L.R. Nelson Corporation is more than a top name in quality residential watering products. With a recent license agreement, reorganization and joint venture, it's also one of the industry’s most dynamic manufacturers, as David Gill discovers.
Retailers, one of the prime customer bases for L.R. Nelson Corporation, demand excellence from their suppliers in several respects. Whether it’s the major chains or a single-unit specialty store, they are looking for more than the hottest-selling merchandise for their shelves. The suppliers that gain the most favor with retailers are those that can manage their inventories, work with them to develop new products (including items the supplier has never made before) and help control their supply chains to keep their total costs down.
These demands fit exactly with L.R. Nelson’s core competencies. The Peoria, Ill.-based manufacturer of aboveground hose-end watering products has focused its resources on category management, integrated product development, supply-chain excellence and category expansion. All four of these core competencies have proven critical to the company’s current status as one of the largest and best-known manufacturers of lawn watering products. According to Rick Keup, L.R. Nelson’s president and chief operating officer, they will also lead the company to even further growth in the years ahead.
“We are probably the best and most well-known manufacturer in terms of the quality of our products, and in our ability to develop new products,” Keup says. “These four competencies also play into our strong abilities to interact with our customers. It involves research and development, but it also involves the synergies we have with our customers.” L.R. Nelson’s talents in this area have grown not only its retail customer base, but also its business with professional turf-product distributors and OEMs in the lawn-products industry.
As Keup describes it, category management involves the manufacturer taking over the management of an entire product category for the customer. “Retailers, for example, ask us to oversee the ordering of new products, the management of their shelf space and the management of their promotions and merchandising. It’s a great way to develop partnerships with our customers” he says.
In its integrated product development effort, L.R. Nelson applies its research and development area to working with its customers on new products. The company is scoring notable successes thanks to its product development. It is currently in the process of launching a line of traveling sprinklers that it developed jointly with Caterpillar, Inc. The two companies reached a licensing agreement for the new product, which is based on the Challenger® Ag Tractor from Caterpillar®, in May. L.R. Nelson thus became the first Caterpillar licensee for a product specifically for the lawn and garden industry.
Exercising its abilities in managing the supply chain has benefited both the customers and L.R. Nelson itself. Keup says, “Controlling our supply chain keeps our costs under control and improves our efficiencies. This, of course, goes down the line to benefit our customers as well.”
Category expansion has become a crucial area for L.R. Nelson. “It’s difficult to come up with new hose-end products, so we have to become more important to our customers by developing products we don’t have in the line now,” says Keup. “Our sales and marketing area provides a big push for us in this endeavor. It involves research and development into new and better products.”
The Seeds of Innovation
Creativity has been a part of the L.R. Nelson culture since the founding of the company by Lewen R. Nelson in 1911. Actually, it stretches back even beyond that date — all the way to 1904, when Nelson invented and patented a coupling device for hoses. The focus on innovation has always been a key to Nelson’s success. In 1972, current owner Dave Ransburg purchased L.R. Nelson from the Nelson family; he is now chairman and chief executive officer.
Ransburg continued the company’s investments in product development after acquiring the company. Today, L.R. Nelson manufactures more than 1,000 products for lawn, garden and landscaping applications, including some of the industry’s most innovative and high-technology designs. Lawn sprinklers, timers, spray nozzles and other watering products can be found in the line.
The research and development department isn’t into breaking new ground simply for the sake of breaking new ground. L.R. Nelson’s goal in developing new products has been, and continues to be, meeting the needs of its customers and of the end user. An L.R. Nelson product improves the user’s environment and lifestyle, and saves that user time and money.
L.R. Nelson has sharpened the focus of its product development and marketing through a recent reorganization. Announced in early August, this reconfiguration established two strategic business units — one focused on retail lawn and garden products, the other on professional turf irrigation products. Each unit is responsible for its own sales, marketing, product development, manufacturing, distribution and customer service. The overall goals of the reorganization, says Keup, are “enhanced customer focus, increased profitability and additional opportunities for growth. We are already the leader in the retail industry, and we’re a strong player in the turf business. But we’re not going to rest on those laurels. We want to continue to grow and continue to find creative ways to meet our customers’ needs.”
Even before the reorganization, no one could have accused L.R. Nelson of resting on its laurels. The company has been stretching the boundaries of its markets for years through new products and other moves. Last year, the company acquired the Sherman/Thompson® brand and other assets relating to that line of consumer lawn and garden products from Union Tools, Inc., of Columbus, Ohio. “This brought us the intellectual property relating to the brand name, some new products and new customers on the West Coast,” says Keup.
Early in September, L.R. Nelson announced a joint venture with Peaktop Investment Holdings Limited of Hong Kong. The new company will be devoted to the sales, marketing and distribution of decorative home and garden products. It will be the exclusive importer, seller, marketer and distributor of several Peaktop products, including water garden products, outdoor water features, low-voltage garden lighting accents and garden decorations. L.R. Nelson will manage the new entity by using its distribution strength in North America.
Peaktop’s chairman and CEO, C.K. Lin, says the joint venture “will develop a greater product line for consumers in North America and enhance the beauty and personal enjoyment of their outdoor living areas.” This, in fact, is exactly what L.R. Nelson’s products have been doing for lawns and gardens for the past 90 years.