American Manufacturer: Diversification Is Crucial

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Published November 18, 2013

| FOXBusiness

Winter is coming, and for Briggs and Stratton, which manufactures snow throwers and other small engines, business will be booming as long as it’s snowy.

But even if it’s a mild winter, Briggs and Stratton CEO Todd Teske is confident about his company’s future. In this edition of Conference Room, Teske tells FBN’s Jeff Flock that the company’s diversification strategy helps protect the business – in all kinds of weather.

Teske says the company maintains product diversity by selling a variety of small engine machines like snow throwers, generators and lawnmowers, and geographic diversity by operating in markets as far-flung as Australia, Latin America, Southeast Asia and the United States.

“The chances of having every season … every weather pattern kind of not do so well for you is unlikely,” says Teske. “Ultimately the diversification helps a lot.”

When it comes to running Briggs and Stratton, Teske suggests that patience is key. In 2012, droughts meant that lawnmowers weren’t hot items, as grass suffered from lack of rain. “But now this last year, it was plenty wet, and so all of a sudden we saw the market pick up,” says Teske.

Aside from the weather, another challenge for the company is fluctuating metal costs. Aluminum, steel and copper are all important to Briggs and Stratton’s manufacturing process. To maintain stability, Teske says the company hedges on metal prices.

“What we do at the beginning of the season is we take a look at what we think is going to happen for the year,  … so we hedge and ultimately we can provide some pricing stability then for the marketplace as well,” says Teske.

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