News

Oct 16, 2023

Spacesaver makes shelving that's found a market in cannabis industry

FORT ATKINSON - A company that began in a barn is, in a way, returning to its

FORT ATKINSON - A company that began in a barn is, in a way, returning to its roots.

Spacesaver Corp., a 50-year-old manufacturer of high-density moveable shelving and document storage products, has found new customers in a product line aimed at the growing cannabis market.

The company three years ago adapted its moveable shelving technology to create growing platforms for medical and recreational marijuana producers, introducing a multi-tiered, LED lit system that allows indoor, hydroponic growers to triple their growing capacity by conserving space.

The stackable Grow Mobile shelves can be collapsed into a seamless bank, and then opened to create a passage for workers to access the plants. By eliminating the need for fixed aisles between single-tier growing stations, the system reduces growers' space needs and, by extension, their real estate costs.

The shelves can be customized to meet growers' specific irrigation and ventilation needs, whether they're growing hydroponically or in soil.

Galenas, an Akron, Ohio grower of medical cannabis, incorporated Spacesaver shelving into its operation when it opened in 2017. Ohio licenses growers based on square footage and a three-tier growing setup allowed Galenas to nearly triple the amount of product it was able to grow under its 300-square-foot license, said Christine DeJesus, the company's general manager and cultivation director.

"It's worked very well. They're easy to move and maneuver and we haven't had any problems. No complaints," she said.

The company is planning an expansion to double its square footage and is in discussions with Spacesaver about building a 5-tier system that it plans to open in late 2023, DeJesus said.

President and CEO Mark Haubenschild said cannabis production remains a niche market for the company, but in three years the Grow Mobile system has been embraced by growers across the U.S. and Canada, where the business has become big enough for the company to hire a regional business manager to oversee sales and service in that country.

Since Grow Mobile's introduction, Spacesaver has expanded its cannabis-focused products to include drying racks that were introduced last year, specialized carts for moving the product from the growing area to drying racks, and plans to introduce new add-on products later this year.

A separate product line was developed to create storage products for dispensaries.

Those developments, Haubenschild said, are simply a newer iteration of the innovation that kept Spacesaver growing over the years, even during the pandemic.

You can find the company's shelving and storage products across the U.S. and Canada. They're used by museums, libraries and schools, police and the military, professional and college sports teams, health care providers and researchers and virtually any other field where high-volume storage is a necessity.

A division of KI, the Green Bay-based manufacturer of school and workplace furniture that bought the company in 1998, Spacesaver's annual sales now top $100 million.

Like its parent company, Spacesaver became employee owned in 2018.

The company employs about 400 people, including 220 who work in its Its 330,000-square-foot manufacturing plant in Fort Atkinson. Engineering, design, marketing and other functions are in a nearby building, the company's original post-barn manufacturing space.

The original idea, to put document storage shelves on tracks to allow them to be squeezed together to maximize work space, was born in Europe in the 1940s as cities were rebuilt after World War II and designers looked for ways to retrofit offices in old, cramped buildings.

In 1972, Janesville resident Ted Batterman took the idea, rented a Fort Atkinson barn, hired seven people and introduced it in the United States with a twist: an option for electric controls rather than geared wheels that office workers turn to move the shelves.

The first of Spacesaver's electric-drive units was installed at the Chicago Historical Society. Although electric power was the company's innovation, less-expensive mechanically-controlled units, geared so that they can be moved almost effortlessly even under big loads, remain the company's biggest seller.

The document-storage market grew rapidly in the 1980s and 1990s, a time when Spacesaver had more than a dozen competitors.

Customers included private and government offices as well as libraries, health care and the military. But, by the late 1990s, the company recognized that paper-records storage would become a dead end.

"That's when we went from paper storage to stuff storage," Haubenschild said.

That transition began with many of Spacesaver's existing customers: libraries and schools began using them to store books, museums found a better way to store items of all sizes, police and military customers found uses for storing items like equipment, evidence and weapons.

At the same time, Spacesaver introduced new lines of personal lockers and other non-moveable storage systems, massive "dark site" off-site storage systems for museum and library collections that are valuable but not on public display, and standalone, mobile storage solutions like stackable weapons lockers or shelving for the military's utility terrain vehicles.

Of the dozen or so competitors in the 1990s. Most failed to adjust and went out of business — Haubenschild counts three remaining competitors — while Spacesaver grew through acquisitions and the steady introduction of new products.

The company's ability to find new markets is a product of in-house research and development and input from a network of contracted distributors who Spacesaver leans on to learn the needs of their customers and offer solutions and new product ideas, said Jake Carter, the company's marketing director.

"They funnel a lot back from that frontline market," Carter said.

Its weapons rack systems, for instance, grew out of a request from the U.S. Marine Corps for a better, more secure way to store its shotguns in the early 2000s, Carter said.

Weapons racks, in a variety of configurations from high-density mobile storage in military armories to police department weapons lockers, are one of the company's largest lines of business.

Another highly-successful product line was born out of Haubenschild's work as a high school football coach and conversations he had with other coaches at national conventions about how to store equipment.

The company by 2013 had been making storage products for athletics for years, but that year Haubenschild and Spacesaver took it to a new level, going full bore into equipment storage as a targeted market segment.

"It was a big influence for me and I'm like, hey, let's get in on this market. Let's see where it goes," he said.

The answer was widespread adoption by professional and college football teams and expansion into virtually every other sport. It also spawned a game of one-upsmanship among some of the universities, which saw the shelving units as a cool recruiting tool, with some seeking elaborate finishing touches like interactive end panels and gold-plated handles. Division I NCAA athletic programs remain the largest sales area for the product.

Mike Valentine, assistant athletic director for equipment services at Northwestern University, said it was "just kind of assumed" that Spacesaver shelving would be part of the design in the equipment room of Ryan Fieldhouse, a practice, competition, and recreation facility that opened in 2018.

"They really are the industry standard in college athletics, just in the way you store stuff," Valentine said.

In fact, it was the fourth installation of Spacesaver athletics storage systems on campus, he said. In addition to football, custom designs of the shelves are used to store equipment in other facilities for basketball, baseball and softball, volleyball, wrestling and Olympic sports.

"The beauty of it is that you can come up with one plan, but it's very adjustable," Valentine said.

Haubenschild said he often pointed out places with Spacesaver installations on family road trips when his children were younger. After a career that started with the company after he graduated from the University of Wisconsin-Whitewater in 1982, he had a lot to point out.

"I used to drive my kids crazy because we'd be on vacation and I'd say I sold a job there, there and there, and they're 'Shut up, Dad!'"

Still, the list of the company's high-density mobile storage customers and their specialty uses is impressive:

The company's move into cannabis production remains a small part of Spacesaver's annual sales, Haubenschild said.

Even with a growing number of states legalizing cannabis production, many growers remain cautious and are "hard to get close to," he said.

But, as the cannabis industry continues to evolve, private equity investors will play a bigger role, and Haubenschild expects the industry to eventually be controlled by a small number of very large growers.

"I think where we're at, we're in a good spot," he said. "We're not like the leader in that space. But like I told the team, we've got the products now. We're learning every day. I think if we're patient, and we let the play develop, and things settle out, it's going to become even a greater piece of our business over time."

However, he's more excited about the potential of the product for other agricultural uses such as growing edible greens and vegetables. In that sense, he sees the cannabis industry as a foot in the door, a learning opportunity that will pay bigger dividends in the future.

"It's a nice niche for us, but really where I'm going to focus our resources moving forward is in vegetables," he said. "I mean, if you take a look at the the size of the opportunity, it's huge, and, right now, the trend is to bring the food closer to the consumer for a lot of reasons: Freshness, health, cost, and obviously for these growers, if they can grow in climate controlled areas they don't have to worry about the weather, droughts, famine, insects."

As large supermarket chains invest in vertical integration, controlling the production of the products they sell, Haubenschild expects another new market could open up. Some he said, may choose to begin growing their own fruits and vegetables, and he wants Spacesaver to be ready.

"Here's the deal: people people have got to eat. They don't have to smoke pot," he said. "We feel that's a big market. We're researching it as we speak, and putting resources against it next year, to figure out more. But the platform is there through cannabis."

Contact Karl Ebert at [email protected]. Follow him on Twitter at @karlwebert.