Petaluma ukulele maker Kala Brand Music riffs revenue past $20M
“Wake up, you need to make money, yeah.”
That line from Stressed Out, a uke-accompanied song released April 27 on YouTube by Tyler Joseph of Ohio-based rock duo Twenty One Pilots, rings like a theme in the anthem of millennial entrepreneurs. It’s also the business plan of Kala Brand Music, which strummed its way from its 2005 launch through years of double-digit growth to 2015 sales of $20.2 million from about 400,000 instruments.
In the past year, Kala revamped its Petaluma headquarters to expand custom manufacture of high-end ukuleles — the kind used by Twenty One Pilots singer Joseph. About 40 of the company’s 50 employees are in Petaluma.
Mike Upton, Kala’s founder, got into the business as a musician — bass player — who “morphed into sales,” he said. “I needed to make more money (possible lyric to Twenty One Pilots sequel, Stressed Out2?). I had a family going. I just needed to make more. I started selling and did really well” for Hohner music company, he said.
Upton helped develop Hohner’s Lanikai line of ukuleles. He had lived in Hawaii from 1989 to 1994, and started selling ukuleles there in about 1998. “Ukes were hot,” Upton said. “The potential was there for business. I saw the need and sourced out the product, worked with people to get it built” in China.
Now Lanikai is one of his main competitors.
His father played the ukulele. “I got a picture of me as a baby with a ukulele,” he said. “I grew up playing rock and roll. Being a musician is a big help, knowing what a quality product is.”
Though Kala started in Petaluma, its first warehouse was in Honolulu. Hawaii initially was 100 percent of the business, and now accounts for about 10 percent. About 60 percent is from the U.S. mainland, and 30 percent is international — some 50 countries, with Canada, the U.K., Europe, Australia, New Zealand and South America in the lead. “We just started in India,” Upton said.
Hawaii serves as a test market, said Dave Cafiero, Kala’s vice president of sales and operations since about 2010 when the company had about 15 employees. “Hawaii is so particular about this product, this category.” With any new product, “if they say yes, then it’s going to be a winner.” Cafiero plays guitar and ukulele.
“Ukulele” is a Hawaiian word meaning “jumping flea.” The four-stringed instrument evolved from Portuguese instruments: the timple, rajão, machete and cavaquinho. Portuguese immigrants came to Hawaii in the 1800s to work in sugar-cane fields.
“If it works there, it will work anywhere,” Upton said. Nearly 95 percent of Kala’s sales come from ukuleles. Most of the business is wholesale through distributors to nearly 2,000 U.S. retail dealers, and half of overall sales are online to those retail outlets.
Its U-bass, introduced in 2009, is a rubber-stringed ukulele designed to sound like a bigger upright bass. The U-bass is priced at $360 for imports to $2,000 for custom models manufactured in Petaluma, some made of “pheasant wood,” a hardwood also called Thailand cassia, with coloration and patterns that resemble tail feathers of pheasants.
“People have copied it left and right,” Upton said of the miniature electric bass. “To do it on that short of a scale in a portable instrument is a revolution. The strings are very stretchy, and the vibration is strange. There was a lot of work we had to do with the pickup to get it to sense the vibration. String tension pushes down on the pickup and activates it. These have very low down pressure. You have to have a very sensitive pickup, which causes problems because it is sensitive to everything,” he said.