Case Studies

Mutual Materials

Providing comprehensive masonry and hardscape solutions in the Northwest

In 1900 Daniel Houlahan founded a small brick company in Seattle in order to supply the city’s rebuilding effort after a destructive fire. Originally called Builders Brick Company, the business rebranded in 1966 as Mutual Materials (MM). For more than a century, MM has grown and diversified. It is still a family business today with Kendall Anderagg, fifth-generation owner and current president, leading the team.

The company sells out of 16 locations in the Pacific Northwest, with distribution locations in Washington, Oregon, Montana and Idaho. Altogether, the business operates 11 manufacturing facilities in Oregon, Washington and British Columbia. The facilities include two brick plants, three block plants, four paver plants, an architectural slab plant and a bagged mortar and grout plant. MM has strategic partnerships with other manufacturers around the region that help fill in the gaps when demand is high.

A strong team

Gary Zagelow, commercial division manager for MM, has been with the business since 1978. “I started out on the order desk right out of college,” he recalls. “The company was growing and I had the opportunity to move into residential sales in Oregon. Eventually I moved into commercial sales in Oregon.” Now, Zagelow leads sales teams in Seattle, Portland and Spokane for the commercial masonry and hardscape business.

Zagelow takes a great sense of pride in the business. “This family has a remarkable story,” he explains. “Throughout the history of the company, they have dedicated virtually everything back into the business. They either make enhancements to the company or share profits with employees. The business is a family and I am proud to be in my 36th year with them. We have a lot of people who have retired after 30 to 40 years with this company.”

A versatile product line

With a history of reinvesting for growth, MM has developed a diverse and appropriate line of products that can be used in both commercial and residential applications. The company’s customer base includes big-box stores such as Home Depot, as well as masons and homeowners. On the commercial end, the team operates through two specific divisions.

“Our commercial sales are split into two areas of focus,” Zagelow explains. “We have a group of representatives who call directly on architects and designers, and then we have sales representatives who call on mason contractors. With architects, we help with design as it pertains to masonry and hardscapes. They determine the exterior finish, but need technical information and expertise to make sure the design is functional and looks good. We help them determine what kind of materials and methods would be best, presenting the right system and the right products for a particular project. We are one small piece of that work. Once that goes out to bid, our sales representatives on the masonry end secure an order with the mason contractors. Generally we manufacture products ourselves and ship them to the jobsite.”

On the residential end of the business, MM targets new construction through mason contractors, homebuilders and designers. The process is fairly similar to the commercial end, although aftermarket sales are more common. Whether for a new home or a family looking to upgrade hardscapes, MM provides retaining wall and pavers for the backyard, as well as stones and brick for patios, outdoor fireplaces and driveways.

Evolving with the market

In both areas of the business, MM is constantly striving to provide new and improved products for builders and end users. Fortunately, product trends are similar between the sectors. “We see a tremendous amount of crossover between the residential and commercial markets, though the application is different,” Zagelow elaborates. “There is more design and detail in commercial projects than the typical residential project. The similarities are part of what makes it work for us. We create products that are not specific to a segment, so the crossover makes it practical from a manufacturing standpoint. There is a fairly small market in the Pacific Northwest. Our comprehensive approach to manufacturing allows us to broadcast our products across different segments.”

In recent years, the company has introduced several new paver products. The latest trends include oversized pavers with a stone-like finish. Zagelow reports that the scale of paving market and the scale of products are getting bigger.

“People want more natural-looking products,” he explains. “The series we are launching in 2014 will meet those demands. We have also developed a new thin clay product, SlimBrick, over the last couple of years. With that, we have found a lot of traction in both the residential and commercial markets. Another popular residential trend is the company’s natural stone thin veneer, which has been more popular than synthetic products.”

Zagelow explains that he continues to see solid growth in the company’s sustainable products. “Part of that market is permeable pavers,” he details. “Jurisdictions want to reduce stormwater issues. With permeable surfaces, water goes through the product and into the ground instead of creating more runoff into the overloaded water systems. That segment continues to gain momentum.”

Smart growth

When it comes down to it, MM has been through several economic cycles. After more than a century, the business has survived ups and downs. Considering the most recent economic downturn, the management team has maintained stability even when the business took hits in revenue. “Certainly we have spent a tremendous amount of time right-sizing the business to coincide with volumes that we are seeing now,” Zagelow explains. “We are busier than we were during the worst of the recession, but we are not back to the levels we were seeing in 2007. Still, we have managed to get ourselves in a position where even at lower volumes we can remain profitable.”

Some false starts and unexpected dips have taken a toll on nearly everyone in the construction industry. Now, Zagelow and his colleagues are cautiously optimistic about the recovery. The business is growing slowly to accommodate changing volumes as the management team actively tries not to allow the business to outgrow itself. “We do not want to increase our expenses and resources too fast,” Zagelow notes. “Our growth is deliberate at this time and we are seeing improvement.”

MM is not on the road to any explosive growth in the next coming years, but remains on an upward trend of controlled growth. With two growing divisions and a constantly changing product line, clients continue to support the unique family business. Zagelow and his team have built a strong company on a solid foundation. With great customer and employee loyalty, Mutual Materials is breaking into a promising second century of operation.

Published on: July 22, 2014

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