While many American businesses suffered in the recent recession, one Fresno-based company managed to thrive as it has done for the better part of seven decades.
iLoveToCreate — started in 1946 by ceramic artist Erma Duncan in her Fresno garage as Duncan Ceramic Studio — is a leading manufacturer and distributor of supplies for the craft and hobby industry as well as the niche ceramic arts market.
After several years of making ceramics and teaching classes in her garage, Erma Duncan started the company, aided by husband Lee and sons Dick and Bob, because of her dissatisfaction with the quality and consistency of ceramic glazes then available.
The family developed their own manufacturing processes to produce a line of glazes with colors consistent from batch to batch — crucial for ceramics in which the actual hue of a glaze emerges only after it has been fired in a kiln.
Third-generation CEO Larry Duncan, Bob's son and Erma's grandson, credits his grandmother's vision to make it easy for people to experience the joy of artistic expression — and a foundation of strategic acquisition and development of wider product lines — for the company's success through the economic downturn.
"When times get tough and people start to focus on their budgets and looking to save money, if they can make something personalized for someone that expresses their love, it's usually received in a more positive way than something purchased off a shelf," Duncan said. "That's been a great driver of our business, always, and in every single year of the four years of the recession, we had very strong growth — compounded growth."
That's not always been the case, however. A recession in the early 1980s revealed the vulnerability of the company — still rooted solely in the ceramics industry — to a changing marketplace.
The 1981-82 recession drove many women into the work force, Larry Duncan said. "Prior to that, 98% of our customers were married, nonworking women," he said. "Once they started working eight hours a day, they no longer had time to spend on the ceramic hobby that many of them had. That had a devastating effect on the entire industry."
Duncan, who became the company's president in 1983, said it was clear that the business had to expand beyond the ceramics industry "because I didn't see it coming back."
After a couple of unsuccessful product launches into the craft industry, the company found a hit in 1989 with a line of fabric paint called Scribbles.
"Within 18 months, that line went from zero revenue to $18 million in revenue," Duncan said. "It brought a whole new sense of life back to the organization and established our name for the first time in the general craft-and-hobby industry."
Additional market growth has come through acquisitions aimed at expanding the company's reach into broader product lines.
In the 1990s, the company — then called Duncan Enterprises — acquired Polymerics, manufacturers of the Tulip line of fabric paints for crafters. At the time, Tulip held a 70% market share, while Duncan's Scribbles represented about 20% of the market.
A few years later, the company bought Rainbow Rock, a tie-dye fashion company, and merged it with the Tulip brand. And in 2000, Duncan acquired Aleene's, one of the leading brands of craft and hobby adhesives.
The combination of acquisitions and new product lines such as puffy paint, glues and body paint "gave us a great platform of brands within the general craft and hobby industry," Duncan said, "and gave us a very strong position with retailers like Michael's and Walmart, JoAnne's and all the independent hobby shops."
The Craft & Hobby Association, a trade organization, estimates that the industry accounts for about $30 billion in sales annually. The association reported that in 2012, 56% of U.S. households, or 62.5 million people, did at least one crafting activity during the year.
In 2006, Duncan partnered with popular Latina novelist and artist Kathy Cano Murillo to create the Hispanic-themed Crafty Chica line of products, named for Cano Murillo's Crafty Chica website.
Cano Murillo not only serves as the public face of the brand, but also designs the products with an eye toward Latino preferences for bright colors and traditional designs.
"We've been distributing product to Mexico and Central and South America for 35 or 40 years, and they've always been great consumers of our products," Duncan said. "They love color, and it's been a great ceramic arts channel for us. … The Latino market is also becoming a much larger percentage of the market in the U.S."
The wider range of products prompted another leap of faith in 2009, when Duncan Enterprises changed the company name to iLoveToCreate — a move intended to better represent its scope of craft and hobby supplies.
"We need to do whatever is right for the consumer and not tied to the ego," Duncan said. "There's definitely an ego having the family name attached to your business, but it was an easy decision to say, 'Let's go for it,' because it just made a whole lot more sense. ... Would a creative consumer, or someone wanting to be creative, rather go to DuncanEnterprises.com or go to iLoveToCreate.com?"
Ceramics, once a cornerstone of the company and Erma Duncan's true love, is now a small — but still important — part of the family business.
"The ceramic arts industry has never really experienced significant growth since the early '80s, and it's less than 20% of our total revenue now," Larry Duncan said. "Had it not been for the acquisitions and focusing on bringing creativity to folks outside of the ceramic arts, we would be a very small company."
Erma Duncan died in 1984 at the age of 92, before the spate of acquisitions and expansions positioned her company as a craft and hobby powerhouse outside the ceramic arts.
iLoveToCreate has about 200 employees, most of whom are based in Fresno. "We used to have a lot more than 200 in Fresno when we manufactured 100% of everything here," Larry Duncan said. "But unfortunately, that's had to change in order to survive."
Duncan blamed California's "overregulation, red tape and bureaucracy" for driving up the cost of doing business here. The company now manufactures most of its products outside the U.S.
iLoveToCreate has offices in Shanghai and Shenzhen, China, and has an ownership stake in a Chinese manufacturer that produces some of the products imported into the U.S.
Still, Fresno serves as the hub for quality control, bottling, shipping and marketing. That includes about 60 people in marketing, sales and product development — the creative team that not only comes up with ideas for new products, but also generates ideas for projects that customers can make using the company's products.
"We've got to be creative, we've got to have new products," Duncan said of the highly competitive industry. "The driver for us is knowing the customers, determining what they need and want, producing and marketing those new products and designs and colors, and using social media to reach out and inspire them."
iLoveToCreate (a Duncan Enterprises Co.)
CEO: Larry Duncan
Location: 5673 E. Shields Ave., Fresno
Phone: (559) 291-4444
Ownership: Private, family owned
Employees: About 200
Industry: Manufacturer and seller of supplies for ceramic arts and the craft/hobby industry
The reporter can be reached at (559) 441-6319, firstname.lastname@example.org or @tsheehan on Twitter.