By Lisa Readie Mayer
Photo Courtesy: ©2017 Jonathan Burkhart for High Five Media, Oklahoma City, Oklahoma.
Through eight decades, four generations, multiple recessions, two fires, and the constant evolution of consumer trends, American Propane Gas Company in Oklahoma City, Oklahoma, has stood the test of time as a monument to successful retailing.
James L. Grigsby, Sr., the first propane dealer in the state of Oklahoma, founded the company in 1936. As the story goes, Grigsby recognized the business opportunity available in converting homes from wood fuel to modern gas.
“It was quite a feat, considering it was during the Great Depression and the Dust Bowl in Oklahoma,” says Herb Hampton, general manager and husband of the founder’s granddaughter.
Over the next 20 years, the entrepreneurial Grigsby, Sr., grew the company by expanding into other industrial businesses, including water well drilling and residential construction. “He developed a few small neighborhoods because they were built-in customers for his gas fuel,” says Hampton. “He was very smart and enterprising.”
It was Grigsby’s son, Jim Grigsby, Jr., who added grills to the gas carburetors and other industrial gas products they sold. “We got into gas grills in the ’70s when they were just a curiosity,” Hampton says. “We started selling post models from El Patio, Falcon, and Charmglow. They were very unusual at that time.”
Grill sales became a significant contributor to the bottom line when the company started carrying Ducane Grills. “Ducane was the first premium brand, and they were expensive at the time,” says Hampton. “It was the force that helped build our grill business.”
|A perfect place to demonstrate.|
By the early 1990s, American Propane was doing about $100,000 in annual sales of the now-defunct Ducane grills and replacement parts. “We said, ‘This is a trend. Barbecue is going big,’” he says. “It was still cart grills then, not outdoor kitchens, but people were spending money on grills.”
Hampton says the management team soon recognized that future grill growth would be limited by the lack of a true retail showroom at the commercial- and industrial-focused downtown location. So, in 1993, with Jim Grigsby, III at the helm, American Propane opened a second location with a large retail showroom on a main thoroughfare closer to the suburbs and more inviting to consumer traffic.
From the mid-1990s to early 2000s, American Propane experimented with its gas grill product mix, becoming one of the first DCS dealers in the state, and adding lines from Viking, Capital, Meridian (a premium line by Ducane), Twin Eagles, Lynx, Thermador, and other brands.Ducane was still the company’s bread and butter brand, but with more space, the retailer added a large selection of other brands to the sales floor, focusing on high-end grills as alternatives to “the cheap imports at the Big Box stores,” according to Hampton.
“We tried them all,” says Hampton. “We would see which were best-suited to our customers and our company, and then started culling brands that didn’t meet our needs and expectations.” Today, DCS by Fisher & Paykel is American Propane’s best-selling gas grill line.
“It has brand recognition and a reputation for quality, plus it has a value proposition that speaks to our customers,” he says. “It’s super well-built, but a little more rudimentary in terms of bells and whistles, which keeps the price down.”
|L to R: Jim Grigsby, Jr., Herb Hampton and Jim Grigsby, Sr.|
In addition, the company currently carries grills from Lynx, Weber, Napoleon, and Blaze Outdoor Products. “We have sold a lot of Weber grills over the years – they became the replacement for our Ducane business,” says Hampton. (Around 2004, Weber purchased Ducane Grills and eventually discontinued the brand.)
Although propane is still the core of the retailer’s business, Hampton says solid-fuel grills and smokers are now big sellers. “We have always carried charcoal grills and smokers from Hasty Bake; they’re manufactured in Tulsa,” he says. “And we were early adopters of kamados.” Though the store originally carried both Big Green Egg and Primo Ceramic Grills, they currently offer only the latter. “We focus on the Primo Oval now,” he says. “It’s a strong brand, but not as broadly distributed. I think we are the biggest seller in Oklahoma City.”
While the store’s pellet grill sales were once limited to the niche market he jokingly calls “barbecue nuts,” it’s now catching on with a much broader consumer base. But despite growth, according to Hampton, the category has brought challenges. After initially carrying Traeger pellet grills, the retailer switched to MAK Grills when Traeger expanded into home centers and warehouse clubs. Now that MAK has announced it will sell only direct-to-consumers, Hampton says, “We are once again looking for a new pellet grill. The retail environment is crazy and constantly changing.”
He says American Propane has seen its outdoor kitchen business take off since adding a spacious outdoor display area when the store was rebuilt after a fire in 2012. The circular, 60-ft. diameter stone patio, sheltered by a solid roof with a dramatic wood ceiling, acts as an inspiration center for customers, and an event and demonstration space for the store.
The retailer partnered with a local contractor and the granite dealer next door to outfit the display with large cooking and beverage islands featuring multiple grills and components built into stone. It also has a smaller stucco grilling island, and an outdoor stone fireplace. In the indoor showroom, there is a pergola-topped, U-shaped stone island that incorporates both chair-height and bar-height seating.
Hampton says the outdoor kitchen category is “far from mature,” but tapered off somewhat since 2013, when oil and gas industry declines and job layoffs challenged Oklahoma City’s economy. However, he says, outdoor kitchens are becoming a “must have” for home resale, so that has helped keep interest high.
He also is seeing interest from homeowners with more limited budgets. “There’s a new market for built-in outdoor kitchens in modestly priced spec homes,” he says. “People want an island peninsula, a good grill, some doors or drawers, and a fridge. They put a TV out there and, starting at maybe $7,000 or $8,000, they’ve got an outdoor kitchen without spending a fortune. It’s an exciting area of growth.”
|A pair of patio heaters stand guard at a stone island.|
He said the trend has helped grills from Blaze Outdoor Products, a line the retailer took on to fill a gap between $1,000 and $2,500 price-points, gain traction. “People know they need a good-quality, reliable grill for outdoor kitchens, because it’s a major production to tear it out if it fails,” Hampton says. “A $1,000 built-in from Home Depot is disposable. It’s at the curb in three years.”
Hampton says customers with bigger budgets often want a second built-in grill, typically a charcoal kamado. Less frequently requested are sinks, pizza ovens, and warming drawers. “Sometimes, we get the customer who comes in and spends $30,000 and wants everything – they tend to be the warming-drawer buyers,” he says. “A pizza oven is a pricey appliance. You can buy a lot of takeout pizza for $4,000.”
The retailer also sells fire pits, fire tables, patio heaters, and other Outdoor Room elements, as well as a full complement of barbecue fuel, grilling accessories, and gourmet sauces and seasonings, many of them made in Oklahoma.
According to Hampton, the store does not offer build services, but typically supplies grills, components, and sometimes design consultation to the deck and patio builders, landscapers, pool builders, and other specialty subcontractors, who refer their clients to the showroom to pick out product.
“Prefab islands and modular islands are not big in our market,” says Hampton. “We use some modular units for displays because they are easy to move around, but they are not big sellers in Oklahoma. We have maybe sold three or four in total, ever. The contemporary look of modular islands is appealing to Millennials, but this is brick and stone country. Modular sells better when labor costs are high. In Oklahoma, labor is cheap and there are lots of people around who can build inexpensive, brick-and-mortar islands.”
LP cylinder exchange is another major business component for American Propane. The company started its own exchange program, building to 50 local dealers and 50,000 cylinders annually by 1997. That year, it also became a distribution partner for Blue Rhino, supplying cylinder exchange stations at Big Box retailers in the region. A fire at the business in 2000 was the impetus for American Propane to sell its private-label exchange operation to Blue Rhino, while continuing as a Blue Rhino cylinder exchange distributor.
Today, American Propane moves 350,000 Blue Rhino cylinders a year, accounting for nearly $1 million in revenue and about one-third of its gross sales, according to Hampton. “The propane business has had its ups and downs, but we’ve weathered them,” he says.
A progressive marketing program has helped American Propane weather other business-climate fluctuations throughout its 80-year history. Hampton says a combination of tried-and-true and more innovative platforms helps them connect with established clientele and build a base of new customers.
For instance, the company still maintains a Yellow Pages ad. “They are practically giving them away and our older clientele still uses the book,” Hampton rationalizes, but they have also invested in events, cooking classes, a top-notch website and social media.
Hampton’s daughter, Kelley Hampton, part of the fourth generation of family members involved in the business, regularly posts recipes, tips, how-to videos and other helpful links on the company’s Facebook page. The retailer uses outside firms to provide creative media and online reputation management services.
One of the company’s most successful marketing efforts has been partnering with The Oklahoman, the state’s largest daily newspaper. In addition to traditional advertising, the store also ties in with the paper’s food editor Dave Cathey, a.k.a. “The Food Dude,” on a series of cooking classes in the outdoor display space.
The charismatic Cathey is a draw for the attendees who pay $50 per event – or about the cost of a dinner out, according to Hampton. A rotating roster of the area’s best chefs demonstrates grilling and smoking techniques, serving up their specialty dishes to the guests.
The events generate follow-up publicity about the store and the chefs in the paper and on Cathey’s blog and Facebook posts. “It’s good co-marketing for everyone involved,” Hampton says. “Print readership has shrunk somewhat, but the paper’s readership is the right demographic for us. The program enhances our image as the go-to place for grills and outdoor kitchens, and helps us stay top-of-mind.”
|Colorful, cheerful art adorns every wall (note the comfortable seating area in front of a fireplace).|
He says the store might increase its social media presence in the future, but only if the cost-benefit analysis makes sense. “At this point, I don’t want to buy ‘clicks,’ because the people I’m selling to are not ‘clicking,’” he says. “The potential customers with the greatest means are still more likely to be readers of the paper. Social media is a challenge as well as an opportunity.”
The Internet falls under that umbrella, too, according to Hampton. “We saw the Internet as a huge threat initially, but now, maybe not so much,” he says. “Grills bought online have magnificent freight issues and a high rate of returns. High-end customers expect perfection, but unless you pay white glove service, the grill is delivered on a pallet to your driveway, you’ve got to assemble it, and if there’s a problem, you’ve got to deal with it yourself. It’s risky. When someone tells us they are considering buying online, we say, ‘Well, it’s the Internet; good luck with that.’ The retail environment definitely keeps changing.”
Changes notwithstanding, Hampton remains optimistic about 2017. “Our Blue Rhino exchange business is in a steady growth trend. The oil and gas industry is improving, consumer optimism is up, the stock market is up, interest rates are still low,” he says. “We are known as the high-end grill dealer in Oklahoma City, so we are in a good position when consumer spending increases this year.”
Store Name: American Propane Gas Company
Locations: Broadway Extension,
Owner: Grigsby family
Year Established: 1936
Web Site: www.americanpropanegas.com
Phone: (405) 843-6868
Number of Stores: 2
Number of Employees: 20 full-time; many are family members
Gross Annual Sales: $3.5 - $4 million total annual gross sales (approx. $900,000 in gross sales for grill business; approx. $1 million in gross sales for Blue Rhino cylinder exchange business; balance is in residential propane heating and other industrial and commercial products/services)
Sq. Ft. of Grill Retail Store: 5,000 sq. ft. interior showroom, plus outdoor display area
Grill Lines Carried: DCS by Fisher & Paykel, Lynx, Blaze, Weber, Napoleon, Primo, Hasty Bake