Seven years after founding Dutch Craft Mattress Co., President Eli Schmucker is confident about the company’s potential for continued growth. He predicts that within three years, the production volume of his Celina, Tenn.-based factory will have tripled and that a second facility, scheduled to open this year, will be fully operational.
Such growth—and Dutch Craft’s very identity—are tied to an unwavering commitment to quality, Schmucker says. It’s that commitment that drives every decision the company makes.
“At Dutch Craft, our core belief is that we build the best product out there and that no one can touch us on quality,” Schmucker says. “Our challenge is to maintain our current standards as we grow.”
An Amish upbringing
Schmucker draws all of his company’s core beliefs—integrity, honesty, hard work and the value of teams—from his Amish heritage.
“I was raised in an Old Order Amish community in Middlefield, Ohio,” he says. “We had horses and buggies and, like all Amish, I left school after eighth grade.” His formal education ended then, but his interest in learning never did.
An affinity for motors and automobiles drew Schmucker away from the Amish life. By the time he was 17, he was working at Therapedic of the Great Lakes. And at 21, he was running that Therapedic factory.
In fact, it was at Therapedic that the idea for Dutch Craft was born. When the company relocated its plant in 2002 to a rural facility near his hometown, Schmucker facilitated the hiring of a group of Amish workers, a move that turned out to be successful.
“I wanted more to do so I initiated the idea of a high-end line of mattresses based on my ‘Amishness’ and the Amish employees,” Schmucker says.
A Southern startup
When Therapedic passed on the concept, Schmucker decided to pursue the idea himself and took an exploratory trip to Tennessee—a place he had visited on vacation and appreciated for its warmer-than-Ohio weather.
“The locals encouraged me to start a company down here and offered to help,” he says. “I was amazed that they took me seriously.”
Schmucker believed that he had three things going for him: He knew how to manufacture mattresses, he could fix machinery and he was extremely motivated. With those assets—and the proceeds from selling everything he owned—he and Bill Troyer, an Amish friend who Schmucker says “wanted to experience life,” set out for Tennessee to make beds. (Troyer later left the company to return to school. He’s now in college and royalty checks from Dutch Craft help pay expenses.)
Schmucker quickly learned that it took more than enthusiasm to launch a successful company. Initially structured as a factory direct, Dutch Craft foundered.
“When I only sold one twin bed in a month, I knew I had to do something,” he says. What followed were two years of what Schmucker describes as “a really huge learning process.”
“All I did was learn,” he says. “I learned how to use a computer, mastered QuickBooks software and read every book I could find on selling. If you have a passion for something, you learn it quickly and I really wanted this business to succeed.”
Instead of relying on customers to come to him, Schmucker took to the road, acting as his company’s only sales representative and knocking on retailers’ doors. When he delivered his first order, he found that his dealer customer was “hugely dissatisfied.”
“The biggest lesson I learned is that dealers want quality and that they don’t want returns,” he says. “I decided right then that I wouldn’t use convoluted foams or fiber pads. I would use no foams with less than 1.5-pound density and all foundations would be made of hardwood. Today, even with beds that retail at $399, we have no returns.”
A commitment to producing only high-quality products set Dutch Craft on a path to success. In 2011, the company posted $4 million in annual sales, an increase of 30% over the year before. Schmucker projects that within five years, annual sales will have doubled over 2011’s figure.
Sue Eldridge, Dutch Craft’s bookkeeper and project manager, thinks that projection may be conservative.
“Even in a bad economy, our sales have increased each year,” she says. “We’ve already surpassed many of Eli’s sales goals. If we keep growing the way we are, the next five years should be amazing.”
Dutch Craft’s platform for growth seems sustainable. The company completely jettisoned its initial factory-direct model and now puts all of its efforts into wholesale sales to retailers. Four years ago, a 45,000-square-foot manufacturing facility replaced the company’s 5,000-square-foot startup plant. Dutch Craft’s current factory produces about 250 pieces a day but has capacity to turn out as many as 1,000.
Schmucker plans to open an additional factory in New York this spring. He’s been shipping to the region for the past two years and has an average of 800 pieces a month going just to Pennsylvania, so he’s confident he has the volume to begin production there.
“We want to start small and build from there,” he says.
Partnerships & private labels
Last summer, Dutch Craft signed a licensing agreement with Stuart Carlitz’s Mattress Development Co. to produce and distribute Eclipse and Eastman House brands in Alabama, southern Indiana, northern Georgia, Kentucky and Tennessee.
“I’m very particular about not selling to two guys in the same town,” Schmucker says. “Licensing gives us an opportunity to sell into a new region and to offer retailers opportunities they’ve never had before.”
Dutch Craft also produces three private-label brands. For now, Schmucker is satisfied with his company’s private-label and licensing deals and isn’t looking for additional partnerships. “I need to get these up and running and always want to be able to focus on Dutch Craft first,” he says.
The Dutch Craft brand
Dutch Craft offers a variety of mattress constructions and designs under its own name, including an environmentally friendly collection called Back to Nature. A group of gel mattresses is scheduled to debut this month.
The Paradise collection, introduced a year ago, has rapidly become a best-seller. With suggested retail prices from $799 to $2,999 for a queen set, the 12-model memory foam and latex collection is the company’s most expensive. It’s also a bit of a departure for a company that has specialized in innersprings—though many with foam and latex comfort layers—and foam-encased coils.
“I was skeptical about this in the beginning, but none have come back and we have had nothing but rave reviews from dealers and consumers,” Schmucker says. “I think the industry is moving toward foam and latex and this Paradise collection could end up contributing about 25% to annual sales in two years.”
The Bouquet collection is Dutch Craft’s entry-level offering, with suggested retail prices from $399 to $999 for a queen set. Because customer demand remains high for two-sided innerspring mattresses, the company “still makes a ton of them,” Schmucker says.
Most Dutch Craft bedding is sold through furniture retailers and specialty sleep shops in nearly a dozen states: Alabama, Arkansas, Illinois, Indiana, Georgia, Kentucky, Missouri, Ohio, Pennsylvania, Tennessee and West Virginia.
The company has about 250 active accounts, but also does a substantial amount of custom work. “We’ve done almost all the tour buses for country music stars, including BarlowGirl, Aaron Tippin and Taylor Swift,” he says.
Getting the word out
It was only last year that Schmucker began to seriously consider the benefits of marketing. “Eli has always been more interested in developing product than dealing with marketing,” Eldridge says. “He was counting on word-of-mouth to sell the product.”
But Schmucker has come to believe that marketing and consumer education are synonymous. Dutch Craft now makes marketing and point-of-purchase materials available to retailers and has upgraded in-store displays with bed skirts, pillows and foot protectors.
Schmucker jokes about “crawling out from under a rock,” but it would be a mistake to underestimate this 31-year-old leader. His employees don’t.
“Eli was always taught to work hard, do the right thing and respect other people,” Eldridge says. “That rubs off on everyone around him. He thinks of us as family and cares about what we’re doing, not only at work but outside of it, as well.”
She adds: “Eli makes Dutch Craft what it is. He expects us to make a quality product and to work hard to achieve that. We don’t let problems get ahead of us. We all want the company to grow, but we want to keep the quality because it makes our customers happy and that makes us happy.”
Meanwhile, the confident young man who set out to build “the very best mattresses” remains confident, if more realistic, after several years of experience. Dutch Craft, Schmucker hopes, will be a long-term player in the industry. He looks to companies like ultra-luxury brand E.S. Kluft & Co. as guides.
“The sky is the limit for us,” he says. “As time passes, everything gets stronger. I don’t know how big we want to get. We certainly don’t want it to happen overnight. You don’t become Earl Kluft overnight.”
|Company||Dutch Craft Mattress Co.|
|Specialty||Full-line mattress producer with license to manufacture and distribute Eclipse and Eastman House brands|
|Facilities||45,000-square-foot manufacturing plant in Celina with plans for another factory in New York|
|Philosophy||‘Our purpose is to serve our God, our customers and our community.’|