By Bill Sendelback
PhotoS: ©2019 Matt Garceau. Camelot Photography. www.camelotphotography.com.
During the early ’70s, the Organization of Petroleum Exporting Countries (OPEC) put a huge oil squeeze on North America with price increases that took the price of crude oil from just $3 a barrel in 1973 to $30 a barrel in 1980. In the frenzy that resulted, the demand for wood stoves exploded, and almost every community had someone with a blowtorch welding wood stoves together. Over the years, most of those garage entrepreneurs went out of business, and many others saw their fledgling companies acquired by ever-growing hearth products companies.
But a few, a very few, have survived as family-owned and family-operated companies. Such a one is Kozy Heat Fireplaces in Lakefield, Minnesota; started in 1976, today it’s a successful, profitable, and growing manufacturer of a broad line of hearth appliances. For all this time, Kozy Heat has maintained its Midwest small-town work ethic and manner of conducting business. That’s the secret to its success.
Dudley Hussong in those early ’70s was production manager for a Minnesota-based, large sewing factory, producing such items as bed comforters and tractor trailer fabric liners. After moving from small town to small town for the company, his employer told him he was moving to Minneapolis. Dudley, being a small-town guy, said “no” and quit to work in his father’s millwork shop located in Lakefield, a very small town of 1,820 people in far southwest Minnesota. Today, the population in Lakefield has plummeted to 1,626 (just kidding).
Like so many others at that time, Dudley decided to build a barrel wood stove to beat the growing price of heating fuel. Once again, like so many others, people started asking Dudley to make wood-burning appliances for them, including a local mason who teamed up with Dudley to design a wood-burning fireplace.
Recognizing a potential opportunity, in 1976 Dudley took out a $1,500 loan on his 1975 Chevy Blazer and started Hussong Manufacturing, building fireplaces one at a time. He began showing his products at local fairs and homebuilders shows, eventually gaining a distributor in Minneapolis. That was the start of continued sales growth ever since.
Kozy Heat’s manufacturing plant, located in Lakefield, Minnesota.
Hussong Manufacturing, now branded as Kozy Heat Fireplaces, began with wood-burners, especially fireplaces. But in 1988, Dudley saw the hearth market changing and redirected the company toward gas hearth products. Some in the company thought he was crazy, but he persisted, engineering his own gas fireplaces. Today, Kozy Heat’s sales are 90% vented gas models while the company’s only wood-burner is now only 10% of sales.
Dudley retired in 2011, and while retaining minor ownership and a position on the board of directors, he has turned the company reins over to his son, Jim, now president after joining the company in 1984. Jim and his wife Tresa are now majority owners of the company. Although retired, Dudley is not standing still. Besides keeping tabs on Kozy Heat, he is restoring muscle cars, mostly his own and mostly a hobby, in his business in Lakefield called Hussong Classic Cars.
Today, Kozy Heat offers vented gas stoves and fireplace inserts, as well as wood and gas fireplaces to specialty hearth product distributors and dealers throughout the U.S. and Canada. Besides its factory and headquarters with 153 employees in Lakefield, Kozy Heat warehouses products in Sacramento, California.
Hussong describes Kozy Heat’s products as “affordable elegance” with basic retail prices ranging from $2,500 to $5,000. “Our product line is not high-end,” he says, “and it’s not low-end, and certainly not builder boxes. We strive for quality and value rather than quantity. Our models are designed for everyday people to be able to afford a nice fireplace. By adding and mixing our many optional features, our dealers can truly customize our fireplaces for each individual customer. We make certain our dealers get good margins.”
While Kozy Heat offers traditional-styled models, the company is moving more toward transitional styling. “With more TV shows featuring linear and non-traditional fireplaces, people are becoming more comfortable with these styles. We’re seeing more and more demand for non-traditional fireplaces,” says Hussong. However, he points out that Kozy Heat will stick with the “bread and butter” traditional or transitional stylings.
“When our competition comes out with a flashy, trendy new fireplace, some of our dealers ask us why we don’t come out with something like that. But most of our dealers say, ‘No, don’t do that. We just want something we can sell and make money on, so continue doing what you’re doing.’
“We are truly a family company,” says Jim Hussong. Two of Hussong’s daughters work in the company, Heather in marketing and Hannah as a technical writer. “Hopefully my third daughter, an accountant, will join the company after she gets more real world experience.
“We’re just like most of our dealers who are ‘Mom-and-Pop’ stores that are family owned and operated. With this background, we understand that if someone calls us, we answer the phone. We don’t have any recorded messages. You quickly get answers from us, especially from our technicians.
“Our dealers appreciate that because they might be calling us for technical service help while their customer is looking over their shoulder. They need an answer immediately. Our dealers tell me that our people always go above and beyond to get them what they need. We call this a Kozy family, and that family includes our distributors and dealers.”
Hussong does one thing that continues to surprise and please his customers. “When we do our early-buy programs, I always call all of our dealers who have placed an order. I love doing that. It is a big boost to me because they tell me how much they like our products. They’ve never had a company president take the time to call them and thank them for their business.”
Kozy Heat’s personal attention to customer service must be paying off. The company has continued to grow each year since Dudley’s first fireplace in 1976, with the company seeing double-digit sales increases in each of the last five years.
Even with Kozy Heat’s 175,000 sq. ft. factory, this strong sales growth is putting pressure on the company’s operations to keep up with demand. “Even after an addition a few years ago, we are running out of room for more production and more inventory, so we’re adding another 50,000 sq. ft. later this year.”
Hussong praises his 153 employees for the company’s success. “Dudley always says the secret to success is to surround yourself with good people who can do things that you cannot. All of our people are very important.” In a recent key personnel move, Hussong promoted 15-year Kozy Heat veteran John Klopstad to general manager. Klopstad formerly was customer service manager and is now handling the day-to-day operations, according to Hussong.
Lakefield, Minnesota, the company’s hometown, is as close as one can get to being in the middle of nowhere. The land around Lakefield is so flat that Jim Hussong laughingly says that he, “watched my dog run away from home for three days.” Lakefield may be tiny, but it’s home to a very successful family-run and family-oriented hearth products company.