HOT SPRINGS — One of Richard Smith’s earliest duties in his family’s mining and quarry business was helping to load Arkansas stones into 55-gallon barrels.
Smith, the recently retired president and fourth-generation family member to be involved in what is now known as Smith’s Consumer Products, said the company prepared the barrels to be shipped overseas to countries like Germany and Japan.
There, the raw and unique Arkansas stones — indigenous novaculite — were cut, finished and returned to the United States, a process the family decided to simplify in the early 1960s.
“We thought, ‘Why are we sending all this stone outside the United States? Let’s see if we can cut and finish it here,'” Smith said. “So we set up our first cutting operation with our first little saw in our garage and started cutting. Then we built another saw, started expanding and started selling Arkansas stones full time into the retail consumer market in 1962.”
The move was one of many to shape Smith’s Consumer Products, which was founded in 1886 by Smith’s great-grandfather and has grown from a company that quarried the high quality sharpening stones found only in the Ouachita Mountains near Hot Springs into a worldwide supplier of knife sharpening products.
The Hot Springs-based company now boasts more than 100 items in its Smith’s line, ranging from electric or hand-held devices designed to sharpen kitchen knives, outdoor knives, axes, lawn mower blades, scissors, bow saws and fishing hooks.
Smith’s is taking another step in its long history by working with Wal-Mart Stores Inc. — the company’s largest customer — to move production of two of its top-selling houseware items from China to the United States as part of the retailer’s commitment to purchase $250 billion in American-made products by 2023.
Leaders of the longtime Wal-Mart supplier said it has been pondering the chance to manufacture products for some time and eventually made the decision to dive in after being compelled by the retailer’s challenge, which was introduced three years ago.
“We talked about needing to hedge our reliance on China products in case something happened with the government or something happened really dramatically with the currency,” Chief Marketing Officer Mark Adkison said. “We had a large amount of our products, other than the Arkansas stones or anything that contained an Arkansas stone, manufactured in China fully.”
While many Smith’s products are now being produced overseas, the company’s longevity has centered on the Arkansas stone — found only within a 20-mile radius near Hot Springs. Richard Smith said the stone is unique because it sharpens and polishes metal at the same time.
His great-grandfather bought land with Arkansas stone on it and worked as an agent for Norton Abrasives, a company located in Massachusetts. His grandfather later ran operations as well. Smith’s father eventually took over the property.
Smith’s quarried, cut and finished sharpening stones for years, but left the mining business about a decade ago. The company now sources the stone from other outfits in Hot Springs, leaving Smith’s to devote much of its efforts to product development, assembly and shipping.
Arkansas stone remains central to a number of Smith’s sharpeners, but the company also produces diamond, carbide and ceramic sharpening tools.
“We were an Arkansas stone company and we felt in our mind when we first started, ‘Well, we’ve got all these different grades of stones and they’ll do everything that you need,'” Smith said. “But that’s not the way it works in the retail market. What I tell my people all the time is ‘You don’t sell people what you make. You make what sells.’ You have to listen to the market and the market will tell you which products they want. And the consumer will tell you what products they want.”
Adkison said those consumers are one reason behind the company’s decision to bring manufacturing back to the U.S.
Nearly 80 percent of consumers surveyed last year by Fayetteville-based research firm Field Agent said it was at least moderately important to purchase American-made products. Field Agent also determined 63 percent had purchased one product over another because it was “Made in the U.S.A.”
In addition, Wal-Mart said its customers have indicated where a product is made is second only to price in importance. So the retailer is working with strategic partners to bring manufacturing and jobs back to the United States, which will be highlighted when Wal-Mart holds its annual U.S. Manufacturing Summit on June 28.
Becky Blake, a Wal-Mart buyer, said the retailer was thrilled when Smith’s inquired about manufacturing its two highest-selling kitchen sharpeners in the U.S.
“When we look at reshoring other items it doesn’t have to be Arkansas,” Blake said. “We’ve reshored in Texas. We’ve reshored in Wisconsin. But it does kind of tug at the heart strings a little bit because it is an Arkansas-based company and that’s where Wal-Mart was founded as well.”
Smith’s researched what it would take to make its products in the U.S. and determined the two kitchen sharpeners were its best place to start. Smith said “hundreds of thousands” of the items are sold annually. The company determined the quality and cost of the product could be maintained even if manufacturing was moved back to the U.S.
sted nearly $100,000 for new tooling that would be used to make the pieces in the United States. The company partnered with Prairie Grove-based PolyTech Plastic Molding, which is producing the items for Wal-Mart. The sharpeners aren’t completely made in the U.S. because a small carbide blade still must be made overseas to help maintain costs, but are on Wal-Mart shelves labeled “Made in the USA with U.S. and foreign parts.”
“We look back at it and, yes, it was a great investment,” Adkison said. “It has spurred us to do additional products, which is probably the most important part. This was successful as our first test. … We now have, as far as new products, probably 10 total that are coming back now that are going to be manufactured or mainly assembled in our facility in Hot Springs.”
It’s too early to measure the impact of Smith’s manufacturing efforts, but a company that employs roughly 35 workers anticipates a need for additional staffing as the production of more products are returning to the U.S.
Adkison said in the next 30 days the company is planning to start full production on seven or eight “Made in the USA” items outside of the two sharpeners currently in Wal-Mart stores.
Megan Greeson, economic development manager at the Hot Springs Metro Partnership, said Smith’s continued growth is key because the company is one of Hot Springs’ “primary employers.”
“They produce a product here in Arkansas and in Hot Springs that is shipped worldwide and then that money comes back to our community,” Greeson said. “It’s important for our community. We don’t have a large number of primary employers, so the ones we do have need that steady growth.”
Smith is no longer part of day-to-day operations, but remains a minority shareholder and is confident expansion will continue. Beau Parker was named Smith’s chief executive officer in April 2015 and the company opened a sales and marketing office in Brentwood, Tenn., although operations and distribution remain in Hot Springs.
Smith said it’s all part of a company’s evolution, something Smith’s has experienced throughout its 130-year history.
“We’re very proud of the company,” Smith said. “We’ve grown the company from a very small little company to one of the largest sharpening companies in the industry today. You get there with hard work. You get there with good employees.”
SundayMonday Business on 06/12/2016
