When going through an economic or market crisis, product diversity is often key to helping businesses survive. Such has been the case at JGB Enterprises — a Liverpool, NY-based distributor of hoses and accessories to the military, commercial, and now, retail markets.
Two areas have especially helped the company not only get by, but continue to succeed during an industrial recession that has plagued the industrial supply sector since late 2014 — an emphasis on manufactured hose assemblies and an expansion into retail. Both have enabled JGB to sustain revenue and overall growth, while many industrial hose distributors have struggled with the downturn in oil and gas customer markets.
Assembly King
At No. 50 on Industrial Distribution’s 2016 Big 50 List, JGB’s reputation for its more than $17 million in inventory and product selection is well-established. But right now, the company is making a major push on the supply side. JGB has made a multi-million dollar investment into inventory and capital equipment for manufacturing and distributing hose assemblies.
The company calls itself “the category king of hose assembly” and has dedicated 200,000 square feet of facility space across five buildings in Liverpool to back up that claim.
“That’s where we’re going in the future,” says company president Bob Zywicki. “Even our good competitors recognize us as being the leader in those hose assemblies. We’re a master fabricator of hose assemblies and we’ll continue to enhance our presence there.”
“We’re like a little sprawling campus over a couple blocks,” Starrantino adds about the hose assembly division.
Today, the company is able to same-day ship hundreds of hoses of all varieties, including pressure wash, frack, water suction, large diameter dewatering, liquid propane, jackhammer and many more. In addition, JGB’s logistics team and freight partners can make deliveries throughout the U.S. to most locations within two days.
JGB’s assembly production team works in two shifts to meet orders that cater to end users in areas such as concrete pumping, suction and discharge, pressure wash, jet refueling and petroleum.
“There’s so many markets that we’ve taken 40 to 60 percent market share of, and it’s our goal to be the most dominant in each of them,” Starrantino says.
The Perfect Garden Hose
The impetus of JGB’s retail expansion came in the form of an innovative new product — The Perfect Garden Hose — which was the brainchild of company founder and CEO Jay G. Bernhardt. The product didn’t just give JGB its first foray into the retail space — it opened new areas of thinking and opportunity throughout the business.
“This taught us how to do flexible packaging, in-house artwork and to look at different hose assemblies,” Starrantino says. It taught us how to put content on a website for retail. It got our engine going as an area to drive sales through.”
The origin of The Perfect Garden Hose began more than 11 years ago from Bernhardt’s frustration with the fact there was no garden hose that wouldn’t kink. So he put up $50,000 for a matching grant and worked with several engineers for more than two years to design, develop and produce a new product that was launched to the general public in 2011 after a partnership with Continental ContiTech to manufacture it under the Tuff-Guard brand.
The new hose helped push JGB from 2009 sales of $70 million in 2009 to $105 million in 2011 and $124 million by 2014. It’s also added two branches in that time in Williston, ND and Houston, TX.
Besides being kink-free, The Perfect Garden Hose’s features include weighing 35 to 50 percent less than conventional hoses, a functional temperature range from minus 20 to 158 degrees Fahrenheit, three sizes — 25, 50 and 100 feet — and six different colors.
“This is an incredible non-kink hose that’s taken the market by storm,” Starrantino says. “It’s grown our company literally millions of dollars in a short time. Previously, our core competency was set. This showed us there are other product lines we can be successful in. We’re now supporting the product sales of other retailers. We’re really excited about it.”
Military And Community Involvement
Approximately 45 percent of JGB’s 2016 sales came from military customers. And with the Trump administration repeatedly saying it will increase military spending, that’s good news for military suppliers like JGB. The administration has also stated a commitment to infrastructure spending, an area industrial hosing products and services are a key element of.
“It’s exciting as we get into 2017,” Zywicki says about those areas of projected increase. “The military needs to have a replenishment of inventory stock for national security reasons. For infrastructure spending — and America’s view on oil and gas and being energy independent — those are good harbingers for our market.”
JGB has been a supplier to the U.S. military since 1982, so it’s only natural that the company’s culture reflects that. Many of JGB’s 240 total employees have military experience.
The company also has a big role in the community. It has its own charities committee, headed by Bernhardt’s daughter, Erica Pigula. Since 2007, JGB has supported more than two dozen charities, including several that have a focus on military veterans.
“My daughter heard about a Make-A-Wish campaign we did for a young boy, and she said, ‘that’s cool that you work at a company that does that,’” Zywicki says. “When you’re a business it’s easy to lose sight of the community around you. It’s a testament to Jay (Bernhardt) and his family that they’ve continued to actively assist various causes and organizations that need our support.”
JGB’s role in the community extends to disaster relief. The company helped with Hurricane Sandy cleanup in 2012, working around the clock during the week after the storm to produce approximately 3,000 hose assemblies that helped clear water from flooded buildings. Sandy hit New York on Oct. 29, and JGB’s work there didn’t wind down until that Nov. 9. The company also helped with Hurricane Katrina relief in 2005.
Value-Added
In a market ripe with other industrial hose distributors large and small, JGB says it’s service level is why customers choose it over competitors. And those services are aplenty, including field support and assessments, private branded products, a quality department, a radio frequency inventory system that facilities just-in-time service, a testing and certification department, 24/7 phone support and an interactive website that was re-launched in August 2015.
One service Starrantino says the company takes particular pride in is life cycle management for the process of crimping critical end item hose assemblies. In addition to following stringent procedures during the manufacturing process, JGB adds a unique serial number to each hose assembly, which gets tied back to a work order and quality log with its date of production. This allows JGB to provide traceability and life cycle management, as its customers are trained to look at hoses periodically for visible cracks, damage, kinks and to see if hose covers are worn. These are red flags to take hoses out of service.
“Customers are really pleased that we’re going the extra mile to manage their products and be there as a solution if something is due for inspection,” Starrantino says.
Expansion
Adding its Williston branch in 2014 and Houston branch in Q3 2016, JGB’s physical presence now extends more than halfway across the country. Besides its Liverpool headquarters just north of Syracuse, the company’s other locations are in Buffalo, NY; Charlotte, NC and St. Louis, MO.
“For a company our size, we have less branches than others in the industry,” Zywicki says. “It’s always been our philosophy to do as much as we can out of corporate, and then develop strategic branches as necessary. We’re out there touching the market nationwide from here in Liverpool.”
The Williston branch — in the Bakken Shell oil region — is dependent on the oil and gas market, so oil’s relative stability over the last 11 months and the U.S. oil rig count more than doubling since May 2016 bodes well for it. In Houston, JGB says it’s pleased with results from customers in construction and new engineered pumping solutions. The Houston branch also serves as logistic support for the company as a whole, helping move product from upstate New York down to southeast Texas.
JGB doesn’t have any immediate plans to expand further, but is always looking for opportunities.
“Right now I want to keep developing Houston, but my eyes are always open for a strategic acquisition,” Starrantino says. “There’s no solid plans, but I continue to vet that opportunity.”
On top of all that, JGB is celebrating its 40-year anniversary throughout 2017.
Whether it’s supporting the U.S. military, retailers, contractors or customers who just want a top-notch garden hose, JGB Enterprises is poised for continued growth as it enters its fifth decade.
“The future for JGB is bright,” says chief financial officer Matthew DeKay. “While industrial distribution, in general, suffered the past few years, JGB never missed a beat. Our ability to quickly transition from servicing different markets based on the global environment has allowed us to consistently outperform our peers.”
