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Battery dealers charge ahead in high-tech age

Don Tollefson started out in the restaurant business in Southern California more than 30 years ago and subsequently moved on to oversee large-scale egg and hog farming operations in Minnesota.

Battery dealers charge ahead in high-tech age

Published: Sunday, Jan. 16, 2011 - 12:00 am | Page 1D
Last Modified: Sunday, Jan. 16, 2011 - 2:50 pm

Don Tollefson started out in the restaurant business in Southern California more than 30 years ago and subsequently moved on to oversee large-scale egg and hog farming operations in Minnesota.

Then he decided the battery business offered huge potential. The 60-year-old entrepreneur has since witnessed an explosion in battery use by U.S. consumers.

"In 1995, I was looking at a lot of businesses … businesses with franchises, and I came across Batteries Plus," Tollefson recalled. "I liked the business model and was convinced that this is a good industry. I thought it would work for me."

Back then, Batteries Plus had only had 34 outlets, and as Tollefson studied up on the company in the cold of Minnesota, he noticed something else: Batteries Plus had zero stores in Tollefson's native California, the most populous and technology-driven state in the union.

A year later, in 1996, he remedied that, opening California's first Batteries Plus outlet in Citrus Heights – Batteries Plus store No. 35.

Tollefson reminds that, back then, the laptop computer and smart phone booms had not yet occurred, so opening a retail battery store was not exactly a license to print money.

He's glad he stuck with it.

He opened his second franchised local Batteries Plus store in Roseville in February last year, and on Dec. 11, he opened a third at 8239 Laguna Blvd., in Elk Grove.

Batteries Plus has grown too. Amid the proliferation of hundreds of hand-held electronic devices, Batteries Plus now has nearly 450 stores in 45 states and Puerto Rico.

Business experts consider the battery industry a growth segment even during hard times – an estimated $25 billion a year in the United States, projected to grow to $33.6 billion in 2012.

"The battery industry right now is recession-proof," said Vishal Sapru, research manager with Frost & Sullivan, a global market research and consulting firm in San Antonio.

Tollefson's new Elk Grove store is the smallest of his three local Batteries Plus outlets at 2,000 square feet. But the ambience is the same: a dizzying array of batteries of all shapes, sizes and uses.

There are batteries for cameras, cordless work tools, phones, computers, electric wheelchairs, boats, security lighting systems, in-vehicle electronic devices, flashlights, dog collars, all-terrain vehicles, video equipment, clocks, thermometers, scanners and watches, to name just a few.

The Elk Grove store even had a desktop stapler-size battery to power the comparatively massive, shoulder-held camcorders of the 1980s.

"If someone comes into the store and wants one of those giant batteries, I still have it,Tollefson said. "People who come in for the first time sort of stop and stare. They can't believe how many batteries we have for so many different things."

Tollefson called the growth of the battery business over the past 20 years "remarkable. … When I was getting into it, you still have those giant portable phones, and there weren't as many (electronic) devices as there are today."

Although Batteries Plus touts itself as the nation's largest battery retailer, there's plenty of competition to go around, from businesses such as Battery Bill and Battery World, plus the electronics departments of major retailers like Wal-Mart.

Tollefson said he tries to stay ahead of the competition by stressing customer service – seeking out commercial battery users, offering battery recycling services and helping customers find the right battery for new products – and giving customers new reasons to come into his stores.

Along those lines, look for Batteries Plus outlets to start offering various light bulbs, perhaps this year.

"It's a natural fit, batteries and light bulbs. Not just light bulbs for lamps, but light bulbs of all kinds, large and small," Tollefson said.

Tollefson said his past farming experience has come in handy in the battery business: "Some of the same things apply … like getting your product into the hands of the people who need it."

Tollefson also is pleased that his family is increasingly involved in a business that analysts believe will grow rapidly over the next decade. His son Ryan is district manager, and Ryan's wife, Heather, oversees commercial sales.

"It's a fun business to be in, and having family involved makes it even more fun for me," Tollefson said.

Tollefson said he's scouting out more potential Batteries Plus sites locally, including Folsom and West Sacramento.

He also expects to see continued expansion in the battery business. The next likely growth segment: motor vehicles.

"When you see what's happening there, with the newest hybrids and electric cars, there's enormous potential," he said.

Currently, lithium-based batteries that power electric/hybrid vehicles are large, heavy pieces of equipment that must be installed by trained technicians. The complex battery in the new Chevrolet Volt plug-in hybrid, for example, weighs nearly 400 pounds.

However, analysts believe it's possible that, someday, auto batteries will evolve to a point that they would be the size and weight of the 12-volt batteries found under the hoods of cars worldwide.

Assuming the same kind of evolution that took video from Betamax to Blu-ray, experts say it's conceivable that motorists ultimately will be able to replace an electric vehicle's battery pack by stopping at a Batteries Plus store or other retail outlet.

"Yes, something along those lines is a possibility in the future," said Frost & Sullivan's Sapru. " … A lot of new chemistries are being built to improve power density and (battery) life. … The time could come where you would not require specialized engineers who can replace it."

Jeff Chamberlain, who heads battery research and development at the U.S. Department of Energy's Argonne National Laboratory in Argonne, Ill., said that kind of technology might be many years off.

"When you consider what it would take to have that much (power) in that small a battery, and a long life, well, that kind of technology might not be available for a long time," Chamberlain said.

Even so, Chamberlain said battery technology is a brave new world, where seemingly anything can happen: "It reminds me of the semiconductor industry 20 or 30 years ago."

And then, there's the China factor.

The United States has long been the world's biggest battery-using nation, but Sapru said "most of the manufacturing has shifted to China."

Analysts believe that China's rapidly expanding industries – including automotive – might ultimately push it past the United States and open up another massive market for battery sellers.

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