Homegrown home run

It’s October. Pennant fever is high. And this year’s World Series hero may just be swinging a made-in-Canada maple bat.

There is one thing hat Arlene Anderson simply won’t discuss and that’s where she buys her maple. She won’t even divulge the region from which it is purchased. “There’s no magical forest,” says Anderson, the president of Sam Bat, a Canadian company that makes what many regard as the best baseball bats in the world. Famed for their durability and craftsmanship, Sam Bats are sold in a dozen countries around the globe and are currently used by more than 120 major leaguers, including such stars as Miguel Cabrera, Kris Bryant, Bryce Harper, Robinson Cano, Ryan Braun, Nelson Cruz and Giancarlo Stanton.

From its headquarters near Ottawa, Sam Bat produces about 20,000 bats a year in some 300 different models and does $2 million in sales. In terms of use by major-league ballplayers it ranks fourth in a crowded field of manufacturers. Because only the very best rock maple is used in the bats that Sam Bat produces for the majors, sourcing high-quality wood is a key factor in the company’s success. If Anderson revealed her suppliers, a theoretical competitor could slip in and buy up the entire stock. “It’s a cutthroat business,” she admits, noting that there are currently 38 companies licensed to sell bats to Major League Baseball (MLB).

Sam Bat's founder Sam Holman

Sam Bat’s founder Sam Holman revolutionized the wooden bat industry when he launched the business from his garage in 1997.

Ironically, most of these competitors owe their existence to Sam Bat’s success. Virtually all of them are producing maple bats, the preferred choice of 75% of today’s big leaguers. But when Sam Bat was founded in 1997 no one made bats from maple — all the bats used in the major and minor leagues were carved from northern ash. The miracle of the Sam Bat story is that its founder, Sam Holman, was able to launch a business from his garage that would, in less than 10 years, revolutionize the wooden bat industry and upend the domination of a company that had held sway over MLB since the early 1900s.

THE UNLIKELY SAVIOUR

Anderson is well aware of that unique legacy and though she is not as well known to the general public as her company’s bats, or even Holman, she is integral to Sam Bat’s success. The 57-year-old is credited with saving the firm and preserving its Canadian identity after she and her husband, Jim, bought a majority share in 2007.

Sam Bat was in crisis at the time — saddled with debt, a broken distribution system, tax complications and sales orders it could not fill. Anderson waded into that morass, streamlined production, found new clients and revenue streams, and today Sam Bat is more profitable than it has ever been.

At first glance, Anderson seems an unlikely saviour. Nothing about her appearance — a petite and vivacious blond, who favours high heels and business suits — or her background — a CPA who formerly worked with KPMG and Canada Post — suggests that she would be a smooth fit with the testosterone-fuelled sport of professional baseball or with factories filled with sawdust and spinning lathes. But appearances in this case are deceiving.

During her tenure in accountancy, Anderson had several clients who were involved in the wood industry. “I’m used to being in factory settings and I’m familiar with different woods and heavy machinery. My grandfather made violins as a hobby while my father made telescopes and had a workshop in our house. Wood is in my DNA,” she says.

A new load of maple arrives at Sam Bat’s factory every two weeks. The kiln-dried wood is delivered in precisely cut white cylinders, commonly known as rounds or billets. After they have been inspected, weighed and graded, the billets are carefully shaped into baseball bats.

Anderson tries to remain closely involved in all aspects of the operation. “I buy all our wood. I do the financial statements for the company. I liaise with sales, I handle a lot of transactions and I oversee social media and marketing. I have to be on top of everything. That’s just how it is when you are running a small business,” she explains.

In fact, until a couple of years ago Anderson used to go out and buy her own logs and have all the wood cut and dried at the plant. But she dropped that arm of the business in order to simplify production and cut costs. “We were really running two companies,” she says. “It just wasn’t very practical.”

Anderson views the company’s bats not simply as a source of revenue, but as works of art, and it’s easy to see why. They are quite eye-catching: each model glistening with varnish, painted and bearing the company’s distinctive logo — a silhouette of a winged bat.

“I’ve always been fascinated by bats — the flying kind, I mean,” says Anderson. “The first presentation I ever did in school was on bats and my husband’s family cottage is nicknamed The Bat House. It makes me wonder if I wasn’t fated to run a bat business.”

FROM BEERS TO BATS

If so, then fate began weaving its magic in an Ottawa pub called the Mayflower in 1996. Holman was having a few beers with Bill McKenzie, a baseball scout, who noted that many MLB players were complaining about broken bats. He challenged Holman, a stagehand and carpenter at the National Arts Centre, to devise something better. Holman went home and looked into it. All major-league bats at the time were composed of ash and had been for 100 years. “I couldn’t make a better ash tree,’’ says Holman, “so I decided to try something different.’’

Holman purchased a rare Italian lathe, turned his garage into a workshop and began making bats out of rock maple — a tough wood with a denser grain than ash that he felt would be resistant to splintering and denting. He was facing long odds. At the time there were only a few companies making bats and the market was dominated by Louisville Slugger, the iconic brand of Hillerich & Bradsby, a Kentucky company that churned out a million wooden bats per year.

In contrast, for the first six years of Holman’s operation, production was run from his house by a staff of seven. “Our machinery was primitive. There were times when we would struggle just to produce 12 bats in a day,” recalls Scott Smith, Sam Bat’s current production manager.

Holman’s masterstroke was getting his maple cudgels into the hands of a few influential and talented big leaguers. Joe Carter of the Toronto Blue Jays was an early convert to the cause. As Holman recalls, “Joe told me I had something special and should stick with it.”

The other key player was all-star outfielder Barry Bonds of the San Francisco Giants, who Holman met at spring training in 1998. “He took one of my bats and started hitting balls over the fences of all four quadrants of the park,” Holman says.

The Giants slugger soon became a loyal customer and as his hitting exploits made headlines, the buzz surrounding Holman’s maple bats increased and a flood of imitators entered the market. By the time Bonds belted 73 home runs in 2001, setting a single-season MLB record, Holman’s business had boomed into a $1.5-million venture. Within a few years the operation expanded to include 17 employees and a 29,000-sq.- ft. Quebec warehouse. But Holman had cash-flow problems. “Orders were doubling each year. We couldn’t keep up.”

On the verge of bankruptcy in 2007, Holman decided to put his company up for sale — the warehouse, the machinery, the patents, everything. Anderson heard about the proposed sale from Paul Balharrie, her husband’s relative. “Paul said, ‘There’s an offer on the table and I think we can do better.’ ” Anderson and her husband examined the numbers and sensed this might be an interesting opportunity. They closed the deal within two weeks.

There was definitely a challenge involved — the company’s affairs were in disarray, a distribution deal with Wilson Sporting Goods had soured, the company had tax complications, production problems and sales were down by a half. To top it off, some of Holman’s major-league clients were leaving and going with other manufacturers, who had rushed in to copy Sam Bat’s success.

But the company also had a few special things going for it, notably its roster of clients. “I wasn’t much of a baseball fan, but even I could recognize many of the names on the list,” recalls Anderson. “When I first started reading them the hairs on the back of my arms stood up.”

Keeping the semiretired Holman in the picture was also part of the deal. He retained a 24% share in the company (Balharrie took the remaining portion), while serving in an advisory role. “We were happy to have Sam stay on. He’s like Colonel Sanders,” says Jim Anderson.

Jim isn’t involved in the day-to-day operations. Running the company is Arlene’s responsibility. “She’s smart and not afraid to go after things,” says Jim. “She will tackle something she hasn’t done before. As CAs we’re trained to be risk-averse, but you have to get over that.”

Ironically, Anderson initially went into accounting because she was trying to avoid risk. “There was a recession brewing at the time I was attending university and I did not want to be unemployable. Accounting and insurance were two industries that were hiring.” Initially she found accounting difficult, but she persisted. “I can be quite tenacious,” she says. After graduating she landed a job at KPMG in Ottawa, where she met her husband and had three children in four years. He went on to become the CFO of Metropolitan Life Canada. Anderson also spent several years working for Canada Post and later ran her own accounting business from home.

One of the first changes Anderson made after assuming the reins at Sam Bat was to buy a rounding machine, a device she likens to a giant pencil sharpener. “Sam was still using lathes. The rounding machine made a tremendous difference. What used to take two days to do could now be done in two hours. If Sam had bought that machine he might be a multimillionaire today,” she says.

Anderson added seven staff to the eight there when she bought the company and set about rejuvenating the company’s client base and its distribution network. She also launched an e-commerce website and tried to rebuild trust with MLB. But an unforeseen crisis emerged soon after she took charge. In 2008, after numerous cases of maple bats breaking and sending jagged pieces of wood flying dangerously across the field and into the stands, there was a rumour that MLB was going to ban maple bats. “It wasn’t our bats that were breaking, but there were a number of operators using poorer quality maple,” says Smith.

The ban didn’t occur, but MLB did issue new regulations concerning bats and doubled the administration fee for each bat manufacturer to US$10,000 from US$5,000. Before adopting those regulations, MLB reps flew north to study Sam Bat’s operation and gather ideas about how to make maple bats safer. That visit exposed a number of the company’s production secrets, details that were quickly copied by other manufacturers.

BIG LEAGUE BATS

Today, there are few secrets left in the trade and the cost of doing business continues to climb. Annual administration fees rose again and are now pegged at US$14,000 a year, with insurance costs at US$36,500. Anderson equates the cost to “the price of entry to a special club.”

The bat-making business is unique in several ways. For one thing, the major-league clientele that everyone pursues so intently represents only a small portion of total sales. In Sam Bat’s case, it’s between 15% and 20% of total sales. But associating your product with major-league players draws attention and boosts credibility. “Brand recognition is the name of the game. You gotta make a bit of noise,” says Marc-Antoine Gariépy, business development manager for B45, a Quebec City company that is carving out a niche for itself with bats made of yellow birch.

Many bat makers employ major leaguers as “brand ambassadors.” In return for free bats, hats and gloves, the players promote their brand and try to enlist teammates. A similar strategy is employed by Marucci Sports, a Louisiana outfit founded in 2002 that recently supplanted Louisville Slugger as MLB’s most popular bat brand. Marucci has a crew of star players who have been brought in as investors and advisers. One of them, Jose Bautista of the Toronto Blue Jays, is a company director at Marucci, which irks Anderson.

“Jose used to be one of our clients and in 2010 he hit 54 home runs using our bats, the highest total that year in the majors. But after the season, he left us and joined Marucci.” Not only that, says Anderson, but when he left he took several teammates with him. Bautista’s influence still pervades Toronto’s roster. Despite the team’s proximity to Ottawa, the Jays had only three players who ordered any Sam Bats this past season — all pitchers.

Unlike many of its competitors, Sam Bat has never paid players to use its product. It’s an old-fashioned approach, but it resonates with some in the industry. “We admire them. They do it the right way. They concentrate on craftsmanship and use the finest quality wood,” says Eric Greguol, lead hand and marketing coordinator at KR3, an outfit in Cambridge, Ont., that produces 27,000 wooden bats a year for the amateur and professional ranks.

In 2011, a big change took place when Sam Bat relocated from its warehouse in Gatineau, Que., to an 8,000-sq.-ft. facility in Carleton Place, located 40 km west of Ottawa. The setting appealed to Anderson for a number of reasons, including its easy access to the US.

Workplace upgrades followed. “Arlene has brought a steely resolve and a woman’s touch to the company,” says Holman. “It’s a cleaner and more efficient factory now. The place we had before was too large — people could wander off and get lost.”

Effort has also been invested in growing the international market. Sam Bat now sells to the US, Korea, Taiwan, Japan, the Netherlands, Italy, Germany, France, Mexico and Australia, among others. Dealing in the international marketplace requires a sound knowledge of duties, taxes, exchange rates and shipping. It is also important to understand cultural differences with respect to what finishes are more popular, as well as model profiles. “Being aware of market expectations and doing your research is key. We have used any means possible via the internet, trade shows and personal introductions,” says Anderson. Recently Sam Bat struck a licensing deal with Taiwan merchandisers. “Taiwan is now our No. 2 market behind the US,” says Anderson. “Many of the top Taiwanese players love our bats.”

In 2015, Sam Bat opened its own retail store in a building adjoining the plant, where it operates tours and customers can buy bats, batting gloves, T-shirts, caps and other accessories.

“We do our own photography in-house, and are active on Instagram and Facebook. The more you can connect with your customers, the better it is,” notes Anderson. The company has also taken advantage of other publicity opportunities. One of the episodes of The Bachelorette featured Sam Bats, and the company had some customized models produced for the occasion. Since 2015 its bats have also been featured in each year’s version of The Show, a popular MLB video game series produced by Sony.

Another factor that has helped the bottom line is the exchange rate. “We sell in US dollars and our expenses are in Canadian, so a weaker Canadian dollar actually helps us. It was much tougher when the Canadian dollar was at par,” says Anderson.

Last year was the best sales year in company history as online purchases increased dramatically, with a doubling of Canadian online sales. Anderson can see sales getting bigger. “I’d really like to double the sales we are doing right now.”

The job requires Anderson to work long and unconventional hours. She often stays behind to take calls when everyone else has gone home. Because the company has customers in so many different time zones, the calls can come at any time. “When teams are on the road they need things right away. I might get a text on Friday night from an equipment manager asking for new bats,” she explains.

Despite the pressures, Anderson says that the bat business offers some very immediate and tangible rewards that all employees can share in. “There is nothing better than shipping out a bat on Wednesday and then watching a player use it on the weekend and hit a home run on television. It is very motivational. There is an intense sense of pride that goes along with it.”