on this day they were to think about a bigger picture — expanding U.S. jobs.

“We told them to go into the meetings with a bias toward yes,” Simon said.

Knowing that half of the meetings would be with prospective suppliers, many small entrepreneurs that might need some assistance, Simon said “buyers were encouraged to look for ways to get some deals done.”

Michelle Gloeckler, executive vice president of consumables and U.S. manufacturing lead for Walmart, said about half of the 800 plus meetings on Tuesday were with present suppliers and half with prospective vendors. She said Wal-Mart will have a debriefing announcement in a few days with results of Tuesday’s Open Call extravaganza.

In her prepared remarks at the afternoon press conference, Gloeckler said deals were struck with suppliers selling toys, home goods, kitchen items, sweaters, shampoo and flashlights. She said important connections were made for suppliers who didn’t get an instant order but had interesting items that warranted a second look.

MAYBE LATER
Monica Kroeger, president of Science Solutions, presented several items to various category buyers throughout the day. Science Solutions is a consumer product company based in Lake Forest, Ill. The main outlet for sales are informercials as well as Home Shopping Network and QVC.

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“One product we got really good feedback from is our Liqui-Sew item. It’s a bonding agent that eliminates the need for needle and thread creating a stitch that can withstand washing and drying, wear and tear,” Kroeger told The City Wire.

She said the Wal-Mart craft buyer wants to revisit with them again in September when they reset for holiday ordering.

Wendell Smith, CEO of Rondell Corporation, made the drive from Little Rock to pitch his tire treatment product “Miracle Glaze” to the automotive buyers at Wal-Mart. Smith said his product got into a few Wal-Mart Stores but it didn’t sell as good as the retailer had hoped, so the product was discontinued.

Made in Little Rock, Smith pitched the product again on Tuesday and said the buyer was receptive to another look contingent upon better marketing in a space crowded by major name brands.

“The buyer gave me some homework to do scoping out area covered by three distribution centers as a place to start. I know from my past experience that making sure your product can be seen in stores, where consumers expect to find it is a big deal. I am working on getting some endorsements from NBA players who use the product as part of a marketing pitch as well. I am excited about today’s meeting and look forward to seeing how far we can take it,” Smith said.

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