Case Study: Woodstream Corp

[Business Development]

Case Study: Woodstream

Hed: Lethal and Low-Tech

Deck: Victor Still Reigns in the Mousetrap World

Summary: You can't get much more low-tech than a spring-loaded mousetrap, and the granddaddy of them all is the one with the big red V for Victor. But even with a patent that expired 80 years ago, manufacturer Woodstream Corp. still dominates the market.

Pull quote: "We sell more and more of them because they work. They catch the little varmints." -- Claudio Baca, Valley Farm & Ranch

Inventors beware: It's tough to build a better mousetrap when the model introduced in 1886 still leads the pack. Woodstream of Lititz, Pa., has managed to keep the spring-loaded Victor mousetrap the world's top seller even 80 years after the trap's patent expired.

What's the secret to staying competitive with a century-old contraption of wire and wood? Woodstream President Harry Whaley and others credit recognition, price stability and a trend toward environmentally friendly products.

"You see Victors on television, in movies, even cartoons," says Whaley. "The big V on the trap is an American icon with a high level of recognition among consumers. Your grandfather used it." Victor traps were even featured in the 1997 DreamWorks movie Mouse Hunt.

And what Whaley calls "a low-cost manufacturing position with little human intervention" (translation: an almost completely automated assembly line, albeit with belt and pulley machines) allows him to compete with cheaper foreign labor.

"Our labor costs are even lower than theirs because of automation," Whaley says of a manufacturing process that's been refined in Lititz for more than 100 years. Victor traps also have "secret design elements," Whaley says, that allow them to be imitated but not duplicated.

Early Traps Used Grisly Methods Perhaps no other mechanical device in American history has been invented in as many versions as the mousetrap. The U.S. Patent and Trademark Office has issued nearly 4,500 patents for devices that impale, constrict by noose, choke/squeeze, explode or electrocute rodents. Before the Victor, devices garroted, guillotined, smashed and drowned mice. The snap trap, by comparison, seems pretty humane.

Woodstream still gets constant submissions of mousetrap designs from inventors but rejects most because they wouldn't be profitable to produce. The company, the biggest U.S. maker of snap mousetraps, employs about 250 people and can has churn out a million mousetraps a week. Whaley won't disclose sales, saying only that they're between $10 million and $50 million a year for traps and the company's other pest-control and pet products, which sell under the Victor and Havahart brands. (According to a survey by Gerald Udell, executive director of the center for business and economic development at Southwest Missouri State University, fully 98 percent of mechanical mouse-killing devices sold in the Wal-Mart chain were Victors.)

The company also makes bird feeders, dog crates, roach magnets, poison-free bug sprays, devices designed to catch wild animals and stray cats without injuring them, and other products to eliminate pests.

The Victor name has been used on products in Lititz since 1886, although the companies behind it have gone through name and product changes. The Victor's manufacturing firm took on the Woodstream name in 1966. Housewares manufacturer Ekco Group acquired the company in 1989, and Woodstream executed a management buyout in December 1999.

"Green" Focus Drives Sales Woodstream is part of a growing industry. According to market research firm ACNielsen, traps for mice, rats and moles accounted for $29.6 million in U.S. sales for the year that ended Dec. 2, a 5.8 percent increase over the previous year.

Whaley estimates that one-third of American households will have a use this year for some pest- control product he sells. Because of this, he believes "core items" such as Victor traps will continue to find a stable market. (He didn't see much impact from recent health scares such as that from the sometimes-deadly Hanta virus, which is carried in the droppings and dried urine of deer mice.)

The real engine driving the market for his products, he says, is growing consumer concern over household use of poisons. Steve Jansen, national lawn and garden product manager for Home Depot, which sells Woodstream products, agrees that the company's attention to "green" concerns such as developing nontoxic products and humane ways of eliminating pests helps it remain the market leader. "Woodstream is always making advancements in environmentally friendly products," he says.

Weather and seasonal needs affect sales, too. Julie Fracker, spokeswoman for Kmart, says the retailer's buyers have seen "a definite spike" in Victor sales since last September. "Sales have gone up significantly and stayed strong," she says. "With the colder weather (driving pests indoors), people need the traps."

Price stability is another factor. Whaley hasn't raised prices on his mousetrap, which sells for about 50 cents, in almost six years. In that time, he says, he has seen his market share steadily increase.

He won't release figures, however, saying only that competitors such as 77-year-old Kness Manufacturing Co. of Albia, Iowa, and scores of newbie entrepreneurs with the "better mousetrap" idea aren't making a dent in sales of the Victor snap trap. Woodstream products are sold by more than 100,000 U.S. retailers. The company also sells its products online but doesn't promote Internet sales. "If people call me for a mousetrap," says Whaley, "I say, 'Go down to your corner store.' "

In addition, Woodstream derives sales from non-mouse-related activities, such as the use of spring- loaded mousetraps to power vehicles in high school physics classes. And a firm in Wheat Ridge, Colo., called Interplanetary Pet Products turns Victor mousetraps into devices to keep pets off furniture. Equipped with plastic paddles, the Snappy Trainers startle the animals, but don't injure them. The company sells 150,000 three-packs a year, creating a nice secondary market for Woodstream.

But the main reason people buy Victor traps has stayed the same for decades. Just ask Claudio Baca, salesman at Valley Farm & Ranch, a farm supply store in New Mexico's Estancia Valley, why his store carries only the Victor brand.

"We sell more and more of them because they work," says Baca. "They catch the little varmints."

At a Glance Name: Woodstream Corp. URL: http://www.havahart.com, http://www.victorpest.com Location: Lititz, Pa. Founder: C. M. Woolworth Founded: 1924 Industry: Mousetraps, pet and pest supplies Employees: 250 Revenues: Between $10 million and $50 million

SOURCES:

Steve Jansen, national lawn and garden product manager, The Home Depot, 2455 Paces Ferry Rd, Atlanta, GA, 30339; 847.818.7600; [email protected] Steven Barwin, executive vice president, Interplanetary Pet Products, 12441 W. 49th Ave., Suite 8, Wheat Ridge, CO 80033; 303.940.3228; [email protected]

Julie Fracker, media relations specialist/spokeswoman, Kmart, 3100 West Big Beaver Road, Troy, MI 48084; (248) 643-1021

Harry Whaley, president, Woodstream Corp., 69 N. Locust St., Lititz, PA, 17543; 717.626.2125; [email protected]

Claudio Baca, salesman, Valley Farm & Ranch Inc., Old Highway 66 South, Moriarty NM 87015, 505.286.3677; no e-mail.

Matt Bell, public information, ACNielsen, 150 N. Martingale Rd., Schaumberg, IL, 60173, 847- 605-5686, [email protected]

Gerald Udell, PhD. executive director, Center for Business and Economic Development and WIN at Southwest Missouri State University, 901 South N, Springfield, MO 65804, 417.836.5671, [email protected].