LBM Journal’s Dealer of the Year awards recognize LBM companies of different sizes that epitomize the entrepreneurial spirit. By definition, the LBM Journal Dealer of the Year describes a company in which leadership excels at identifying underserved— or emerging—markets, satisfying customers, and constantly working to grow and improve business. While these companies represent vastly different operations, the common thread is their fierce commitment to finding ever-better ways to serve their customers and their communities. This year’s Dealer of the Year winners are Ganahl Lumber, Keim, Zuern Building Products and Design Center, Hamilton Building Supply, and Krempp Lumber Company.
This article originally appeared in LBM Journal which can be found here.
Zuern Building Products and Design Center: Diversified and growing
Photos: Spottswood Photography
Most lumber dealers in the midst of expansion and increased revenues will tell you about their growth strategy. It isn’t every day, however, that a diversification strategy enters the conversation. It has been said that while good companies can grow by doing what they’re currently doing only better, great companies grow by doing that as well as trying something new. The latter is what makes Zuern Building Products and Design Center in Slinger, Wisconsin our Dealer of the Year in the category of $50 million to $100 million in sales.
Zuern Building Products and Design Center has come a long way since the 1953 opening of Allenton Lumber and Fuel. The business, started by Louis and Irene Zuern, served customers from a single location about an hour north of Milwaukee. In 1970, it was sold to Louis and Irene’s sons, Don, Bob, and Joe Zuern. Today, the ownership team is made up of five siblings and cousins, all third-generation owners. The company employs just under 200 full-time employees among its four full-line lumberyards, two design centers, and corporate and distribution center.
Second-generation growth
Zuern Building Products expanded from its 1970 transition from the first-to second-generation family members. Brothers Don, Bob, and Joe Zuern started with a single location with five employees and in 1985 acquired Hanson Lumber in downtown Watertown, Wisconsin. After a decade at that location, a new store and yard were built in Watertown’s south side, and the downtown property was sold.
The company grew again in 2007 with a new location in Cedarburg, Wisconsin. By 2011, the third generation had purchased the business and in 2014 Zuern acquired Worzella Lumber in Franklin, Wisconsin, giving it a four-location reach across the Milwaukee metro area.
“The strategic growth model was to surround the Milwaukee market in a 30-mile radius,” says co-owner Jennifer Zuern. Jennifer is part of a five-person ownership team that consists of siblings and cousins who purchased the company from their parents in 2011. Dave, Jim, and Greg are sons of Don and Jan Zuern; Tom, is the son of Bob Zuern; and Jennifer is the daughter of Joe Zuern.
Diversification decisions
Since the third generation took over, the company has rebranded as Zuern Building Products and Design Center, opened a new 70,000 square-foot facility in Slinger, Wisconsin, and purchased a two-location window design center that has introduced the company to the Madison, Wisconsin market.
Greg Zuern, co-owner who oversees logistics and operations, says the plan of acquiring the 70,000 square foot facility in Slinger has placed them in a market leadership position in the millwork, window, and cabinet categories. “We have a climate-controlled facility that can handle and store these categories,” he says. The facility serves as a distribution center for all Zuern locations in these categories, and also houses the company’s corporate offices.
“That warehouse space was just critical to our existing growth,” Greg says. His cousin, Jennifer agreed, adding that the ability to expand in those categories allowed the company to also shift more focus onto design centers.
In April 2020, as the nation was still beginning to tackle the COVID-19 pandemic and the economic uncertainty that followed, the company acquired Window Design Center, with locations in Delafield and Madison. Renamed Window Design Center from Zuern, the stores feature expansive showrooms, additional warehousing in Madison, and both inside and outside sales and service support.
Zuern Building Products and Design Center still very much operates like a traditional lumberyard, though you wouldn’t know it from visiting most of their locations. Redesigned showrooms featuring the latest in product and design serve a customer base of 84% pro contractors, both builder and remodeler.
With the recent market growth in home remodeling during the pandemic, Jennifer says she believes the 16% walk-in retail traffic from homeowners will increase as homes have become offices, classrooms, and entertainment centers as well.
Plans are underway to remodel all of the Zuern showrooms, which will be modeled after the recently redesigned Cedarburg store. “We want to create an interactive design and selection experience,” Greg says.
With the Cedarburg store rebranded in 2019 to serve as a template for the rest of the locations, Jennifer says each location will be a destination where builders, customers, designers, and decorators collaborate in bringing a homeowner’s dream property to life. Franklin and Delafield’s remodels have begun since the first of the year.
“We work with customers from design to completion,” she says. “If they don’t have a builder, we work with many who are very reputable. We’ll guide them in the proper direction to one of our customers.”
Team tactics
What most enables Zuern’s growth and diversification trajectory, Jennifer says, is the company’s employees. The company prides itself on both its tenured, veteran staff as well as its new, up-and-coming team members.
“We’ve got a great group of team members we’ve built a bench with,” she says. “There’s a great dynamic between the veterans and the newer staff. They’re teaching each other. The veterans have knowledge beyond measure of products and product application. The newer team members have the technology knowledge to share. The culture we’ve built is very strong and the tenured team members continue to pass that on.”
At Zuern, it’s important that staff know that they are not expected to be a master at everything. “When a customer comes in they can find someone who is a master at windows, doors, or cabinetry,” Jennifer says. “Our people aren’t generalists. Our showroom experience is very different than that of our competition. It’s a branded feeling that you’re not walking into a lumberyard. You can touch, you can feel the products, and it’s more experience and selection driven. We have spaces where customers can sit and work—builders send clients in with decorators and they spend a day here.”
Beginning this year, the company has brought in a corporate training and development leader who is working with each position in the company to create an onboarding and career path for each participant. “That’s really going to be important for retention,” Jennifer says.
Voted a Top Workplace in the Milwaukee market in 2019 and 2020 by the Milwaukee Journal Sentinel, Jennifer says the company’s culture has helped recruit and retain new members. Driving that culture is company President Arleen Mantel. While Arleen has been president for six years, she’s been with the company for 44 years. She plans to retire this year, with Tom Zuern to follow as President.
“She has served somewhat as a liaison,” Jennifer says. “She was a great bridge from the second-generation team members and into the third generation of ownership.”
With a large family group of ownership, and another generation several years away from involvement in the company at a management level, Zuern has learned to look outside the family for expertise when adding to the team.
“We understand that we don’t have all the answers,” Jennifer says. “So, we’ve brought in some great leaders from outside the family. We’ve hired leadership from within the industry, but outside the family because we don’t want tunnel vision as we grow. We know that to grow, we need outside ideas.”
The growth trajectory for Zuerns will continue upward, says Jennifer. With location expansions, rebranding, and diversifying into design centers all happening within the past few years, the company plans to continue the momentum of its record-breaking 2020, which brought revenues of just over $89 million.
Greg says his team will continue to fine-tune the distribution capabilities within the company and implement much of the advances in technology his IT department learned throughout the pandemic.
“We are very advanced in our IT for this industry,” he says. “Our IT team is very involved and is constantly creating efficiencies that make purchasing from Zuern easier.
I think—even in this industry that is notorious for not embracing technology—our core in doing business is to maintain the cutting edge.” Greg added that Zuern’s IT director was recently asked to serve on an Advisory Board for Epicor BisTrack.
Until the economy completely recovers even after the pandemic, Greg says that product lead times will have an effect on business. As such, Zuern’s purchasing team is in constant communication with vendors and sales team leaders, and communication has become more critical than ever.
“Our business model and team approach continually add value for our clients. As we set ourselves apart we see a constant increase in opportunities,” Jennifer says.
