When we wrote about Zippo Manufacturing in September 2004, the Bradford, Pennsylvania, lighter company was engineering a turnaround.
The Problem Fewer Americans smoke. As a result, sales of Zippo's lighters began to stagnate in the 1990s. In 2001, George Duke, chairman of the board and grandson of Zippo's founder, hired CEO Greg Booth to make the business "a marketing company rather than a manufacturer." The plan was to license the Zippo name, expand overseas, and introduce new products, including a multipurpose lighter that hit shelves in 2002. The company also sponsored an online rock band competition, the Zippo Hot Tour, to attract younger customers. But Duke admitted that the turnaround would take time. "We'll crawl before we run," he said.
What the Experts Said Ann A. Fishman, president of Generational-Targeted Marketing Corp. in New Orleans, said that the Zippo brand has potential with Generation Y and praised the Hot Tour promotion. Meanwhile, Rob Frankel, author of The Revenge of Brand X, predicted that Zippo "could give Coleman a major run for its money in the camping category."
What's Happened Since As Duke expected, things are going slowly. Zippo started a Hot Tour in China and has formed a promotional partnership with Chinese MTV. The company has licensed the Zippo name in China, Japan, and Italy, for use on stoves, clothes, watches, and sunglasses. Sales in China have doubled, to $10 million, since 2003. Still, overall sales remained flat in 2005 as Zippo plotted a strategy to target a younger audience. To that end, the company has created a sleek butane lighter called the Blue Flame, which is slated to debut in 2007.
What's Next Zippo recently signed on with the Joester Loria Group, a New York City licensing agency that has worked with brands such as Mountain Dew and the Care Bears. The first U.S. product to use the Zippo name will be a flashlight. This year, Booth hopes sales will increase 2 or 3 percent, to more than $200 million.