Koeze Says Nuts To The Economy

May 20, 2002
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GRAND RAPIDS — As many companies announce lay-offs and cutbacks, Koeze Co. is undeterred in its course of expansion.

In fact, after last year, it had no choice.

The firm’s expansion involves adding 75,000 square feet to its 20,000-square-foot secondary facility on Burlingame Avenue. Once that project is completed, the secondary facility will become the primary location, because Koeze will move its Burton Street operations into the Burlingame site, which is only a few blocks away. 

Designed by Cal Jen of A.M.P.G. and being built by Pinnacle Construction Group, the new facility will not provide any additional production capabilities, although there will be room for possible expansion. 

Instead, the move focuses on making the company more efficient by consolidating into one building, and solving the distribution problems of previous years.

A higher ceiling and more storage space will allow for greater storage capacity, as the mail order end of the business grows and a need to house thousands of individual boxes arises. 

The new building also has better loading facilities for UPS transport — Koeze mails out over 60,000 packages via UPS each year — as well as more office space and a larger and more sophisticated retail store.

The new store will have a look similar to the old East Paris location, and will have indoor pick-up bays for large orders — so customers and fundraisers alike will no longer have to carry large boxes through the snow.

“With the move, we’re completely set up to ride the next wave of growth,” said Jeff Koeze, the firm’s president.

The well-established regional brand of specialty nuts and confectionary treats, based locally in Grand Rapids, expects to do 35 percent of its annual sales in the first three weeks of December.  The company annually does over 95 percent of its total business in the fourth quarter.

“We’re slow, but it’s still early from our perspective,” Koeze said.  “But we’re not uniformly slow.”

Koeze said he has seen steady sales in the firm’s more expensive items, selling the impressive gift sets at or above projections.

In fact, it expects to sell out of its Cream-Nut Old-Fashioned Peanut Butter and Delen Caramel with Mixed Nuts and Popped Corn.

Both items are returning to the Koeze catalog after being discontinued years ago.  The mainstay of the Koeze line, its cashews and various nuts, are lagging behind this season.

“It’s a mixed bag,” Koeze explained. 

“The retail store is up substantially, while the fundraising is slow.  Much of it is the Sept. 11 effect. People made lots of donations — and appropriately so — to New York charities.  I’ve heard that local charities are suffering. There is not an unlimited amount of dollars to give…”

Koeze, supplier of snacks to Northwest Airlines First and Business Class fliers, has also seen a downturn in its only non-holiday endeavor with the recent decline in air travel following Sept. 11.

“We also know we’ve lost corporate business,” Koeze said. “I’ve heard it from some of our regular customers. ‘We’re hurting,’ they tell me, and in many industries that is very understandable right now.

“It’s a good news-bad news situation.  We still have a lot of important selling going on, we just need to wait and see if people get fired up for Christmas or not. People tend to procrastinate these days.”

Following a landmark 2000 season, Koeze has hired nearly 30 percent more temporary employees this year.  Last season, Koeze found himself working long hours in the warehouse to fill orders.

But if there was any one sign that the Grinch is staying away from Koeze this year, it’s the company’s $4 million expansion project.

“We were completely maxed out last year,” Koeze said. “My distribution manager said to me, ‘That’s it. This is the year we know our capacity.’ We couldn’t go another season without expansion.”

On a side note, Koeze believes that a quirky little coincidence could have attributed to the slowness of their midrange products.

The new toll free area code, 866, which is the fax number for Koeze Direct, is also a Rockford area telephone prefix.

Any customers faxing in orders to Koeze that may have forgotten to press “1”, have been dialing an elderly Rockford woman, afflicting her ears with the obnoxious squawking squeal of a fax machine.

“I think we’ve got that sorted out,” Koeze added. 

“We’re a little worried that some orders may have been lost.  We plan to start calling some of our regular customers to see if their orders may have been lost.”

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