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Friday, Jun 2, 2023

Stone Cold Success

“I was born into the business of stone.” That was the answer to the first question of an interview with Arik Tendler, president of CaesarStone US. The choice of Tendler to lead the Israeli-based company’s push into the American marketplace 10 years ago was a good one. Under his direction, U.S. sales have grown to $80 million, and the company has branched out from its Valley headquarters to locations in the San Diego and San Francisco area as well as Atlanta, Miami and New York. CaesarStone is a quartz-based product manufactured in Israel that is used primarily in residential kitchen countertops. Any regular viewer of home remodeling television programs will recognize the material which competes with both natural stones like granite and manmade solid-surface materials like Corian. We caught up with the very tall and very energetic Tendler, who had just returned from Israel and was preparing for a trip to Atlanta, in his Van Nuys headquarters. Question: Tell me how you became involved with CaesarStone. Answer: I was born into the business of stone. All my life I’m doing this natural stone stuff. After the army in 1987 they (CaesarStone) came to me , I was one of their clients , and tried to offer this quartz thing, this artificial stuff and I threw them out of my office. I’ve seen the product be so successful. In America, stone for home (kitchens) used to be 5 percent or 6 percent of the market. In Israel, which is the size of New Jersey, it is 100 percent. From when I started, the difference is that now there are millions of people using it and it’s a different ballgame. I’ve seen this product taking over and kicking out other products. But laminate, Formica, it’s the number one countertop in the country. Q: Tell a little bit about the product. A. The product itself is called quartz, quartz surfaces. Quartz is cold and heavy just like other stone. It’s got all the upsides of granite, and the upsides of the Corian-type products. It’s scratch-resistant like stone, stain-resistant like solid surfaces, because you know granite can stain, and it’s guaranteed. There is a lifetime guarantee. Q: And it’s all manufactured in Israel? A: Yes, Israel invented the product. Since then the whole segment called quartz surfaces has grown tremendously and we have a lot of competitors LG and Dupont we have some pretty big companies after us. It’s a pretty big industry now but we invented it. They (CaesarStone) invented the product in ’87, I don’t want to take credit for them, and they are the largest one in the world now. The U.S. market is one of the three biggest markets they have. They own some markets in the world Australia, Israel, obviously, and Europe. Q: When Israel is experiencing problems like they are now in Gaza, does that affect production? A: I came back from Israel yesterday. Unfortunately it’s a country that’s used to wars but when you’re there you don’t see anything. And in times of war, the Israeli airline is still flying, the steamship lines are going in and out, it’s never failed yet. The only time we had a problem was a strike here in Long Beach. Q: Do the remodeling craze and the bad economy go together? A: Quartz surface is so small still market-share-wise that even if the whole cake shrinks this whole chunk is getting bigger and bigger and bigger and so we think we can go through this whole economic crisis relatively without problem. In times like this, it takes about a year for it to sink in that they can’t sell their house, therefore they can’t buy a new house. They say, ‘our kitchen is old, our bedrooms are old, let’s go for a remodel.’ That’s what we’re seeing now. We grew (sales) 40 percent in ’08. Q: How else has the company grown? A: We started in North Hollywood in 1999. I rented a small room in a stone shop and we used it as our office. We moved to Sun Valley in 2002 and we had one facility. It was everything together in one place. Since then we opened seven more places, distribution centers around the country and also this place, our headquarters in Van Nuys which we opened a year ago. We still have our Sun Valley facility which is basically our Los Angeles division. It has a small showroom, offices, inventory and a warehouse. Trucks. The whole thing for the L.A. area. Q: What made you pick the Valley? A: People don’t know that besides porno, this is the capital of the stone world. The Valley is probably the capital of stone, I don’t want to say in America, but definitely California, maybe the West Coast. The number of stone suppliers, fabricators, all this, I don’t think on the West Coast there is a bigger consolidation. It just makes sense for us. Q: How did you start a whole new company in the United States, coming from Israel? Obviously there is a big difference in how business is done. A: First of all, lack of information really helped me. I would guess if I would know where I was going I’m not sure I would do it. Second of all, the U.S. in general is much easier to do business in because usually what you see is what you get. They’ll do everything they can to make it happen. They don’t load you with a gazillion rules and stuff just to make your life harder. Q: Now a lot of people would argue with that and say that California has too many rules. A: I would tell Americans in general, guys you live in La-La land. I’ll take you to the Middle East for a week, and when you come back, you land in whatever state, and you’re going to kiss the ground. God really blessed America. In general, doing business here is easier. In California which is very famous for its laid-back philosophy, if you’re a go-getter, if you’re a hunter, you’ll make it. Not always, you also have to be lucky, but the biggest challenge I had moving here was my wife and kids. Q: What’s changed about your business over the past 10 years? A: Our first business structure, philosophy, model, whatever you call it, was so different today it wasn’t even funny. I made a gazillion mistakes. We just adopted the old traditional business structure of this industry which means that we don’t try to cut corners and we live and let live. Basically there is no conflict of interest. Q: Can you explain that? A: What I mean by that is the stone fabricator, his job is to sell to you or to a kitchen showroom, a countertop. I don’t sell direct to anybody. I sell to the stone fabricator. I create demand with the consumer and the architect and all the tradespeople I don’t tell the consumer, ‘Look you came to get a sample, I’ll sell you the product cheaper.’ I don’t open my own stone shops. We are giving great service to these guys and they appreciate it. The architect is getting samples for free. We do deliveries for free. Q: You don’t charge for delivery? Isn’t that a huge expense given the weight of the product? A: The truth is, if I want to be accurate, we started in ’08 like a surcharge if you will. A minimum charge. Until ’08 it was free. Q: What’s next? A: Focus. Nothing is next. We keep on doing what we’re doing. We’re opening more places. We’re planning in ’09 to open two more places. One will be in the Valley. We are thinking of improving our Sun Valley location. We own the place but we’re looking at a 50,000 square foot warehouse in Sun Valley. The place we have is too small. It is very uncomfortable for consumers, customers. So we are looking to move, just down the street maybe. We are negotiating on two places. That’s number one. We are hiring, right now we are hiring 12 people, mostly here, mostly in sales and marketing. We are investing more money in advertising because we figure that the only thing between us and selling more is product knowledge, consumer knowledge. We have a good product. We don’t have to cheat. I don’t have to be a great salesman. We’re not even sales people. We’re more marketing. As soon as you get the product into your home, (claps hands in a taking off motion).

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