Glam trash: Vipp
Question: when is a bin not just a bin?
Answer: when it’s a Vipp. Jette and Kasper Egelund reveal the trash-to-cash tale of a family firm and an unlikely design icon
words by Scott Berman
Scandinavians can be downright fastidious about the design of darn near anything, often with wonderful results. But waste bins?
“Why not?” asks Jette Egelund, chief executive officer of Vipp. The Danish company has been around since 1939, but has only become assertive in recent years. How? By making this common household object into an icon of high design, exporting to more than 30 nations worldwide.
Vipp is clearly doing something right. Its marketing model, for example, is based on what Kasper Egelund, the company’s sales and marketing manager (and Jette’s son), unabashedly calls a story of love and commitment, using curiosity and creativity to foster the product. “That’s the foundation of all our marketing,” Kasper says. Paramount is the belief that “product is king.” It’s much as his grandfather held it.
Jette and Kasper meet me at Vipp’s attractive headquarters – a former print factory dating from 1910, in Copenhagen’s Islands Brygge. Jette is a petite woman of 57, with salt-and-pepper hair and plenty of enthusiasm. Kasper, 32, is slim, serious and smart. They talk easily, sip coffee, and quibble with each other over the finer points.
They describe how the company started in 1939. Jette’s father, Holger Nielsen, designed a bin for his wife Marie’s hairdressing salon in Randers, in Denmark’s Jutland region. For Holger, it was simply something special for his wife. Customers liked what they saw, and Holger made bins to order for friends and other clientele for decades, keeping a very modest company – there was one employee as late as the 1990s.
When Holger died in 1992, Jette bought the business from her mother. She plunged right in and started exploring options for the company, including mail-order distribution and trade fairs.
The mid-1990s was a pivotal period for Jette, both personally and professionally. She left her job as a social worker, divorced, and moved from Copenhagen back to her childhood home in Randers to learn the production process. She outsourced production to a factory in Lolland region of southern Denmark in 1998, and moved back to Copenhagen, where she brought Kasper and her daughter, Sofie, a graphics designer, into the business.
The first few years were hard: Jette encountered indifference among upscale Danish furniture retailers and bombast from male counterparts who perhaps saw her as a less-than-formidable entrepreneur. But it emerged that the Egelunds had a knack for business. There was no magic formula, says Jette – sales started growing once she increased manufacturing capacity and sales and marketing outreach. Eventually, through sheer dedication and persistence, she landed key retailers in Copenhagen, and, in particular, the upscale Conran Shop in London. Sceptical retailers began coming around after hearing this news and as the trade press started covering Vipp, highlighting it as a tiny family business in Denmark beginning to make international waves.
Along the way to success, the company hired and fired some agents in Germany, brought in export salespeople, expanded into new national markets, and boosted its staff across the board: from three employees in 1999 to 41 today.
A turning point for Vipp’s image came in 2001. Copenhagen’s Danish Design Centre surveyed international design industry professionals and academics to come up with a list of iconic products. There were 100 chosen, with five from Denmark, including a Bang & Olufsen radio, an Arne Jacobsen chair, and a Vipp bin.
By 2000-2002 sales were up significantly, and by 2004 Vipp had moved into its new Copenhagen headquarters, the renovation of which cost €4m and 13 months to upgrade, according to Jette, an investment indicative of her commitment to grow this company.
Today, Vipp sells to more than 30 national markets, including most of Europe, as well as Japan, South Africa, Israel, Canada and the US. Vipp’s pre-tax earnings in 2006 were about €750,000 on sales of about €7.4m. Sales have grown an average of 32% in the past two years. Danes buy the most, about 30%, followed by the Dutch, Norwegians and Germans, who constitute the fastest growing market. The US accounts for about 10% of the turnover. They are not snapping them up as an afterthought, either: prices range from €185 to €500 in upscale retail shops. Vipp’s soap dispensers retail go for about €85.
Vipp’s unique selling properties are design and quality, craftsmanship and attention to detail, the Egelunds believe. The company invests in both, and creates its margins by charging accordingly, with a sharp focus on its upscale segment. There are copycat bins of cheaper design and lower cost, but these are not competitors per se – price is not the key determinant in Vipp’s segment. A more viable competitor is Armani Home, according to Kasper. The company maintains authenticity by “designing for ourselves,” he says, “and not using focus groups to determine whether a new product works.”
Vipp recently has added to its bins, toilet brush and laundry basket range, a soap dispenser and towels, both manufactured in China. Other products are being planned for the entire home. The Egelunds do not seem unduly worried that this may dilute the brand. In fact, “let’s see how far you can take it,” Jette says. They cite the extended product lines of Ralph Lauren, Calvin Klein and Ferrari and want to associate Vipp with such brands. “It’s the Vipp DNA thing,” Kasper explains. In other words, the progression from product to product has to be logical, and each must be of the highest quality.
Something as mundane as a waste bin would seem at first glance to be wholly out of place in the realm of high design and culture. But Jette’s interest in high culture is palpable. The result of the 2001 design survey was undoubtedly a boost when, in 2005, Vipp recruited 30 artists – including French designers Phillipe Starck and Christian Lacroix – to decorate the bins for Handicap International, with whimsical and playful results. In 2006, bins adorned by Mauricio Clavero, an industrial designer from Chile, were exhibited at the Louvre in Paris. In February this year, Vipp marketed a limited edition bin called Reykjavik Blue – just 40 numbered units, each with its own fur bag.
In addition, Jette’s love of music, and her significant other, Danish conductor Mogens Dahl, inspired her in 2005 to convert an old car workshop on the Vipp lot into an attractive concert hall. The Mogens Dahl Institute for Music opened in 2006. The musical sideline – the facility can be booked for functions – is just one of the initiatives keeping the Vipp campus buzzing with activity.
A greater market penetration in the US is next on the agenda. For this, the Egelunds decided to start at the beginning – literally. In late 2007 the company plans to open a replica of the original family hair salon in the fashionable, affluent TriBeCa section of New York City; it will be a sleek US showcase. In five years, the Egelunds expect the company to have a longer line of products, a higher profile internationally and a stronger presence in retail.
But profits, plans, products and promotions aside, what really drives the Egelunds? Kasper says it’s having a team, setting a goal and succeeding. Jette says simply, “I love to win. I like the medals.”
bin there
Vipp is building an upscale, international market mostly out of an unlikely product. Here are some of the key lessons the Egelunds learned along the way
• Don’t let outside agents and distributors get between you and your customers. Instead, hire qualified in-house sales and marketing professionals who know the products and will argue for them.
• Treat customers like partners in terms of marketing, deliveries and publicity. Build a long-term relationship.
• Consumers expect to find Vipp products in high-end home furnishing stores in their national markets. When you go to a pizzeria, you expect to find Coca-Cola there, right? Try to create the same sort of expectation about your products in your customers’ stores.
• Explain to your employees exactly where you are taking the company, how, when and why. Not doing so creates a disillusioned team.
• If you want advice, get it from people with a proven track record in your business area.
• Have a clue. Before launching a new initiative, make sure to really master your business model.
• Having numerous national markets is not the point. The point is to have power in your markets. So it’s better to be a big fish in a small pond than a small fish in a big pond.
• Strong products take strong leaders. Be decisive: no guts, no glory.
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