ORCA CEO Cliff Walker spends much of the year on the road, in business attire, selling his brand's coolers and drinkware. So when he’s home working in the Nashville headquarters, he comes casual, dressed in earth-toned shorts and a T-shirt. That down-to-earth approach is a good reflection of the brand and its core audience, where ice retention comes before brand pretention.
Walker spoke with SNEWS about how Outdoor Recreation Company of America (ORCA) has grown into one of the largest cooler brands albeit a distant second to YETI, which is anything but an elephant in the room.
How did you decide to enter the cooler market and form ORCA?
Cliff Walker: I’d like to come up with some grand story that I did all my research and homework for several years, but I really didn’t. I was drinking beers from a YETI cooler and I thought we could do a better job. I thought we could make them in the U.S…and back then YETI really had no competition. They had control of the rotomolded [heated plastic is kept in rotation to evenly fill the cooler molds] market, where the evolution of coolers had gone from a $40 to a $400 cooler.
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How have you differentiated yourself in the cooler market?
CW: We started to look at our ice retention. We made our walls and foam a little thicker and made sure they were puncture resistant and could pass the grizzly bear test [to be certified bear-resistant by the Interagency Grizzly Bear Committee]. We thought there was a big opportunity to do a premium “Made in the U.S.A.” cooler.
I remember our first cooler was 75 quarts and we made our first [foam mold] out of plywood. As soon as we put the foam in the cooler for the first time, there was so much pressure that it blew the sides out of the plywood, and the foam and wood went everywhere. Looking back we should have hired a team of engineers and an astronaut. Six years later, we have 60 different molds in seven different sizes and maybe 60 different color combinations.
YETI does a fantastic job – you'll hear me bring them up and you'll never really hear me say bad things about them because they created a market for everybody, which is cool. But you gotta think, "How do we do better and differentiate ourselves?" And we're really the only one with all the sports licensing. We all started in the hunting and fishing industry and the road we wanted to take is the whole sports and tailgating niche.
The sports licensing takes up a lot our efforts to get all our products licensed. The NFL licensing is very hard—we’re talking about years of work—and with colleges you have to go to every one of them for approval. That side of our brand is really starting to grow. I’m not a very patient guy, and it’s taken forever just to get the basics like matching the right colors. [The coolers] are plastic, so it’s not like you're just pouring Pantones and the color’s right. You have to play with it a little. We had three hockey teams where the yellow was just a little off and we had to go back and forth to get it right. It would be way too hard for someone not making them in the U.S. to do that.
Most of the coolers on the market look very similar, maybe too similar. Have you had any copycat complaints from other companies, or with other companies?
CW: Rotomolded coolers are not something that can be patented. YETI’s brand manager and I will actually call other brands out for straight knock-offs. I don't think it’s cool to straight copy stuff. We want to be our own brand. I don’t think we were ever trying to copy; we just wanted to be in the cooler business. And we’ve been copied, too. We were the first to come up with backpack-style coolers, our ORCA Pods and Podsters, and now all the other brands have one too.
How has having the coolers made in the U.S. helped you?
CW: When you ship a lot of coolers, you’re shipping a lot of air, so there's really no cost savings versus making them domestically. You pay more for labor here, but you pay less for shipping here. It’s pretty much a wash. We know that from a cost perspective, we can make them as cheap here as anybody else can import. We can offer multiple colors (which allows them to mix and match cooler lids and bodies for sports licensing and custom orders) here that no one else can do on an import product.
YETI had a rare PR miscue after the former NRA president took to Facebook to complain about being dropped from a discount program. ORCA, like other cooler companies, re-iterated its support of the Second Amendment as the social media outrage seemingly had customers looking to transfer their loyalties. What did that do for ORCA?
CW: We’re glad they let us in the conversation. Since that time we’ve done quite a bit of business with the NRA. We founded this company on hunting and fishing and the outdoors, so that’s what we believe, right? So, not to get into some political agenda, but that’s who we are. I think YETI may have felt some pressure from the big box stores. For us, I’m not going to change what I believe and we’re going to support the Second Amendment.
Did the social media buzz translate into new sales?
CW: Oh, we saw an incredible boost. We probably picked up 250 dealers within two weeks of their announcement. There were some mad folks. We had people blowing up their [YETI] coolers. It was good for me; we had a big increase in sales. Sometimes your competition is your best sales guy.
How will ORCA continue to innovate and grow its audience?
CW: I think customers like us. We offer a lifetime warranty versus a five-year warranty. That’s good customer service and what people expect when they’re paying $300 for a cooler.
We have our LIddUp cooler, which is a cool concept and it’s started to get some traction. The LEDs in the bottom will light up the inside of the cooler without shining in your face. We’re starting to see a gain is in the fishing world and we’re looking at a military deal now, using red lights, so we’ve got that cooking. I think there’s tremendous room for growth.
You can only make so many coolers. Can you make them better, yeah? Our goal is to eventually make the coolers and soft-sided coolers lighter without compromising their insulation properties. We’ll probably have four to five new products coming out in January.
I’m never satisfied with staying in my little niche. We want to grow within our breadth of our business model. We’ll always innovate, we’ll always expand, and we’ve got to. But, I don’t want to come up with products just to be coming up with products.
The premium cooler market seems to be hitting a plateau, if not a peak. How will ORCA stay in the game? Outside investors?
CW: There are a lot of cooler manufacturers, and I think you'll see, in the next few years, a big fallout of cooler manufacturers, because there’s too many. It’s hard anyway, and the competition makes it more difficult. Standing out in the market is the biggest challenge. That's where we have to realize who we are. We had a good footprint in the southeast and picked up several multi-chain stores to get us exposure in the northwest and northeast, so I think the brand itself will continue to grow.
I don’t think we’ll ever be first, but I’ll take second. I’m down with that. We can be our own company. We can make our own money. YETI wasn't a $400M company either until they got bought out by private equity. [Editor’s note: YETI's most recent IPO valued the company at $1.7 billion] As we’ve grown, you can see some different alliances and deals where we could become that big, but I can't do it by myself. I've had opportunities to look at different deals, but right now, I like where we are. A couple years down the road, we’ll see. I’m not ready to retire yet.