Year after Reno relocation, leak-detection equipment company thriving amid pandemic
Back in the early 1990s, Brian Haug was running a machine shop doing truck-and-trailer repairs in Gilroy, California, when an opportunity came knocking at his door — literally from next door.
A company making machinery for the fresh-cut fruit and vegetable industry asked Haug if he could help them with an issue sealing plastic tray containers.
Haug solved the problem, making a machine to seal the trays manually. Looking to speed up the process, the same company then asked him if he could build help them automate the sealing process.
Haug did that, too.
By then, Haug realized he had found his niche as a machinist. Soon after, in 1995, he broke off from his truck-and-trailer repair shop and started his own Bay Area-based company, Haug Quality Equipment, to serve the food-manufacturing sector in the Salinas Valley, a major agricultural hub in California.
After an initial focus on building automated packaging machines, Haug’s clients began asking him what equipment they could use to test the integrity of the seal on their packing. Haug didn’t know of a machine, so — as he is wont to do — he built one.
“I came up with a device for testing the seals on the packages that were coming off of my own machines,” Haug told the NNBW. “And then I started selling those (machines) to other produce companies in the Salinas Valley. It ended up that leak-testing started taking off and going all over the country into a lot of different food-manufacturing facilities.”
In response, Haug doubled down. He halted the company’s production of automated packaging equipment and narrowed its focus on developing and selling leak detection testing equipment to the industry.
The move paid off; 25 years later, Haug Quality Equipment now provides leak detection and equipment and leak testers for more than just food-manufacturers in Salinas Valley. The firm’s list of clients, which expanded into the medical and pharmaceutical industries, ranges from startups to Fortune 500 companies, including Kraft, Nestle, Pepsi, Starbucks, Johnson & Johnson and Amazon, among more.
“Packaging defects can cause multiple issues,” Haug said. “Leakage, spoilage and possible contamination all lead to revenue loss and liability. Companies use our machines to give them the confidence that their product will reach their consumer at the highest quality.”
Over the past year, Haug has been cultivating the company’s growth from Northern Nevada. In August 2019, Haug Quality Equipment uprooted from the Bay and planted in the Biggest Little City, opening up shop in a 17,000-square-foot facility at 2530 Wrondel Way.
“The tax burden in California has increased over the years, and Nevada is a very friendly place to do business,” Haug said. “And shipping is easier out of the new facility that we have; we have more space; and we can be much more organized and efficient.
“And it’s absolutely beautiful here.”
Since relocating to Reno, Haug Quality Equipment’s sales have steadily climbed, culminating in a 50% jump in sales in January and February of this year, Haug said.
Further, since the coronavirus pandemic hit in March, business has barely slowed — Haug said company sales have consistently stayed 20% higher each month compared to last year.
“I was not anticipating a higher amount of sales,” Haug said. “Luckily, we were in a strong financial position and could’ve ridden it out even if we would’ve dropped 50% (in sales) — that would’ve been worst-case scenario.
“I don’t think we would’ve ever had to stop like a restaurant had to stop.”
Haug pointed to the fact that the mass closures — and continued restrictions — of restaurants nationwide triggered an increase in in-store and online grocery shopping. This, he said, has required the food-manufacturing companies to expand production, yielding more clients seeking leak detection testing machines.
“Our company tends to do very well during the recessions,” he explained. “We sell more products because our customers are expanding. They’re shifting from food-service business back into more retail, especially with the restaurants cutting back.
“Everybody eats. I won’t say these industries are recession-proof, but they are certainly recession-resistant.”
Continuing to innovate, Haug said the company is working on new products to meet the demand of its clients, including one with an electronic control system test that can simulate altitude for scenarios such as a semi-trailer truck going over the mountains or an airplane flight.
In a nutshell, the test allows clients to see if their seal on packaging will hold while in transit.
“When you go to a high-altitude pass in Colorado, sometimes the packages would expand so much they would pop or start leaking,” he said. “We can electronically simulate that in our leak-test tank.”
Looking ahead, Haug said the company hopes to attract enough new business to warrant adding “several more” employees. Currently, the small company consists of six staff in Reno and one salesperson in Chicago.
Construction could begin next year and require about 500 to 600 workers, with a permanent workforce starting at 150 to 200 people with potential to expand.