Expanding the Line
By Richard Wright
Jim Ginocchi (president) launched Coyote Outdoor Living in 2010, just three short years after the collapse of Lehman Brothers when most businesses were still licking their wounds and working to get back on track. It certainly wasn’t the best time to start a new endeavor.
But Ginocchi, a practicing lawyer at the time, had worked with Home Depot and with Barbecues Galore. He knew the barbecue/grill market and saw an opening for a mid-priced product.
Over the next eight years he built his company to approximately 1,000 dealers in the U.S., Canada, Mexico, Central America, South America, and Israel. In a few weeks, at the Casual Market Chicago, he will introduce three new patio collections designed by Kerrie Kelly of Design Lab.
Hearth & Home: Talk to us about launching in the wake of a recession.
Jim Ginocchi: “Yes, 2010 was an interesting time to get into the business. However, since I had some connectivity to the builder industry and the barbecue industry from my time at both Home Depot and Barbecues Galore, I had seen the ups and the downs in the builder industry. In the world of outdoor kitchens, everyone was jumping into building grills. KitchenAid, Jenn-Air, all the big indoor appliance people were getting involved.
“However, when the housing market declined, KitchenAid vacated; Jenn-Air started to vacate. GE started to limit their line of grills. People were under water with their mortgages, so we were finding the outdoor business, the landscape remodel business, was actually growing because people were staying in their home and putting more money into their backyard. So there was a bit of luck as well as strategic timing that Coyote launched at that time.”
Am I correct that you design all your products here in the U.S.?
Ginocchi: “Correct. We have an engineering team. We’re like the Apple model – designed in the U.S. and made overseas. We do all of the design work here, in Carrollton, Texas, right outside of Dallas.”
From when you started, how long did it take you to reach profitability?
Ginocchi: “The funny thing about this business is we were always in the black from day one. From my work with previous lines, I had built up a following of distributors, and they came on (board) as soon as I told them what I was doing in designing and building a value model that was going to blow away the existing products on the market. They trusted me, so we had orders before we had final samples. We were actually in the black from day one.
“In addition, I carried over a key account. At the time they were called John Deere Landscapes. Now they have renamed themselves SiteOne Landscape Supply, and they are an existing account today. They transitioned over to Coyote before Coyote even had its first piece on the market.”
Obviously, you had a good reputation coming out of your other jobs.
Ginocchi: “Absolutely. It was that, coupled with the products, that made them stay. A reputation only lasts so long. It’s the products that make them stay.”
Today, there are quite a number of manufacturers selling barbecues and at every price point. Competition has to be fierce out there.
Ginocchi: “Competition is very fierce. However, we still are the only barbecue company that I know of in our range that offers what I call premium-line features at a mid-level price point. Every one of our products is made of 304 stainless steel; not just the hood or the grates, but everything down to the bolts is all 304 stainless steel.
“We are the only grill in our price line that offers full 304 stainless with, of course, a lifetime warranty on the stainless and the burners. We are also the only mid-level priced grill that uses all pro-style burners, meaning Infinity burners.”
Over the years, many retailers have complained about the low margins they get from barbecue manufacturers. Most manufacturers say the same thing, that ‘We came out of the appliance industry where all the margins are low and that’s why we have continued doing it.’ It has always seemed to me that was a dumb move. I can point to some excellent retailers who dropped barbecue because they didn’t want to work for 32 points.
Ginocchi: “Correct. That is the reason why we go through distributors instead of going direct, or just on the Internet. I think there is margin availability and capability for all facets, both in the Internet channel, and the brick-and-mortar channel, which is becoming an up and coming channel in outdoor living. Margins are a real need for the mom-and-pop barbecue stores because that is their lifeblood. Our distributors are adept at creating programs, whether it’s a combination with other products, whether it’s refrigeration or other indoor/outdoor types of products, or fireplaces, those type of things they can package for those mom-and-pop stores.
“Here’s two main points that others do not have, and that I think puts us in the forefront. One is our abundance of inventory because our distributors are regionally based and they all have warehouses with full inventory of Coyote products. So instead of waiting two, three, four, or five weeks for a product, you’re getting that product basically on order, with mostly some sort of shipping concession. If you have a certain size order, then your shipping is free. That is another way for them to get what I call back-end margin points.
The Coyote Firetable Powered by Blazing Beats is available as a set with four Laguna Armchairs.
“Then, of course, there’s serviceability. Not only does Coyote have serviceability, but all of our distributors have built in serviceability for all of their lines. For me and for our line, going through distribution protects margins; it protects the retailer because you must be a brick-and-mortar retailer to carry our products. We do everything we can to protect our retailers, and that includes the mom-and-pop barbecue stores which are having difficulty staying as competitive on the whole as the Big Box or the appliance stores.
“A lot of direct sellers don’t have the salesforce I have in the mass of my distributors out in the field. I currently have 10 distributors in the U.S., and distributors in Canada, Mexico, Central America, South America, and Israel. That is probably upwards of 350 salespeople of Coyote on the ground selling Coyote every day. Not just selling it, but servicing it, and educating the dealers, and that’s why we have such a high success rate of both turns of our product and display placement, and the proper locations that we need to do displays.”
Looking at our Buyer’s Guide this year, it seems you have covered all your bases very well. You now burn with charcoal, electricity, gas, infrared, multi-fuel, and wood. Then you spread out very nicely in terms of channels of distribution. You’re in furniture stores, hardware stores, garden centers, home centers, HVAC dealers, Internet sellers, and specialty retailers.
Ginocchi: “When we were creating Coyote, we didn’t call it ‘Coyote Barbecues.’ We called it Coyote Outdoor Living. We had a vision from the outset that we wanted to proliferate outdoor living. We wanted to perfect our cooking system, which is what we call the center, the hub, like the kitchen is the heart of the home, but we also wanted refrigeration, drawers, doors, storage.
“Now we are obviously getting into furniture. We want to become the outdoor planning tool for both beginners and for contractors, builders, and designers. We want our line to be accessible and executable for each step of the game. So you don’t have to go to 12 different places to plan your outdoor living space. We want to be the one-stop-shop for outdoor living planning.”
How many retail stores are you in?
Ginocchi: “We are about to announce another country for distribution; that will be coming shortly. We will probably be 1,000-plus for hard retail displays of Coyote products that are on the ground.”
Now we get to patio furniture. I was going to ask what prompted you to jump into the patio furniture field, but you’ve answered that question. It’s because you want to provide everything for the Outdoor Room.
Ginocchi: “Yes. There are a lot of people specializing in patio furniture. We specialize in outdoor living. That is sort of our claim to fame. But a lot of our business dealings are with builders, designers, and landscapers. Many times we hear, ‘Can you do this for us? It would be great if we had everything in a one-stop-shop.’ So we worked with a renowned designer named Kerrie Kelly. She is out of Sacramento, and has been named a trend spotter and one of the top up-and-coming designers in North America.
“Our grill is in the affordable, or obtainable, luxury category. That is what we want our furniture to be. It’s not going to be everyday furniture you see at Big Boxes. It’s going to have some differentiation, but it is not going to be priced out of the market where some of the higher-end furniture is. Very much like our value line of grills, the same applies to our furniture.”
Which frame materials are you going to begin with?
Ginocchi: “They are all cast-aluminum frames, but what we do is mix and match elements. Right now we have three lines. They are the Laguna, the Catalina, and the South Beach. For example, the Laguna collection uses texture and rich color to tell its refined, classic story. The Laguna collection is available as a seven-piece dining set, seven-piece deep-seating set, and as a five-piece fire pit set.
“Our Catalina is also aluminum with a wicker pattern, but it’s obviously outdoor-safe aluminum that has some wicker accents on the corners. We do incorporate other elements for the aluminum base that will provide for the longevity of the product being outside. We do use Sunbrella fabrics in all of our lines. It provides a complete all-weather look that is still affordable and useable for everyday outdoor living.
“The South Beach is more of a clean, modern approach that marries aluminum with a woven texture. It has very urban-looking elements, with a grayish-black, woven-type element that is very different than what the market has today.”
South Beach Collection.
Would you say your patio line is mid-price point?
Ginocchi: “I would say our line is mid-price point, very much like our grills.”
How many fabrics are you offering?
Ginocchi: “Right now we only have the three fabrics, but we are going to see how the growth of the line goes and possibly add more customized fabrics in different colors as well.”
Now, are you going to be smart and let a woman pick the fabrics?
Ginocchi: “Kerrie Kelly is more than a woman. She is, and you can print this, a designer extraordinaire. She has her finger on the pulse of the design community. She can really feel what people gravitate toward, both in design and style, color-wise, and in its functionality. She originally based that on the indoors, but has really developed an ability and affinity to take that into the outdoors. We’re very lucky to have her on our team.”
What have I not asked that I should have?
Ginocchi: “We do want to emphasize our go-forward vision that is bringing the whole space together. That is with furniture and our grill line and our ready-to-assemble island line. We also want to make sure that Coyote is at the forefront of what I think is the newest craze and the newest market opportunity in outdoor living, which is urban outdoor living. When I say urban, it could be a high-rise, which are dominating in terms of the build market, or patio living, or retirement home communities, and 55-plus communities.
“There have got to be solutions for those folks, whether they can do it with a smaller premium gas grill like our 30-inch, which is our luxury line, or if it is our electric grill, whether it is our standalone or our all-in-one piece of furniture, which combines our electric grill with refrigeration encased in our RTA cabinet that comes with two bar stools. In the next five to 10 years you’re going to see a lot more people looking for urban solutions, and we want to be in the forefront of that movement.”
Am I missing anything else?
Ginocchi: “At the Casual Furniture Mart in September we will be launching our new fire table, a line called Blazing Beats: Coyote powered by Blazing Beats, which will combine our furniture sets with a fire dancing table that has full Bluetooth capability and different styles that will combine very nicely with our existing line of furniture. We will have our products available for viewing in both our booth as well as at the Backyard BBQ Party on the first night of the Market.”