a long list of products from all four of those brands coming out each year. Brand-wise, we probably will add
another one. We would see if some- thing came up, but we feel the four we have will take us forward for the next few years. From a product standpoint, we will definitely be expanding prod- uct lines.
VB: Also, you talked about strategic acquisitions [in the growth initia- tives]. In that area, are you talking about buying other companies, buy- ing other products or buying brands? Trepp: Most of our growth is going to come from [existing brands through] the initiatives we talked about. But we do hope and believe that one of the ways to get to our growth goal would be through a handful of acquisitions. There are some companies that
a very strong awareness in the “good or better” segment. That’s really been our heritage over time. The high-end market, “the best,”
is about a third of the dollars in small appliances in the U.S. It varies a little bit depending on the market you are in. That’s a scenario that we didn’t play in very much. Our goal was to [determine]: How can we build and invest in products and in brands that really play a stronger role in that part of the market? That led us in acquiring the Weston brand back in late 2014. It has very high-end products focused on field-to-table and farm-to-table: meat grinders, food preservation products — things like that. We introduced the Hamilton Pro-
fessional line. Again, high-end prod- ucts. [Through licensing agreements], we also introduced Wolf Gourmet in 2014 and introduced the CHI brand of irons and steamers in the past 18 months. That portfolio of brands allowed us to grow very nicely.
VB: Are you looking to add more products like this to that area? Trepp: Yes, for sure. You’ll see a lot more products coming out. We have a beautiful coffee maker coming out from the Wolf Gourmet brand, then
have a very successful strategy of acquiring companies nonstop. That’s not what we’re focused on. We do hope to find several [acquisitions] … probably not transformable ones, but ones that we can fill in opportunity areas for us. It could be a category that we don’t compete in very well. It could be a brand, a particularly strong brand.
VB: Would you be able to say what sort of areas you would be interested in? In terms of fill-ins and places where you want to be stronger? Trepp: It’s always tough to say because you don’t know who’s for sale. One example I’d give you is where we wouldn’t do it. We are the No. 1 brand of kettles in the U.S. and in Canada. So, if there was a company that was particularly strong in kettles, it wouldn’t be really additive to us. There are over 50 categories we
compete in the retail business, and globally there is a number of categories in the commercial market that we have opportunities in. So, really, we just take it in and say: Where do we have a gap in our portfolio and where can we fill that in?
VB: What percentage of your sales are international currently? How do you plan to raise that? I think I saw
www.VirginiaBusiness.com
something saying that you want to raise that to 35 to 45 percent. Trepp: That right. That’s a longer- term goal right now. About 77 percent of our business is done in the U.S. That’s combined Hamilton Beach and Kitchen Collection, so a very U.S.- focused company. Conversely, if you look at the small appliance business around the world, over 70 percent are purchased outside of North America. Clearly, if we want to grow and
want to address consumers’ needs in small appliances, an important way to do that is to reach them outside of the U.S. We are a strong player in Canada already but have plenty of room to grow. We have a strong presence in Mexico and plenty of space to grow. [We have a] very strong position in Latin America, but we are just entering South America. We also began selling directly into
China several years ago and are looking at testing additional markets. So, I think our goal is, on the retail side, to expand in the Americas, continue to expand in China and then test a few more markets. Commercial is already a very
global business for us, one that is about 50-50, U.S. and international. We see a very strong upside in both U.S. and internationally, but clearly an oppor- tunity to grow that business faster. Between the commercial and the retail business, it would give you between 35 and 40 percent [in international sales]. We have a long way to go, but we are investing in products and capabilities and people around the world to try to get growth going.
VB: Would you introduce new prod- ucts that are specifically targeted to those [international] markets? Trepp: When it comes to new products, we want to make sure every- where we go, we understand what the consumer is looking for. We don’t want to just ship in things we think work. We want to talk to consumers. We are doing research in these markets. A great example would be in
Brazil. Consumers will, almost always after using an iron, empty the water out of it. That’s something that people don’t do much around here. So, we
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