Small Minnesota company hits it big with Walmart during annual pitchfest

The first time the father-son team of Nick and Nicholas Sovell went to Bentonville, Ark., they were part of a select group of entrepreneurs and small-business owners hoping to land deals with Walmart.

The men, whose Savage-based company manufactures a special absorbent and waterproof mat, had been invited to participate in the retail behemoth's first pitchfest for American-made products, known as Open Call, in 2014.

"We drove down because we had so many samples to sell," said son Nicholas Sovell, executive vice president of RPM Inc. "We got down there and we were running back and forth between rooms with these big ugly suitcases."

RPM had been selling a mat for outdoor grills to Walmart since 2006, but the men left the one-day Open Call event with deals to produce a cargo liner, dish-drying mat and a litter box pad. Today they've got seven products on store shelves and are gunning for more.

Walmart is putting the word out for its sixth Open Call event, which now runs for two days, June 18 and 19, at the company's headquarters in Arkansas. The retailer will accept applications through April 30 for any company whose products are made, sourced or grown in the United States.

Prospective suppliers will have 30 minutes to stand in a 6-foot by 10-foot room and make a product pitch to a representative of the largest company on the planet. Products could wind up in Walmart stores, Sam's Clubs or on Walmart.com.

"The real goal is to be invited," said Nick Sovell, 72, a self-described serial entrepreneur who also invented the Key-Rock. He bought marketing rights for the surface protector pad his company now sells under the Drymate Mat brand in 1997.

The Open Call event is tied to a pledge Walmart made in 2013 to purchase $250 billion of American-made products over the next decade. The retailer estimated the move would create 1 million new U.S. jobs, including 250,000 in manufacturing and a ripple of 750,000 indirect jobs to support and service the products.

Company spokeswoman Tiffany Wilson declined to offer specifics on how Walmart has performed against that goal, saying the retailer is "right on pace with where we want to be." The company reports that two-thirds of the products at its 4,700 U.S. stores are made, sourced or grown in America.

Walmart said it spent $8.3 billion with Minnesota suppliers last year, supporting more than 96,000 jobs.

Sourcing goods in the United States allows the retailer to respond more swiftly to seasonal demands or when stocks run out, the company said. It also helps lower risks of currency swings from doing business overseas. And it reduces its carbon footprint, which helps the company meet sustainability goals to reduce emissions at its stores and across its supply chain.

At last year's Open Call, Walmart buyers listened to nearly 600 pitches in every major product category, including toys, apparel, health and beauty, and food. It drew prospective suppliers from 46 states, Washington, D.C., and Puerto Rico.

Wilson said the retailer doesn't have a set number of products it aims to secure, but that successful companies provide shelf-ready products, including packaging.

Many of last year's successful pitches involved Earth-friendly products, such as cloth diapers, locally grown cotton products or items that significantly reduced plastics or other packaging, she said.

"We're looking for products that are unique … or that help us expand offerings we already have," Wilson said. "They have to fulfill a need for a Walmart customer."

When RPM first started supplying Walmart, the company was selling less than 50,000 mats. Now they're up to 500,000 a year. Capacity at the distribution center in Savage is maxed out, so the Sovells have leased an additional 6,000 square feet. Everyone that services the business, such as custom printers, fabricators and packagers, has expanded as a result.

RMP has sales in the $5 million to $10 million range, said Nick Sovell, the co-owner of the company along with founder Mike Bachman. The company also sells a Drymate Mat tool box liner, undersink mat and picnic blanket to Walmart.

Three times a year a Walmart employee pulls one of their mats off the shelf and tests it to make sure it doesn't contain harmful chemicals — and that it lives up to its claims.

"When Walmart says they're going to do something, they do it," Nick Sovell said.

The first version of the gas grill mat was sourced overseas, at 50 percent less cost, he said. But when Walmart committed to American-made products, it stayed with the Sovells through the transition.

"In the long run, it sold better even though it cost more to make," the elder Sovell said.

The men are preparing to make another run to Bentonville, hoping this time to meet with buyers for Sam's Club. Even if they don't walk away with a deal, they've learned that getting a face-to-face meeting with a buyer can "plant seeds" that lead to future arrangements.