Volume 44 Number 10
A to Z with Charger Water’s Buzz Goldstein
Buzz Goldstein began in the water treatment business in 1965, working as a part-time assembler for Rainsoft at it's Elk Grove Village, Ill., manufacturing plant, later becoming an installer and service technician.
But it wasn't until 15 years later that he launched Charger Water Treatment Products as the water treatment division for a group of plumbing supply houses owned by a father and son team, Sig and Steve Feiger.
In between, he worked for a few water treatment dealerships in the Chicago area, honing his skills in an industry that would provide him with his life's career.
Goldstein got to know the Feigers while he was their representative at a company he was working for at the time. He talks about starting the water group from scratch by convincing plumbers to buy a softener, going out to help them make a sale, building it and helping them install and set it up.
"From A to Z," Goldstein said. "I also made out literature myself. Everything was do-it-yourself back then." That was then, this is now.
Today, Charger Water employs 30 people, it clears more than $10 million in sales a year, and it has offices in Chicago, Port Richey, Fla. (near Tampa), Victor, N.Y. (near Rochester), and Fort Worth, Texas—with warehouses in the first three and another planned for Texas by December.
The Florida branch was launched in 1993, the New York branch in 1995 and the Texas office opened in April of this year. It's headed by Bill Hall Jr., formerly of Alamo Water Refiners, who has 15 years experience in the water treatment industry. That's about the minimum experience level for many of the Charger employees, Goldstein said. Eric Beck, Florida manager, has 20 years experience, and David Van Etten, New York manager, has 20-plus years experience.
Goldstein noted that everything is a challenge in expanding like that, but "if you don't have the right people, you don't have the business." Charger learned that the hard way when its first choice to run the Florida operation used the opportunity to learn the industry and open its own business. Still, he feels, that worked out best for Charger since, under Beck, the operation does four times the business that was being done in Florida out of the Chicago branch. New York's sales figures are similar, which means great expectations for the Fort Worth office. Overall, the company has been little affected by the economy, growing on average 10 percent a year. The business is split 70 percent residential and 30 percent commercial.
Below, Goldstein tells interesting stories on his given name and how he came to be called "Buzz," hog farming and water treatment; and he also expresses his views on opportunities facing the industry and the Water Quality Association. But first, here's a few details on his company:
Charger Water Treatment Products
General Manager: Buzz Goldstein
Dealer Base: More than 900 active dealers month-to-month
Vendors: More than 30 different companies, including Osmonics, Pentair, Purolite, Clack, Park International, GLI/Hach, Stenner, Harmsco, Ideal Horizons, KDF, Action Manufacturing…
Products: A full range of water treatment equipment, including softeners, ROs, filters, aeration systems, and a variety of components for residential and commercial applications
Now, on to the interview:
WC&P: How long have you been in the business and how did you get started?
Goldstein: Personally, I've been in the business since about 1965. I took a part-time job with Rainsoft. Their home manufacturing plant in Elk Grove Village. I worked in the shop assembling units and was asked to become a helper/installer and then I was an installer and service man. That's basically how I got into the business and I've been in water treatment ever since then. After that, I worked for a few different dealerships…
WC&P: All in the Chicago area?
Goldstein: All in the Chicago area. One of them that I was working for supplied plumbing supply houses and builders and different other businesses with water treatment products. I got to know the people I work for now while I was their representative for the company I was working for at the time. They approached me in 1979 and asked me to start a water treatment division for them. So, I started Charger Water Treatment Products.
WC&P: Who were these people, by the way?
Goldstein: These were Sig and Steve Feiger, a father and son. They own right now about 32 or 33 plumbing supply houses plus some heating supply houses. We have the water treatment group, which is a standalone corporation with four locations now. We're located in New York, Florida, Chicago and Texas. Down in Fort Worth, that's our new branch. Plus, they own an indoor heating company called Heat Link. They own quite a few different businesses. They asked me to start the company, Charger, and I did. I started it from scratch. From the outset, I would go out and make the sale to a plumber—convince them to buy the product, go out and help them sell the product, come back to the branch and build the unit, and then go back out and show them how to install it and set it up. It was like that from the beginning.
WC&P: From A to Z…
Goldstein: From A to Z. I also made out literature myself. Everything was just do-it-yourself back then. And we've just grown tremendously since then. We're a good company. We're a profitable company. We've got a great team of individuals working for us. [They're] very knowledgeable in the water treatment industry. Most of our guys have at least 10-15 years experience in water treatment. We have incredible shop people backing us up. Our whole thing is customer service. What we try and do is try and build a real good partnership-type of relationship with our customers, with the dealers we have working with us.
WC&P: Now, the Feigers, do they have a separate name for their company?
Goldstein: There's about seven or eight different names for their corporations.
WC&P: What's the main one?
Goldstein: Crawford Supply, it's called The Crawford Companies.
WC&P: That's out of Chicago?
Goldstein: Yes, it is. It's out of Chicago.
WC&P: Well, you've partly answered the next question, which is tell us a little bit about your company and what's new. Why don't you give us a little bit of an idea about how the company has made the transition from 1980 to the present. You mentioned four different locations that Charger has now. How did those evolve? Bear in mind that part of what we try to do with these interviews is educate people about what it took for a company to make it in this industry and these are some of the challenges that they had to overcome…
Goldstein: We were kind of a "me too" business when we first started, compared to other OEMs at the time. We were doing a good business in the Midwest, some business in the Northeast -- you know, New York, Pennsylvania up to Maine. We were doing some business in the Southeast -- Florida, Georgia, Louisiana, in there. And then we were doing some business out West.
WC&P: Was this all by word of mouth?
Goldstein: Well, we were doing our advertising. We started early on advertising with your magazine.
Goldstein: And we started sending out a monthly sales flyer that described items that we had to try and attract business. So, it was a lot of direct mail, a lot of phone calls, a lot of sales work -- you know, personal sales work like going out to see customers. And I was covering all of this myself. So I thought, "We're doing a good business down in Florida; let's think of what we'd have if we opened a branch down there." So, we called on a lot of customers down there and made the decision to open up a branch…
WC&P: This would have been when?
Goldstein: This is in 1993, I think, that we opened our first branch. That was in Venice, Fla.
WC&P: Who managed that for you?
Goldstein: Well, they're no longer with us. Right now, we have Eric Beck as manager of our Florida branch. He does a tremendous job. Eric's been in the water treatment business about 20 years. And it's a very successful branch. We're now located in Port Richey, Fla., and it's doing very well.
WC&P: I take it Venice and Port Richey aren't too far from each other?
Goldstein: No, it wasn't a strong move, but it was a correct one. We ended up capturing about four times the business that we were doing out of this branch. And the business is growing every year.
Goldstein: So, in 1995, I decided to look at the northeastern United States. I decided let's try it again, so we opened a branch in the Rochester, N.Y., area. We have David Van Etten as our manager in that branch. The same thing happened. Because we give faster service, we had the products, a warehouse to draw from if we didn't have the products -- we were able to capture more of the market. And the same thing is happening there that happened down in Florida or our Chicago area branch. We're able to respond quickly to the customer, develop personal relationships because we have somebody in the area -- we have a warehouse in the area. It's working out fairly well. Our customer service rate is very high. It's very good. It's, you know, kind of a nice combination.
WC&P: Were there any challenges in opening those warehouses?
Goldstein: Oh, everything is a challenge. If you don't have the right people, you don't have the business. So, the challenge was to first find the right people to work with; and that took about a year in each instance to find the right person, No. 1, to head the organization and, No. 2, the other people that will back him up.
WC&P: What's that?
Goldstein: The sales people, the shop people, the phone people…
WC&P: How does the Florida situation illustrate that?
Goldstein: What do you mean?
WC&P: You'd mentioned you opened it with one person and now it's managed by someone else.
Goldstein: The first person that we had that opened the branch, they really didn't work out. I think they had it in mind that they were going to open up their own business. They kind of used us to learn the business and then went on and opened up their own.
WC&P: I think others have heard that scenario before, unfortunately.
Goldstein: Yeah, it wasn't a very pleasant scenario. But, you know, you take your lumps, you put your head down and you keep moving. That's exactly what we did. Actually, we turned out to be in a stronger position because of the people we have now and the location we have now. So, it was a learning experience. It was a difficult situation. And we…
Goldstein: We just persevered. That's it. I hope we don't run into folks like that again. So far, we have not. Because, they weren't the type of people we really want to associate with.
WC&P: So, the newest thing at the company is the Texas office. Tell us a little bit about that, if you could.
Goldstein: We have Bill Hall Jr. He's been in the business now for about 15 years and is very knowledgeable about water treatment and the industry. We talked to Bill a couple years ago. He was thinking about getting involved in the OEM part of the business. We talked for a bit and put it on hold for a while. Then, this last winter, he called us again, and it turns out we were able to come to an agreement. We brought him online in April 2002, I believe. Right now, he's setting the groundwork, finding a building and all the other necessities for opening up a location down in the Fort Worth area. We should be opened up down there probably in November or December.
WC&P: But he's already working with you?
Goldstein: Yes, he's calling on customers.
WC&P: And I imagine making sales with shipments from the other warehouses.
Goldstein: Yes, we are. At this time, we ship everything either from our Florida branch or our Chicago branch for the Texas market.
WC&P: Now, I understand Bill had sort of a reverse situation to what you experienced at first in Florida, where he was looking for someone to work with, found one company and it didn't work out. Your situation came up and, similarly, he indicated it worked out for the better of all concerned because of that.
Goldstein: Right. I believe the company they were working with -- I'm not sure of the name -- they were not a full-line water conditioning OEM. They were more of a specialty company.
WC&P: Membranes and RO, yes.
Goldstein: It was very difficult for them to make the transition for such a large scale distributorship. You've got all these three and four thousand parts in your inventory and the part numbers. You have to build units specifically for different water treatment dealers. It's a really different ball game, so it took them months and months just to get to the point where they were set up to sell product. It wasn't a good match. Whereas, our computer system allows us to link any of our offices to the mainframe and we can all share information and inventories and buying power. The computer takes all of that information and builds the different units for us as a kit…
WC&P: I assume that allows you to work on things in real time between offices and set up your production schedule for a just-in-time delivery capability.
WC&P: How does that work? Is this system something that you installed to dramatically change the way you did things or did you work toward it gradually, slowly developing it over time?
Goldstein: What we did is we switched to this new computer system, called Eclipse, about three years ago. And it had a lot of the features that we needed for assembly. It had a lot of stuff. It's hard to describe. Just many things for our customers and for our purchasing -- I mean the computer system would do all the purchasing for itself if we wanted it to.
WC&P: What was it like before that?
Goldstein: Prior to that, it was more hands-on. The computer assisted us. This is a computer system that we work with.
WC&P: How many employees do you have?
Goldstein: Oh, we've got about 30 employees.
WC&P: Who are some of your major vendors?
Goldstein: Our major vendors would be Osmonics, Pentair Water, Purolite, Clack Corp., Great Lakes International, let's see who else…
WC&P: GLI just became part of Hach.
Goldstein: Hach is certainly one of our vendors. Those are a few.
WC&P: What specific product names or brand names do you work with?
Goldstein: Charger actually started out as a brand name and we use it as the company name, but one of our products is the Pro-H2O line. Then, whatever control valve we use on a specific unit, we add that afterward and it becomes part of our product line.
WC&P: Are you also assembling ROs?
Goldstein: No, you know, we have not.
WC&P: You get those straight from Clack?
Goldstein: Well, we have a few suppliers of ROs and ROs are almost a commodity right now because of the influx of product from Asia and different areas of the world. They're very inexpensive. And, to do RO right, you really need a lab and a clean room -- there's a lot of different things you have to do. So, right now, we're staying out of manufacturing ROs or assembling them ourselves -- and we're just buying them packaged.
WC&P: We try to collect interesting anecdotes or stories about someone's personal experience in water treatment that kind of personalize these for the reader. What sort of anecdotes or personal stories would you share with others in the industry -- interesting things that happened, oddities or something funny?
Goldstein: You know, we do some agricultural work. I remember a pig farm. Down in southern Illinois, a guy had this really modern pig farm. And he had really smelly water in the house. It had a horrible odor. When I walked in, my eyes began to water and burn. He had a pond on the property and a well and he was drawing water from the pond for the house. I asked him why he didn't take it from the well and he said they couldn't because it was contaminated with E. coli. I mentioned that he'd need to try and find the source of the well contamination and rehabilitate it if possible. Meanwhile, I asked him to show me the pond, which was just out in the open on the property. As we walked up to it, I noticed a couple of what looked like boulders the size of Volkswagen's in it. I asked what they were and he said: "Well, those are pigs. The wander out here and can't get out, so they drown." And they were drawing water from this into their house. There were dead pigs in it. I came up with several solutions for them, starting with removing the carcasses and putting a fence around the pond to keep the pigs out. I said they also should aerate it, put in some equipment to spray the water up in the air, which would help a little bit.
WC&P: Add a mixer…
Goldstein: Yeah, anything. I gave four or five different methods. He would not do any of them. Nothing.
Goldstein: He would not do a thing. He said it was too much money.
WC&P: So he just left it that way?
Goldstein: He just left it.
WC&P: What was he and his family drinking in the house?
Goldstein: He was buying bottled water at the time. But they were using that pond water for showers, laundry, dishwashing… It was amazing. I followed up three of four days later to see if he at least contacted the county [agricultural extension] agency or this type of stuff, but he hadn't done anything. I don't know what he did. Don't know if he's still alive. Don't know if his wife left him, either.
WC&P: One might hope… either that or he's in an open tent.
Goldstein: Yeah, could be.
WC&P: Tell us from your perspective in the market -- from the vantage point that you have -- where do you see the industry going?
Goldstein: Boy, this industry, it's amazing. I don't see any end to what we could do, what we could accomplish. I don't think we've tapped 35 percent of what we can do in the forms of household water treatment or drinking water systems or even commercial.
WC&P: What's left untapped?
Goldstein: Oh, geez, when you think of all the units that were put in back in the '50s and the '60s and the '70s and the early '80s, that were the old technology, old control valves -- all of those need replacements. The housing market is going strong. We've got all kinds of new customers that are coming on line for us. Manufacturing is demanding better water. I mean you can't turn your head and not see a prospect.
WC&P: How much of your business is split between commercial/industrial vs. residential?
Goldstein: We probably do about 70 percent residential and 30 percent commercial.
WC&P: How's that grown on either end of the scale -- commercial/industrial vs. residential? What's the growth factor in each?
Goldstein: I think that the growth factor on the residential is higher right now. I can't really give you a percentage, but it seems to us to be higher.
WC&P: Just because of housing?
Goldstein: Yes, because of housing growth. And, when it does slow down, then the water treatment dealer switches gears and goes back to the replacement market. So, I think there's just a tremendous opportunity. You know, water being what it is, there's not a lot of it around. We've got the same amount of water we've always had here on the earth. We're going to have to start treating it better. We're going to have to get smarter. We're going to have to get better RO systems that give us more water for use with less water going down the drain. There's a whole lot of improvement here that we can do. I see it as a growth industry for the next 25 or 30 years, I would guess.
WC&P: What sort of issues pop for you in terms of commercial/industrial in terms of what's going to affect growth? And, for instance, what areas do you work in personally? Do you work with specific companies or do you work through dealers?
Goldstein: We work through dealers. We don't do any retail on our own. We're adamant that we never will. Unlike most of our competitors who have a retail operation, we do not. We do business strictly with the dealers.
WC&P: How many dealers do you work with?
Goldstein: At any given time, at least 900.
WC&P: Overall, I imagine there's a much larger base.
Goldstein: Oh, yeah, but any given month, we're dealing with at least 900 to 1,000.
WC&P: We generally like to include some indication of revenues in these interviews as well?
Goldstein: Let's just say $10 million.
WC&P: And what sort of percentage growth have you been seeing?
Goldstein: At least 10 percent.
WC&P: What was it last year?
Goldstein: Last year it was about, oh, 14 percent.
WC&P: Any impact from the economy or 9/11 or anything?
Goldstein: Surprisingly, no. At first, last September, we did see a slight drop off. But it picked up again in October and it has remained strong.
WC&P: We've kind of gotten some indications that a turnaround -- or that long awaited recovery -- is starting to occur. Have you felt any strengthening in the market?
Goldstein: No, no, not yet. We've been steady at that 10 percent throughout the year. I think strengthening would be probably 16-17 percent for us. Then, I'd be happier at that.
WC&P: What are you anticipating for next year?
Goldstein: Next year, I'm looking -- if the economy comes around -- we might see that 12-14 percent again.
WC&P: The last question we have is what's the one hot-button issue you see facing dealers or the industry -- you can mention your market segment, distributors, if you like -- that will have the most impact in the next few years?
Goldstein: That's a big question. It's an important question, too. There's a few of them actually. I think we need cleaner lines of distribution from the manufacturer to the OEM to the dealer. I think we have to build stronger relationships with the dealers. And I think the dealer has to look more at combinations when he/she walks into somebody's house to make sure that they're taking care of all the water in the house, not just point-of-entry, but point-of-entry and point-of-use. We have a challenge now in the Chicago area where they're using Lake Michigan water more and more in the suburbs and I think the dealers have to adjust to that. It's 8 to 10 to 15 grain water that they're dealing with now, rather than the 30, 50 or even 100 grain that we used to see around here before. But there's still the opportunities to sell equipment. They just need to be a little sharper and educate the consumer a little more.
WC&P: I recall reading recently that there's been a lot of problems with municipal discharge into Lake Michigan, so that raises some issues that dealers might be able to take advantage of, yes?
Goldstein: That is constant. I can't count on both hands this summer the times that Chicago beaches have been closed because of high coliform counts.
WC&P: It's been an issue in Milwaukee as well.
Goldstein: Yes, but we don't hear about that as much. Every week here you hear about something going wrong and them closing a beach. Who knows what they're dumping into Lake Michigan. The inlet for the water is about two miles offshore and I don't know if that helps or not. I myself live in Park Ridge, Ill. We have Chicago water, but I've got a water softener and an RO system -- and I wouldn't live without it.
WC&P: I have the same. Was that the one hot-button issue or is there something else that stands out for you?
Goldstein: Right at the moment, I can't think of much else.
WC&P: There's certification issues, efficiency issues, the new standards in California?
Goldstein: Those have all been ongoing concerns. I don't think you could really tag any of those as the one hot-button issue.
WC&P: The WQA has been organized on all of these lately…
Goldstein: The WQA is doing a good job of overseeing what's happened between the local governments, the federal governments and the dealer, which is excellent. I mean Peter Censky is just doing a great job. They just caught this one little rule down in Texas where you couldn't discharge the water softener drain into a septic system, which is really a non-issue and has been for some time. Regardless, they helped to get that changed back to the point where it should be such that it's OK to discharge a water softener drain into the thing because it doesn't do any harm…
WC&P: I believe they're working similarly in several other states on that same issue…
Goldstein: Kentucky, they got it changed there.
WC&P: Massachusetts is still a tough one they're working on and, in Wisconsin, the issue has mellowed there. Ohio and Iowa…
Goldstein: Right, I think that you're going to have more states trying to have more control over what people put in their homes to treat their water.
WC&P: That's because states are having more requirements put on them by the USEPA, etc.
Goldstein: Yes, but they're also looking for additional revenues for permits, too. Really. There's a lot of things that crank into that. I mean that's just something that we're going to have to deal with. It's got to be watched. It's got to be looked over. Some regulations are going to be good. Some are going to be silly and need to be changed.
WC&P: Do you have any general comments about the transition at the WQA over the past few years? It seems as if it sort of came to a crux with the identity crisis in the last year and now they're working on a strategic planning process to refocus the association…
Goldstein: They're in a tough position. There's been a heck of a lot of consolidation in our industry and I think they've lost a lot of their revenue because of it. But I think that Peter has it headed in the right direction. He's trying different things right now and he's asking a lot of questions, which is nice. I know they sent us a couple of questionnaires recently and asked our opinions on many of the problems that they're facing. We told them what we thought. I think that he's doing a good job. I really do. I think that maybe a two-day [trade] show is a step in the right direction. I'm not sure yet. We'll try it. And, if it doesn't work out, I believe that Peter will likely be open to suggestion to change it and try something else.
WC&P: It's probable that it will be changing over the next few years regardless as WQA feels out the best way to go…
Goldstein: And now they're not going to have anything, at least I'm told that, running for the dealer during the actual trade show exhibition, which is very critical to us. It was very disappointing to have a dealer come into our booth or walking through the show and hear, "I've got to get to a seminar." That happened more than once.
WC&P: I would imagine that the appropriate phrase here would be -- sometimes too much of a good thing is not necessarily the best.
Goldstein: I agree.
WC&P: WQA puts together such a good, broad educational program and everyone says, "We can do more." But sometimes it's important to ratchet that down a little bit so that you're not undercutting a very important aspect of the event, which is the activity on the trade show floor.
Goldstein: Right. We go there to talk to dealers. That's why we go to the show. That's why we invest in the show. If there's no dealers for us to talk to, there's no reason for us to be there.
WC&P: Well, I think we should have a pretty good turnout in Las Vegas. Cheap airline flights, inexpensive hotels and sunshine -- let's go!
Goldstein: I believe there will.