As CEO of Northstar Balloons, Nico Kieves Wyrobek has the odd experience of running a company that is simultaneously a legacy, second-generation manufacturing business and a start-up—inheriting all of the challenges that presents. Fortunately, she has more than 30 years of experience in the balloon industry to call on, having grown up in the business initially started by her parents.
Plymouth-based Northstar is making a run at becoming a market leader in the global balloon industry, building on its strengths in manufacturing and pushing the boundaries of what balloons can be. Though Northstar can print standard 18-inch balloons to match any competitor’s, it has been carving out a name for itself with creative, intricately shaped balloons like no others.
The company’s catalog tells this story, from the pirate octopus with eight wiggly tentacles to a helicopter with a free-standing rotor to Daphne Dragon, who has horns and fire coming out of her mouth. As Wyrobek and her team call on customers or attend trade shows, they often have people crowding around and raving about their distinctive balloons.
“What we really wanted when we started Northstar was fresh thinking,” says Wyrobek. “A balloon is a floating greeting card with a message on it, and that’s what we wanted to do with our products. Instead of being encumbered by a history that says, ‘You can’t do that,’ we go to our engineers and say, ‘We’re going to make this, help us figure out how to make this.’ We really push the limits.”
Northstar’s limit-pushing is paying off. Since 2007, the company has at least doubled revenue each year, nearly doubled its factory, and grown to about 80 employees. Northstar takes full advantage of the Kieves family’s decades of experience in the balloon industry, strengths in precision manufacturing, and a singular sales and distribution structure to become a new—and veteran—force in the balloon industry.
Balloons, Part I
The Kieves family got involved with balloons the 1970s, when Wyrobek’s parents, Garry Kieves and Michaela Graeb, distributed them in Europe. They moved from Belgium to settle near family in the Twin Cities in 1980 and started the balloon manufacturer, Anagram International. An engineer at heart, Kieves focused intently on designing and building machines to manufacture excellent quality balloons. The family’s efforts grew Anagram into one of the world’s largest manufacturers of metallic balloons.
Twin daughters Nico and Nina literally grew up in the business. They would spend time at Anagram’s headquarters after school, helping with filing, answering phones, whatever was needed. When it came time to chart their own career paths, the sisters decided on other professions, with Nina becoming a veterinarian and Nico pursuing law.
Realizing the family business wasn’t going to have a second generation of leaders and ready for new challenges, Garry Kieves decided to sell Anagram in 1997. Amscan, a wholesale supplier of party goods and the parent company behind Party City, Party America, and others, bought Anagram and still owns it today.
The Kieves family moved on to owning and operating other Minnesota companies, including Motoprimo Motorsports, a full-service motorcycle dealership, and Talon Innovations, a CNC machine shop in Sauk Rapids that supplies parts to the semiconductor industry. Nina and Nico Kieves helped their dad run two Motoprimo locations in Burnsville and Lakeville—eventually dialing back to just the Lakeville facility. The Kieveses also recapitalized and turned around Talon, selling the company last year. It seemed like their balloon days were over.
But industry players had other ideas. In 2007, the family’s non-compete agreements with Anagram/Amscan ran their course. A former competitor approached Garry Kieves to ask whether he’d be interested in manufacturing a new generation of balloon machines. “They didn’t have the expertise in-house to do the intricate stuff we do here, and they were looking to expand their range and take over some market share,” Wyrobek says. “They said, ‘You’ve been kings of quality and always made a better balloon. How do you feel about partnering with us?’”
The soon-to-be partner proposed that Kieves and his team manufacture its foil balloons, utilizing their existing distribution network, mature sales force, and strong creative team to boost sales. The family sat down to determine whether they had the heart, stomach, and desire to get back in the balloon business, and whether they wanted to invest the capital to start a new venture. At the time, Nina Kieves was in veterinary school and Wyrobek worked as in-house counsel at Excelsior Energy, an energy development company in Minneapolis.
“My dad and I had a lot of conversations. Is this going to be something where we just make and sell, or will this be the legacy business we want it to be? I had a nice day job, and I liked it, but we said, ‘Let’s do it.’ The numbers will work great,” recalls Wyrobek. She worked out an arrangement with her employer to spend one day a week at the family business, subsequently named Northstar Balloons.
The Kieveses were just getting their new balloon company off the ground when the Great Recession hit. No surprise, it turned out to be a tough time to take a crack at a new venture. After their partner lost one of its biggest customers, it became apparent that the investments Northstar poured into its high-tech balloon-making machinery weren’t panning out.
“The idea was that they would stop manufacturing foil balloons and we would do all of it. That never came to fruition,” says Wyrobek. “We had a big factory and lots of capacity, and we had to fill it somehow.”
The Kieveses thought that the best way to fill this capacity was to go beyond being a contract manufacturer. By 2011, they decided to get back into the business full bore. Not only would Northstar make other companies’ balloons, it would ramp up its design abilities, customer service, sales and marketing, and distribution to bring its product directly to customers.
Wyrobek, who earned her law degree and a master’s in public policy from the University of Minnesota, already planned to get more formal business training. It would prepare her for eventually working full-time at Northstar. She took one year off and earned a master’s in management from Stanford University’s accelerated Sloan Program.
When Wyrobek graduated in 2011, it turned out that time had come, just as Northstar was ramping up design and production. She joined Northstar full-time as vice president and became CEO in 2012. It’s quite a family affair, with Garry Kieves serving as chairman of the board. Nina Kieves sits on the board and her husband, Patrick Ward, heads up sales in Mexico and Latin America.
To inflate its balloon business, Northstar needed to build its creative studio. The Kieveses tapped into the Twin Cities’ rich pool of design talent by bringing on artists and graphic designers from other industries. They also invested in a flexographic printing press, which allows Northstar to print its own balloon designs onto extremely thin sheets of plastic. “One of the first things we said was that in this industry, it never pays to buy your printed material from someone else,” says Wyrobek. “You want to buy raw material and print it yourself.”
Purchasing the nearly 16-foot-tall PCMC printer in 2012—and investing in one of the largest drums in the balloon industry—allowed Northstar to make much bigger balloons than competitors. It also opened other doors into printing for the packaging industry. So while Northstar grew its balloon business to 1,400 SKUs with sales across the country and around the world, it also worked to build a second line of business as a printer of flexible packaging.
The timing couldn’t have been better for Northstar to enter the commercial printing market. It turns out suppliers weren’t able to keep up with demand for flexible packaging, as more companies move from paper and cardboard to plastic. Northstar had plenty of capacity on its flexographic press and started quickly adding customers. Anyone who shops at Costco has seen its handiwork on Kirkland Nature’s Domain pet food bags, or on bags for other foods like potato chips.
Wyrobek calls the commercial printing Northstar’s best-kept secret, and its workload actually splits evenly between balloons and packaging. The company added its second, larger flexographic printer this spring, giving Northstar the ability to take on more work for clients and do 10-color printing compared to its current eight.
Balloons, Part II
But back to the balloons. Wyrobek and her team set out to create highly visual and unique balloons that would really stand out in the industry. Northstar frequently comes to market with different shapes, like its 3D, four-sided balloons, or animal balloons shaped like the creatures they are supposed to be.
Many competitors make a unicorn balloon by printing a picture of a unicorn on a standard circular balloon. Not Northstar. It cuts out an intricately shaped unicorn, complete with its signature horn and a jaunty pink tail.
And while other manufacturers make letter and number balloons, the quality isn’t great. Northstar’s are striking with unique patterns like zebra print, brighter colors, and precise shapes, says Lisa Gibson, who manages US and custom sales. Unlike competitors, the company markets to tweens with balloons that say “HB2U”—Happy Birthday texting style—and develops clever messages like a coffee cup–shaped balloon that reads, “I Love You a Latte.”
The balloons certainly stand out in the crowd, but it’s the quality that keeps retailers and distributors coming back for more. Garry Kieves holds numerous balloon patents for inventions like the self-sealing valve. Knowing that Kieves was involved prompted Jim Rose to sign up as a Northstar distributor, and it’s been a good decision.
“I think they are innovative, and their design work is really good. They don’t have a huge line but they fill some gaps that other companies don’t fill,” says Rose, who knows the Kieves family from their Anagram days. “Their quality is good, their price is good, and one of the things I know very well about Garry is that he is an absolute fanatic when it comes to quality.”
Part of that excellent quality comes from using Kieves’ precision machines to cut out Northstar’s intricate shapes—incorporating some of the sensor technology the family learned from owning Talon, the semiconductor company. Its MicroSeal technology generates balloons that require less helium and can be made without an encircling big border of foil. It also gives pressure points about 30 percent more strength to hold their shapes.
Another client, the Corner Balloon Shoppe in Minneapolis, began carrying Northstar Balloons as soon as they started coming off the press. Customers love being able to buy balloons that are manufactured in Minnesota, and many also enjoy the company’s balloons that aren’t licensed characters. The shop has a display area just for the Northstar balloons “because we think they are that great,” says owner Kristin Traynor. “The artistry on their balloons is amazing. The details and the effort they put in and the thought they put into them is really great. We can’t keep some of their balloons in stock.”
Sales have been a bit trickier than Northstar bargained for, mainly because Anagram has put up a stiff fight. Some distributors have shied away from offering the Northstar label for fear of angering the much-larger corporation, says Gibson.
These obstacles inspired Northstar to get more creative with sales. The company offers direct, online ordering to help retailers save money by bypassing distributors. Many manufacturers rely on distributors to offer extras to clients, such as providing helium and ribbons, or helping retailers blow up and merchandise balloons. Northstar stays in play by handling this end of the business, too, and by offering competitive pricing to retailers and distributors.
“It’s been very challenging. We tell them to be willing to take a risk and that it’s worth their time and money to work with us,” says Gibson. “We’re starting to see some successes by adjusting our pricing and being very competitive. Like any company, it’s about getting everyone to know your name and your quality.”
Northstar also has made inroads on its custom side of the business, working with numerous clients like Walgreens, Walmart, and other retailers that use balloons for promotions. It also makes balloons for sports teams or character license holders (like Angry Birds) in other countries. International sales overall have been strong, especially in Mexico and the United Kingdom, which have a deep tradition of balloon sales.
The company will continue to make its case in this small industry, where there are few players and everyone knows each other. Despite the slow start, the sales challenges, and the angst of launching a new company, it’s been worth it for Wyrobek. She truly enjoys working again at her family’s business—and a second-generation one at that.
“People ask what I do and I say that we sell happiness. At some point it’s in your blood. I love doing it,” says Wyrobek. “The opportunity to work with my dad and say that maybe we can build a company that has a legacy that will last—boy, not everybody gets that chance. It’s hard to pass that up if it’s handed to you.”
She’s striving to build a business that her toddler son, expected newborn (due this summer) and the next generation eventually can take over—one that’s focused on selling happiness through the best-quality balloons money can buy.