Walpert gets cracking
Lachine company designs a good chunk of North America's Christmas crackers

This holiday season millions of North Americans will eat Christmas dinner wearing funny hats, reading corny jokes, and listening to the bangs and pops of traditional Christmas crackers.

True, real-life crackers are less impressive than those Harry Potter used in the first J.K. Rowling book, which produced canon-sized explosions, lots of mice and admiral's hats. But it's a good bet that the crackers Canadians will have on their tables this year, were designed at the Lachine offices of Walpert Industries.

"Crackers are big in England, and in countries (with a substantial British heritage) like Canada the U.S. and Australia," said Martin Walpert, the company's president. "But in recent years, we have been trying to broaden their appeal."

Crackers look like rolled up candy. They act as a decorative element, placed alongside cutlery at dinner, or hung from trees. To open one, you pull the ends, and the cracker opens with a bang. Inside, are treats which (depending on the model) can range from gimmicks to treats to a small watch.

Walpert estimates the international market at $150 million, with the lion's share sold in the U.K. Walpert Industries generates sales in the mid-seven figures, -- about two-thirds of it in the U.S.-and is one of the world's five or six major players. Almost 70 per cent of the production is for private label customers such as HBC, Sobey's and Saks Fifth Avenue and the balance is sold under the company's brands.

Christmas crackers originated in Victorian England. A London confectioner got the idea while on vacation in Paris, when he noticed the French custom of wrapping candies in fancy papers by twisting the ends together.

He brought the idea to England, but instead of wrapping candy, he put small novelty items inside along with a piece of paper on which was written a romantic verse. The idea made its way across the ocean, gaining a devoted following in the U.S., however the verse is typically replaced by a crony joke. In 1919 a Norman Rockwell illustration of two kids pulling apart a cracker appeared on the cover of the Saturday Evening Post.

According to one retail buyer, the tradition is still going strong today. "It's a basic Christmas item," said Jane Diplock, of the Hudson's Bay Corporation. "Every year I buy a cross section of designs and price points to appeal to a variety of tastes."

Walpert Industries is a family business that was founded in the early in 1960s by Lorne Walpert. His son Martin joined in 1988, after an extensive career working in human relations for a Toronto based record company. A few years later his father passed away, and Martin has been president ever since.

Coming back to Montreal after more than a decade outside the province was a bit of a culture shock, but Walpert immediately got to work. "The company was doing fine. But I sensed that if we could improve efficiency we could grow, particularly in the U.S.," Walpert said.

The company embarked on a major investment and marketing expansion plan. Walpert ordered customer machinery to automate the manufacturing process, and took on new space and contracts.

But the competitive edge provided by the new machinery didn't last long, and when in the mid-1990s, Walpert lost a key account to a competitor he decided to take action.

"I had been approached several times by people who wanted me to move production overseas, but we were taking a go slow approach with a few test products," Walpert said. "But when we started losing business, I gave the entire project the green light."

"I chose China, because there are many giftware companies doing business there, and it seemed a natural extension," Walpert said.

Investing in China is fraught with peril, because rule of law is shaky, and bureaucracy is legendary. Direct investments are prohibited, and can only be arranged through a joint venture with a domestic player. Even then, investors cannot be sure of getting their money out.

But so far the move has paid off. Today Walpert's Chinese plant, which is located in the outskirts of Beijing, employs between 20 and 130 piece workers depending on the season. Walpert flies down twice a year, but direct supervision is handled locally.

Design, which according to Diplock determines whether a particular cracker will sell, continues to be done in Montreal.

"A key part of the cracker is the decorative element," Diplock said. "They are placed on the table, and they have to match the other Christmas decorations, so Reds, Greens and Golds continue to be popular colors."

In recent years, Walpert has been trying to grow the cracker business by finding applications outside traditional Christmas and New Years festivities. For example one innovation was a Hanukkah cracker, which according to Walpert's Quebec representative, is seeing increased popularity.

"The Hanukkah market is growing all the time," said Shelley Schechter. "That's especially true when the holiday is close to Christmas as it was last year, and will be (in 2003)."

Next year Walpert is thinking of expanding outside of the cracker market, to get a bigger piece of Canada's $12 billion gift, tableware and decoration industry, by taking on new products such as greeting cards, Christmas ornaments, and tabletop accessories.


Photo caption: Martin Walpert, president of Walpert Industries pulls open one of the Christmas crackers that his company manufactures at its Beijing plant.


Sidebar: Getting ahead

o Martin Walpert joined Walpert Industries in 1988 and immediately implemented a growth strategy by investing heavily in marketing, automated machinery and taking on new plant space.
o Almost 70 per cent of the company's production is for private label customers such as HBC, Sobey's and Saks Fifth Avenue.
o In 1997 Walpert invested in a Beijing manufacturing facility, where the Christmas crackers are now assembled. The designs are produced at the company's Lachine offices.
o The company has been working to broaden the popularity of Christmas crackers to appeal to other holidays such as Hanukkah, and will be adding new product lines next year.





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