Choices: Compliance or Leadership

(Originally published in the July 2012 issues of Merchant Magazine and Building Products Digest.)

Starting from a clean slate confers all sorts of benefits.  For new merchants, ones just starting up (a rare breed, I know), it’s relatively easy to develop a green business model and brand, stock only greenest-in-class products, and forge winning customer relationships with green builders and remodelers. 

For those saddled with the baggage of history, existing customer and supplier relationships, and predictable revenue streams, it’s a different story.  How do you green your product lines, bring your existing customers with you, while appealing to a new breed with rising green expectations? 

We’ve been dealing with these questions in this column for the last several years.  Based on personal experience, as well as observations of what has worked for others, we’ve drawn the conclusion that any merchant can become a green merchant, and inevitably, every merchant must.  But it is a difficult journey fraught with many compromises.  The recent kerfuffle over a new credit category proposed for the latest incarnation of LEED 4 highlights one of the trickiest.  

First, the kerfuffle.  Without getting too bogged down in technical detail, the main issue is the proposed “Avoidance of Chemicals of Concern” credit, which aims to raise the bar on indoor air quality by eliminating certain chemicals in emitting products and that certain products include disclosure of chemicals used.  In one part of the proposal it references REACH, an EU program that monitors chemicals.

The American Coating Association took exception in widely publicized comments it submitted to USGBC, arguing that compliance would hurt the market.  They suggested an alternative, compliance with 2007 California Air Resources Board Suggested Control Measure, instead.  Even 61 members of Congress got involved. 

There are two points to be made here.  First, let’s recall some recent compliance history.  There were a few industry leaders who saw new CARB regulations coming in 2007, did nothing, and were forced to take back their non-compliant product from retailer shelves and distributor warehouses.  Second, LEED does not require compliance.  On the contrary, it aims to identify leadership­ – that’s what the “L” in LEED stands for – and more to the point, it is voluntary.  No manufacturer is required to make, test, or certify products that meet LEED credits.  This is an all important difference that separates compliers from leaders.

For merchants trying to create a winning, green formula being able to identify the difference between products and manufacturers aiming for compliance, and those focused on leadership, is crucially important. Who would hire a builder or an employee, whose main selling point is compliance with minimum regulated standards?  Don’t we all want to work with leaders who go beyond the minimum and set their own standard?  Don’t we want to be leaders?  But the unfortunate reality is that because of longstanding channel marketing practices, with manufacturer spiffs, promotional deals, brand or industry dominance, and so on, this is also an area where compromises are inevitable.  And probably, there are long-term relationships involved, too, which can make it tricky.

So, what to do?  First, develop an understanding of current vendor relationships and identify the manufacturers with a commitment to continuous product improvement, innovation and leadership.  Second, start strengthening relationships with the leaders and collaborate on new programs wherever possible.  Third, identify gaps and seek new greenest-in-class alternatives in every category.  Fourth, engage those manufacturers in the compliance camp and encourage a change in their product development philosophy. You never know, they just might listen.  Finally, develop a long-term trend toward greenest-in-class products.  It may be tricky to manage existing relationships and the short-term benefits they confer, but in the end, working with leaders delivers its own rewards.

Adapting to Drought and Deluge

(Originally published in the May 2012 issues of Merchant Magazine and Building Products Digest.)

The weather lately has been weird and wild, but get used to it.  It’s the new normal.  Climate scientists tell us that weather extremes will be more common and that long-term patterns are shifting.  This doesn’t just make the weather report on the evening news more interesting.  Consider, for example, that shifting rainfall patterns can affect water supplies, livelihoods, and lifestyles.  Some communities are facing more severe drought or drought for the first time in living memory.  Some places are seeing much more rain, and some are getting their rain or snow sooner or later in the season.  Any of these changes can cause big problems for communities who fail to adapt. 

This is where you, the home and shelter dealer, can come to the rescue.  Changing weather patterns, whether drought or deluge, create opportunities for you to do good for your community and do well while doing it. 

For starters, educate yourself about water issues in your areas of operation.  If you’re in a community already affected, you may already be aware of local and regional rainfall patterns and water supplies.  If not, there are good resources online, such as National Oceanic and Atmospheric Administration’s (NOAA) website.

Second, build your expertise in those mitigation and adaptation strategies your community needs.  In a drought?  Look into rainwater harvesting, greywater recycling systems, high-efficiency toilets, even composting toilets. (Believe it or not, collecting the rain that falls on your roof is illegal in some places, and residential greywater systems are not approved in all communities.)  Buy and read “Rainwater Harvesting for Drylands and Beyond”, by Brad Lancaster, one of the nation’s leading experts, then share it with your staff.

If your community faces periodic deluge and flooding, there are short term mitigation and longer term adaptations to evaluate, too.  For example, in West Coast urban areas facing huge El Niño storms, rainbarrels can help reduce the runoff that overwhelms storm sewer systems. Softening urban hard surfaces and hardscaping to allow for “slowing, spreading, and sinking” rainfall, also reduces runoff and recharges aquifers. Permeable pavers, anyone?  And for flooding, dry flood proofing measures and elevation may be viable short term strategies for dealing with periodic flood risks in some instances.  But flood mitigation is a complicated legal and technical domain – do your homework before diving in.

Once you and your key staff are prepared, start building the stock and services around the solutions best suited for your community.  Water conservation measures inside the home might be one category that works in every part of the country.  And nearly all toilet manufacturers offer High Efficiency Toilets, but have a look at Niagara Conservation.  They make it easy to source a range of water saving devices, including their Ultra High Efficiency Stealth .08GPF toilet. 

I’m also a big fan of greywater recycling.  It’s still early days for residential systems, and most solutions are do it yourself, or “green it yourself,” projects, but this presents a wonderful merchandising opportunity.  Pull all the right components into a robust display, along with the right tools, some books, and related products.  Check out GreywaterAction.org for ideas. 

And catching the rain - it’s a no-brainer for many regions of the country.  The key component is storage and the most innovative solution I’ve seen is RainTechnologies’ RainSpace.  It’s flexible, capacious, and low cost.

These kinds of solutions may require some thinking outside the box and a little extra effort.  But they can earn LEED credits for your green builders, conserve water, and improve quality of life in your community.  You’ll be doing well by doing good.

Green Bricks and Blocks

(Originally published in the April 2012 issues of Merchant Magazine and Building Products Digest.)

Durability is one of those green building attributes that doesn’t get enough attention.  Things that last a long time don’t need to be replaced as often, which saves money, material, and energy.  Durable items that are reusable and recyclable are even better. And ones made from abundant, recycled, or easily renewable material right from the get go are, theoretically, the best. 

So, why doesn’t the ubiquitous and overlooked “brick” get more attention from green pundits and sustainability gurus?  It’s durable, reusable and made from abundant materials, clay and slate.  Where red bricks fall down is high carbon footprint.  Bricks require high-temperature kilns, which consume lots of energy, and that’s a deal killer for most green architects. 

But there’s more than one way to make a brick.  Innovations in recent years, as well as shifting attitudes about older brick making technologies, are combining to make the category much more interesting.  Are we close to a renaissance in building with brick?  Who knows?  But for building materials dealers looking to refresh an ancient category there are innovative new solutions worth evaluating.

Let’s start with the basic red brick.  Red brick has a specific aesthetic that may represent an important aspect of a region’s building vernacular, or may simply be appealing to individual customers.  If it has to be red brick, there is a green alternative.  Bricks made with fly ash, such as those from CalStar Products, can capture that same look and feel, but with a fraction of the carbon foot print.  They’re made with an industrial waste product, fly ash, and are steam cured rather than kiln fired, and at comparable price and performance to the traditional clay brick. 

Fly ash bricks are an innovation that could very well capture the imagination of architects, specifiers and builders, and begin to gain significant market share at the expense of traditional red bricks.  They fit well with mainstream attitudes and represent a safe way forward.

For some dealers there are niche opportunities to push the envelope a little further.  Recycled paper offers one of the more unusual building materials currently testing the boundaries of what’s possible.  A new company in Texas, MasonGreenStar is testing the market with GreenStar Blox, bricks made from recycled paper, cement, and proprietary additives.  The bricks weigh only about a third of comparably sized adobe or compressed earth blocks (CEB).  This technology is not ready for prime time just yet, but it may represent an important alternative building material in the future.

In a return to the past, natural building projects are often focused on using materials like adobe and CEB which can be sourced on the building site.  While many dealers are stuck in a “stock and ship” paradigm, on-site material sourcing and production presents a different kind opportunity for the enterprising green dealer. 

Renting compressed earth bricking making equipment and hosting training courses could be business opportunities for dealers currently supporting natural builders, or those inspired to evangelize natural materials.  Earth Tek is one manufacturer of brick presses and blenders worth a look.  But if you’re interested in building your own, you can do that, too.  Open Source Ecology is developing open-source plans for what it calls the Global Village Construction Set, machines that could be built by almost anyone that would be necessary to deliver the industrial needs of a small town, including a CEB press.  For some, this kind of brick making might provide new sources of revenue as durable as the bricks themselves.

Green Spring Training

(Originally published in the March 2012 issues of Merchant Magazine and Building Products Digest.)

March is my favorite month.  Why?  Spring is in the air, at least in some parts of the country.  And baseball is just around the corner.  And now, some market research has come out demonstrating that green building is poised to lead this industry out of the doldrums.  Things aren’t back to normal, or back to a new and different normal, not just yet.  But if you’ve been working to bring your retail or wholesale operation into the green big leagues, this could be your breakout season. 

The study from McGraw Hill reports some interesting numbers that should inspire optimism.  The share of new single family homes built to a LEED or equivalent standard reached 17% and rising to about a third of the market in five years.  Builders report that marketing green homes is easier and the majority of customers are willing to pay a little more.  Among builders who are doing some green projects, 39% report that green work is having a positive impact on their bottom line, compared to 90% of builders who are fully dedicated to green.  There were similar results for green remodelers.

I want to focus on one takeaway from this.  The reason dedicated green builders and green remodelers report better results – and are looking forward to better prospects, too, I might add – is because they are focused.  They have the knowledge and skills, and therefore the credibility.  They know what they’re doing and they believe in it.  These are the companies driving green forward and these are the companies getting the bigger share of the projects.  If you’re looking to grow your green business, these are the pros you want on your team.

Given the strength of this trend, making green building an increasing focus of your own business is an obvious forward thinking strategy.  Equally important is building strong relationships with the leading green builders and remodelers in your market area.  This may seem obvious, too, but to build productive relationships these four key points are worth repeating.

First, be prepared to walk your talk.  No amount of schmoozing will win customer loyalty in this arena without expertise and knowledge to back it up.  Don’t rely on manufacturers and product knowledge to see you through.  Go the extra mile and develop internal expertise in LEED or other residential green building programs.

Second, go to them.  Don’t expect them to come to you.  Visit them at their office, their job site, green building association meetings, trade shows and conferences.  Most regions have a USGBC chapter or equivalent – join it.

Third, bring value to the relationship, right away.  If you can help them win a new project, introduce them to a talented new sub, point them to an innovative new solution, they will come to see you as vital part of their business ecosystem.  When this happens, they will start bringing value to you.

Fourth, dig deeper and find expert builders, remodelers, retrofitters with specialisations that make sense for you and your region.  Energy retrofitting, rainwater harvesting, green roofs, and solar are all hot areas – maybe they’re ripe for building new relationships, too.  Develop the right product categories they need, host in-store events, and develop referral programs.

At the end of the day, it’s the customer relationships that sustain any business, especially during lean times.  This industry is adopting green building at an accelerating pace and demand is showing signs of picking up.  It’s the leading builders and remodelers who are winning an increasing share of the business.  By getting together you can build a solid team and make this a winning year.

Two things for 2012: Energy and Community

(Originally published in the January 2012 issues of Merchant Magazine and Building Products Digest.)

It’s January, a time when we’re all staring into the headlights of an oncoming new year bearing down and wondering how it’s all going to turn out.  Perhaps you’ve had the same premonitions I’ve had about 2012.  Clearly, there are going to be some rough patches.  It’s an election year and the electorate seems in a bad mood.  The economy seems in a bad mood, too, with high unemployment, rising foreclosures, and little building activity. 

Some dealers will do well and some won’t – it’s going to be a mixed bag.  So what can you do to put yourself in the former category?  It all depends, of course.  Do you serve mostly pros or consumers?  Are you are a chain or a locally-owned indy?  There is no one size fits all strategy.  I’ve said it before and I’ll say it again, green dealers seem more buoyant, more resilient.  But I think this year’s going to take a little more effort.  What’s my advice for taking your green strategy to the next level?  Two things:  energy efficiency and community.

First and foremost, make energy efficiency job one.  If you’re a dealer in this channel this needs to be top of mind for everything you do.  I’m talking about the whole picture – operations, products, merchandising.  If you can find a way to pay for it, do a lighting retrofit, install solar panels, insulate every building you’re heating. This is going to reduce your operating expenses and demonstrate your leadership.

Stock products that will save money for your customers:  insulation products that meet LEED or other green building program criteria, triple-glazed windows, insulated doors, LED lighting.  Finally, do your homework on rebates and other incentives and plaster the information everywhere.  Label products that are energy efficient and can reduce bills.  Stocking the right products and merchandising them effectively will help maximize your sales.

(Besides, if you don’t who will, BestBuy?  Yes, apparently.  They’re piloting a new home energy retail concept.)

Secondly, do everything you can to get closer to your community – customers and other stakeholders, too.  Whether you’re primarily serving pros or consumers, be energetic in learning about your customers’ needs and finding ways to serve them.  Who is building houses?  Who is remodeling?  What are homeowners doing on their own?  Host events in your store that bring your buyers and customers together and get them talking.  Walk the aisles and the yard with your customers and listen carefully to their feedback.  If you’re getting this information from manufacturer reps you are listening to the wrong people. 

Don’t be afraid to leave the comfy confines or your store, either.  Attend local USGBC meetings.  If your community has a “shop local” campaign or a business alliance, such as a chapter of BusinessAlliance for Local Living Economies, for example, join it.  And don’t forget other groups who are active in your community.  Forging these links may make all the difference this year.  It will keep you from stocking useless inventory and will identify the products and materials your customers need.

Energy and community.  It’s simple and clear.  It provides a solid mission for your staff that’s imbued with optimism.  It can provide the basis for a marketing campaign.  And if you follow through, if these are truly priorities for your organization, you will be doing all the right things to appeal to green builders and remodelers, home owners and DIYers.  Certainly, you’ll learn about other needs, products and opportunities along the way, too.  And whatever turmoil the year may have in store, I believe, you’ll find that energy and community will see you through.

Innovation in Interesting Times

(This was originally published in the December issues of Building Products Digest and Merchant Magazine.)

This dismal year is almost over and most people won’t be sorry to see it go.  On the other hand, if apocalyptic 2012 predictions are correct, the New Year will see the Mayan calendar coming to an end and so, apparently, will the world.  Yikes!  There’s a curse, reputed to be Chinese, that goes, “may you live in interesting times.”  Well, we’re living it.

But even in these interesting times, I still find reasons to be optimistic.  You don’t have to be green to do well in our business, but green dealers tend to do better.  That’s encouraging.  This year, there were several innovative products and materials that were either launched or found traction in the market.  That’s also encouraging because innovation is exactly what the home and shelter supply chain needs – in products, materials, merchandising - the whole package.  And it seems to me that’s exactly what’s in the pipeline for next year and beyond.  Here’s what I’ve got my eye on.

For several years, we’ve seen small independents roll out green-only retail concepts and doing well in their respective niche markets.  But this year Green Depot (www.greendepot.com) took a step into the “big leagues” when they acquired EcoHaus on the West Coast, making them the first coast-to-coast green home improvement chain.  They’ve demonstrated that green can scale.  Who’s next?  It might be new, Austin-based TreeHouse.  It’s big, well designed, focused 100% on green building, and is an easily replicable concept.  These are but two examples of the shape of things to come.

On the product front, it’s hard not to get excited about the innovations in energy efficiency.  Perhaps there’s no better way to gauge what’s happening here than to look at the least sexy product category:  insulation.  There’s a place for mass-produced  formaldehyde-free, high recycled content fiber glass, but for a paradigm shift, you’ve got to look at what small companies are doing.  For example, we’ve talked about hemp as a building material, but now there’s hemp insulation, too.  American Lime Technology’s Breathe™ Insulation is made from hemp and flax fibers, is breathable and functional, with obvious green benefits over conventional materials.  And then there’s insulation made from fungus and agricultural waste – hard to get greener than that.  Designed by Ecovative Design (www.ecovativedesign.com), Greensulate™ is currently undergoing testing and may come to market next year. 

If insulation is the least sexy product category, then thermal mass, as such, is the least commercialized.  As passive solar designers have known for decades, properly managing thermal mass and solar gain results in efficiency and comfort.  For example, a granite south-facing wall absorbs heat during the day, keeping interior spaces cool, re-radiating that heat at night, keeping interiors warm and comfortable. 

Imagine if, instead of logistically unfriendly granite, thermal mass was a product that came in rolls, like bubble wrap, that was easily installed in walls and ceilings like, well, bubble wrap.  Turns out someone already has.  Phase Change Energy Solutions (www.phasechange.com) has developed BioPCmat, a roll of bubble wrap like material that is essentially thermal mass in a roll.  Properly installed, BioPCmat can result in 30% energy savings.

Products like these offer radical new approaches to products and materials.  And this is just the tip of the iceberg.  Philips recently unveiled the Microbial Home design concept including a kitchen that produces its own cooking gas – methane – from bathroom and kitchen waste.  Whether these product innovations take off in the marketplace is an open question.  But innovation breeds innovation.  If this pace of new product development continues, 2012 could well be very interesting, but in a good way.

Made Greener in a Factory Near You

(This article was published in the November, 2011 issues of Merchant Magazine and Building Products Digest.)

Over the last thirty years, the manufacturing core of the United States has been dismantled piece by piece and shipped off to other countries.  Looking for competitive advantage through least-cost labor, brand owners and manufacturers have gradually concentrated in China, which now accounts for a large proportion of product sold through this channel.  Even commodity products are very likely to be sourced from China or other faraway places, and not without complications.  Has anyone forgotten the drywall controversy? 

Low prices are good, or so market logic would dictate, but in a globalized economy there are unintended consequences.  Economists have argued that the American middle class, made up of folks who save to buy a house or remodel the one they own, has been significantly diminished by the loss of good paying manufacturing jobs.  This has had a devastating effect in hundreds of local economies that still struggle with high unemployment and underemployment.  In addition, cheap goods and materials from abroad may have other, hidden costs.  Lower quality, for example, can slow productivity or require expensive remediation. 

From a green point of view, there’s another unintended consequence.  Most imported goods and materials will have much higher embodied energy, in other words, a larger carbon footprint.  Shipping goods across the ocean spews tons of carbon into the atmosphere.  More importantly, a foreign factory may get its energy from inefficient coal-burning plants, so before the import is even shipped, its carbon footprint may already be wildly off the charts compared with a domestically made alternative.  There may be other environmental consequences, too, where factories are located in countries with few safeguards in place against pollution, deforestation, etc.

Reducing the embodied energy in buildings is the main motivator behind USGBC’s LEED credit for locally-sourced goods and materials.  This is good, but does it matter?  Is anything even made in this country anymore?  Yes and yes.  Obviously, sourcing goods and materials close to the building site means lower embodied energy, lower amounts of carbon emitted to the atmosphere.  It also helps to support local businesses and encourages builders to incorporate local materials.  Lumber, stone, strawbale, cob – regional resource strengths will help recreate regional building vernacular, too, providing a welcome break from the homogeneity of mass home production.  Shortening the supply chain also delivers strategic business benefits, such as less risk of disruption from overseas events and, potentially, more collaborative relationships between manufacturer and dealer.

And yes, there are still plenty of products made in this country.  A Montana builder made news promoting his 100% American built house (www.theallamericanhome.com), demonstrating that it can be done and with little extra cost.  It also showed that there’s strong interest from builders and prospective home owners to source their goods closer to home. 

So, what’s a good, green dealer to do?  Work with your distributors and manufacturers to identify where the products and materials are made, then identify opportunities to make some changes.  Shorten the supply chain.  Products made closer to home are better or “greener”, theoretically, than those made farther away.  For example, qualified products and materials made within 500 miles of the jobsite earn LEED credits.  Weigh the costs and benefits wisely – a toxic product made next door is always worse than a green import from Europe.  Do work with local manufacturers to green up their product line, if necessary.  In the store, develop signage that educates and informs your customers about the benefits of buying local or buying American.  Finally, resist the temptation to wave the flag, but do make the case based on quality, economics, and environmental benefits, there’s a strong one to be made.