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Tangled garden hose? Israeli ingenuity solves a common suburban dilemma
Posted By Jessica Steinberg On May 15, 2005 @ 8:00 pm In | No Comments
The ReelSmart consists of a water-powered reel engine, a practical combination of plastic and design that uses the water inside a hose to reel in the green tubing that gets strewn across the lawn. Tired of the unwieldy, tangled garden hose in your backyard? It might be time to try ReelSmart, a nifty Israeli invention that solves a common suburban dilemma.
It’s a water-powered reel engine, a practical combination of plastic and design that uses the water inside a hose to reel in the green tubing that gets strewn across the lawn.
It is, as they say, ‘reel smart’, and since it is plastic and home-oriented, it must involve Zvika Yemini, the Israeli entrepreneur who made his fortune in do-it-yourself products for the American market.
“Gardening isn’t part of Israeli culture, and neither are toolboxes,” says Yemini, the founder of Hydro-Industries, the company behind ReelSmart and container maker Zag Industries, which made its name in toolboxes for the DIY market. “That’s for Americans, who get out there in their boots and gloves. But we learned the market. That’s what I’m good at, intuition and export.”
These days, Zag’s 1,500 employees manufacture 30 million units of toolboxes, plastic sawhorses and home tool organizers, representing 60% of the company’s $110 million in sales. The company was traded on the New York Stock Exchange for two years before being purchased by tools supplier Stanley Works, a Standard & Poor’s 500 company, for $140 million, leaving Yemini with just 7% of his plastics creation.
A mechanical engineer trained at the Technion Israel Institute of Technology, with a masters in marketing from Baruch College, the 53-year-old Yemini started out designing massage showerheads and children’s educational toys. He landed at Israel’s Keter Plastic in the 1980s, bringing the container company into the world of plastic lawn furniture and $700 million in annual sales. By the late 1980s, he had created his own incubator for plastic inventions, Zag Project Development Co., creating industrial pallets made out of recycled plastic for General Electric, and plastic egg tray display cases for the supermarket industry.
But Yemini’s moment arrived in 1993 when Bernie Marcus, founder of the Home Depot chain of DIY stores, came to Israel looking for sturdy, plastic toolboxes. Marcus talked to Keter, but Yemini reacted faster, designing an award-winning series of butterfly tool boxes for Home Depot, simple yet well-designed storage containers in a wide range of sizes with locking drawers and compartments for nails and screws, nuts and bolts, hammers and screwdrivers.
Three years ago, he was approached by Ehud Nagler, a mechanical engineer from the Technion Entrepreneurial Incubator Co., part of the Technion Institute. Nagler had invented a water-powered engine, but couldn’t figure out what to do with it. He brought the idea to Yemini, who came up with the idea for storing the engine in a hose reel. Together they founded Hydro-Industries, a three-year-old company that has produced several generations of the self-winding garden hose reel.
Built entirely out of plastic parts and about the size of a computer monitor – the old-fashioned kind – the hose reel is powered by a three-piston engine stored in the drum of the reel.
Operating the reel is pretty simple: After using the hose, a flick on the well-marked lever on the side of the reel activates the winding process by using the power of the water flowing within the hose to haul the hose back inside. Because it relies on water power, the reel doesn’t require batteries, electricity or springs to operate.
There are now ten versions of ReelSmart, including wall- or floor-mounted styles for different lengths of hose, ranging from the Country 60/100, housed in a durable wooden case; to the Wizard, the smallest version yet.
Sold primarily in the US and Europe, ReelSmart retails for $40 to $50 in a variety of catalogues, hardware and do-it-yourself (DIY) stores and infomercials, including Home Depot, Wal-Mart, Ace Hardware, Sears Roebuck & Co., Target and television’s QVC home shopping channel. The hose reels are manufactured in northern Israel, with possible plans to build additional plants in Caesarea and the US.
Around 350,000 units were sold in 2004, with sales growing from $2 million in 2002 to $10 million in 2004, and plans to produce one million hose reel units in 2005. At present, Reel Smart has penetrated 2% of a market that primarily uses the old-fashioned manual hose reels, Hydro-Industries’ biggest competition.
“The manual method works,” said Hagar Gal, vice president of sales and marketing for Hydro-Industries. “It’s just a matter of convincing the market to try something else.”
Lowering the price to $30 or $40 will help, which Yemini plans to do with the latest versions of ReelSmart. He also raised $5 million from a group of American investors, after starting the company with $8 million from his own capital and that of several friends, including industrialist Stef Wertheimer, businessman Tzippa Carmon who represents several DIY chains in Israel, as well as the government’s Office of the Chief Scientist, which pitched in half a million dollars.
His current plan is to hold an initial public offering for Hydro-Industries within three years. Yemini also invests heavily in the company with its earnings, plowing 20%, or $4 million of Hydro-Industries’ sales over the last two years, back into the company’s research and development.
A recent winner of Ernst & Young’s Israel Entrepreneur of the Year award in industry, Yemini is currently thinking about applying ReelSmart’s water-powered engine to desert coolers. He’s pretty sure it would win raves, but admits that not every invention of his has been a success.
A set of stacking toolboxes for Home Depot, for example, were a total failure. But other ideas have succeeded tenfold. The Zag toolbox that doubles as a stepstool, or the Move ‘n Groove, a gardening box on wheels with a kneeling pad for avoiding dirty knees and a built-in drink holder were both unmitigated successes. So was the Fat Max, a power-latching tool box and the $300 DIY workshop, a set of plastics sawhorses and wall-mounted tool holders.
As for Hydro-Industries, the upcoming versions of ReelSmart include containers shaped like snails, frogs and dwarfs, popular garden ornaments in American gardens.
“Plastic is a tool,” says Yemini. “I could have done it with steel as well, but the idea here is mo-tech, mind-oriented technology. It’s a combination that can do fantastic stuff in Israeli industry.”
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