Lodge’s Recipe for Growth
With sales doubling in the last six years, Lodge Manufacturing Co. is rising to the challenge of fulfilling customer cravings for cast iron cookware.
Shannon Wetzel, Managing Editor
(Click here to see the story as it appears in the December issue of Modern Casting.)
Executives at Lodge Manufacturing Co., South Pittsburg, Tenn., have a lot of ideas about why demand for their cast iron cookware is growing at a rapid clip. Maybe it’s the marketing. Or it could be the millennials’ interest in cooking. It could be a desire to buy an American-made product. Perhaps it’s because cast iron cookware is a natural product with no nonstick chemicals. Whatever the reason, sales have doubled since 2009 and customers are clamoring for more.
To feed this hunger, the metalcasting facility in South Pittsburg, Tenn., embarked on a significant expansion with long-term plans for adding even more capacity in the coming years.
In 2013-2014, an at-capacity Lodge Manufacturing replaced its melt center and installed an additional sand system and vertically parted molding machine—basically a greenfield foundry attached to the existing plant. The expansion added 40% more production capability to the operation. Now, at the end of 2015, Lodge is at 100% capacity again. The world loves cast iron cookware.
Recipe for Growth
Cast iron cookware has been a fairly stable market for Lodge Manufacturing Co. since it opened in 1896 but growth was not always so rapid. The company saw a downturn in 1998-2001, but a new development in 2002 began turning the tide. Historically, new cast iron cookware needed to be seasoned by the consumer—a process in which the skillet or pan is covered with oil and heated—in order to achieve its natural nonstick characteristic. In 2002, Lodge offered a few items of seasoned cookware, and they sold so well that by 2005, all cookware at Lodge was sold seasoned.
“When we started seasoning pans, that turned our fortunes around,” said Henry Lodge, president, Lodge Manufacturing. “The number one customer service call we would get was about seasoning. The younger generation didn’t know how or didn’t want the hassle.”
Consumers wanted the cast iron pan their grandma used, but that deep black patina didn’t come until after years of use. Lodge’s seasoning process, in which the raw castings are sprayed with oil and put through a custom oven, produces cast iron cookware with that desirable dark, nonstick surface right out of the box.
Another big upturn came when most other metalcasting facilities were bleeding—the recession of 2009. Cast iron cookware is inexpensive. Eating out was a luxury many could not afford. More TV cooking shows were showcasing dishes made in cast iron cookware.
“When the economy was in a slump, people weren’t going to restaurants as much,” said David Shouse, vice president of human services, Lodge Manufacturing. “People grilled out, cooked at home, cooked outside.”
Plus, a new generation of cooks entered the market.
“There’s a social aspect. It seems what is reaching millennials is the idea of cooking for fun,” Lodge said. “Cooking is part of the entertainment, and they seem to enjoy working together to prepare a meal. It’s working for us.”
Lodge Manufacturing watched the growing popularity of cast iron and knew it needed to start planning for an expansion to meet the demand.
“We saw it coming,” Lodge said. “We started planning two years before we thought we would need the capacity, based on our expected growth in the next five years.”
Preliminary planning began in 2009. At the time, Lodge was producing all its cookware on two DISA 2013 vertical molding machines. The team knew it wanted, at the very least, another vertical molding machine that would run two 12-in. skillets in a mold, and that it would need to build capacity in melting and sand. Lodge Manufacturing tasked plant engineering firm Vulcan Engineering to develop a plan for the metalcaster to review. The plans had to be implemented without shutting down operations. With capacity so tight, the metalcasting facility could not afford to take production offline for any time period.
“We had done a good job of balancing the systems for the existing lines,” Lodge said. “To get an increase in capacity, we had to upsize everything. We wanted the best foundry possible, so we asked Vulcan to show us two plans that were different. We showed those to the team and asked, ‘Which one is the best (without looking at the price)?’”
For the team, the choice was obvious. They opted for the plan that provided the best production flow, although it meant more work to the building in order to gain the necessary space for the new equipment.
“We didn’t have enough height and length,” said Michael Whitfield, vice president of manufacturing, Lodge Manufacturing. During the expansion, a portion of the existing building was torn down and rebuilt with higher ceilings and more floor space. Here, the company would install a DISA 250 molding machine, Simpson Technologies sand system and Inductotherm Corp. melt deck.
“We basically built a foundry attached to our existing foundry,” Lodge said.
The manufacturer kept its 290 employees in the loop on the construction and implementation plans through state of the company addresses and weekly team meetings.
“Our people were really good about explaining what we had to do,” Whitfield said. “We were prepared.”
By the end of 2013, Lodge Manufacturing had completed the new melt center, which was sized to handle melting for all three of Lodge’s molding lines. The melt center consisted of two Inductotherm Corp. 10-ton electric furnaces along with its ARMS System robot to perform melt deck operations, such as taking metal samples and checking melt temperature. Furnaces are tapped into mobile crucibles that are transported to the three molding lines via an automated overhead crane. Each molding line utilizes automated pouring to fill each mold.
In 2014, the new molding line and sand system were up and running. The sand system is sized to handle all three lines, although at this point it is just serving the new molding line. The new line makes 420 molds per hour, compared to about the same number of molds per hour on each of the older and smaller lines. However, the new line can make twice as many 12-in. skillets per mold as the older lines, meaning the line is often making four castings in a single mold.
“Increasing the amount of castings in a mold may lead to higher scrap,” Whitfield admitted, “But we are getting more saleable castings at four per mold than say, three. It’s a tradeoff.”
Along with the sand, melting and molding upgrades, Lodge Manufacturing added capacity in finishing with a new MetCast continuous shot blast cleaning machine and Didion cleaning equipment. A new wash and spray line, where raw cast iron pans and pots are guided through a thorough cleaning process that involves stone-like scrubbing media and soap scouring the cookware clean. An additional seasoning line was also added. The unique washing and seasoning process provides Lodge’s cookware with a smooth, clean, cosmetic finish and a dark patina associated with Grandma’s heirloom skillet.
The company initially hired 25 people to handle the added production.
A day after the entire expansion was complete, Lodge Manufacturing was again at 100% capacity.
In 2005, Lodge Manufacturing hired a full-time public relations professional to promote the company and products, developing long-term relationships with chefs, cooking groups, magazines and newspaper food writes. This has enabled Lodge to obtain almost priceless publicity for cast iron cookware in general and the Lodge brand.
In-house marketing helped steer the company in what to plan for in the 2013-2014 expansion, which was to be the first phase in a three-phase expansion process. But plans have changed.
“Up until four years ago, our in-house marketing was tracking the trends very closely to what was happening in the market,” Lodge said. “But the growth of the last four years has astonished all of us.”
Lodge Manufacturing has doubled its sales since 2009. The extreme growth of the last five years is causing the cookware manufacturer to rethink its original three-phase plan for something that adds more capacity sooner. The planning team is also strategizing in 10-year increments instead of five.
“We feel more urgency for additional capacity now than we did when we started the most recent expansion,” Lodge said.
As the only U.S. manufacturer of a full line of cast iron cookware, Lodge Manufacturing is the go-to source of retail giants such as Amazon and Wal-Mart. While it’s possible another manufacturer could try to enter the market, the barrier to entry is the distribution system. Lodge has been doing business with Wal-Mart for 30 years and the relationship is well established.
“If a large retailer is going to make a big change, such as adding product to more stores, they know we need four to six months’ notice,” Lodge said.
The brand is well-recognized—thanks, in part, to the Lodge name cast-in on the helper handles of many of its skillets and shown in countless magazine features, TV specials and cookbooks. More products have been released, as well. In the last few years, Lodge began offering enameled cast iron cookware, which it sources from China, and carbon steel pans it sources locally. Additional product development in cast iron is on hold due to the capacity constraints.
“We are now trying to look at a more optimistic scope of what we need to accommodate growth,” Shouse said. “Even if the growth rate slows down, it’s still a lot of pounds to add.”
No solid decision has been made yet on how to accommodate the continued growth, except that the company does want to meet the challenge. The company expects it will need to double its existing capacity in the next year or two.
“We intend to keep going.” Lodge said. Shouse added: “We do feel like we need to keep it rolling.”