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Hearth & Home April 2016

Stûv 16-IN fireplace insert.

Wood Struggles

By Bill Sendelback

For some manufacturers, sales of wood stoves/inserts are declining, while NSPS Step 2 looms ominously in the distance.

Back in the day, wood stoves were the heart of the hearth products business. That’s no longer true, and today wood stoves are struggling to hold their own in light of environmental and regulatory challenges, demographic changes and very low fuel prices. Gas stoves have rapidly taken up the slack, with sales increases taking market share from wood stoves.

“Customers are not going away,” says Stuart O’Conner, vice president of Sherwood Industries/Enviro. “They’re just switching to gas models. The younger generations are not as interested in burning wood. They don’t like the hassle. Although our wood stove sales were up about seven percent, dealer sales were flat, and we see a trend toward wood stove sales being flat or decreasing.”

While not at the same level of fluctuation as pellet stoves, wood stoves are having their own ups and downs. Wood stove sales in 2014 in the U.S. were up 19 percent, and wood inserts were up 18 percent. In that same year, wood stove sales in Canada were down five percent, while inserts were up a whopping 31 percent.

But through the third quarter of 2015, wood stove sales in the U.S. were down 4.5 percent and inserts were down 13.5 percent. Wood stove sales in Canada didn’t do much better, with stoves off almost 1.5 percent and inserts down 12.5 percent.

But wood stoves still dominate the U.S. market at 76 percent, and fireplace inserts at 24 percent. Wood stoves are even stronger in Canada, representing 80 percent of that market, down from 86 percent in 2014, with inserts totaling 20 percent in 2015.

To punctuate the fall of wood burners, wood stove sales in the U.S. in 2015 totaled 87,666 units, down 31 percent from the most recent high water mark of 126,801 in 2001. Wood-burning fireplace insert sales in 2015 were 27,909, down 34 percent from the recent high of 42,495 in 2006.

Despite falling sales of wood stoves and inserts, a few manufacturers surprisingly are reporting strong sales.

“We had a good 2015 in wood stoves and inserts,” says John Czerwonka, vice president of Hearth Sales for Napoleon Fireplaces. “We beat our 2014 numbers in both stoves and inserts. But for us, inserts were stronger than stoves. While gas is continuing to grow, wood stove sales stay fairly steady, fairly predictable.”

Model XIR4 from Napoleon Fireplaces.

“We had a great year and bucked the industry trend, up 12 percent,” says Alan Murphy, president of Blaze King. “We saw record sales in wood stoves and inserts in both 2014 and 2015. Wood stove sales were down in the fourth quarter because fuel prices were so low, including propane, and consumers are switching to gas.”

“The industry was pretty flat, but we had a really strong 2015 and gained market share,” says Bob Ballard, senior vice president of Marketing for Hearth & Home Technologies. “The warm winter last year was the biggest problem.” But most manufacturers didn’t experience sales growth in wood stoves.

“For us, wood overall was down 13 percent,” says Bret Watson, president of Jøtul North America. “Wood stoves did a little better than that, and inserts did a little worse. But our gas products were up 25 percent last year to represent 55 percent of our sales. We think wood will stop its decline this year, but with an aging population and low energy prices, we see wood stove sales flat for 2016.”

“Last year was not the year we had hoped for in wood stoves and inserts,” says Dave Kuhfahl, president of HearthStone. “We really didn’t have a sales season with the low fuel prices and a winter that never happened, and our dealers began running down their inventories.”

“We had a good year overall,” says Glen Spinelli, president of Regency Fireplace Products, “but sales of wood-burners were kind of soft. We made up for it, however, with increases in our gas products sales.”

Steel wood stoves continue to dominate wood stove sales in both the U.S. and Canada. Steel stoves racked up 72 percent of the U.S. market versus 28 percent for cast-iron models. Steel is even stronger in Canada with 87 percent of the market and cast iron at 13 percent.

“Lower price points for steel stoves are a big sales driver,” according to HHT’s Bob Ballard. “Our sales of cast-iron models have surpassed sales of our soapstone models,” says HearthStone’s Dave Kuhfahl. “Cast iron is a bigger market, and we are now designing ours to be cleaner and less gothic.”

Even Jøtul, a long time stalwart in cast-iron wood stoves, is seeing a shift toward steel construction. “The industry is seeing a trend favoring steel as steel stoves gain market share,” says Bret Watson. “And we’re seeing our sales move toward steel.” Jøtul has combined the two materials with models featuring a cast-iron exterior shell covering a steel fire box.

Pacific Energy Fireplace Products, however, is seeing its cast-iron models grow by 50 percent each year, according to Cory Iverson, North American Sales manager. “We’re introducing three new cast-iron models in our Neo line that now represents half of our international sales.”

Alderlea wood stove from Pacific Energy.

“Sales of our cast-iron models are down,” says Sherwood’s Stuart O’Conner. “Consumers are going for steel models because of their lower prices.”

Contemporary styling is also growing in wood stoves and inserts, but with much less acceptance than with other hearth products such as gas fireplaces. Transitional design, halfway between traditional and contemporary, featuring cleaner looks and flush inserts, seems to be more acceptable in wood stoves, and the more vertical European look is gaining ground, but very slowly.

“Traditional styling is still the most popular in wood stoves,” says HHT’s Ballard. “Contemporary styling looks nice and has interesting aesthetics for the consumer, but if the customer wants a heater, he or she chooses traditional models. We think contemporary and traditional styling in wood stoves are niche pockets in the market.”

“We offer contemporary wood stoves, and their sales are steady, but we think contemporary never deserved the press it gets,” according to HearthStone’s Kuhfahl. “For us, contemporary means cleaner lines, but not European styling. We don’t see contemporary as a strong trend in wood stoves.”

“We’re seeing more interest in transitional and modern or contemporary, but it’s a smaller percentage of the pie,” says Napoleon’s John Czerwonka. “A trend we are seeing is people asking us to offer cheaper models, but we’re not interested in price-point products. Consumers want reliable, good quality products, and they are willing to pay for them.”

“In the last three years we’ve seen more interest in contemporary styling, so we’re working on more contemporary units, but the bulk of our sales is still traditional,” according to Sherwood’s O’Conner. “Today’s consumer doesn’t want his grandfather’s stove. He wants something different, even in colors.”

“There is a definite growth in contemporary styling, but in specific geographic areas like big cities and urban areas,” says Marc-Antoine Cantin, president of Stove Builder International/SBI. “Rural areas where heating is needed, they want large models for large wood sizes. European-styled models are just too small.” Cantin points out that flush fireplace inserts are growing in popularity.

While many wood stove manufacturers have slowed introduction of new wood burners to concentrate on readying models for the NSPS Step 2 standards, some are offering new models. New from Blaze King are its Sirocco 25 flush, traditional steel wood insert with large door glass, and its Ashford 25 insert with a cast-iron front. Both models meet the NSPS 2020 standards with EPA ratings of 0.9 gph.

At the end of 2015, Foyer Stûv reintroduced 16 EPA single burn-rate models now with EPA certification. Stûv also is introducing in May three sizes of its 16-in. model EPA single burn-rate fireplace inserts. Six Stûv models now meet the EPA 2020 standard, and eight others have gph ratings of between 2.0 and 4.5.

HHT is launching two new wood stove families in its Quadra-Fire line, its cast iron Explorer Series and its steel Adventurer Series. Both feature HHT’s Smart Burn Technology to connect the stove to a thermostat for increased efficiency. HHT also is re-launching its Vermont Castings (VC) brand to “bring back VC’s image, going back to its heritage of craftsmanship,” says Bob Ballard. New VC products will be available in 12 to 18 months.

Explorer III wood stove from Quadra-Fire.

New from HearthStone is its Tula, a European-styled wood stove featuring thermal storage on top.

Jøtul is introducing its new F100CF and F400CF cast-iron wood stoves and C450 fireplace insert, all with clean-faced doors.

Pacific Energy is introducing its Alderlea 1.2, 1.6 and 2.5 cast-iron wood stoves and its Alberni 1.2, 1.6 and 2.5 steel wood stoves, both series featuring the company’s Neo steel floating firebox.

New from Stove Builder International is its Drolet Black Stag steel, traditional wood stove, an EPA-certified model with a unique solid cast-iron door, a model designed for the natives of Northern Canada.

Travis Industries has introduced its cast-iron Rockport and steel Evergreen mid-sized wood stoves into its Lopi line. The Rockport features Travis’ Hybrid-Fyre technology that produces only 0.8 gph, meeting the EPA’s 2020 standard. The traditional Evergreen, offering legs or pedestal and a large ash pan, produces 3.4 gph with an efficiency of 74.5 percent and features a cooktop surface.

Evergreen wood stove from Lopi.

United States Stove Company has introduced in its Breckwell line its SW180, SW740 and SW940, three steel wood stoves that can be fitted by the dealer with pedestal or legs or used as a fireplace insert. Two new cast-iron, porcelain enamel wood stoves, also in the Breckwell line, are the SWC21 and SWC31.

Manufacturers Looking Toward Step 2 of NSPS

With Step 1 of the EPA’s New Source Performance Standards (NSPS) now in effect, wood stoves currently on the market must meet the 4.5 gph emissions minimum. But many manufacturers are already developing and testing for Step 2 of the NSPS that begins in 2020. This has caused some manufacturers to forsake bringing new wood stoves to market that meet the Step 1 standard, and instead they’re concentrating their R&D development on Step 2.

Emission limits for all wood stoves and inserts in Step 2 are 2.0 gph if testing with cribs, as are most models today, and 2.5 gph if tested with cordwood. Manufacturers may seek EPA’s approval to test with cordwood and, if so, they can apply a special label to their stoves that “recognizes that emissions from cordwood testing more closely reflect emissions from in-home use,” according to the EPA website. Some manufacturers already offer wood stoves and inserts that meet the more stringent 2020 standard.

But the much tighter emissions standards for 2020 are leaving many manufacturers scratching their heads as to what technology will be required to meet those standards – catalytic, hybrid using both cat and non-cat technology, non-cat or some new technology.

“We’re working toward the 2020 standards, and we are confident we can get there,” says HHT’s Bob Ballard. “But it will take a lot of investment and maybe a different technology.” HHT already offers its Flex Burn hybrid technology in its Vermont Castings line that meets the 2020 standards.

“I can’t believe what we as an industry bought into with these Step 2 standards,” says HearthStone’s Dave Kuhfahl. “It won’t benefit our air, but it is something the EPA can hang its hat on. We’re trying to make it without exotic technology, but we don’t know if it’s possible. We’re trying to stay with simple technology more acceptable to the consumer.” HearthStone is working to reduce emissions in all its current products; some are already testing between 2.0 and 2.5 gph.

Manchester 2.9 cu. ft. wood stove from HearthStone.

“We’re not yet introducing any new wood stoves,” says Michael Lewis, director of Product Development for Innovative Hearth Products. “We’re focusing on developing an EPA-certified wood fireplace and using that test data to help us with new wood stoves.”

“The 2020 standards should be everyone’s focus,” says Jøtul’s Bret Watson. “It’s science as well as engineering. We plan on hitting 2.0 gph earlier than 2020. The 2020 standards favor catalytic technology because the testing must be repeatable in follow-up testing, and catalytic technology is more repeatable. It’s going to take capital to get to these new numbers, and that will mean fewer wood stove manufacturers.”

“There is now a fork in the road with this NSPS,” says Kuma’s Mark Freeman. “It’s forcing us to redesign our entire line, looking at hybrid technology.”

“Meeting 2.0 gph is a real challenge with non-cat technology,” says Pacific Energy’s president Shannon Sears. “Catalytic technology can help to pass the tests, but we don’t think it’s good for the environment or the consumer. In our case, we’re designing products to meet the standards in three markets – North America, Europe and Australia.”

“We’re going to need cat or hybrid technology,” says Sherwood’s Stuart O’Conner, “but a cat adds about $300 to the price, so we have cost concerns about wood stoves in 2020. It will be a challenge.”

“We’re confident we can meet the 2020 standard with non-cat technology, but it won’t be easy,” says Regency’s Glen Spinelli. “We have four models that meet that standard using hybrid technology, so we know how to make them, but we’re trying to do it in a simpler way. It takes a lot of testing.”

Tax Credit Extended

A bright spot for wood stoves is that the Federal tax credit for biomass stoves has been extended and is retroactive for sales made in 2015. HR 2029 extended the 10 percent up to $300 Federal tax credit for biomass stoves that are at least 75 percent efficient to Dec. 31, 2016. There are no other changes to the past tax credit.

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