Alpine Industries Inc., the Greeneville-based major manufacturer of indoor air and water purification appliances, is spinning off its marketing and distribution services to create a new company.
Bill Converse, president and founder of Alpine, told approximately 550 employees at the company's Mt. Pleasant Industrial Park headquarters and manufacturing facility this morning that a company called EcoQuest International has been formed to take over the multi-level marketing network through which Alpine's products are sold.
EcoQuest International will be solely owned by Michael Jackson, who has been a co-owner and executive vice president of Alpine, according to a spokesperson.
Jackson has been Converse's partner in Alpine since 1994.
EcoQuest will assume ownership of Alpine's entire dealer network, which includes more than 150,000 active dealers nationwide, Alpine announced in a press release issued this morning.
At the same time, Eva Converse, Bill Converse's wife, will become the sole owner of Alpine Industries, while Bill Converse will continue as president. Previously, Jackson was an Alpine co-owner.
Terms of the business reorganization, indicating who paid what to whom, were not disclosed. A spokesperson said that the business reorganization is "in process" and is expected to be completed by the end of this month.
EcoQuest also will assume ownership of related computer hardware and software and the trade names for Living Air, Living Water, Alive and Wellness and other current Alpine products.
The press release stated, "EcoQuest will continue to focus on providing consumers with innovative products and services designed to enhance the quality, safety, convenience and comfort of indoor living - which is at the core of Alpine's technologies - expanding its product line to include items produced by other manufacturers as well."
Converse said he will head Alpine's science and engineering functions, with Alpine becoming what the press release calls "a focused research and development-based manufacturer of environmental technologies and appliances."
For the time being, both companies will continue to operate out of the same Mt. Pleasant Industrial Park facility, according to Cindy McConkey, who handles Alpine's and EcoQuest's public relations and information functions through the Knoxville-based Ackermann Public Relations and Marketing firm.
In a telephone interview this morning, McConkey said that both Alpine and EcoQuest expect to grow through the years, a statement indicating that a division into new, separate facilities could happen later, along with new jobs.
Although no official timetable for such further developments is in place, "this is a growth plan," McConkey said, referring to the restructuring.
Advance Notice Given
Advance word of today's announcement was given over the weekend to about 350 of Alpine's top dealers, who had gathered in San Antonio, Texas, for the company's annual "bonus banquet," at which awards, bonuses, etc., are given to top-performing distributors.
The announcement, made in Texas by Converse, was "well-received" by the dealers, McConkey said.
Under the restructuring, Alpine will continue to develop and produce products, and EcoQuest will be given the opportunity to obtain first rights to market them.
Such rights have already been obtained by EcoQuest for Alpine's best-known existing product lines, she said.
Should EcoQuest decline to pick up marketing rights for future products, Alpine will have the right to distribute them in other ways, McConkey said.
Headquarters To Stay Here
Converse was quoted in the press release as saying, "'If you had told me that what I started in the basement of my home 14 years ago would become a $200 million company with more than 700 employees locally and across the country and an international distribution network of more than 350,000 distributors, I would have wondered what you had been inhaling.'"
Converse continued, in the press release: "'Alpine Industries has been so successful, and I'm so proud of our engineering team, of the people here at this plant who make our products, of my partner and friend, Michael Jackson, and of all of our distributors who understand the need for our products and the business opportunity we've created for them. This is a great platform for going on to the next level.'"
Converse emphasized in the release that both Alpine Industries' science and engineering and the new company, EcoQuest, would remain headquartered in Greeneville, which he said "has proven to be an ideal place to do business."
'Not Related To FTC Case'
The release continues, "He (Converse) also added that, while some may speculate the restructuring is related to the recent verdict in Alpine Industries' suit with the Federal Trade Commission, the move actually has been under consideration for some time."
McConkey told the Sun this morning that she has heard informal discussions of the idea for many months.
Alpine leaders made a conscious decision, she said, to go ahead with an idea that was needed for the welfare and growth of its business, despite the inevitability that speculation would be made attempting to link the move to the FTC matter.
In November 1999, Alpine Industries and Converse lost on most points of a civil lawsuit brought against them on behalf of the United States, through the FTC, alleging that the company lacked "competent and reliable scientific evidence" to back many of its claims regarding the efficacy of its air cleaning products.
Attorneys for Alpine and Converse have said they plan to seek either a new trial or a new verdict in the case.
The restructuring "'is a significant change in our business strategy, and that's not something you conjure up overnight,'" Converse stated in the press release.
"'This has nothing to do with the FTC case. Alpine Industries will continue to act in good faith to meet all of its responsibilities.
"'The restructuring is something we have been working toward for some time now as part of our long-range growth strategy. As a courtesy, we already have discussed it with the judge overseeing the case and notified the FTC of our plans."
No response had been received from the FTC about the announcement as of this morning, McConkey said.
'Level Requires More Focus'
The press release continues to quote Converse: "'We simply are at the maturity level in this company that requires us to become even more focused - and what Michael (Jackson) does best is the marketing and distribution, while my true strengths lie in research and development.
"'In the last year or so, we had found ourselves limited in many ways. And when that happens, you have to find ways to get beyond the plateau and begin climbing new summits.'"
According to the press release, Alpine Industries has grown from a base of revenues of $7 million in 1994 to $187 million in 1997.
During that same time period, its dealer base ballooned from 20,000 to nearly 250,000, a figure now up to 350,000, McConkey said. About 150,000 of those dealers are actively selling the products.
In 1998, the company was recognized for its business success, ranking 84th on the prestigious Inc. 500 list of the fastest growing companies in America.
Alpine Industries has been honored as the Multi-Level Marketing Company of the Year three times in recent years by various trade organizations and trade media.
Developing New Products
Converse is further quoted in the release: "'We have been in the midst of developing some exciting new products and new technologies through our engineering and R-and-D (research and development) function, only to have to set that work aside because it did not fit into the abilities of our sales network.
"'Sales and marketing of highly technical equipment, often developed for specific, science-based niches, require a very different approach to sales than the diverse, consumer-focused sales network we have in place today.
"'Alpine Industries' science and engineering has the ability to develop cutting edge technologies with large-scale applications for food processing, water quality, waste management and farming.
"'By restructuring and tightening our focus on engineering, development and manufacturing, we are free to work with other technology companies and laboratories to pursue these business opportunities nationally and internationally.'"
Converse said that Alpine will have to build a small, more traditional sales and marketing function internally, the release stated.
But he also noted that the restructuring "does not mean a parting of ways between Alpine and the dealer network that we started, or Michael Jackson and me, for that matter, although we will be two separate companies."
He added in the release that other contractual agreements "will provide a win-win relationship" between the two companies as they move forward.
"For instance," the release stated, "provisions have been made to provide incentives to the EcoQuest sales network to allow its dealers to benefit from bringing a new product opportunity to Alpine."
Michael Jackson Quoted
Jackson is also quoted in the release: "'EcoQuest International will expand and grow at an even faster pace due to this business development. We will expand our product line to include new products to enhance and advance the quality of living indoors.
"'We have more than 3 million Living Air sales, stacks of testimonial letters from satisfied customers and 14 years of successful home-based business building backing us up.
"'That's an incredible foundation to build on. Now, with this spin-off of the new company, we fully expect to see this business explode.'"
The release adds: "In addition to the sales force, EcoQuest also will acquire the customer service, marketing and creative services functions needed to support the multi-level marketing business, Jackson said.
"Long-range plans include exploring shared ownership to EcoQuest field leaders and key employees and a possible initial public offering within the next 48 months."
- Managing Editor Douglas Watson also contributed to this article.