Behind the scenes look into Scholzen Products

BY JOHN MARTIN
PVF industry veteran

Hello everyone! I’m glad you stopped by Martin’s Corner once again to see if I’m in — and if I have anything credible to tell you about! It is really good to have you in the “Corner” for a bit of catchin’ up on things! I have to admit that after taking a month off from the norm to be able to write to you totally about wine in the month of June………then sort of rest up during July, is just about to bring me to the conclusion that I need to work — like all the time. Now, to be clear (for Anvil International and for the sake of our president Tom Fish), it is very true that I do work all the time, so what I mean is taking off from my side job at The Wholesaler for a couple months (okay Mr. Fish!). Writing about wine is a pleasure, so I’d never get tired of that; in fact after finishing this article on a unique family-owned and- operated wholesaler, I will once again have a bit of a wine tip of the month for ya to think about. Anyway, it is great to be back again, so let’s get to it!

I am so pleased to bring the story of Scholzen Products to the industry in this issue of The Wholesaler! The story of this founding family, and how and why the company got started is so worthwhile sharing with you! It is very unique in my opinion — not that it is much different than that of other worthy companies, but the circumstances and the timing of it becoming what it is today is really interesting.

This incredible journey begins with a gentleman named Henry Scholzen, born the son of German immigrants on March 17, 1894 in Racine, Wis. His family was just one of many other German families that chose to settle in the Wisconsin area upon entry to America back in those days. Henry served as a cook for the U. S. Army during World War I, and afterwards decided to go West. But unlike many others, he came as an employee of the dining car and hotel department of the Union Pacific Railroad. Prior to being transferred to Southern Utah to actually manage the Union Pacific’s facilities at the Utah National Parks (Grand Canyon North Rim, Bryce, and Zion) Henry was over the Union Pacific dining car division from Ogden, Utah, to Hollywood, Calif., with offices in both of these cities. He was a pioneer to the present-day Zion National Park Lodge, having actually set up a mess hall three full years before the 1925 construction of the lodge. During that time, he asked a lady named Mary Sanders of Hurricane, Utah, if she would help manage the dining hall at Zion. From that very day, she became his long-time constant companion and partner, and they were married in 1924. Their only child Jack was born in Hollywood, Calif., the following year. Even as a child, Jack found himself involved in the business adventures, and was driving trucks for his father and the businesses at the ripe old age of 14!

In 1928, Henry quit working for the railroad and all their companies due to the fear of a transfer. He did not want to even think about leaving Southern Utah. Taking a leap of faith, he decided to go into a business for himself. It is amazing, but he started to raise chickens, turkeys and rabbits to sell to the big restaurants in the Los Angeles area. On his return trips over land from California, he would freight in construction supplies for Southern Utah contractors in the area. As the economic conditions changed, he decided to branch out into other products.

Knowing how the Union Pacific Railroad processed their business thoughts for the future, he and Mary had the vision to see that the government would not spend vast amounts of money on future park facilities without the positive knowledge that roads would indeed be built to connect those parks together.
With that thought firmly in mind, they sat down and put together a business plan. They started to contact business contractors, and builders to see what their next plans were. Their work really paid off. When road contractors, tunnel builders and other construction activities started moving into Southern Utah and Northern Arizona, they were ripe and ready! They sold everything from blasting powder to groceries and meat for the construction mess halls. BIG BUSINESS!

From spring every year until the road conditions stopped them for winter, Henry and Mary loaded their truck in Salt Lake City with general construction supplies and food for the construction camps. The big accounts for them were the contractors on the Zion National Park Tunnel and Highway. In 1930, when the tunnel was completed, they began selling contractor supplies and equipment from a small warehouse in Hurricane, Utah. Although the company was known as Scholzen Produce Company from 1928-1936, Scholzen Products Company was in reality born right after 1930 when the tunnel project was completed, and they actually moved into that Hurricane warehouse.

That, my friends, is how Hurricane, Utah, became the headquarters of Scholzen Products, and remains so until this day.

As Jack grew older, he made selling trips with his dad. He would fill orders and learned how to figure pricing even before learning how to read! He also acquired his father’s business ability, and his sincere feeling of civic duty and responsibility. Fast forward a bit. When Jack was 15 years old, his dad Henry had a terrible auto accident. Jack had to leave school to help out with the business. Henry finally recovered, but all of the stress from that plus the long hard hours he had lived in the business finally caught up with him, and he passed away July 18, 1951. This indeed left Jack with the total responsibility of the business at age 26!

Fast forward a bit more, and you find that Jack married Thelma Olds; they have six children who are carrying on the family business. Jack passed away on September 19th, 1987, leaving the family business to those six children. They are Nick, Nancy, David, Keith, Linda and Mary Lu. They were all taught and are very proud to possess their father’s integrity! It is apparent to me that the noble character imprint and accomplishments that were left behind by Jack and certainly his father Henry on the face of Southern Utah will stand through this current generation and many more.

Let’s talk about Hurricane (pronounced Hurra-can), Utah for a few minutes before we move on to my interview with the current management of Scholzen Products. I’m gonna wager that the bulk of you good industry folk reading this article have no idea of where Hurricane is located on the State of Utah map. (That’s okay, as I really did not know either until I started this.) Located down near the Nevada/Utah border, it is very close to the Utah city of St. George of I–15 toward Las Vegas! (Now, you must think you know why I found it!) Anyway, the Hurricane Valley sat vacant through the 1800s, but was opened to farming in 1904 when water was brought to the valley. It took 11 years to build that canal to get the water there, but those that helped in the project were given land in now fertile valley. The city was named after the world’s longest fault that runs along the city’s eastern rim (bet you did not know that either), and did not get actual power and water until 1917! Another little-known fact is that The Hurricane State Bank, which opened for business in 1920, was heralded as one of the safest banks in the country during the Great Depression! There are almost 15,000 people living in the Hurricane area today.

So, I have told you all I know or found out about from the historical point of view when it comes to a wholesale distribution house that not only is 83 years old, but has been in the same founding family right up to today via fourth-generation management! Isn’t that great? So I invite all of you to read on for my interview with the Scholzen management team.

Martin: Good morning gentlemen, it is great to meet you all and have this time to not only review and confirm all the wonderful history associated with your family up to the present-day business of Scholzen Products here in Hurricane, but to also see and hear first-hand about Scholzen Products and how you have actually thrived for the last 83 years! I’d like to start with president Bruce Ballard, and ask you to please give the readers a snapshot of the company today?

Ballard: Thanks John, but before I start, I want to give a big thanks to you from the family and employees of our company for that great historical account of our family’s arrival in the U.S., and what has evolved since then. We really appreciate it. First of all, I am president here at Scholzen Products. For the record, I also take on the responsibility of purchasing all our steel product needs, and I am still the prime contact in reference to any steel or welding need or issue in the company. I have been employed here for 31 years, and it has been a very good time. Being part of the family and a company officer has given me the opportunity over the years with all other family members involved to really work together with each other and our employees for the good of the company and its legacy. Scholzen Products Company’s active sales territory covers from southern Nevada to Northern Utah typically along the I-15 corridor and the surrounding areas. We cover the customer base in our area with two locations in Hurricane and St. George, Utah. We employ 65 very dedicated and loyal people. Most are making this a lifetime career. Of this head count, seven are dedicated outside sales and 12 are dedicated to inside sales. As a company we have chosen not to have a dedicated vice president of sales. What works better for us is to have a market segment specialist for each of our divisions, and they make the final call on that piece of our business. One of the benefits of working for a family owned business, which is actually operated by the family, is that you are not just an employee; you become a member of the family. I’ll list for you in no particular order the balance of the working officers and family management in the company today. They are:

• Nancy Harris, who is treasurer and the keeper of all of our credit applications and the processing of them. She is also very handy answering the phones around here!

• David Scholzen is vice president and branch manager of our Hurricane branch.

• Keith Scholzen is secretary and travels an outside sales territory for us.

• Nick Scholzen is our finance manager and is responsible for all of our accounts payable. Nick is a good guy for any vendor to know!

• Kelly Ashcroft is one of our directors also, and is responsible for all of our fencing sales and activity.

One last thing John, allow me to tell you a little bit about Casey Carnell, the man who got you involved and really wanted to see that this interview on our company take place. Casey, as you know is our commercial plumbing sales manager, and he was brought on board to do just that — help us build the commercial sales segment of our business. He works out of the branch in St. George where Jeff Turek is the branch manager. He has a total of some 17 years in the business, and we are very proud to have him on the Scholzen family team. After beginning his career with an independent, then going through that crazy acquisition period a few years back, he became an employee of one of the big box guys in the territory. Didn’t take long for us to “find him,” and the rest is history as they say. He is very important to the commercial segment of our business, and we expect great things from that area as we go forward through his leadership.

Martin: What a great lineup of people to take care of the business! I do know Casey through the UPA buying group structure that you are a member of, but this is my first time to meet him also. Seems like a very dedicated man who really does know the business. He was telling me earlier this morning that it sure was a good feeling to be back with a strong independent in a market place that believes in taking care of a customer with service and inventory!

Ballard: Yes, I feel we have a great team across the top level of management here at Scholzens, and in my opinion, it continues through middle management and throughout the entire company to the truck delivery folks. We are proud of the entire group.

Martin: As well you should be! Sounds like a dedicated lineup of quality folks. I can tell that I am going to totally enjoy this story! Next Bruce, could you share with us how your sales are divided among product categories and between residential and commercial?

Ballard: I sure will, but one of our best qualities here is how diversified we really are as a total company. If there is a need, we try to fill it, no matter what traditional category it may fall into. Our ability to source any need our customer has is one of the prime reasons for our growth and success over the years. Scholzen is the dominant supply house that services this area. Between PVF and plumbing, I’d say that 25.0% is PVF related, and 45.0% is plumbing, with the balance being all others.

Martin: Since I have had the management tour of your warehouse and grounds, I’d sure say you are correct on being able to supply anything a customer would want. A very nice operation indeed. I mentioned earlier that I had knowledge of Scholzen being part of one of the industry buying groups which is UPA in Sanford, Fla. Would you comment on how Scholzen has been able to use this group function and their chosen vendors to help grow your business?

Ballard: Sure. Relating to UPA for the company is part of the charge we have given Casey, and it seems to be working extremely well. Being aligned with the UPA buying group has indeed been all positive from my point of view. The Corp brothers are very industry oriented and good to work with. In fact, we have been working with them in the positive effort to continue to improve our profit margins, as well as developing a private label program for some products. It is essential to be part of a buying group in today’s economic world to help and support what you have to do sometimes to be able to compete with the big box stores.

Martin: You seemed to really like that question my friend, and I’ll tell you that I really liked your answer! My company (Anvil International) does business with most groups out there today, and UPA is certainly among that grouping. I can tell you that I agree on your comment about Bill Corp, Doug Corp and Roy Jacobs, their resident expert in valves and product in general. I’d say he is a pretty darn good sales guy for them also. They all are friends of mine, good customers and have been in the industry a long time. Good choice for you to be sure!

Now, are there any special or major projects in your area that you have been involved with that are a particular source of pride for your company?

Ballard: We of course are very proud of all of the projects that we have participated in. However, one of the most recent projects we participated in that has made a huge impact in our market was the new $159-million St. George City Airport. It definitely has kept our trucks and our purchasing agents very busy trying to keep up with the demand.

Martin: How good is that? Most houses even in the large cities don’t have new airports to deal with, so congrats on that job! Now sir, with reference to the business climate around here for the past couple years and forward, have you had to change the focus of your business or do anything differently? Could you also describe the market conditions in your area currently, and have you or do you see an improvement going on now or when?

Ballard: I’m pleased to answer this question John. One of the many good things about Scholzens is that because of being so diversified we have not been affected by the downturn in the market like the big box wholesalers. We are not solely dependent upon plumbing or waterworks to survive. This is and always will be a sense of pride for us. As I mentioned before, we like the fact that we can source anything for any of our customers, at any time. It allows us to operate in many markets at one time.

Martin: So, you have had to make little focus change because of the in-place diversification that has been historically built into your service system, is that correct? Does the current market conditions and what you see down the pike have you planning to do anything different?

Ballard: You know, we really do watch our markets very closely for signs of change even in good times. We don’t panic and start to think that times are bad or have been bad, so we have to make big changes in what or who we are. No sir, we simply strive to keep a closer relationship with our key vendors and talk to them about change and new products for new emerging markets possibly. We are attending more trade shows and trying to keep a keen eye out there in the street looking for possibly the next game changing idea, but even with all that, we take care of whatever the current market is everyday, and when you treat customers in an honest and fair way, they tend to come back. We love that “next visit” from a new account! Feels really good.

Martin: Thanks Bruce, for that clarification. Next, I’d like to ask how have your customers’ expectations changed over the years, and how has Scholzens adapted to those changing needs/wants?

Ballard: Our customer base over the years has been very loyal, and that sense of family that we impart to our employees translates over to our customer base. When you buy from Scholzens you buy from family. We make it a point to not just sell to a customer, we want them to be a part of our lives. We want to know about their family, because we are in the business of building relationships. Coming to Scholzens’ counter is like coming to your local barber shop. Where a lot of wholesalers make their mistake is they send out their salesmen for strictly sales, and then get mad when the salesmen come back empty handed. You have to build that relationship and trust level first, then the rest will fall into place.

Martin: Absolute wonderful response! Thanks for that! Just a couple more I promise. Do you have any special events/activities that you sponsor to help build customer loyalty and relationships?

Ballard: We do many activities to build relationships with our customers. It is not uncommon to see our salesmen out riding 4-wheelers, or on fishing trips, or skeet shooting with our customers. Two times a year we have a breakfast and lunch for our customer just to say thank you. We also hold continued education meetings with our reps, and invite our customers to participate, so we are not just order takers — we learn hand in hand with our customers. The more we learn as a company, the better prepared we are to service our customer base. Our knowledge base is unrivaled, and a real source of pride within our company.

Martin: Can you describe the leadership philosophy at Scholzens, such as accessibility to customers and employees, and hands-on activity by the owners?

Ballard: I can do that John. Scholzen Products Company is a family owned business, and we pride ourselves with the fact that we work hand in hand everyday with our customers, and employees. At any given time any customer, or employee can walk into any one of our offices and sit and talk. One of the things that makes us unique as a company, is our strong work ethic.

Martin: Last question I promise — with so many sources of competition in the marketplace, how does Scholzens attempt to differentiate itself?

Ballard: Again, for us it all falls back to our diversity. The more items that you can provide for a customer the more you become their first point of contact. Most of the big box stores have turned into nothing more than catalog stores, and rely heavily upon their distribution centers to provide them with product. As a family owned business we cannot rely upon a distribution point, because we are the distribution center. Our purchasing agents do a very good job of keeping us in material, and that helps us stay ahead of the game. When a customer comes to your counter they need the parts now, not two days from now. We use our inventory levels and our relationships with our vendors as a huge advantage over our competition.

Martin: You know Bruce, it really does look like the Scholzen success model has been totally built around that one word — and that word is “DIVERSITY!” It certainly has worked for your company, and you have every right to be proud of the success we have identified. You guys have been great, and from me and all the management staff from The Wholesaler, thanks, and we really appreciate the time you have given us to put this together for the pleasure of all our industry readers. Good selling!

Well that’s it folks…….I sure hope you all have enjoyed this true story coming right at ya from Southern Utah! Thanks again for dropping into “Martin’s Corner” just to see what’s goin’ on! Don’t forget, as you read through this issue, please finish up by checking out my interesting wine tip for the month of August!

Starting in our industry in 1968 at Anvil International (formally Grinnell Company) Martin has been with them over this 43-year span of his life through five different owners! Currently serving as VP-National Account Sales for Anvil’s mechanical products division, he has worked in every phase of the company from warehouse to sales (inside and outside) to branch management in the 1970s-1980s. He served as regional VP for their West Coast units, and since about 1990 in this national role with contacts and customers/vendors coast to coast. Currently also, he is responsible for Anvil as their lead person at ASA & MCAA, and identified as Anvil in all the wholesale industry buying/marketing groups. John can be reached anytime at jmartin@anvilintl.com or his cell phone at 303-588-9806.