How Eric Lofquist uses product development and trust as key ingredients in Magnus’ success Featured

2:59pm EDT January 3, 2013
How Eric Lofquist uses product development and trust as key ingredients in Magnus’ success

1. Weatherhead 100

Magnus International Group Inc.

City: Painesville Township

Year founded: 2007

Sales growth: 2,735.6%

Co-owner, president and CEO: Eric Lofquist

Magnus International is a manufacturer and distributor of unique, natural animal feed ingredients, natural waxes and alternative fuels.

 

Magnus International Group Inc. bases its growth model on high-volume product development coupled with a high degree of trust in sharing information with its suppliers and customers.

That model is working remarkably well for the Painesville Township-based manufacturer. Magnus has achieved explosive growth during its five years in business. The lion’s share of that growth has taken place since 2010. Up to that point, Magnus had concentrated on converting petroleum-based waste into renewable fuels and all-natural waxes. But 2½ years ago, Magnus started concentrating on creating products for a new market segment — animal feed ingredients — and its business took off.

“By far, the largest segement of our growth has been on the animal nutrition side of our business,” says Eric Lofquist, Magnus’ president and CEO. “The growth on the energy side — renewable fuels and so forth — has been good from time to time, but natural gas prices are low right now, so that makes it hard to grow in that segment.

“However, our growth on the animal nutrition side has been strong and constant. Once we started focusing on the animal feed side about halfway through 2010, we really started to see the change. That’s when we started to grow in a big way.”

Magnus’ leaders attribute their company’s growth to two key factors: prolific new product development and getting those new products to the marketplace quickly.

“The year 2011 was by far our best one in terms of growth, in both real dollars and percentage,” Lofquist says. “We hit a real sweet spot with new product development, which has continued through 2012. Most of these new products are in the animal nutrition area; that’s where 90 percent of our new product development is focused. And we’ve been able to move the products from development out into the market very quickly because of the way we have our business structured with our partners.”

Magnus is uncommonly ambitious when it comes to developing new products.

“We want to have at least one new brand per quarter out in the marketplace,” Lofquist says. “So that might mean we’re working on three, four, five different products a quarter. Some of them won’t make it past the lab stage. Some might not cut mustard out in the market. But we’ve learned that we always need to have a bench of new products we’re working on from the development side.”

The speed with which Magnus is able to move products from development to market is based on the company’s close, partner-based relationship with its customers and suppliers.

“The way we structure our business and our relationships with our vendors and customers, we’re very transparent,” Lofquist says. “We share a lot of information about profitability and cost, and that helps us move to market much faster, as opposed to having the traditional vendor-customer relationship. We’ve modified these relationships to function like partnerships. Even though they’re not partnerships in the legal sense, they feel like partnerships because of the amount of information we share.”

Many of Magnus’ “partners” are versatile in terms of how they work with the manufacturer, serving as both supplier and customer at different times and sometimes in both roles simultaneously.

“We transform materials that are thrown away by food companies — fats, oils, greases — into a number of products,” Lofquist says. “Sometimes we’ll buy some material from a vendor, then make a new product from that material, then sell it back to them as a customer. So it crosses division lines for some of these large companies.

“It’s fun to be able to sit down with them and say, ‘We’ll pay you X for this material. It’s going to cost us Y to remanufacture it into this higher-level product. And then you can take that back to your marketplace or use it in some of your internal products.’ ”

How to reach: Magnus International Group Inc., (216) 592-8355 or www.magnusig.com