Small Business

Hooked on Quality


For six generations, Norway's Mustad clan has manufactured a small but crucial product: the fish hook. Since fishermen are scrupulous in their evaluation of each and every hook they use, production of the tiny pieces of metal is deceptively specialized.

To get it right, sales representatives from O. Mustad & Son travel the globe investigating the sorts of hooks favored by anglers from Alaska to Asia and then report back to the outfit's factories around the world. The globetrotting pays off: Family-owned Mustad has been the world's No. 1 maker of fish hooks for 125 years.

Mustad is one of the most innovative niche players in Europe (see BW, 01/26/04, "Hidden Champions"). To stay ahead of the competition, Gjovik-based Mustad, the offshoot of a metal-wire manufacturer founded in 1832, consistently introduces new products. For instance, the company recently launched a range of fly hooks that are sharper than the models they replace. In all, Mustad markets more than 10,000 items, including fishing lines.

WIRED. "Even though the fish hook is a very old product, you have to come to the market with new products so customers understand that you are not complacent," says Hans Mustad, the company's 45-year-old chairman. Making fish hooks "doesn't seem very difficult," he adds, "but to get it right every time is a challenge."

In a country like Norway, the world's ninth-largest fish producer, hooks represent a key niche. Mustad mastered the craft early on, and in the late 1800s, it invented and perfected a machine that gave the company a massive advantage over competitors, whose hooks were made by hand.

In addition, Mustad has its own wire mill, which gives it greater control over the end product. Having high-quality wire is a key part of producing superior hooks, according to Mustad. And making the hooks by machine helps to ensure that each is the same size. This consistency is a key factor in retaining customers, Mustad says. "Each fisherman has a very particular view on what kind of fish hook will make him catch the most fish," he says. "If the fisherman buys 100 hooks, he wants every hook to be exactly the same shape and size and sharpness and so on. If he finds one hook that is a bit different, he'll think, 'This one I cannot use because the fish will not bite on it.' So it has to be very accurate on production."

LOOKING EAST. Such a painstaking devotion to accuracy helps Mustad see $60 million to $70 million in total sales each year. In 2002, operating profit rose to $4.5 million, a 32% jump on the previous year. With production in Asia, Europe, and South America, Mustad's fish hooks are in 140 markets worldwide. The U.S., with some 45 million sport anglers, is now Mustad's biggest market. "Today we are in all markets -- all markets where you can find water," quips Mustad.

In the months to come, the outfit is looking to expand even further, adding jobs in China and Singapore. Low labor costs and a fast-growing local market make Asia an attractive place to grow the business, and one of the most promising markets for introducing new, fishing-related products.

With such a strategy, Mustad's slogan -- "So sharp even fish talk about us" -- seems fitting. By Laura Cohn in London


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