Bill's Blog

It occurred to me over the weekend that you just don't see any good business news anywhere you look. It is all doom and gloom. Third quarter results are coming in and they're dismal at best. It seems as though the perfect economic storm has come together and every sector is down. Some say that it is this generation's Depression. But, there has to be good news somewhere. Some products have to be on an upswing. Every economy, whether good or bad, brings opportunity. You just have to look for it; so I went looking.

I didn't have to look very far, because while watching a myriad of sporting events this past weekend you couldn't help but see advertising from Husqvarna. Husqvarna is a Finnish company that makes an outstanding line of power equipment. They are heavily promoting their chainsaws. For all of you who have often wondered how to pronounce their name, here is the phonetic pronunciation - husk-var-na. The ads direct you to a great web site/micro site with the vanity url "Master Your Great Outdoors." They've tapped into a market need. Based on economic necessity and the high cost of home heating, it appears that many of us are getting back to the great outdoors. As I was working outside this weekend, I heard that unmistakable sound of chainsaws throughout the day. There is money being saved with each chainsaw roar!!

In doing some checking, both locally and regionally in the Northeast, the average cost for a cord of wood is up between $40 to $60. This is a substantial increase over '07, but maybe not as high as what homeowners might expect to see in increased fuel oil prices this winter. That trusty old sage, the Farmer's Almanac, is predicting an extremely cold winter this year. Could it be that many are going back to their ancestral roots and starting to cut down trees to heat their homes? There are some compelling statistics which indicate that people are looking for alternative ways to heat their homes. According to the National Barbeque and Patio Furniture Association (yes, there is an association for everyone), sales of wood stoves are up by 54%. The subcategory of pellet stoves is going through the roof. Wooden pellets are a lot easier to use and not as messy as traditional split wood.

Everyday we read about more jobs being cut, but Harman Stoves (one of the leading brands in the category) based in Halifax, Pennsylvania, is adding more than 100 jobs to keep up with skyrocketing demand for its pellet stoves in an area where all other factories are downsizing. It proves a point that there is always opportunity in any economy, if you look for it.

Like Husqvarna, Stihl, the German power equipment manufacturer is also spending a great deal of money advertising chainsaws. It is ironic that both brands have about a 40% market share and neither is sold in the big box home centers. In fact, Stihl has considerable disdain for home centers. They proudly trumpet in their ads the fact that you'll never find a Stihl piece of power equipment sold in a big box. Right now that has to be making their 8,000 dealers happy as they're seeing customers coming in through Stihl's pull efforts. It makes you wonder how the other brands that comprise the 20% can tap into this market phenomenon. What is interesting to note is that the majority of the other brands are either sub-brands or wholly owned subsidiaries of both Stihl and Husqvarna. Really, those two brands have a lock on the business.

All the stove manufacturers also sell through an independent dealer network. They have the same "protect the dealer" philosophy as Husqvarna and Stihl. Calls around to any local stove dealers will tell you there's a backorder on stoves, oftentimes - six months waiting time!! It reminds me of the early eighties when fuel prices were out of sight and many people were shifting to burning kerosene in their homes. There was a manufacturer here in Connecticut called Kero-Sun that did gangbuster business for a 2 to 4 year period. It was an account that many agencies yearned for. By the late eighties, people shunned kerosene heating as an unhealthy and unsafe way of keeping warm. Kero-Sun went to the brand graveyard. It was the ultimate brand fad. The interesting thing about the stoves of today is that they offer a far more compelling product from the images that you conjure up of the wood stoves of 20 years ago. They are far more aesthetic, with interesting design elements and burn more efficiently. No more getting up in the middle of the night to add wood. Pellets have revolutionized the category, as well. It's cleaner and more efficient. Perhaps there's a trip to a wood stove dealer in your future. There is a dazzling array of brands and choices in the wood and pellet stove space.

A perfect economic storm has essentially cratered our overall economy. The coming together of high fuel oil prices and the prospect of a hard upcoming winter has created a perfect storm of opportunity for the likes of Husqvarna, Stihl, a myriad of stove manufacturers and those who cut and sell wood for a living. This chilly October morning looks as though it's the forbearer of a long, cold and dark winter. Stay warm, no matter how you do it. These brands will be more than happy to help you keep warm.