Oct 8, 2012 at 9:17 AM
Customers enjoying a beverage at an Olive Garden in California might not know it, but chances are the coasters placed on the table were made at a Johnson City business that has operated in Northeast Tennessee for more than 20 years.
KATZ Americas is the largest manufacturer of beverage coasters in North America. Their clients include Outback Steakhouse, Chili’s, Darden Restaurants Inc., which owns Olive Garden, Red Lobster and Longhorn Steakhouse, and brewing company Anheuser Busch, whose brands include Budweiser and Michelob.
Of the 1.5 billion coasters made annually by the company, 1.3 billion are produced at the company’s factory in the Johnson City Industrial Park, according to KATZ Americas Chief Operating Officer Michael Elbers.
That’s pretty astounding for a company that was more or less forced to bring production stateside when facing bankruptcy.
It all started with Elbers’ father, Karel Elbers, and his aunt, Kitty Elbers, who founded Ad-Mat International Coasters in Canada in 1985.
With expenses skyrocketing and the majority of their business growing in the United States, Ad-Mat shut down its Canadian operation and began looking to take its operations to the states.
Originally, the company was just going to set up a sales office in the U.S., but the family decided to move all manufacturing to the states after finding Johnson City.
“We were really just traveling around trying to find a nice spot to put up shop and we came across this place,” Elbers said. “We got in contact with the Economic Development Board — Eddie Williams at the time — and put some incentives together and came out here.”
Johnson City’s close proximity to both Interstate 26 and Interstate 81 was one of the big selling factors, Elbers said.
The company’s raw materials, which are imported from Germany, are shipped to Charleston, S.C., so they can get product within six hours of arrival.
Another attractive quality of Johnson City was its work force, which is one of the factors that has helped keep the company in production since it opened.
“The one nice thing that allows us to stay very competitive out there against some of the other coaster manufacturers is the work force is great. We have employees who have been with us for 10 to 15 years,” Elbers said.
In 2007, Ad-Mat merged with its biggest competitor — American Coaster Co. in Buffalo, N.Y. — to form American Coaster Ad-Mat.
About a year later, that company was sold to The KATZ Group, which was acquired by the Koehler Paper Group.
KATZ Americas acts as a member of the Koehler Paper Group and takes care of operations in North, Central and South America, with the Johnson City facility producing the bulk of their product.
A northern facility, located in Sanborn, N.Y., produces lower-volume coaster orders, digital printing and pulpboard books.
KATZ Americas’ Johnson City facility employs 50 people.
While most industry saw major cutbacks during the recession, Elbers said KATZ Americas’ business has continued to grow, with record years setting in almost annually.
Some of the volume of their orders from restaurants affected by the economic downtown has been reduced, but those drinking are always in need of coasters.
“In a good economy people drink and have fun, and in a bad economy people drink even more to drink their sorrows away,” Elbers said.
In the end, using coasters is one of the most cost-effective ways to advertise a business, especially when compared to billboards or TV commercials.
“If you compare our product to some of the other means of advertising out there, ours is a very cheap way to get your message across,” Elbers said.
The company has produced coasters for nearly every type of business, including law firms, medical offices and apartment complexes.
The use of coasters as advertising has increased exponentially because of their reusability and low cost.
With that kind of mass-market appeal, Elbers said their product has a lot of staying power.
“This product has been in Europe for many, many years, although it’s used as more of a utility item when you have a beer or any kind of drink there; you automatically get a coaster. That is still something that I think we’re trying to teach the U.S. market,” he said. “It’s more of an advertising tool the way people look at it. Just because of that and the inexpensiveness of it, I think it’ll stick around for many, many years to come.”
For more information, including KATZ Americas’ full product line, visit www.katzamericas.com.