In this episode, Patrick speaks with Jason Nottestad, International Sourcing Manager for VT Industries, a laminate manufacturer and hard surface fabricator with nationwide reach.
You’ll learn:
- How Jason handles shipping from all of the plants.
- How logistics is affected by shipping.
- The two different divisions that benefit from materials purchased from China.
- How VT industries became the nation’s largest post-form laminate producer.
- New innovative ways that VT Industries has made changes in post-form laminate market.
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If you have stories or insights that you’d like to share with other fabricators, please reach out to Patrick.
Transcript
Welcome to StoneTalk, the podcast for countertop fabricators. Brought to you by Moraware, makers of JobTracker scheduling software and CounterGo estimating software for countertop fabricators. I’m your host, Patrick Foley.
Jason Nottestad: Hello?
Patrick Foley: Is this Jason?
Jason Nottestad: It is.
Patrick Foley: Hey Jason, Patrick from Moraware, how you doing?
Jason Nottestad: I’m good, sir. How are you today?
Patrick Foley: Good. What were you doing in China?
Jason Nottestad: We buy quartz from China. We buy quartz slabs.
Patrick Foley: Okay.
Jason Nottestad: We started our own quartz line a little over two years ago. My official title is now International Sourcing Manager. I was the Eastern Regional Sales Manager for a
while and then before that I was the head of customer service and project managers. As of now, I’m in charge of all the international sourcing we do for granite imports.
Patrick Foley: Cool.
Jason Nottestad: I was over there working with our vendors. That was trip number five. Trip number six is in three weeks.
Patrick Foley: Well, I hope you like that travel.
Jason Nottestad: You know what? It’s never dull. It’s been interesting. I’m learning Mandarin, as well.
Patrick Foley: No way. Good for you.
Jason Nottestad: Great. Yeah, way.
Patrick Foley: You’ve already answered a couple of my questions, but let me step back and start more broadly. What does VT Industries do? How would you describe your company?
Jason Nottestad: VT Industries was founded in western Iowa by Roger Clausen in 1956. It’s still a family held company. Roger’s son, Doug, is our CEO. The family, the Clausen family is intimately involved with the company, as well, working with it. VT has three separate divisions. We started out in 1956 making laminate countertops. We’re now the nation’s largest post-form laminate producer.
Patrick Foley: Really? Wow.
Jason Nottestad: Yeah. We have seven factories in the US and Canada that make post-form laminate countertops.
Patrick Foley: Can you define … I’m not an expert in the industry. Can you explain, just for me, what post-form means, as opposed to …
Jason Nottestad: Sure. If you look at a laminate countertop, the post-forming process is taking that piece of laminate and applying it to the board underneath in a fashion that you don’t have to do any work afterwards. That would include putting the edge profile on with the laminates and then also bending up the back, so that the backsplash is integral with the deck piece. The definition of a post-form countertop would be that everything is done in the process of creating the top, so there’s no side from end capping, there’s no other process that needs to be done at the end of that.
Patrick Foley: If I were a countertop fabricator and wanted to offer laminate to my customers, does that mean if I buy post-form countertops, you’re the equivalent of the fabricator, like I’m getting completely finished, measured countertops, or am I still putting them together?
Jason Nottestad: Yeah. You’re still putting them together. We produce blanks.
Patrick Foley: Okay, thank you.
Jason Nottestad: On the laminate side, we just produce blanks. We’ll make straight top, that’s an 8-footer, 10-footer, 12-footer.
Patrick Foley: Got it.
Jason Nottestad: Some of the tops, we actually cut to 45, the miter on, for an inside corner.
Patrick Foley: Got it.
Jason Nottestad: Then, we do make bars as well, which will be finished on two sides. After that process, essentially, then it goes to one of our distributors or fabricator partners, who do the work of measuring the top, doing sink cutouts, and doing the installation, as well.
Patrick Foley: Is laminate as a business, or, as least, is your laminate business, is that growing or shrinking? Is that more of a maintenance business is it, are you even innovating?
Jason Nottestad: We’ve always been an innovator on the laminate side. We’ve introduced upgraded edge profiles. We call it our premium edges. Through VT Industries, you can get an OG edge on your laminate countertop. You can get an equivalent of a crescent edge and now the newest edge we’ve created, you can actually get a finished 1/8 inch radius on a laminate top that’s post-formed. For all intents and purposes, it’s an eased edge, equivalent to a stone edge.
Patrick Foley: Nice.
Jason Nottestad: We’ve always been an innovator in the post-form laminate business. Our founder, Roger Clausen, is actually in the Kitchen & Bath Hall of Fame, for his innovations in the industry.
Patrick Foley: Wow, cool.
Jason Nottestad: Very interesting guy. What we’ve continued to do on the post-form side, is actually gain market share. The volume of the countertop industry is ever changing, so in say, the multi-family industry, what once was an 80% market share for laminate countertop, is now an 80% market share for, say, imported Chinese granite. The market itself for laminate for a post-form countertop, has definitely changed over time. In the future, this industry will grow. The laminate industry will grow, but it’s certainly not going to have the growth numbers that the hard surfaces will.
Patrick Foley: Right.
Jason Nottestad: For us, on the post-form side, what we’re trying to do, more than anything else, is to gain market share.
Patrick Foley: Is that why you got into the hard surfaces, too?
Jason Nottestad: It’s definitely part of the reason that we did. VT is a very forward looking company. What we’ve invested in all of our manufacturing facilities has been they’re technology driven. We have two facilities that make doors for commercial applications, such as interior doors for hotels, and office buildings. We make about 11,000 doors a week through our facilities in Holstein, Iowa, and then one in Indiana, as well. That’s been very technologically driven. Our facility in Holstein is quite amazing to look at. You’re in a small town in Western Iowa, and yet you’ve got a facility that we could make a door that isn’t touched by a human hand throughout the whole process.
Patrick Foley: Wow.
Jason Nottestad: I mean, it’s very advanced and well run. Part of that idea of looking forward was, where’s the market for countertops going to be in the future. It was clear that from about, I mean, realistically from about the early 90’s onward, hard surfaces began to make a larger and larger impact within the countertop industry and VT recognized that. In about 2005, the idea of entering hard surfaces came to fruition. In 2007, we began the construction of our first plant in Rome, Georgia. It’s part of an existing facility. We took part of the existing laminate plant in Rome and converted it to a hard surfaces facility, with Bretton Manufacturing.
Patrick Foley: That was my next question. Your using the Bretton process, but you are manufacturing your own, not just distributing?
Jason Nottestad: We don’t actually make the quartz slabs. All of our processing equipment is from Bretton in the Rome facility. In the California facility, we’ve got a mix of Bretton and Comandulli equipment. We are a large scale fabricator. Our initial idea was to be strictly that, was to be a wholesale fabricator. We have transitioned from there into being both a wholesale fabricator, we do offer direct services as well, on the templating and installation side. That was something that our customers, I don’t want to say demanded of us, but that became clear that that needed to become part of the business model so we’ve expanded into that realm as well.
Patrick Foley: Who are your customers? Who do you target?
Jason Nottestad: Our customer base is really diverse. We got almost two hundred customers in the Southeast now that we service from the Rome facility and that can be everyone from another fabricator that we do quartz work for. A lot of our fabricator customers look at VT as someone that can be their quartz provider. Some of these guys, they would like to just be … They want to concentrate on granite. Some of them want to concentrate almost entirely on exotic brands. They feel that’s their niche, and when they have a job that is a quartz job, they will subcontract with VT, in the Rome facility, and then we will be their fabricator of choice.
That’s one aspect of our customer base. We also have mill work customers that will come to us, and say, “I’ve got this project, and I’d like to use you for either a single location or multiple locations.” Because of our logistical reach, we service every Lowe’s and Home Depot in the country, on our post-form laminate side. Because of that, our logistical base has to cover, literally every corner of the nation. With that being said, we can actually service nationwide accounts quite well. We’ve done a lot of work with several nationwide accounts through mill work houses that have a lot of separate locations scattered throughout and we were able to find either a template install partner in the region, or do it ourselves, and it services smaller locations.
Menchie’s Yogurt comes to mind. I don’t know if that’s something that is familiar to you, but we did a lot of locations of Menchie’s Yogurt, fabricating Caesarstone, apple martini, and templating and installing. We did that project at several different mill work houses. That’s one other customer base. Another segment that we’ve got is, the independent template installer. That would be someone who sells countertops, and perhaps they have a showroom, perhaps they don’t. What they could do is, they can provide expertise on the front end. Sell a job to a customer, template that job, and, for the most part, send that job to us digitally and then we will produce that job and ship back to them and they will install it.
That’s the third segment of our customer base. As we go on, we’ve worked extensively with the hospitality industry. We’ve worked with apartment renovation companies. The customer base really is quite varied.
Patrick Foley: I find the template or installer customer particularly interesting, because I spoke to one just today, had a customer who didn’t do their own fabrication. They farmed it out to someone. I didn’t ask who. Obviously, that’s an interesting model. Can you literally serve someone doing template installs anywhere in the US?
Jason Nottestad: Sure. Yeah, absolutely.
Patrick Foley: Wow.
Jason Nottestad: My background, for five years, from 2003 until 2008, right when I joined VT, my dad and I had our own template install company in Wisconsin. What we do in that, I lived in Madison, Wisconsin, he lived in Milwaukee, we used the fabricator out of Milwaukee, KG Stevens. We would sell jobs in essentially in Wisconsin. Wisconsin was our base. We did a little work in northern Illinois. A few jobs in Minnesota and Iowa, as well. My dad was our salesperson. He would go out, sell the job. I would follow up with the template. At that time, we used eTemplate. I would go and I would do the eTemplate, come back to my home office, draw the job in CAD, email it to KG Stevens. They would fabricate the job and then I would go with our install helper, and then we would pick up the job, drive to the job site, install it, and then move on for the next one.
That, to me, is a very, very interesting and potentially successful model for a lot of guys in the industry. Personally, I think that’s an incredibly underserved market, right now, because … I mean, we were literally a granite and quartz company, without having to make that enormous investment in the fabrication equipment. For us, it was really ideal. I had stone experience from working in jobs for years and years. My father was … I brought him in as the salesperson. He had the sales experience. It wasn’t in the kitchen and bath industry but he translated the sales experience immediately into the countertop area and we were off and running.
I mean, 2003 through 2008 was by and large … It was not the most difficult time to sell a countertop. We took advantage of that as well. With that being said, technology allowed us that freedom to remotely turn in jobs, that to me, it was just outstanding. It really opened up a new avenue for us. Within VT, our top customers are all digital. When we go down our customer list and say, who are the guys that are the most successful with the business model we’ve created. All of those guys have made the commitment to a digital templating system so when we receive a job in whether it be in Rome or in our California facility, that job comes in a CAD file.
From there, it’s programmed, it’s sent through our production process, and it’s shipped out. That piece of technology, in my opinion, opened up the industry to a whole other channel of
potential sales.
Patrick Foley: Just out of curiosity, do most of your customers, can you tell if they’re using the same brand of templater or is it a mix?
Jason Nottestad: It’s quite varied. The most popular digital templating system that our customers use currently is the LT55.
Patrick Foley: That’s what I would have guessed.
Jason Nottestad: We do have customer’s that use the eTemplate laser. We do have customers that use the Proliner as well. As a service, in the Rome facility, we also process Phototop. If someone buys a Phototop capture kit, what we do is, they will go to the job site and they will take the pictures, and then they will send the pictures to us. We process the job and send them back the CAD drawing, for them to approve.
Patrick Foley: Interesting.
Jason Nottestad: That’s been very successful, because what that allows potential template install guy to do, instead of making that $10,000 plus purchase of the software. We’ve got the software, so all they need to do is purchase the capture kit which is a much smaller investment on their part and allow us to do the processing. That’s been a very successful program for us as well.
Patrick Foley: That is interesting. From a business opportunity perspective, that makes this, really, if someone wanted to get into selling countertops, their overall investment would be pretty minimal if they are using someone like you to actually build them.
Jason Nottestad: Yeah, I mean, if you look at the idea of a Phototop capture kit and just a simple purchase of tools, your investment in a vehicle is going to be much more than in your investment in the simple equipments. When my dad and I started our business in 2003, we went forward with … we purchased eTemplate, we purchased the uploader and then we purchased the installation tools. That investment for us was over $20,000. To get into the stone industry, that seems like a very minimal investment. If you look at a capture kit instead of installation tools, I mean, you’re literally … you save $5,000 when you’re in the stone industry.
That doesn’t include the … I mean, obviously if you want to be successful, you’ve got to have that experience of being a countertop guy. That in itself, you don’t buy that for 5 grand. But if you got that based off experience, it certainly is a really interesting way to approach the market.
Patrick Foley: Or someone doing solid surface or laminate already, again, it’s one of my past guests, Ted Sherritt was talking about. The value of owning the relationship with a customer, if you already have the relationship with the customer, being able to fulfill more kinds of business for them, more of their requests just makes it, makes you higher value and makes it more likely that someone is not going to leave.
Jason Nottestad: Yes, absolutely. Part of what we’ve done in the Rome facility as well, because when we started in the hard surfaces in 2007, the idea we have a huge base of laminate customers. We would like to be their hard surface provider as well. The way that I actually came to VT was I started as a consultant. We set up training school in Rome where we would actually bring guys in and train them on the installation techniques they would need for … to do quartz and granite installations. In Rome, we’ve got a facility set up. It’s got three kitchens, two vanities. We still run a 2-day class where a guy would come in. We will do everything, handling sinks, sink settings, coring holes, polishing edges. We will run that entire class and it’s no charge. We’ve ran about 300 people through the class so far. It’s been great. Actually, it’s been a lot of fun too. We’ve had some good laughs during that class.
What translates is this, if you’ve got the skills. If you understand, especially if you’re a soft surface guy. The soft surface guy translates into quartz so easily. I mean, they get it. There’s not a lot of explanations for you besides from how … the main difference is how you do a theme and how you … Those are the two main differences, in my opinion, between the granite and the quartz and the soft surface. We’ve had really good laughs in the classes.
Patrick Foley: Interesting. Do you ever miss having your own business?
Jason Nottestad: You know what, it was a really enjoyable way to earn a living. I think that every now and then, I’d like to get back to doing the field work because I do not get to do that very much anymore. I don’t think I really miss it. I mean, as a small business owner, it’s seven days a week. I spend a lot of time on the weekends doing cash drawings. It was a great way to make a living when I was doing it. I’m 43 now so I’m not sure I could haul countertops around as nimbly as I used to. It was a really good way to make a living.
Patrick Foley: Fair enough. If you can, can you describe kind of internals of your fabrication? Do you have a specific saw manufacturer that you prefer or is that not your part of the business?
Jason Nottestad: Inside the plant itself?
Patrick Foley: Yeah.
Jason Nottestad: As far as equipment goes, we made a commitment to Bretton right at the beginning of the process. Our facilities are monstrous. We went with the whole Bretton Production System which includes combi cuts which are the combination CMC or combination water jet and saw. Then we went also with the transload system which is the automatic material handling process. Within each of our plants, the middle corridor is a 4-story material handling area. It contains all of our slabs. With the Bretton process, your material comes in, the way you check the material is with a photograph.
We’ll, say, when we get a container of quartz in, it’s off loaded into racks and then we bring each slab over to machine with the acronym of JOT. What the JOT does is it will assign a part number to that slab and then photograp the slab. What our JOT operator can do is that it can go to that slab, whether it’s quartz or granite and inspect it really well and make any areas that he consider to be questionable. Then when that slab is photographed and sent into the transload, then the programmer looks at setting the job onto a slab. They actually use a slab photograph.
They take the CAD drawings and position them onto the slab so that if there’s any areas that needs to be avoided, that can certainly be done.
Patrick Foley: Are they using Slab Smith for that or something else?
Jason Nottestad: It’s actually an internal Bretton software. The system runs internally with Bretton hardware and software. Then, when the job is programmed and ready to cut, the combi cut operator will actually pull the slabs down via the computer system and they will come down and be organized so that each slab that was programmed with the parts that were needed will actually be the computer program and the slabs will marry themselves together at the combi cut. That will go ahead and do all the cutting. What this does for us is it allows us for us to avoid … In a quartz scenario, you want to avoid inclusions, any kind of a weird spot that you got on the slab that you don’t want to appear in the job, you can do that. On the granite side, you can also look at any kind of a flow or pattern variation and arrange the pieces in that way.
The Breton system is similar to Slab Smith. I guess the front end is slightly different. The Slab Smith goes for a very high resolution picture. The Bretton system is more of a production picture. It’s not that …
Patrick Foley: It’s less customer facing?
Jason Nottestad: Beautiful kind of Mark Lazone website presentation pictures but it certainly is very good for what we need it to do.
Patrick Foley: You said this monster facilities, can you tell me approximately how many square feet a week you’re doing? I mean …
Jason Nottestad: Between the two, we’re doing about 10,000 square feet a week right now. The Los Angeles facility does more than the Georgia facility currently. That’s not nearly the capacity that we potentially have. I mean, we’ve got a lot more capacity but we are still … we’re seven years in but we feel like we’re still building, we’re definitely building as a company.
Patrick Foley: How are you finding new customers typically? Where do you think your new customers, like the new template install customers, where do you think you’re going to find them or how are they going to find you?
Jason Nottestad: On the template install side, that’s an interesting customer to try and find. We’ve actually had, I think more luck on that side just on people who either knew of us from the company they were working for and decided that was something that they wanted to get into. Or, somebody really, just happen to hear about VT and approached us and said, “This is what I do already. I’m looking for another vendor.” From that side, when you’re a template install guy, from my experience, you’re always looking for an additional vendor to work with just to kind of cover yourself. Our main vendor, my dad and I, our main fabricator was KC Stevens but we actually work with a dozen different fabricators throughout Wisconsin and Iowa. That template install guy, it seems that he’s always on the lookout.
Patrick Foley: Interesting.
Jason Nottestad: A lot of the people who subcontract install for us, also sell on the side. Maybe their main business is that they are installers but they also do … obviously they’re going to be in the business and in that business setting and be known so that they also do sales as well.
Patrick Foley: It’s interesting to me how the whole ecosystem develops sometimes end to end where maybe one company has a showroom and does all the work including template install and yet others are divided up by … There’s a separate kitchen and bath dealer. There’s a separate template, separate fabricator. It’s interesting how you can slice and dice the execution of the delivery of the work in different ways.
Jason Nottestad: Absolutely. I think in the early 2000, late ’90s, early 2000’s, a lot of kitchen and bath dealers looked at the countertop segment especially the granite side and said, “Man, I can get into that and make a lot of money.” A lot of can be opened up shops. A few of those are still around. I think the lion’s share of people who exited the granite industry during the recession were people who … that wasn’t their primary focus. That’s not. They didn’t start out to be granite guys. That I think is really part of the reason that you ended up with a lot of people who had a segment of a skill within the granite industry because of the experience they’ve had, maybe didn’t know how to do the whole thing.
I’d look at it as, like you said, there are some companies that do every single aspect of that countertop job but I would say a lot of the industry right now is specialized so that the person that sells the countertop is not necessarily the person or the company that’s going to manufacture it.
Patrick Foley: Right. I find that division very interesting personally. My last little question is going back to what you’ve mentioned about logistics. I’m not sure much would translate from a big company to a smaller company because as you said, you grew your logistics mechanism because you’re such a big laminate seller, manufacturer. I guess, tell me more about your logistics. I mean, if you’re shipping all over the country, do you own your own trucks? Do you work with other … how much is in built into your system and how much are you just coordinating through other shipping companies?
Jason Nottestad: For many of the plants, each plant operates a little bit differently. When I look at the … let’s just take the Rome, Georgia plant as an example. We contract with a shipping company for all of our services. We’re not the owner of … VT does not own a shipping company. We contract with a shipping company. That being said, the shipping company has an office within our facility. They’ve been the provider of shipping for 17 or 18 years now. It’s not a hit or miss operation. It’s a very controlled, it’s a dedicated operation to that VT facility. We have a set of schedule for deliveries throughout the Southeast. For the Rome plant, we deliver within about a 400 mile radius of that facility. You look at the schedule. We are in, let’s say, you take a place like Charlotte, North Carolina. We deliver to Charlotte on Tuesdays and Fridays.
Patrick Foley: Interesting. That was neat.
Jason Nottestad: When a customer orders a top from us, the first thing we have to do is we have to find where it’s going to go into the production schedule and then after that, we have to work with our shipper and say, “When is the next truck going to Charlotte after the job is finished?” and just make sure that there’s room on that truck, there’s a spot for that 8-frame. Then we let the customer know this is going to ship on Friday, deliver on a Tuesday. All of our trucks, the trailers are curtain side. It’s not like a traditional box trailer where the back opens up and you just drive a forklift in there and grab whatever is in the back. The curtain side trailers, you would pull into a facility and the side of the trailer opens up. Your 8-frame is right there, you bring your forklift out, take the 8-frame off, sign a receiver then our truck driver zips up the curtain side and he’s on to his next stop.
Patrick Foley: Interesting.
Jason Nottestad: That’s the logistics of how we deliver. We also work with LTL companies … if we’re outside of that 400 mile radius of the Rome plant, then our two options are to, one is to send it by LTL where we would just contact shipping company and say what’s my rate going to be to take it to Pittsburgh. Or the next idea would be we have drop points that are covered by both of the shipping areas. If I want to ship to Pittsburgh, I can either do it by LTL or I can go ahead and talk to my other plants in that area and see if there’s a way that I can drop off a frame and have that frame picked up by a truck from that point.
We can cross stock on a particular area. We’ve done this many times when we ship to Texas where we’ll actually cross stock an 8-frame in New Orleans. Our trucks from Brian, Texas will pick up that frame or material from New Orleans that’s been dropped off from Rome.
Patrick Foley: Interesting. The particularly fascinating part about that to me is that your logistics does affect your production schedule, that you have to make decisions when you’re going to build something based on when you can ship it out at least in part.
Jason Nottestad: Yes, absolutely. That’s something that we work with our customers on. Obviously when you got a production schedule, you’re always … it’s always the fluid document. If we talk to a customer, maybe this customer is in Florida and we say, “Look, here’s when the top is going to be done. You’re not going to make this truck but you’re going to make the next truck.” They say, “I got to have it this particular date. Is there any way you can bump it up on the schedule to meet the earlier truck?” We’ll do our best to adjust the schedule to meet that demand. Obviously that’s always been … that whole process is always fluid.
We do have occasions where people will come pick up tops and we do have … we do work with several dedicated drivers as well that will take tops wherever we need them to go just as a straight shot. From the Rome facility, we cover parts of Texas. We send a lot of tops up in North Dakota. We’ve done projects in Connecticut, Pennsylvania is quite common for us as well. We can cover a very large slab of the country just using either our logistical network that’s already built into VT or an LTL network that we’re in contact with.
Patrick Foley: Very interesting. Actually, very last thing, to bring it full circle, when you go to China, is that just simply the volume of work you do allows it, makes it worthwhile to get large quantities of material more cheaply? Is that the reason for going to China or is it something else?
Jason Nottestad: You know what, that’s definitely part of it. Two different things, out of China. We have a multi-family division where we do on-the-side projects for apartments and condominium out of fabricated Chinese granite. The other part of that is that we work with Chinese quartz manufacturers and purchase slabs from them. Those are the two segments that we do in China. That’s been … The Chinese quartz industry, it’s a very interesting industry. It’s grown in both quantity and quality over the past five years. Really, that whole quartz industry in Southeast Asia has really exploded. That’s been a part of the reason to explore that, to really see what’s out there.
It’s a different philosophy. Plants are much smaller compared to your standard Bretton line. It does allow for, I guess, a little bit more flexibility in product as well. That’s been pretty interesting for us.
Patrick Foley: Cool. Interesting enough that you’re learning Mandarin. I hope that …
Jason Nottestad: Yeah, it’s a big laugh that I’m learning it. That’s correct.
Patrick Foley: I hope that investment pays off in many different ways.
Jason Nottestad: I’m sure it will a few years from now.
Patrick Foley: Thank you so much for spending this time. Love hearing your story. If there’s anything I can do, let me know.
Jason Nottestad: That’s great. I appreciate it, Patrick.
Patrick Foley: All right. Have a great weekend. Bye-bye.
Jason Nottestad: All right. Thanks. Bye.
Thanks for listening to StoneTalk, the podcast for countertop fabricators. If you liked this episode, be sure to visit stonetalk.org or subscribe to StoneTalk on iTunes for more. Visit the StoneTalk show Facebook to join in the conversation and follow @stonetalkshow on twitter.
StoneTalk is brought to you by Moraware, makers of JobTracker scheduling software and CounterGo estimating software for countertop fabricators.
I’m your host Patrick Foley and I look forward to spending time with you again on the next episode of StoneTalk.
