Sometime this January, Melissa Kieling will take her son Brennan to China to see the factory he and his siblings made possible. The trip will have to wait until Brennan, a freshman at the University of San Diego, has a break from classes, which is only fitting given that the family business, PackIt, is all about education.
After all, the PackIt Story—or, How Spoiled Fruit and Shower Curtains Created One of America’s Fastest Growing Companies—begins with single mom Melissa looking for a way to get her kids to eat healthy while at school, a desire that gave birth to an idea for a lunch bag with freezable, gel-filled walls that cool and keep food cold, which produced a prototype stitched together at the local dry cleaners, which landed on a folding table at a Las Vegas trade show, which launched PackIt to the forefront of the housewares industry while experiencing, at times, six digit growth—yeah, six—even though the company has been around all of six years.
“In 25 years in the housewares industry, I’ve had the privilege to represent several companies that offered quality, functional products worldwide,” says Rick Sadofsky, the company’s chief sales officer. “None of them had the kind of projected growth that PackIt is approaching.”
Where the company is right now is impressive enough. PackIt has sold about 6 million bags, manufacturing them in China where PackIt has not only a factory but a warehouse from which product is shipped directly to the more than 40 countries where it is sold.
Though international sales already account for 11 percent of total revenue, Kieling, who co-founded PackIt and is its CEO, says she’s set a goal to more than double that to 25 percent over the next two years. With the company experiencing rapid expansion in Europe and Asia this year, Sadofsky says he is “very confident we will meet or exceed the projected growth.”
Which put another way, means “What part of ‘six-digit growth’ do you not understand?”
Actually, the events of the last half dozen years are still somewhat incomprehensible for Kieling. It’s one of the reasons that she would like Brennan to see the China factory, since watching the workings of the company’s Westlake Village headquarters—staffed by 27 employees—is one thing but, she says, “you don’t understand the volume we’re doing until you visit the factory and see four floors of production. It’s just mind-blowing.”
Especially when you consider that it was just a handful of years ago that she was meeting her first potential international distributors. One of the first she met was Robert Jeffs, sales and marketing manager for Cambur Industries, one of Australia’s largest importers of housewares. Kieling’s story had begun to gain some traction in the media: single mom struggling to get by—car repossessed, $13 in her checking account—who’d become frustrated that the money she was spending on good food was being wasted since her two sons and daughter weren’t eating it. Exasperated, one morning she asked her son Garrett to level with her and tell her if he would eat the blueberries she was preparing to pack for him:
“Are they going to be warm and mushy by lunch time?” he asked.
“Yeah,” she said, “they will be warm and mushy.”
“Yeah,” he said, “then no.”
She had tried those blue bricks you freeze in the freezer, but she found that they didn’t work much of the time and, anyway, usually didn’t come back from school. She went online to find a bag that would not only keep food cool but that you could put room temperature items in and have them become colder through the day but found nothing. Soon, she was creating a product all her own, using a shower curtain to store the cooling gel, having her prototype stitched together by a tailor at her dry cleaner. After raising a couple hundred thousand dollars and an initial order from Target, this took off. By the time she met Jeffs, her story and product had already started to get noticed by mom blogs and morning shows—PackIt has been featured on the likes of Today and Good Morning America, the latter of which declared it a “game changer” for families.
Given this, given that Kieling’s first foray into entrepreneurial waters had met so quickly with success, Jeffs wasn’t sure what to expect: Clueless? Arrogant? Arrogantly clueless?
“What stood out to me when I first met Melissa was her business card which read something like “Melissa Kieling: CEO/Mom,” Jeffs says. “She had such a wonderful personality at our first meeting, such great character; no airs, which can be present in a lot of export managers. She was passionate about her product, knew it inside and out, but also the product was practical and knowing our market here in Australia and the climate, I knew instantly that PackIt would do well.”
It certainly has done well in Australia where, more than three years into PackIt’s partnership with Cambur, both parties have benefitted from a relationship that has engendered a good deal of respect, not to mention an annual growth rate of 50 percent.
From the start, Kieling has been adamant about two things when it comes to partnership with international distributors. First, she refuses to go into any region where she does not have complete confidence in a distributor there, many times using as a roadmap other U.S. companies who have flourished in regional partnerships. One reason that she connected with Cambur was that it had already had a successful relationship with American homeware brands Aladdin and Stanley.
“We look for great partners to basically mimic what we do in the U.S.,” Kieling says. “We don’t want distributors who just want to sell the product. We’re really all about building a brand, and to do that you have to support education to the consumer, whether it’s through P.R., marketing or point of sale.
“The secret sauce of our product is on the inside, so the uniqueness is not necessarily obvious to the customer—we’ve got to make sure they are educated before they encounter it. That requires passion and energy and we absolutely demand it from our partners. Really, our strongest territories are where we find a distributor that’s willing to do the work.”
It worked with Jeffs who, at his first meeting with Kieling, was presented with a PackIt bag and immediately told to shove his hand inside.
“You can explain the concept, it sounds so simple, but you kind of get a puzzled look if you just talk about it,” Kieling says. “Actually demonstrating it at trade shows has been invaluable.”
“It was so forthright and so effective,” Jeffs said. “You put your hand inside and could immediately feel that this was cold. Carrying the product demonstration over to the consumer was a lot more challenging. Our first summer with PackIt, we ran magazine ads, started a brand website and also developed a point-of-sale video for retailers to use in-store. The combination of these elements has worked exceptionally well and it’s turned out an easy product to sell. There’s something new each year to offer our customers.”
Like all of PackIt’s international partners, Cambur handles shipping fees itself. Cambur uses freight forwarder APC Logistics, which the company has utilized for decades. Currently, Cambur imports PackIt as a seasonal product. Jeffs says demand begins to climb around August and continues to climb until mid-February. During this time period, they receive, on average, one container load per month and sometimes will bring in two shipments in a 40-foot container.
Though distributors are responsible for arranging the importing of products, PackIt officials learned early on the importance of working with their partners to ensure that all documentation is verified and approved prior to sailing. The company now has a team in California that oversees the process to ensure all worldwide requirements are met.
Kieling puts such a premium on finding the right and reliable partner that she says she’s bypassed some regions of significant “untapped potential” because they’ve yet to find such a partner in the region. (FYI, the company is still looking to expand into India and China.) In either case, she says she’s gotten good at trusting her gut. If she feels someone would be beneficial as a partner, she many times will seal the deal with nothing more than a handshake; and if something feels right but just “not quite right,” she’s learned to walk away.
“I know it’s almost a cliché to say that a relationship only works if it works for both parties but I absolutely believe that,” Kieling says.
“After all, they’re creating the face of the brand in their territory. We’re just 27 people in Westlake Village; we couldn’t begin to represent the brand all over the world. We really have to rely on our partners who understand local regulations, local customs. I really think our story is great in creating our brand. That this wasn’t a product created to make money but one that was created out of genuine need. That we really believe in what we’re doing and that high level of integrity we hold for our business has got to be presented by the partners we choose.”
Trade shows have proven invaluable for the company to meet, interview and, in some cases, ink deals with some distributors. With February’s Ambiente Show in Frankfurt, Germany—the world’s most important consumer goods trade fair—coming soon, PackIt officials have begun to spend time researching and networking with other sales managers, companies and distributors to identify potential partners. Each potential partner is reviewed in advance of the show as to whether they not only meet PackIt’s needs on the ground but are a good fit for what they can offer in branding and marketing strategy. If they pass that, then it’s a matter of examining the quality of their work and the satisfaction level of their current or past customers, something Kieling says is surprisingly easy to find out.
“Globally, you’d be amazed how small the industry is,” she says. “You usually can track down a reference somewhere. For instance, the International Housewares Industry has a great network to check references. That’s really valuable.”
Once PackIt decides on a partner it doesn’t end the courtship there. In actuality, Kieling believes that the most important sales pitch she makes to her international customers begins with the sales pitch she makes to her distributors. Motivating them, getting them excited about new products, giving them all the tools and assets to communicate with them about new marketing activities, constantly suggesting new ways to educate or communicate with consumers is an ongoing conversation between Westlake Village and the rest of the world to, quite simply, make it as easy as possible for PackIt’s partners to sell the product.
“You want to make sure they are embracing and prioritizing your brand,” Kieling says. “I mean, you have to be realistic. The fact is that you’re not going to be the only brand they’re working with so it becomes Sales 101: You want to keep them excited about your brand. This is the key to a successful territory. When I look at where we’ve found a lot of success—Australia, the UK, Germany and France—it really does go back to the fact that we found the right partner, someone who embraces the brand, someone who will build the infrastructure necessary in each of these countries from the ground up, something that would be unrealistic for a bootstrap company like ours to do on our own.”
Of course, there is enough that is left to Kieling and crew that she has had “many, many sleepless nights.” The same mom bloggers who can make you a star can just as instantly say you’ve lost a step, so Kieling says constant quality control is a necessity. Still, what keeps her awake the most is inventory planning.
“Being able to properly plan inventory purchases is not only huge from the perspective of being able to support sales but so that you can take advantage of opportunities that come up unexpectedly,” she says. “I think managing inventory planning has been our biggest challenge and we’ve made refining that process a priority for us.”
Of course, having a lot of inventory to manage can be a nice priority to have. In fact, Kieling says one of the nicest things she hears about her company is that it has high brand loyalty and low brand awareness.
“I like that because it means the people who know us, love us, but not enough people know about us yet. I believe that if we continue on this path, through educating people that this concept exists, we’ll really be able to grow.”
People like the University of San Diego economics professor who was speaking about starting businesses and, when a young student said his mom had started a new business that had met with some success, asked what line of work she was in?
“Lunch bags,” the student said. “She makes a freezable lunch bag.”
“You mean like this one,” asked the professor, lifting up the contents of his lunch in a PackIt bag, the sight of it surprising Brennan Kieling and giving him a great story. This January, he’s sure to be impressed by even more PackIt stories; four of them.
13 Logistics Industry Thought Leaders