By Eric Smith
<span style="color: #999999;">At a time when many U.S. brands are moving their manufacturing facilities from one foreign nation to another in hopes of avoiding tariffs, Seattle, WA-based Outdoor Research has doubled down on domestic production.
The longtime outdoor gear brand recently opened a 32,000-square-foot facility in El Monte, CA, slightly topping the company’s 30,000-square-foot plant in Seattle. The company spent $3 million on the new building, which employs about 120, also effectively doubling its manufacturing workforce.
While the company will manufacture many products for a variety of end-users at the new facility, it was primarily built to make tactical gear for Department of Defense and NATO contracts. Outdoor Research has been serving the military and tactical markets for 25 years.
The company’s president, Michelle Wardian (pictured above, center, alongside manufacturing and R&D staff), said she can’t disclose the specific gear being made there, but it does align with the company’s array of gloves, gaiters, headwear and apparel. Production capacity at the plant the depends on the assortment, but Outdoor Research chalks up about 15,000 hours in labor a month.
SGB wanted to know a little more about the new plant and why the company decided to invest in U.S. manufacturing (hint: military contracts require products to be Made in the USA).
Here is what Wardian shared with SGB about the new facility, why a short supply chain is critical, the challenges of meeting Berry Amendment regulations and what’s driving growth these days at Outdoor Research, especially in tactical.
What kind of growth is Outdoor Research seeing in tactical and what are the growth drivers for that division? In the last 12 months, we have doubled our tactical business and see this demand continuing forward. Outdoor Research has a long history of supplying outdoor equipment to the United States Armed Forces, including the most highly trained elite users in the armed forces, who require unfailing gear for a wide variety of climate and terrain challenges. We are growing because we have put in decades of research and development with the toughest users, incorporated their feedback into our gear and continue to improve our product in all ways that matter: durability, protection and comfort. In the last 18 months, we have prioritized direct dialog with the users and the research labs that qualify field-issued equipment. Our engineers and manufacturing team know exactly what they are solving for. Our customers are increasing orders of Outdoor Research product because of this clarity of purpose and function.
What’s the primary channel for tactical and how is that channel performing (strengths and weaknesses)? Our primary tactical customers come from the U.S. and other NATO countries. These specialized customers are upgrading personal protective gear for the men and women who protect us, specifically for their hands, head and feet. With performance being such an important criterion, demand for Outdoor Research product is high. We’ve taken on the challenge of a shrinking supply chain and maximized our core value in engineering, fit, material and price. One of the biggest strengths of Outdoor Research is that we have a long history of actually making our own stuff. We have an incredible team in the U.S. who are not only manufacturing geeks, but they regularly get into the mountains and canyons, so they are testing the end product all the time. Leading our Tactical Sales channel is a former Army Officer, formerly deployed in Afghanistan and Iraq, who understands the life-and-death nature of having reliable gear. This gives us unique insight into customer need and an incredible sense of responsibility.
In terms of challenges, this business has a long and arduous buying cycle process. The testing we employ in the production area alone requires a fanatical level of commitment and discipline. This level of risk and long-term planning certainly is not for everyone, but as a result of this dedication, Outdoor Research has become the premier Gore-certified glove-making facility in North America and a trusted supplier of U.S.-made specialty tactical gear.
From the production side, what is advantageous about increasing your U.S. manufacturing (being Berry Amendment compliant, fighting tariffs, better labor pool, etc.)? The Department of Defense requires product from only U.S. factories, using only U.S. materials. This is a difficult equation as labor rates increase and equipment costs go up. The only way to compete is to invest in engineering, automation and improved workflow with properly trained sewers. By doubling our production in the Los Angeles area, Outdoor Research has tapped into a sewing community who watched jobs go offshore and are eager to work in a high-quality manufacturing environment. Outdoor Research invested in the best equipment (normally only seen in Asia), along with training and quality processes that increased efficiency and helped our sewers better enjoy their jobs. Staff from our existing Seattle factory have been flying back and forth to L.A. for months to share their own expertise and knowledge. We now have a total of 240 sewers and a culture of innovation that grows stronger each day. This is also an advantage for the commercial side of Outdoor Research, feeding our innovation pipeline, product-development strategy and faster prototyping turnaround.
Beyond the numbers or DOD requirements, how about from the brand/marketing/PR side—why is it important for Outdoor Research to produce in the U.S.? What message does that send to channel partners and customers? We have always been understated about our tactical heritage and expertise because of our deep respect and admiration for the people who protect us, and the seriousness of their work. That said, having a factory in the U.S., and talking with elite customers about how our products have performed in tough situations, brings real credibility to what we do. We love to share customer stories internally and you’d be surprised how many people send us back gear to thank us. It’s rare for a brand to be part of someone’s life story, and even more rare to have built product that may have even helped save their life. This gives us purpose and a real sense of pride. We selectively share stories of these brave and dedicated consumers out of respect for their individual experiences as well as respect for the nature of the customer.
How does tactical compare to growth companywide, and what’s else is performing well for Outdoor Research? We are having a great year with high double-digit growth and profit. We are nicely balanced in revenue contribution from our channels including tactical, commercial wholesale and e-commerce.
In the wholesale market, 18 months ago we made a conscious decision to clean up the market and focus on growing specialty retail. We followed that with hiring a new VP of Sales who is committed to growth through high-integrity partnerships and clear expectations for how the brand shows up across North America. Our e-comm business is maturing at a healthy rate, and we see this channel as an important funnel for direct customer feedback and product insight.
On the operations side, we not only opened up the new L.A. factory but also added a new 110,000-square-foot distribution center and installed a new e-comm platform. This year is all about operational excellence and creating a better consumer experience across all touchpoints.
Looking beyond the product, where is the company differentiating right now—whether that’s talent recruitment, supply chain optimization, messaging, etc. (or some combo)—and what do you attribute that to? The biggest shift we see at Outdoor Research is the heightened sense of opportunity, focus and team commitment. We believe in the magical mixture of having the right people who share a common sense of achievement and are competitors themselves. Being owned by a manufacturing parent like Youngone Corporation (who live quality and innovation as a core value) and Dan Nordstrom (who is rooted in the customer experience) focuses our decision-making in what is best for the long-term integrity of the brand. The retail landscape is not easy these days and it’s easy to get distracted. We are incredibly grateful to be grounded in not only what we do, but why we do it. As a result of all these things, there isn’t a lot of static for us—we see clearly the journey and opportunity ahead.
Photo courtesy Outdoor Research
[author] [author_image timthumb=’on’]https://s.gravatar.com/avatar/dec6c8d990a5a173d9ae43e334e44145?s=80[/author_image] [author_info]Eric Smith is Senior Business Editor at SGB Media. Reach him at eric@sgbonline.com or 303-578-7008. Follow on Twitter or connect on LinkedIn.[/author_info] [/author]
