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Hearth & Home May 2016

L2 linear with HeatShift system from Valor Fireplaces.

Burning Bright

By Bill Sendelback

Gas fireplaces light the way in a slow hearth market.

Warm winter weather throughout most of the country, coupled with exceptionally low prices of heating fuel, resulted in a 2015 hearth products sales season that was far less than stellar. However, there was a bright spot – gas fireplaces.

Wood-burning appliance sales were down six percent, and pellet appliances were off an estimated 34 percent. Gas was the sales star for 2015. Gas stoves and fireplace inserts were up marginally, and although 2015 manufacturer shipment numbers were not available for direct-vent gas fireplaces - which represent the bulk of gas fireplace sales – the industry consensus estimate is that total gas fireplaces were up about seven percent, riding the wave of the resurgence in new home construction.

Vent-free models garnered the highest percentage sales increase, up almost 19 percent, but the total sales of gas products was tempered by B-vent models continuing their slide, down 32 percent for the year.

“Last year was a gas year, and since we only offer gas products, we did well,” says Nick Bauer, president of Empire Comfort Systems. “Cheaper fuel was really the answer. Oil prices are still low, natural gas prices are depressed, and propane prices are low. We’re forecasting substantial growth in gas hearth appliances in the next three to five years. We’re trying to get in front of that growth, so our plant is working 20 hours a day to keep up with demand.”

Bauer is seeing equal sales growth in both vented and vent-free models. In fact, one of the company’s new vent-free linear gas fireplaces is now one of its best sellers. “And we’re selling a lot of outdoor linear gas fireplaces,” he says. “We can’t keep our 60-in. linear models in stock. I’m surprised at the strength of our higher-end price points.”

New for Empire Comfort Systems are its True 40 direct-vent fireplace featuring the company’s TruFlame catalytic technology, touted to be the “most eco-friendly vented gas fireplace on the market,” the Boulevard VF Linear 60- and 72-in. vent-free models, and a new DVLL48 linear direct-vent with the burner imbedded into a firebox floor of LED-lighted crushed glass.

Empire Comfort’s DVLL48 includes logs, stones and stainless-steel coils.

Innovative Hearth Products (IHP) was “up a fair amount” in 2015 in its gas fireplace sales, especially in its direct-vent models, according to Glenn Thomson, executive vice president of Sales and Marketing.

“We saw the Canadian market down,” he says, “but with the increase in U.S. new home construction we had a similar trend line to the gas fireplace industry, up six to seven percent.”

Thomson sees a trend toward upper-end models with more “whistles and bells, apps, lights, sounds and even smells. These buyers want more variety, more features. Builders, too, especially of custom and semi-custom houses, are looking for unique products.” Thomson explains that besides the upper-end products, sales of builder boxes are strong, but continue to be impacted by downward pressure on pricing.

“Vent-free will always be a segment of the gas fireplace market,” Thomson continues, “but it should be marketed and sold properly.” He points out that while the maximum standard for vent-free gas hearth products is 200 ppm per hour of CO, the standard for gas cookstoves is 800 ppm per hour of CO. “Now that the largest long-time opponent of vent-free has acquired a company successfully selling vent-free and is now marketing and selling vent-free models in its brands, that should increase the vent-free market,” he says.

Outdoor gas fireplaces are another growth area for IHP. “Even outdoor products manufacturers are now including gas fireplaces in their Outdoor Room packages,” he says. While contemporary styling is all the rage, Thomson says customers still look toward traditional models in “80 percent of the sales.”

IHP sees an opportunity in the core, mid-range gas fireplace models for semi-custom homes. Several new IHP models aimed at this segment feature more modern driftwood logs. “Although the bulk of the sales are still traditional, Millennials are leaning toward less traditional styling, maybe in traditional sizes but with different ember media, rocks, glass – something different than their parents’ fireplaces.”

With 2015 gas fireplace sales that reportedly “outperformed” the industry, Hearth & Home Technologies (HHT) is re-engineering most of its gas fireplaces by the end of this year for “an exciting 2016,” says Bob Ballard, senior vice president of Marketing. “We’re seeing good, steady momentum in new home construction, and slower but steady, healthy growth in remodeling. The big challenge for us and the industry is to educate builders as to why they should include fireplaces and how to put the right fireplace into the right home.”

Ruby gas insert from Majestic.

The clean, flush look is a continuing trend in gas fireplaces, Ballard says. “This has been a trend in premium models, but it’s now trickling down to lower-priced units.” Contemporary styling is attracting more consumers, but they cling to some traditional effects, Ballard contends. “They want the clean and flush look, but with traditional logs; linear styling is no longer a trend. It’s proven and is here to stay,” he says.

Big news for HHT is its “commitment” to vent-free gas products after its purchase of the Vermont Castings Group. “People may be surprised by this, but we were really educated about vent-free by the Monessen folks,” says Ballard. “We’ve gotten a lot smarter. Vent-free is a great, safe product if it is sold, installed and used correctly. We’re focusing resources on vent-free, and our Monessen line is now 100 percent vent-free. We’re introducing 16 new vent-free models this spring.”

In HHT’s direct-vent gas fireplace lineup, its entire Majestic line will be changed to new models by the end of 2016, all featuring the company’s IntelliFire ignition system. Other improvements will include flames, logs, refractory and ember media. HHT’s popular Novous Series in its Heatilator line is also undergoing updating and improvements, particularly in the flames. In its Heat & Glo line, the Slimline Series is receiving a complete overhaul and a refreshing.

Valor Fireplaces/Miles Industries in 2015 beat the gas fireplace industry’s overall sales increase with a 15 percent increase, says Paul Miles, director of Sales. “And this year is going quite well, very strong on the West Coast and softer in the East where there was no winter.”

Although Valor is “dependent” on the remodeling market, Miles says there has been a big change in the builder market. “A lot of potential gas fireplaces have been displaced by electric models, particularly in urban areas like Vancouver, British Columbia. Installation is much easier, and installed prices are lower.”

Miles has noticed increases in the average sale prices of gas fireplaces as customers opt for more expensive models. “People are choosing more expensive, clean-faced and linear models, and we’re seeing a lot of growth in these units. Years ago $2,000 was at the top end for an installed gas fireplace. Now it’s $10,000, and some models may top $25,000.”

The market share between traditional and contemporary models has “stabilized,” according to Miles. While Valor has a 60/40 percentage split between its traditional and contemporary sales, he says the industry is now split 70/30 percent. “But with the strong trend toward clean-faced, flush models, is that really contemporary? Our top seller is now a clean-faced model we call ‘transitional’ style.”

Another trend in gas fireplaces is the growth of electronic whistles and bells, Miles says. “This will continue. It’s like today’s technology in autos. Gas fireplaces are now almost an extension of our smartphones. But this technology also will address efficiency concerns as it makes our products burn smarter.”

Valor is spending 2016 tweaking its current models. But it has added its new Heat Shift heat management system to its Linear Series. Heat Shift draws convection heat from the fireplace to vents well up the wall, reducing the temperatures above the fireplace by half to allow safer installation of TVs above the fireplace. Valor also is adding new technology and venting options to its Portrait Series for easier installations in older, urban homes such as brownstone buildings.

Napoleon Fireplaces had a “pretty good” 2015, outperforming the industry, according to John Czerwonka, vice president of Hearth Sales. “While our U.S. sales were up, our Canadian sales were off a little last year,” he says. “Not percentage-wise, but dollar-wise, giving dealers nice margin dollars.” Traditional models are “still where the bucks are,” says Czerwonka, but transitional and contemporary models are gaining market share.

Napoleon Ascent BL 36 Linear Gas Fireplace.

“New homes continue to use models that are traditional,” he says, “but consumers love the clean-faced look of transitional and contemporary styling.” Napoleon has seen sales increases with some of its outdoor models after giving them a contemporary facelift.

New from Napoleon are seven entry-level builder models including its BL-36 linear model, but Napoleon’s HDX52, the company’s largest builder model, has become its most popular. A fire control system from Apple, the eFire, to control functions such as flame height, lighting intensity, colors and fireplace timing has been added to Napoleon’s LV-38 and LV-50 in its Vector Series linear models, and later this year it will be added to the LV-62 and LV-74 units. Napoleon also has added the very sheer, almost invisible mesh glass barriers to its mid- and high-end models.

Lucius from European Home.

European Home had a “great” 2015 and is having another “great” year so far in 2016, says Cory Ploessl, Marketing manager.

Indicating what the company expects to be another strong sales year, consumer traffic on European Home’s website was up 77 percent from October to January.

For European Home, the sizes of its fireplaces being sold depends on the region, obviously with the larger sizes selling better in the North, so the company is working to persuade consumers to install smaller sizes in warmer regions rather than having to contend with excess heat.

The company’s new Smart Hearth Technology app includes fire turn-down settings to modify heat output, as well as being able to turn on the unit, adjust the flame and measure fuel usage. The company also is using double panes of glass rather than mesh screen glass barriers on some of its models to test the consumer acceptance of this feature.

While revamping European Home’s J Series vent-free outdoor models, Ploessl says the company took into account the trend to reduce boundaries between indoor and outdoor living spaces, making double-sided, indoor/outdoor fireplaces more popular. The company is also focusing on its surrounds to give the consumer “lots of options” for the “feel” of a custom installation, using textures, rust, colors and other industrial styling features.

New from European Home is its Modore 75H, a smaller, less linear, square model featuring non-reflective glass that makes the glass “disappear.” Also new is the Lucius 100R, a smaller peninsula model in its Lucius Series.

With new home construction continuing to improve and with the DOE’s proposed rulemaking to further regulate gas appliances on hold, the hearth industry is quickly developing innovative, efficient and fashionable new gas fireplaces. This is a good time for hearth dealers to take advantage of these new gas fireplaces to bolster their sales.

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