Grado Labs Factory Tour
A Brooklyn Success Sixty Years in the Making
Sitting with a rather antsy John Grado in the third floor listening room at Grado’s factory in the Bay Ridge section of Brooklyn, one gets the sense that the storied manufacturer of headphones and phono cartridges has not been this busy in decades. Grado, who took over the company from Uncle Joe; the inventor of the world’s first stereo moving coil cartridge back in 1953, has a reputation for being incredibly blunt and candid with his thoughts on all-things audio, and it’s a perspective with a lot of weight behind it.
Apple’s iTunes celebrated its tenth anniversary this past April and the folks at Grado will be the first to admit that the impact on their business was profound; the first three years of their headphone business in the early ‘90s was a real struggle and Grado admits that they made no money. The explosive growth of the iPod and portable audio has turned what was a struggling part of their business into a major revenue source and based on all of the product that was awaiting shipment, it is clear that Grado is running at full capacity.
With the exception of the iGrado and their in-ear models (GR10, GR8, and the iGi) which are manufactured in China, everything else Grado makes is manufactured in the United States and the company goes to great lengths to market that aspect of their business.
The Grado “factory” in Brooklyn is a converted unassuming multi-story home/fruit store/machine shop that Grandpa Grado purchased in 1918 and with the exception of the steep and narrow stairways, almost every inch of the building is used to maximize the cramped space.
The basement machine shop where headphone molds are produced, and the deliberate and patient work required to produce their award-winning phono cartridges takes place looks dated and it is hard to imagine how the technicians are able to produce thousands of headphones and cartridges each year in such an old-school set-up, but the reality is that the dedicated employees get it done with great efficiency.
The cartridge and headphone assembly stations are split up over multiple floors and while it all seems a little chaotic with so many employees working on seventeen phono cartridge models and ten different headphone models, the amount of product that gets produced on a daily basis is rather astounding.
Grado may not be selling as many phono cartridges these days compared to the 1970s and 1980s, but business has picked up significantly from 1990 when their business dwindled to 12,000 units for the entire year.
“In the 1970s, we were producing 10,000 phono cartridges a week and were back-ordered for six months,” remarked Grado when we broached the subject of vinyl’s resurgence. “1980 was certainly the peak for us when we were still selling 10,000 cartridges a month, but with the advent of digital audio, that business took a major dive and by the mid-90s, we were certainly in a bad situation.”
“We sold 60,000 units in 2005 and our issue now is keeping anything in stock. It’s a real challenge to have enough stock for dealers, and sufficient parts to meet demand,” replied Grado.
Grado’s most popular cartridges are still the Prestige Gold1 ($220.00) and Prestige Green1 ($80.00) and while audiophiles have prized the more expensive wood body Platinum and Sonata models for their punchy and colorful midrange, the millennials that have Grade up at night are sticking with the entry-level cartridges for now.
“Let’s be honest. The current generation of kids doesn’t even know what a hi-fi store is and they are far more comfortable shopping online for a pair of headphones or their first phono cartridge. This is a generation that grew up with Beats by Dre and an iPod and while we’re excited to see them interested in vinyl as a format, it is still very niche. These kids are not running out and spending $3,000 on their first turntable, but we are in a good position because we sell high-quality cartridges that are affordable and are compatible with a lot of good tables and phono preamps.”
While the growth in cartridge sales has Grado swamped, John Grado is surprisingly less optimistic long-term of about the growth of headphones sales.
“We’ve had ten years of growth and it has certainly put our business on solid footing for the future, but we’ve already seen the headphone market begin to plateau and with so many new products entering the market, we have had to take a step back and rethink what we plan on offering in the future.”
Grado has a number of new headphone models in the development stage; an acknowledgement that not every customer wants a pair of open-ear headphones, and there are plans to ramp up production of their headphone amplifier which has taken a backseat to the insane demand for their headphones and phono cartridges.
Grado’s marketing approach has also changed thanks to the efforts of Marketing Director, John Chen, who has been extremely active building relationships with manufacturers like VPI who offer table packages with Grado cartridges and headphone amplifier manufacturers such as Woo Audio who sell Grado headphones on their website and display at trade shows.
Grado has an enormous and loyal base of brick and mortar and online retailers that have made the brand a global success story, and while online sales now account for 75% of total product sales, the company has no plans of abandoning the retailers who have been loyal for so many decades.
Grado doesn’t do the audio show circuit, but there is no shortage of their products at shows and compared to more expensive products from competitors such as Audeze, AKG, and Sennheiser, the venerable SR60i which I schlepped around the globe for almost ten years before they were stolen somewhere between Eilat and Jerusalem, are a major bargain.
The more expensive “corkscrew” Grado headphones such as the RS1i (reviewed in the current issue) and the GS1000i offer a more transparent window into the sound with more potent bass response and better detail retrieval, but all of the Grado products share a similar house sound that has made them popular with music lovers around the globe.
John Grado may be correct that the headphone business will eventually begin to swallow itself and products will become a commodity and consumers will ultimately vote with their wallets, but he is far too busy to worry about that eventuality at this point in his life. The graduate of John Jay College who wanted to spend his life as a lawyer has instead spent decades selling the art of sound reproduction and that’s a Brooklyn story with a happy ending. -Ian White