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Crayola President Rich Wuerthele’s Keynote Remarks from LVEDC Fall Signature Event

By Colin McEvoy on September 29, 2022

Crayola President & CEO Rich Wuerthele speaking at the LVEDC Fall Signature Event, held at the State Theatre in Easton on Sept. 20. (photo by Marco Calderon)

Below are the keynote remarks delivered by Rich Wuerthele, President & CEO of Crayola, during the Lehigh Valley Economic Development Corporation Fall Signature Event on Sept. 20.

I am thrilled to be here with you this afternoon. Thank you to Don and the team for inviting me to be the keynote speaker today. And thank you to Don and the team for all the great work that you do making the Lehigh Valley a vibrant, energetic community to live, work, and play within.

I am going to share a Crayola case study with you, I’m going to talk about our beginning and why we came to the Lehigh Valley, and then close it out with a bit of a status update where we are today.

And there’s a common thread and theme through this case study, and that is quite simply: the Lehigh Valley has been instrumental to our success over a 119-year history. And it’s not only been instrumental in our overarching success, but really critical to the heartbeat of our business, which is manufacturing.

So let’s step back to the beginning: 1885, the Peekskill Chemical Company in Peekskill, New York, handed down by Joseph Binney to his son Edward Binney and his nephew (his son’s cousin) C. Harold Smith, two very complimentary business leaders. C. Harold Smith a consummate sales professional, business development expert; Edward Binney, introspective, inventor. So they take over the family business, and it remains in Peekskill for 15 years.

Crayola President & CEO Rich Wuerthele speaking at the LVEDC Fall Signature Event, held at the State Theatre in Easton on Sept. 20. (photo by Marco Calderon)

They’ve got really three product ranges that spurred their growth. They had a red oxide dye that went into paint that painted a majority of the barns across rural America. And then they had a carbon black product that went into all sorts of industrial inks, shoe polish, manufacturing raw materials into other products. And then they had kind of the forefather of the crayon, which was – and here’s some killer marketing for you – a carbon black crayon called Staonal. They kind of took those three words (stay, on, all) and mashed them together, because if you were writing on a window, wood, or steel, it would mark it. It was kind of an industrial sharpie back in the day.

So they’re having a great run as a company. A lot of the raw materials they are getting are from the blossoming oil industry in Pennsylvania. So they said, “Hey, we need to have a foothold in the state of Pennsylvania. We’re getting a lot of raw materials from the state of Pennsylvania.” So they began to evaluate where they could land in Pennsylvania. They had actually moved their headquarters to New York City by then, they still had the manufacturing in New York, but they were looking at a landing zone in Pennsylvania.

And it was a little happenstance where they met a mill owner that wanted to sell his mill that was literally half a mile from here, where we are standing and sitting today, on the Bushkill Creek. They went through the evaluation process, and as they dug into the Lehigh Valley and certainly Easton, they came across words and themes that some of the panelists today have even mentioned here before I got up here.

Crayola President & CEO Rich Wuerthele speaking at the LVEDC Fall Signature Event, held at the State Theatre in Easton on Sept. 20. (photo by Marco Calderon)

They noticed first the affordability of the region was very attractive. The resources of the region were very attractive. They had the Bushkill Creek, they had the Lehigh and Delaware rivers. Transportation and location was appealing, they could easily get to the brunt of the population in the United States. And then the location’s proximity to New York, proximity to the growing oil and energy business in the state of Pennsylvania.

And then really the clincher, which again was talked about earlier today, were the people. They found the people to be resilient, entrepreneurial, engaged, great work ethic, loyal. And that was the piece that solidified them on the decision to come to the Lehigh Valley, which happened in 1900. And it’s just amazing today that those are a lot of the reasons that we’re successful today, and it was the reasons that the panelists felt like the family and the region were so attractive.

So the company moves here in 1900, and another interesting side note is one of the founder Edward Binney’s wife was a schoolteacher, and she was pressuring her husband on woefully inadequate school supplies. Slate pencils were terrible. The chalk just left a cloud in the classroom, harming the children’s eyes and lungs. And then crayons were toxic, brittle, and just terrible.

So, with pressure from home, they come here, open up the mill originally to do work in carbon black but quickly realized that, with a lot of the slate locally, they started making in 1900 the best slate pencils in the world. In 1902 they launched the first dustless chalk, which won a gold medal at the 1904 World Fair in St. Louis.

In 1903, Crayola was born, and they launched eight crayons for a nickel a box. So just a tremendous run, and those attributes that originally attracted them to the Lehigh Valley are a lot of the attributes that have kept us successful in our business for the last 119 years.

Crayola President & CEO Rich Wuerthele speaking at the LVEDC Fall Signature Event, held at the State Theatre in Easton on Sept. 20. (photo by Marco Calderon)

Fast forward to today: the National Association of Manufacturers does a quarterly survey, and as part of that survey, they say “What are your three biggest challenges as a manufacturer?” And the last quarter, no big surprise, the three biggest challenges were labor and retention of that labor and talent, supply chain challenges, and raw material pricing and availability.

If you think about those challenges, the Lehigh Valley has been instrumental in helping us overcome them as a company.

From a talent perspective, like everyone, we had talent challenges at the beginning of the pandemic. But we hired 100 people within a year to help with our increased demand and stabilized our labor about midway through the pandemic. And everyone remembers driving up Route 22 and Route 33 and there’s a billboard every two miles about anything from $25 to $35 of wages. We were able to secure 100 new people into our factory and stabilize our manufacturing far faster than our peers across the country that are still chasing talent.

In the Great Resignation, we only had a 5% attrition rate of our professional staff over the last two years. So credit that hopefully we’re doing something right as a company, but I think it also speaks to the make-up of the talent here in the region that we’ve got dedicated employees that are excited about what they’re doing and they’re signing up for the long-term with the company. So talent and retention, check that box; we were able to navigate it because of what’s here in the Lehigh Valley.

We get to supply chain issues: again the proximity of rail, air, the airports, the Newark port, which we’ve all heard the stories about not being able to get product into the West Coast, not being able to get product out of the West Coast. We use the Newark port. Seventy percent of what we sell around the world is made right here in the Lehigh Valley, but we do import 30% of what we do from the port and Newark has been a dream, with the ability to get it into the Lehigh Valley and move it around the world. And then obviously the proximity of all the great transportation. If we have issues with rail, we can move it with trucks, or if we have to we can move it with air to expedite things.

The LVEDC Fall Signature Event was held on Sept. 20 at the State Theatre Center for the Arts in Easton, Pa. (photos by Marco Calderon)

And lastly, the availability of raw materials and costs. The costs are going to go up for everyone, but I would say from the availability of raw materials, just being a U.S.-based manufacturer has enabled us to get everything we need. We’ve never had the factory shut down, we had a couple issues online occasionally, but it was a huge competitive advantage.

So here we are today, this will be the largest year in the company’s history; which eclipsed last year, which was the largest year in the company’s history prior to that, which eclipsed the year before, which was the largest year in the company’s history before that.

Our market share in the U.S. has never been higher. Our international growth is about 8%, 9% greater than the last three years.

So we’ve had a wonderful run, and so much of that success, whether you’re talking about manufacturing or the whole company, is attributed to being in Easton and the Lehigh Valley.

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