YETI® – “Wildly Stronger, Keeps Ice Longer”

Rotationally Molded Premium Ice Chest

by SUSAN GIBSON, JSJ PRODUCTIONS, INC.

The YETI® cooler is a rotationally molded premium ice chest developed to fill a void in the market – a durable cooler with longer cooling retention for use in hunting, sport-fishing, camping, boating, rafting, tailgating, paddling, and barbecuing (to name a few). In addition, YETI® coolers are used in commercial applications for the oil & gas, construction, ranching, military, and medical industries. The YETI® name is synonymous with the “Abominable Snowman” said to roam the Himalayas. YETI® has become known by the market as the “Wildly Strong – Keeps Ice Longer” cooler, and has become associated with “Good Times”. The YETI® brand has come into its own as a status symbol, a badge of honor…even a Rolex for Rednecks!

YETI® co-founders, Roy Seiders, CEO, and his brother Ryan Seiders, President, have a long-lived passion for hunting and fishing. They also have an entrepreneurial spirit for business. Their passions began at home as they were growing up in the Texas Hill Country hugely influenced by their father, Roger Seiders, who owns an epoxy coating for fishing rods business, Flex Coat. YETI® was started in 2006 and is based in Austin, Texas.

When Roy got out of college, he didn’t write a resume, but instead followed in the footsteps of a long line of family entrepreneurs. Roy, like Ryan, went to work trying to discover the right business to get into. Both were interested in something involving their love for the outdoors; hunting and fishing in particular. Ryan had already developed a fishing rod business called Waterloo Fishing Rods. Roy, being the younger brother, came along and worked at developing a high-end aluminum fishing boat business for the Texas Gulf Coast. However, it wasn’t too long before the call of the YETI® was just too strong to ignore.

The idea for a durable, quality premium ice chest was born out of Roy’s frustration with the ordinary ice chests being used on his boats. “They didn’t hold up to the sitting, casting, and platform uses that are required. The lids would cave in and the latches and hinges would break,” Roy said. He realized that his frustrations with ordinary coolers must be shared by others with similar interests and across many markets. And, as a side benefit, he realized a rotomolded ice chest would have thicker walls for ice retention, which would later become a hallmark attribute for the brand. Roy and Ryan set out with the goal to enter the premium ice chest market with a quality cooler from the cooler box to the hinges, latch, and rope handles.

The brothers’ values had always been surrounded by quality and service due to growing up around their father’s business. “YETI® is authentic to who we are,” Roy said. “Our father’s company put four kids through college and afforded us the lifestyle our family wanted.”

The Seiders family entrepreneurial history dates back to 1836. There is a historical marker in an area of Austin, Texas known as Seiders Springs Park where Roy and Ryan’s fourth great grandfather, Edward Seiders, ran a bath house in the mid-1800s. The story is that General George Custer was a guest at the Seiders’ bath house in 1865. Also, one of the first local grocery stores in Austin, Kash-Karry Grocery, was co-founded the Seiders family and employed many of their relatives though the 1900s.

Roy graduated from Texas Tech with a degree in Management Information Systems, and YETI® wasn’t the first business for him. When he started in the cooler business it wasn’t fully evident that it would succeed either. It has been a work in progress and they have learned along the way to perfect the product YETI® is today. “We never quit growing and innovating,” Roy said.

Employing and partnering with the right people has been of paramount importance to the success of the company from the beginning. “We knew that we didn’t have all the answers, and we needed to find the right people with the right answers,” Roy said. It has been a foundational business philosophy to surround themselves with the best employees and business partners they could find to ensure the success of YETI®. “We’ve always worked hard to track down quality people; people we can trust; and people that are smart and capable,” Roy said.

The Market

“The YETI® customer is one that is willing to pay for quality that will last,” Andy Hollon, COO for YETI®, said. They often hear the customer say, “It is worth every penny.” YETI® customers have proven they are willing to pay the extra amount for a product that is built off the premise of what Roy and Ryan originally wanted the product to be. There was no extensive research or market planning. “YETI® is an authentic product that came about due to what Roy wanted for himself – a quality, durable ice chest that keeps things cold longer and withstands the test of time,” Andy said. “The cooler market is a huge market. We are looking to sell premium coolers to a small percentage of the market,” Andy said.

“Companies like Igloo, Coleman, and Rubbermaid who also make ice chests, tend to manufacture and market their less expensive products to a high volume market typically driven by the big box retailers such as Walmart and Costco. Some of these big industry players along with many smaller independent start-ups have now gotten into the premium ice chest business, but so far none have emerged from the pack as a major threat,” Andy said.

When asked who the competition is, Roy replied,
“No clear #2 has emerged yet. There may be as many as ten other manufacturers trying to get into this market, but
they are already behind the curve. They are using YETI®
as their benchmark,” he said. However, Roy’s quick to point out that his philosophy is not to worry about things over which he has no control.

Early on Roy realized there was a second void in the cooler market. Because the big brands in the market were designed to chase volume, there was a void left on the shelves of the smaller “mom and pop” type stores. The margin for bigger brands was just not there for the smaller specialty retail stores to be able to carry their product.

The YETI® brand was marketed in the beginning by Roy going around to see if there was an interest among the specialty retailers to carry a premium ice chest that would cost more, but would stand out as a luxury item that was more durable and had more quality than anything else on the market. From there the YETI® brand worked its way onto TV Shows like Duck Dynasty and Swamp People and sponsored such sporting greats as wild game hunter Jim Shockey, host of Jim Shockey’s Hunting Adventures on Outdoor Channel, and salt water fishing legend Flip Pallot, host of the groundbreaking Walker’s Cay Chronicles on Outdoor Channel. Over a short period of time the YETI® cooler became a “badge of honor” integral to many sporting success stories. Since the company began, and fast forwarding to 2013, the brand has been clearly established across a multitude of industries including use for transporting human limbs and organs for the medical industry.

“Our phenomenal growth has presented its own challenges,” Andy said. “The necessity to meet the demand has opened the door for competition. But the Seiders brothers never let the phenomenal growth in demand for the product compromise their focus on quality. The story of the YETI® brand is rooted in the quality of the customer experience – and that means consistently delivering a great product while backing it up with great service. Roy and Ryan were stewards of the brand in the beginning just as they are today, and this has a lot to do with the success of the brand,” Andy said.

The average YETI® costs between $200-$400 and can go for as much as $1300. YETI® offers its coolers in team colors or with custom corporate or organization logos, plus YETI® sells a selection of branded items such as caps, t-shirts, etc.

Rotomolding Process 

The first rotomolded cooler developed for YETI® was made in Thailand. “At the time it was the best cooler out there, but we soon figured out that it wasn’t all it could be. This was when we pursued a manufacturer in the Philippines to build the cooler we wanted from the ground up,” Roy said. It was based on Roy’s ideas with an engineering team behind him that the company’s first prototype was built in the Philippines. The company was already manufacturing coolers for the Australian market, but there were some warranty issues and their plan was to manufacture and sell based on volume. It was notable at the time, however, that there was a premium cooler market in Australia and it was far ahead of that in the USA.

Rotomolding was always the right process fit for YETI® due its capabilities for manufacturing heavy duty, durable coolers. Also rotomolding’s low-cost entry investment made it the logical choice. “We are asking our manufacturing partners to stretch what is possible with rotational molding in order to build a flawless ice chest every single time,” Andy said.

The Rotomolded YETI® cooler features include:

• One-piece rotomolded polyethylene body (the same process as used for whitewater kayaks)
• Walls filled with thick 2” foam designed to keep things colder for longer
• Lid filled with 3” polyurethane foam
• Heavy duty, non-breakable hinge system
• Freezer quality sealing gasket to lock in the cold
• Food-grade material construction (dry ice compatible)
• Non-slip rubber feet
•  Recessed leak proof drain plug
•  Lockable lid design including heavy duty T-latches and integrated padlock ports
•  UV resistant
•  Built-in slots for the tie-down capability, making locking down a cooler to a deck or boat easier

YETI® Tundra® ice chests have been thoroughly tested by the Interagency Grizzly Bear Committee (ICBC) of the U.S. Forest Service in both contracted simulations and with wild grizzly bears. YETI® Tundra® coolers met ICBC requirements and have officially been approved by the IGBC as a bear resistant container for use on public lands occupied by grizzlies.

A big step change in the evolution of YETI® products was when the company changed their tooling to CNC aluminum molds manufactured by Persico S.p.a., located in Bergamo, Italy. Prior to the change in tooling technology the company experienced labor issues caused by additional work in the post mold process, according to Roy. However, through Persico and their new CNC aluminum tooling, most of the extra labor has been eliminated and YETI® coolers have become a better product.

YETI® is still being manufactured in the Philippines. However, due to the high market demand for YETI® products, several USA rotomolders have now been partnered to manufacture YETI® products including: Plastics Professionals, Hedstrom Plastics, Centro Incorporated, Dutchland Plastics, and Solar Plastics. “We consider these molders to be among the best in the USA,” Roy said. In fact, we have some of the very best partners out there working right along side us to build the YETI® brand. He cited industry consultant Paul Nugent as being instrumental in helping the YETI® brand become what it is today.

From the rotomolders prospective, “Mold care is critical to the YETI® quality program where a high gloss finish is the standard,” David Braeunig, General Manager Hedstrom Plastics, said. “Any minor defect is pronounced on the finished product and constant diligence is required to maintain the degree of quality required. The production of the YETI® cooler has high quality expectations that make the learning curve steep, but we have certainly elevated our capabilities during this process. Our mold shop takes pride in that quality as well as protecting YETI®’s assets to assure a long life,” David said.

YETI®’s high-quality resin materials are supplied by ICO Polymers, McCann Plastics Products, and VPlas of New Zealand. “We employ extremely tight tolerances with our products so our materials must be the best,” Andy said. With regard to the secondary processes of foaming and assembly there has been a learning curve, according to Andy. Logos are engraved into the cooler in several places as part of the mold, which also helps provide structure under the lid. YETI® utilizes a high quality post mold graphic produced by Mold In Graphics, Clarkdale, AZ, for corporate customers and fundraiser coolers.

YETI® Success & The Future

From the launch of YETI® in 2006 to today, the company has experienced 100% growth year over year. In 2013, the company will realize sales in excess of $100 million. As for share of the premium cooler market, Roy’s guess is that YETI® controls around 80%, but he says that is a conservative estimate. Last year, YETI® was named to the INC. 500 List of America’s Fastest Growing Private Companies.

For the future, Roy feels the YETI® idea is suitable for other opportunities. “It is a brand that can be used in other places by leveraging its core attributes, which are durability and insulation. And, while YETI® coolers remain in extreme demand in the USA, the company hasn’t yet stretched out to market the product internationally, although it is shipped all around the world. “Our core strengths are in design, marketing, and selling premium products, and we will stay true to our core plan. We will continue to work closely and grow with the best partners out there to build the YETI® brand,” Roy said.