Family-owned company keeps party going for 101 years

PERU, Ind.—In some ways, Mike Kuepper’s life has been one big party. Which makes sense, considering his family has been keeping the party going for 101 years.

Today, that party is happening inside a building in Peru. Inside the massive factory that stretches an entire city block, rooms are packed with boxes filled with party hats, foil tiaras and blowout horns.

One room has boxes of bouncy balls, plastic hand-clapping toys and shelves stacked with candy. In another room, a large printer cranks out specialized paper plates and cups with party-themed designs. And that’s just the tip of the party iceberg.

The company is called Kuepper Favor Co., which operates inside the nearly 140-year-old factory that stretches along the railroad tracks. The building was constructed in 1895 and at various times was used to manufacture wooden phone booths, bubble lights and auto parts for some of the nation’s first automobiles.

But the company didn’t start in Peru. It was founded in Chicago in 1921. That’s when Kuepper’s grandfather, George W., started making items such as crepe paper nut cups and hats that he sold at his five-and-dime store. The party business was so popular that he ended up selling the store and founding Kuepper Favor Co.

By the 1950s, Kuepper’s father, George C., ran the company and wanted to move it outside Chicago to a more business-friendly state. He started looking at factories around the Midwest.

In 1956, he found the facility in Peru and made the move.
Kuepper, 69, was a child when the family left Chicago, but he remembers being packed in the back of the car and then being unloaded in a small town in rural Indiana.

The family business set the backdrop for Kuepper’s childhood. In high school, he started working summers operating machines and working on the manufacturing side of the company. After graduating from college with a marketing degree, he took a job working for his dad.

But that all changed in 1978, when his father passed away at 65. Before the funeral, the company’s accountant took Kuepper aside and told him the business was struggling. He suggested it might be time to sell.

Instead, Kuepper decided to take over the business and do everything he could to turn it around. When he did become the owner, he was the youngest person at the company.

“Once he passed, it was like, boom, I was in charge,” Kuepper said. “… I was forced to grow up fast. I remember thinking, ‘You got to get serious. All of these people are depending on you.'”

After years of hustling, Kuepper landed major accounts with Hallmark and American Greetings, making party favors that the companies would then sell to Walmart and other major retailers.

During that time, business was booming, and the Peru factory sometimes had over 100 workers producing nearly all their party goods in-house.

But by the 1990s, the global economy was in the middle of a seismic shift as U.S. manufacturing moved overseas to cut down on labor costs. One by one, party companies similar to Kuepper’s closed down, unable to compete with Asian manufacturing.

“No matter how tight I could make our margins, China could always undercut me,” Kuepper said.

He saw the writing on the wall. It was time for another major pivot to keep the family company going.

In 1994, Kuepper established another company called Party Direct, which purchases most of its items and then sells them directly to customers. By partnering his two businesses, Kuepper was able to keep prices well below competitors.

Party Direct really took off in 1997, when they landed an account with Chuck E. Cheese. Soon, they had catalogues and product lines they were mailing out to companies all around the U.S. that had birthday party programs.

Today, the company sells to Disney Cruise Lines, Dairy Queen, the National Elks Club, bowling centers like Heritage Lanes in Kokomo and a variety of other chain hotels and entertainment companies.

The pivot into wholesale kept the business going and allowed Kuepper to outlive just about every other competitor. He said today, he knows of only two other family-owned party favor companies in the U.S. When he took over in the 1970s, there were dozens.

But as Party Direct grew, Kuepper Favors Co. shrunk. By around 2010, manufacturing in the factory had mostly come to a standstill. The machines that had once cranked out 10,000 party hats an hour or cut giant reams of paper sat idle.

“Some of this stuff, it’s sad to see it just sitting here,” Kuepper said.
With the huge drop in manufacturing came a huge drop in employees. The company that once had over 100 workers now employs just 12.

Kuepper said it was tough to cut staff over the years, but the move was necessary to keep his family’s century-old business intact.

But the challenge coming from overseas manufacturing was nothing compared to what the company faced during the pandemic.

He said business was doing well in late 2019. By the summer of 2020, sales had shriveled by over 90% as the country went on lockdown due to COVID-19.

Nearly overnight, Kuepper was faced with an insurmountable challenge that was sure to be the deathblow to the company. He tried to pivot into making masks and other items for the pandemic, but it wasn’t going well.

In the end, he said, the only thing that kept the business afloat was the government loans and assistance that helped tie them over for the next year.

Today, the demand for party favors is as strong as its ever been, but that hasn’t made it any easier running the business. Kuepper said with the global supply chain still in turmoil from the pandemic, it’s become difficult to get basic supplies like paper to make some of their products.

“I was hoping it would all get better by now, but it’s not,” he said. “Before COVID, I had all kinds of different suppliers to choose from, but now it’s just difficult to find anything.”

But after running the company for 44 years, Kuepper has become a pro at adapting and finding creative ways to deal with the near-constant changes in the economy.

That’s what the company did during World War II and the Great Depression, when it couldn’t find employees or supplies, and that’s what Kuepper is doing today.

And even though it’s sometimes a struggle, he said, the job still feels fun after all these years. After all, what’s not to love about helping people throw a party?

“People in the party industry are just more positive, self-motivated people,” Kuepper said. “It makes it fun to work in this industry.”