Difficult to handle and work with. A sure means of dust dispersion. Or concrete in its lowest tech and purest commodity form. Where packaged dry mix is concerned, take your pick.

But if a south Florida company has its way, concrete in a bag will command more respect from everyday customers — especially the contractors or homeowners loading up to 15 bags per order — and will be easier for retailers to stock. Likewise, Miami-based Einstone Inc. figures that by offering a better way to handle concrete in small quantities, craft-minded consumers who are exposed to store displays, quirky print and radio advertisements, and web site promotions will also be compelled to give the material a try.

Einstone's radical alternative to conventional 60-lb., dry mix packaged product is a 40-lb. plastic bag of low slump, set-retarded concrete. Accompanied by a liquid activator pouch, the material is sold in Concrete or Sand Topping Mix versions. Colored activators and stylish finishing tools round out the line.

A product of concrete and construction materials veterans thinking outside the box, Einstone has reached commercialization with a group of investors and professionals in retail management and consumer product development, branding, and marketing (note “Ingenuity to bear” box, page 18). Their backgrounds span intellectual property practice; tenure with Big Five accounting firms, Proctor & Gamble, and the Lowe's Cos. and Container Store retail chains; Mercedes Benz model marketing; and invention of proprietary medical devices and the Reebok Step exercise tool. Topping all “nonconcrete” influences surrounding the new product is Brand Institute. The Miami-based firm helped develop the name Einstone on the heels of similar efforts for Starbucks Coffee — yielding Frappuccino beverages and other brand extensions.

Now a stand-alone entity, Einstone emerged from a holding company, Building Brands Inc., that develops and markets building and construction products. A seven-year-old sister operation, EZ Street Co., licenses production of polymer-modified, cold mix asphalt in 35-lb., plastic bag units for retail sales, or bulk for utility-cut and full-depth pavement construction. While licensing suits the EZ Street product, it is not part of Einstone's current strategy. Concrete Products recently visited Miami to see who and what are behind Einstone, how the product is faring in its retail launch, and why a little company might end up revolutionizing the process by which most people experience concrete first hand.

Brand builder

“We bring excitement to a category with a long standing presence at retail, but that has always been seen as a commodity,” says Dag Seagren, president, CEO and co-founder of Einstone Inc. “If you walk through a typical home improvement store, nearly every item is evolving with modern packaging and signage. That stops when you reach the packaged-concrete aisle.”

For retailers, he explains, the disadvantages of paper-packed dry mix multiply: Sales opportunities are missed as prospective users find little in a concrete section to grab their attention. Packages tear or break open often, spreading dust and diminishing a clean, pleasant shopping environment retailers try hard to maintain. And, damaged packages represent lost merchandise, disrupting inventory management and the potential for stores to obtain appropriate credits from vendors.

Einstone's better packaging, merchandising and cleanliness favor retailers, Seagren notes, as user convenience stands to offset higher price points — from three to four times that of conventional packaged-concrete items. “Consumers are willing to pay more for convenience,” he contends. “It's a trend running across product found at retail, from home improvement items to packaged or fast food.”

Is there a difference in the premium Einstone users might pay for convenient concrete versus the higher costs shoppers incur for potting soil in a colorful, tear-resistant and reclosable 20-lb. bag, or a 1-lb. bag of ready-to-serve Iceberg lettuce? Seagren offers those as a few of many examples where consumer product vendors — who grow business by gaining shelf space at retail — have used creative packaging, store presentation and a convenience pitch to boost price points and margins.

The Product

The idea of packaging fresh concrete came from Patrick Weaver, a Phoenix-based regional quality control manager for former EZ Street licensee Calmat Materials (now part of Vulcan Materials). “I liked the concept of ready-to-place patching and paving material, and wondered how it could be adapted to concrete,” he says. After working on a number jobs calling for mix adjustments to accelerate or extend set times, and dosing returned-concrete loads with hydration stabilizers for next-day orders, the idea of a concrete EZ Street version seemed more plausible, he adds.

In the tradition of Apple Computer and Hewlett-Packard founders, Weaver set up shop in his garage. Under a moonlighting arrangement, he experimented for about six months with mixes bearing commercially available set control agents. “I was testing how concrete could be put to sleep, then awakened,” he quips. “The trick was to make concrete that would last two to three months in a plastic bag.”

Along the way, he upgraded to a more powerful KitchenAid mixer — thoroughly cleaning an original model, then giving it to his wife Joann, who still uses it for its intended function. As he neared viable mix designs and concrete and activator packaging methods, Weaver — through his his own company, Millennial Material Technologies — teamed up with the principals of what would become Einstone Inc.

Continuing in a quality-control capacity with another Phoenix operator, New West Materials, he worked out an Einstone production scheme using an old Cemen Tech stationary batch plant. It afforded him opportunity to test material commercially on an Arizona Department of Transportation fence post-setting job. Work took place over a one-week period and saw consumption of 6,000 bags along freeway berms.

After the January 2001 ADOT experiment, Weaver and his Building Brands partners proceeded with a 12-month plan to commercialize their formulation. As Einstone principals enlisted specialists in consumer product retailing, merchandising, plus legal and financial support, Weaver arranged to relocate from Arizona to south Florida. With production his primary responsibility, he drew up a floor plan for existing space in Medley, Fla., near Miami. Procuring equipment under hushed circumstances, he ordered a new stationary batch plant model from Cemen Tech, informing the Indianola, Iowa, manufacturer that he was going into religious themed statuary.

The Launch

Einstone hooked up with Wilkesboro, N.C.-based home improvement retailing giant Lowe's Cos. for a spring 2002, 48-store pilot in Florida. Bulk packaging and merchandising displays were crafted around the Lowe's Home Improvement Warehouse bay: 8- ∞ 16-ft. racks with three shelves above the floor level, at which activator and finishing product bins, and 63-bag “pallet box” bulk merchandising units are placed. Commonly used in big box retail settings to display everyday or “impulse buy” items, the pallet boxes are skid-mounted and of triple corrugated-wall construction. The Concrete and Sand Topping Mix bags have retailed in the $5.87 to $6.50 range.

Beyond the Lowe's program, which covers core do-it-yourself homeowner and small contractor customers, Einstone has secured distribution with Chad Supply, Tampa. A subsidiary of Orlando-based plumbing and electrical distributor Hughes Supply, Chad serves multi-unit housing developments from 25 warehouses across 12 Southeast states.

Einstone batches, blends and bags all product for the pilot at Medley. Five contract haulers deliver 18 to 20-pallet box loads to Lowe's and Chad Supply properties throughout Florida. Although production methods are in their infancy, the plant can output 1,200 bags a day with a four-man crew.

From its headquarters, Einstone Inc. hosts an extranet site to provide critical plant-store-office links for customers keen on exploiting the internet to reduce operating costs and paperwork. “The site provides electronic communication between the plant, field service representatives, individual stores and the Lowe's home office. It can be expanded into a national system relaying real-time information on point-of-sale data to track margins, inventory turns, and effectiveness of promotions and advertising,” explains Senior Vice President Lars Seagren, who co-founded Einstone with his brother and oversees information technology systems.

In the Lowe's pilot's first two months, without promotion, stores were moving Concrete and Sand Topping Mix at weekly rates of 20-40 bags and 10-15 bags, respectively. After two months of store exposure and newspaper and radio advertising, those figures have climbed up to five-fold.

“Do-it-yourself homeowner and small contractor customers will embrace this method for setting posts, floor and flatwork patching and landscaping jobs,” assures Dag Seagren. “When you have a product with a considerable premium over an established alternative, it takes time to change users' mindset.”

As the Florida rollout continues, and individual stores fine tune merchandising and promotion of the line, Seagren and his team are looking down the road at full bore, standardized production and wide distribution. Einstone recently named a general operations manager, Dan Lloyd, who held a similar position at a mammoth Proctor & Gamble facility in Georgia. Eager to customize batching, blending and packaging equipment that wider scale Einstone production would require, he is confident that he can apply to concrete what he knows from making Bounty and Charmin products.

Lloyd recognizes the consumer, professional and industrial side of a material like Einstone. Regardless of the target market, he observes, “Product value is determined by two criteria: quality and pricing. Einstone represents a third — convenience. It's a 21st century product for a 21st century customer.”

Einstone Inc., 305/665-8600; www.einstone.com

“Ingenuity to bear”

Two contingents back Einstone's development and commercialization: 1) Insiders who know concrete, asphalt and construction materials; and, 2) Outside professionals who until recently might not have known the difference between cement and concrete, yet offer perspective on how to position Einstone as a high margin, value-added “smart” product warranting the attention of big box home improvement and general merchandise retailers. Just after the February 2002 Lowe's launch, Einstone officials convened at headquarters to discuss principles of retail merchandising and account servicing, product branding, and intellectual property.

Neil Goodman, Vice President of National Accounts, Charlotte, N.C.

Former Director of Special Order Sales, Lowe's Cos.

“In home improvement stores, packaged concrete is considered a project driver, as it is usually purchased in conjunction with other products that might go into a patio or deck. Since concrete is used by small contractors and do-it-yourself customers, it is very competitive and moves at large volumes quickly.

“Retailers measure product on one main benchmark: gross margin return on investment (or inventory). Buyers are held to GMROI targets in every department and have to allot shelf or floor space accordingly. Wall Street grades retailers on expansion prospects and same stores sales growth (annual volume increases in properties open at least one year). Value-added products like Einstone drive such growth.”

Dr. Francis Young, P.E., Board Member Auckland, New Zealand

Former University of Illinois Civil Engineering Professor, Associate Director of Center for Advanced Cement-Based Materials at Northwestern University; leading authority on cement hydration, chemistry and paste microstructure

“Packaged-concrete is the kind of application where the industry has not brought ingenuity to bear. I have always felt the industry should be innovative in the use of materials. Most innovations in concrete are mix-related and driven by engineering. Einstone is innovative in both mix technology and packaging.”

Al Silva, Chief Financial Officer

Former Ernst & Young director of finance

“A product launch with a retailer like Lowe's Cos. requires a supplier to set up online collaboration. Using [Oracle Small Business] system modules, we are able to hook up with the electronic data interchange Lowe's has for automatic stock replenishment.. We can track all stores' ordering, shipment and delivery.”

Charlie Larsen, Chairman, Lead investor

Partner, The Innovation Factory, Atlanta

“Companies who want in with big box retailers have to have more than a good product that turns. Vendors have to execute in all areas that store buyers consider important: product knowledge, training for department associates, promotion ideas, packaging and logistics.

“We have built production and information technology systems to take the Einstone product nationwide. When retailers or distributors elect to move beyond a pilot, there is usually little lead time.”

Edward Leftwich, Merchandising Design

Real Models Inc., Atlanta

“A retailer like Lowe's usually requires prospective vendors to set up a full-scale store display model. We proposed a 1 ¼ 12 scale display from which buyers could visualize signage and graphics. The objective was to keep the presentation of pallet boxes, activator and tool shelves, and “how-to” signage simple. We were bound by a common rule of thumb in retail displays: you have about seven seconds to involve a shopper in a product or section.

“When I tell people in mainline consumer products about work with a concrete company, they don't see the potential for a lot of imagination. I'm flattered to be involved with a product that is about much more than dusty bags.”

David Schweitzer, Cross Platform Consultant Taos, New Mexico

Recent project: Promotion of Mercedes Benz's online showroom for the $130,000+ G-Wagen model, sold exclusively over the web.

“The challenges we face introducing Einstone are not that different from other premium products. We have to help retailers tackle the issue of selling concrete to everyday consumers or people who have never worked with it. For smaller order professional customers, we need to show that this is not the same type of material they are used to placing. It saves time, eliminates dust and minimizes the need for clean up around the working area.”

Cathy Fitzgerald, Brand Manager

Former Container Store design associate and marketing agency account executive

“The Einstone bag has an individual look; there is continuity between it and the store display. We have a lot of information to fit into the header sign and sum it up with “Convenient Concrete.”

“Female shoppers observed in pilot stores have moved beyond the concrete side and inquired about craft possibilities — patio stones, landscaping effects. A lot of this interest is because of the packaging. Creating a new category of packaged-concrete customers will be a key element of Einstone's future.”

Rick Hillstead, Intellectual Property Director

Partner, The Innovation Factory, Atlanta

“The strategy behind intellectual property encourages individuals or companies to brainstorm, view their industries or target businesses in a whole new light. We find with Einstone that there is much IP process to be transferred from industries outside construction or retailing.

“We have filed for provisional patents on the Einstone line. An IP strategy runs alongside those filings to augment product development. We have taken an aggressive stance to protect our intellectual property. In the past such measures might have been treated as an afterthought.