SB Foot is determined to stay true to its roots and true to the people of the town of Red Wing, Minnesota, where it has been based for 140 years. However, it is also investing heavily in new technology to make the most of the raw material on its doorstep. 

Twin City Tanning South St. Paul is managed by SB Foot and the tannery has a 50% share in its ownership. SB Foot’s Technical director, Andy Rhein, is enthusiastic about the arrangements the company has in place. “Leather is made in the beamhouse,” he says. “Chrome tanning stabilises the protein, but it’s in the beamhouse that you build the foundation, and the  more control we have over that the better. We are like a gourmet restaurant: we want as much of a say as possible in the quality and preparation of our raw materials.” He points out that the tannery is working hard to educate hide suppliers on the care and handling of raw material, but acknowledges the particular nature of this special supply chain relationship. “We can help with information in important areas such as green fleshing and what is required to chill the hides for transport to the tannery. But the hide supplier needs to get rid of the hides quickly, and if he can’t he will have to spend a few dollars per piece for curing. By using fresh hides, SB Foot saves the hide supplier time and money and reduces the amount of salt going into the effluent.”

Harvesting is moving further north to the Midwest of the US, he continues, because of drought conditions in the south limiting food supply. Cattle have suffered in recent years and hides of inferior quality in terms of size, weight and insect damage have come into the supply chain. Weather hasn’t been the only factor. Mr Rhein says that when the price of hides dropped dramatically in 2009, many feedlot owners stopped spraying animals to prevent insect damage in an effort to save money. “I have seen the entire surface of a side covered in insect bites,” he adds. “They are making more money now that prices have gone up again, but they have not  gone  back to  spraying the cattle.  For us, it’s becoming harder and harder to cover up all the defects on hides. We are beginning to have dialogue about this with our suppliers, but it’s far from easy and we can’t hope for too much help from the packers. If they had any influence over cattle feeders and livestock farmers, branding marks would have disappeared long ago.”  Although insect damage is not good news for tanners, the reduction of insecticides going into the ground water is a positive.

High hide prices

The hides SB Foot is buying now are heavy weight branded steers, sourced mostly from packers in the Midwest area. According to purchasing manager, Dennis Rindels, the packer’s location is important to SB Foot; it can pick up fresh hides daily and get them into the wet blue process within a short period of time. The use of fresh hides versus cured is beneficial, as the packers do not have to use resources to cure the hides, which helps Foot’s cost structure. Hides are a commodity and traded daily. Pricing is affected by a number of factors, including world demand, the number harvested, the placement of cattle in feedlots, reduction in beef consumption in the US, and current economic conditions on the world market.  The current drought conditions, lack of grazing land and corn being made into ethanol for the biofuel market have all contributed to an increase in the cost of raising branded steers. 

Hides prices at the middle-to-end of 2009 were in a range of $35–$55 dollars per hide, and today’s price is $81–$86 dollars. It’s the same animal hide, but just more expensive to purchase. “We anticipate the hide price to remain firm for the balance of this year and possibly remain strong for the first half of fiscal 2013,” Andy Rhein says.

As for purchasing leather chemicals, SB?Foot uses suppliers with a strong sales and technical force that the tannery feels can assist with any necessary technical support. The biggest suppliers maintain safety stock available to be shipped at short notice. The company has a dedicated fleet of trucks to pick up chemicals weekly as needed, which allows easier control of inventory levels. 

To Texas and back

In the course of its 140-year history, SB Foot has, naturally, experienced a number of ups and downs. Daryl Mark, who is in charge of quality issues at the tannery, explains that a move to set up a facility in Texas in the 1980s was aimed at controlling raw material better by being closer to large sources of hides. The reverse happened, though. Hides were coming out of the tannery with drawn grain and poor tensile strength. By the middle of that decade, financial resources were drying up and the Foot family sold the tannery to neighbour and customer Red Wing Shoe, with SB Foot III, whom the industry knows as Buck, remaining as president of the tanning operation. Mr Foot fulfilled that role until his retirement five years ago and did much to pave the way for the current mutual understanding between the tannery and the footwear company, encouraging Red Wing Shoe to use the research expertise in the tannery to develop leathers for its products. Mr Mark remembers going to the footwear factory once or twice a week to review quality issues concerning the leather SB Foot was supplying. “There was some resistance to change and it was difficult for the shoe factory to imagine going from several leather suppliers to basically one. But in time the shoemakers were able to recognise the value of our relationship and it is now difficult imagining going back to the way it was.”

After Red Wing Shoe, SB Foot sells leather to several globally recognised branded footwear companies and a large portion of the leather also goes into the making of US military footwear. Total output from  the  tannery at the moment is around 20 million square-feet a year.

Demand for leather

Some synthetic material is making its way into the material mix for certain products in Red Wing Shoe’s range, particularly where it’s outdoor footwear sub-division, Vasque, is concerned. For the most part, though, Andy Rhein says it is clear that for this customer leather is king. “It’s a company that doesn’t just want to sell you shoes,” he says. “It wants to supply a service. It wants to measure your feet properly and, although you can buy online, you have to go to a store to make sure the shoes you have bought fit properly. It has a repair department and customers send shoes back to Red Wing to be rebuilt. The team there talks about the shoes coming home. Leather is made to last and people do not readily throw away their Red Wing  shoes; the brand has a fan club rather than a customer base.”

He recounts the experience of an electrical worker in Maryland in May 2012 using a jack-hammer on an abandoned duct bank without realising that part of the electrical duct bank was live. A loud explosion followed and the man was thrown backwards and injured. On his release from hospital, his employers carried out an investigation into what had happened and found that he had hit a live, unmarked electric line with 15,000 volts running through it. The line’s copper shield was blown away, but the Red Wing boots saved their wearer’s life.

Return on technology investment

One of the benefits of using Vortex retanning drums is one that the manufacturer itself, Italian tanning technology provider Vallero International,  appears not to push. There are 17 of these drums at SB Foot and the company has found that Vallero International is true to its word with its promise of savings in energy and water-use (60% and 40%, respectively). Turning at four revolutions per minute and with the dragon’s teeth-style shelves inside, the drums produce sides that tannery workers can lift out easily. There is no tangling up. And because they are ergonomically easier to lift out at the end  of  the   process,   there is the opportunity for reduction in stress and strain injuries. At this stage, each side will weigh around 10 kilos, but in one load, a worker could easily be lifting that weight 25 or 30 times. Snagging can bring the lifting movement to an abrupt halt and the jarring this causes can lead to a muscle injury.

“When we first put the Vortex system in, alongside traditional drums, the guys in the tannery didn’t comment,” Andy Rhein recalls. “But I noticed that they were soon fighting to see who got to unload the Vortex drums. That told us everything we needed to know. We don’t want injuries. Retanning time includes 16 hours turning slowly in the Vortex drums, followed by four hours’ resting time before going into samm-setting, just to allow the chemical reactions to come to completion. Plastic covers go over them during the rest period to keep moisture in and dust out.

Another technological breakthrough has come slightly further down the line. Another Italian tanning machinery manufacturer, Cartigliano, has communicated consistently about the benefits of its wet-staking technology. When it launched its Staktreking wet-staking machine in 2007, it explained that it was based on medium-high vibration frequency, which would give improvements in layout, thickness and uniformity. Mr Rhein says the company has gained significantly in yield. “The loads on the carts are as flat as a deck of cards,” he points out. Efforts are being made to carry this idea into staking at wet blue stage, prior to shaving, to control the amount of wet blue shavings the operation produces.

Waste not want not

While the company is doing everything it can to reduce waste, it wants to keep shaving at wet blue stage. Andy Rhein says: “If you shave, you open up the fibres and make sure that the chemicals you use penetrate fully. [There are] claims from suppliers that they can eliminate wet blue shaving, but if you do that, the chemicals won’t penetrate, because the chemicals go in from the flesh side.”

There is a landfill site 50 kilometres from SB Foot to which the shavings go at the moment, and it has the capacity to keep taking material from the tannery and manage it correctly. It is clay-lined and handles only industrial waste, almost, the company says, at a level of hazardous substances (a category the tannery waste does not fall into). Other ideas over the years have failed to take off. At one time in the 1990s, there was interest in using the shavings as bedding for horses. SB Foot said no. “You need to control what you do with your waste,” Andy Rhein says, “and we prefer not to take any risk.

Waste management is a constant challenge, of course, and the Red Wing Shoe group takes a collective approach to many aspects of it. Internal lean events have yielded interesting results. John Smith, now director of enterprise risk management for the Red Wing Shoe group, was environmental director of the tannery until April 2011. He recalls an exercise examining water consumption in detail. It showed that SB Foot was consuming 16 litres of water a minute even over the weekend when it was producing no leather. “We waited for the next weekend and went through the tannery,” he explains, “and we could hear the water running into the drain. It was the Bauce samm-setting machine. It’s water-cooled, so if the machine is left on, it keeps consuming water. Now we make sure we turn it off at the end of the working week.” Mr  Smith   has  served  on  state-level   task forces  on  issues  such  as  water  quality.  “The state people have a job to do, just like we do,” he comments. “We generally see eye to eye.” The treated effluent from  the  tannery goes  into  the  Mississippi, the river that runs through Red Wing all the way to the Gulf of Mexico. The tannery is located 50 metres from a much smaller body of water, known as the Hay Creek, a carefully controlled trout stream. Prior to 2002, the wastewater was discharged into the Hay Creek after being treated at the wastewater facility next to the tannery. Today, that facility acts as a pre-treatment plant before discharging to a larger municipal treatment plant for final treatment and discharge to the Mississippi.

A long way from Wall Street

A lot has happened during the 140 years in which the SB Foot tannery has been active, and as well as being a continuous and important source of jobs (it stayed open even during the depression of the 1930s and employs 175 people today), its contributions include helping to fund the public library, which has an SB Foot room. It’s creating jobs that excites owner, Bill Sweasy. Red Wing Shoe has been Mr Sweasy’s family business since 1905. “We looked at buying the tannery for two reasons,” he says now. “We saw that it was going to close. We still had shoe factories in the US, so we thought about making leather ourselves. The tannery was there, the resource was there, the people were there.” And the people were the second reason. Red Wing is a small town, Mr Sweasy says, a place where it doesn’t matter what you drive or what you wear because everyone knows who you are anyway. In a big city, what you wear says something about you, but it doesn’t in Red Wing. What matters there are actions. He wants to be able to look the townspeople of Red Wing in the eye and be sure that he is doing his best to create jobs and keep local families prosperous. Bill Sweasy says he feels immense pride that the town still makes high-quality leather and high-quality shoes and that it is shipping those shoes all over the world, including China, from where the US is currently importing so many consumer goods. “We have strived to look at our own value chain, from raw hide to finished shoe as a holistic system,” he continues. “We know that it’s just as important for the retailers who stock our shoes to make money as it is for us. We want to be profitable; we want our dealers to be profitable. But in ten years I have never asked our company president and chief operating officer, Dave Murphy, what the bottom line is. Never. That’s not the way to achieve success, in my opinion.”

Instead, his focus is on making quality products that discerning consumers will pay for, and he makes it clear he regards being a privately owned company as a distinct advantage in this; there is “no Wall Street looking over our shoulder”.

Red Wing is a long way from Wall Street. He knows there are famous fashion and accessories brands, companies that owe much of their success to consumers’ love of leathergoods, that are now compromising on quality and starting to use synthetic substitute materials, at least in their entry-level products. He asks: “But how many of them are privately owned? How many of them are thinking about keeping things going for the generation that is coming after them? And how many of them are just thinking about the next quarterly report?”

Quick response

An emphasis on the workforce, their families and the wider communities is one of the main reasons SB Foot is still in business, according to operations director Andy Rhein, who is originally from Europe but regards himself as a Minnesotan now. He talks in glowing terms about the commitment to the tannery from Red Wing Shoe and from Bill Sweasy in particular. In the last six years, the parent company has invested an estimated $12 million in new technology and, on the back of that, he says the tannery has performed well. “The end result is that we are able to provide employment, including health insurance for our workers and for their families,” he says.

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