Another Good Show
By Bill Sendelback
Photos: ©2017 Robb Cohen Photography & Video. www.robbsphotos.com.
Most hearth products dealers and manufacturers didn’t have a strong sales year in 2016. Even with a recovering economy and a continuing increase in new-home construction, factors such as low heating fuel costs and no winter weather except in the West caused most companies to go to the HPBExpo (March 1-4 in Atlanta) optimistic but cautious about what 2017 will bring. Show attendance, while not topping the recent high of Nashville in 2015, still fared as well as last year’s show in New Orleans.
“When the show closed, we were both happy and relieved,” said Jack Goldman, HPBA’s president and CEO. Happy and relieved because not long before the show opened, registration numbers were down 23% from last year. But by the second day of the show, attendance passed 2016’s New Orleans total attendance numbers – 6,808 to 6,778.
“Atlanta is unique in that it has a great many direct air flights and easy driving for a large population,” Goldman explains. “This allowed many attendees to fly or drive in the morning, see the show for only one day and go home that night. We don’t see that opportunity in most of our other venues, but it may explain why some thought the attendance was down.”
Goldman also reports that most manufacturers he talked with were “happy” with the show traffic, and were able to see the customers they wanted to see.
The number of exhibiting manufacturers certainly was no problem for attendees. There were 411 total exhibiting companies in Atlanta, topping every Expo for the last seven years, as did the total indoor booths at 1,209. Outdoor booths totaled 83, better than the New Orleans totals, but showing the continuing slide from the high of 292 in 2010 in Orlando.
|The Outdoor Burn Area was the site of a very well-attended party the first night of the Expo.|
Some notable manufacturers were absent from this Expo. Regency Fireplaces, recently acquired by European hearth products giant Nibe, was still planning its product mix with potential Nibe brand items and passed on exhibiting at this year’s show. However, Regency already has contracted for a large exhibit space in Nashville next year.
Montigo, a perennial non-exhibitor, also has contracted for Nashville exhibit space following its recent acquisition by a private equity firm and the appointment of Jonathan Burke as its new president and CEO.
Glass door manufacturer Portland Willamette, an exhibitor at every HPBA show, was absent this year; the company was in the final stages of being acquired by glass door and hearth accessory manufacturer Ironhaus.
More revealing was the total of non-exhibitor attendees, 3,704, down from New Orleans 2016 and way down from the record 4,817 of Nashville 2015. But the number was respectable compared to most shows in the last seven years. The number of retail companies, or dealers, also was down. The category of buying entities, which includes retail companies as well as distributors and other buyers, and is the most important category for exhibitors, were also down. Each company or buying entity may bring more than one employee to the show, but each company or entity still is totaled as just one company or entity.
Atlanta as a venue drew mixed reviews. Some loved it for its ease of getting there, others for its restaurants. Some complained about the distance from most hotels to the very large Georgia World Congress Center. However, the show hall was well laid out and easy to navigate, and the meeting rooms were convenient.
If there was one black eye, it was the location of the outdoor burn area. Totally dominated by grill manufacturers, the site was a healthy walk from the show hall, almost in another ZIP code, and inconvenient even with the shuttle buses provided by the HPBA.
Just as the HPBA was “happy and relieved” when Expo attendance numbers finally surpassed 2016 totals, exhibitors, too, didn’t know what or who to expect in Atlanta. In general, exhibitors felt the show was a success; some even felt attendance was better than they expected.
“Traffic was intense each morning and slowed in the afternoon,” according to Jim Litchfield, National Sales manager for United States Stove Company. “Our traffic was better than last year, and we saw our big hitter buyers.”
“We didn’t have high expectations for this show,” confided Patrick Moynihan, founder and president of Sólas, “but it was much better than we thought it would be. And we sensed optimism for this year from the customers.”
“While maybe not as good as some shows of the past, this was a good show with good traffic,” said Marc-Antoine Cantin, president of Stove Builder International. “But we saw very few customers from Canada, (probably because of the dollar exchange rate).”
“We were swamped,” said Perry Ranes, Sales director for Travis Industries. “We could have had our booth anywhere in the show and we still would have been swamped.”
Some long-time attendees also saw this show as one of the good ones. “This was a good show, especially with all the new products, particularly the many fire pits,” said Jim Van Norman, general manager of five-store retailer Rich’s for the Home, Lynnwood, Washington.
“Traffic was good, and there were a lot of big customers ready to buy,” according to Charlie Page, a manufacturers representative from the Northeast. “I think we’ll have a good 2017.”
|The Travis Industries booth was jammed from the opening to the closing bells.|
Products on Display
Obvious on the exhibit floor were many, many more grills and barbecue products, almost dominating the hearth products, and there were many more linear gas fireplaces, many of which all looked alike. Fire pits, too, were much more plentiful than in past shows, and the number of Chinese manufacturers continues to grow.
A trend with gas fireplaces appears to be multiple panes of glass, as many as three, thus allowing the outer glass to be cool to the touch and eliminating the need for a glass barrier screen.
While many interesting and innovative hearth products were featured in the Vesta Awards program, there were other hearth products deserving of interest. Here are just a few:
Sólas displayed its Forty 6 VF, Twenty 6 VF and One 6 VF vent-free gas fireplaces with fireboxes only four in. deep for easy installation into a wall, or mounted directly on a combustible wall.
Stove Builder International showed its Osburn 3000, a pellet stove designed to look like a traditional wood stove with a flat top that slides to open the internal fuel hopper. The company also showed its Horizon EPA-certified wood-burning fireplace with a 4.28 cu. ft. firebox, yet it produces only 1.6 gph of emissions.
Hearthstone displayed its new Aurora linear gas fireplaces including models to be direct-vented, power-vented, vent-free, wall-mounted, see-through, freestanding or as a fireplace insert.
Olympia Chimney, better known for its venting lines, introduced its line of five Ventis brand ZC wood-burning fireplaces, three of which are EPA-certified and high performance.
New from Italian manufacturer Ravelli is its Victoria C pellet stove with an automatic self-cleaning burn chamber rather than a traditional burn pot.
Called “one cool fireplace,” Aqua Zone Comfort showed its electric fireplace that includes a heat pump to cool as well as heat. A built-in, 32-in. LED smart TV allows views of a fire video; it also can be used as a TV or gaming center.
Stoll followed up its last-year offering of steel wall panels with new bronze-colored, etched-glass wall panels.
Ortal offers black glass in some models that allows the flames to be featured when burning but hides the firebox when the fire is out.
|Would you put your hand in this fire? Sure, once you noticed that it was made by the Dimplex OptiMyst, an electric fireplace.|
Government Affairs Update
Regulatory challenges continue to plague the hearth products industry, including concerns about the EPA’s New Source Performance Standards (NSPS), the U.S. Department of Energy’s (DOE) efforts to regulate all gas hearth products, and an increasing number of state and local regulations that threaten the future of hearth products. These and other industry challenges were outlined for manufacturers and hearth products buyers at the Expo.
“With the new administration’s actions against federal regulations, increases in state regulations may become more important,” said Ryan Carroll, HPBA’s director of Government Affairs. The HPBA is supporting “reasonable” national regulations rather than opening the door for every state to enact its own regulations, creating a snake pit of different regulations for the industry.
The HPBA is challenging the NSPS regarding its Step 2 emissions levels set to take effect in 2020; it hopes to get Step 2 revised or at least moved to an effective date in 2023. The briefing schedule issued by the U.S. Court of Appeals for the D.C. Circuit calls for filing of HPBA’s opening brief on March 27, 2017, and the EPA’s response brief is expected June 14, 2017.
After a reply brief from the HPBA, the case is expected to go to court this fall, according to David Chung, partner in the Crowell & Moring law firm and the HPBA’s legal counsel. “This administration seems extremely responsive to our industry and is more sensitive to the costs of regulations on our industry.”
The HPBA is working with other stakeholders to create an ASTM test method for wood-burning appliances using cordwood. That method will be recommended to the EPA sometime this summer; the EPA can accept or reject the recommendation.
In addition, two bills have been introduced in the U.S. House of Representatives in the interests of the hearth products industry. HR 453, the Relief from NSPS Act of 2017, would extend the time for Step 2 to take effect to 2023, giving dealers, distributors and manufacturers more time to sell off old Step 1 inventory.
HR 694, the Stop EPA Overregulation of Rural Americans Act, would repeal the entire NSPS. But the HPBA, which has publicly opposed this bill, points out that a complete repeal of the NSPS would cause the industry to have to deal with potentially separate state and local regulations rather than just one national regulation.
The HPBA continues to address the Department of Energy (DOE) on its broad definition of hearth products and erroneous assumptions in the DOE’s efforts to regulate all gas hearth appliances, including decorative, heater-rated, gas logs and perhaps even gas grills. But, taking a pro-active approach, the industry is reacting to the DOE’s proposed ban on continuous pilots by working with the CSA Group through a new Energy Conservation Task Force to eliminate continuous pilots from upcoming ANSI standards for gas hearth appliances.
John Crouch, the HPBA’s director of Public Affairs, expressed the HPBA’s concerns about California’s Zero Net Energy (ZNE) part of the state’s 2019 energy code, which mandates that all new residential homes as of 2020 must produce their own power, calculated on an annual basis, the practical effect of which may be a mandate to put solar panels on every new home.
“We are trying to make certain that zone heating, such as with hearth products, is part of this discussion,” said Crouch. The HPBA is concerned that homebuilders are beginning to make gas fireplaces only an option in California. And California utilities are concerned that homebuilders will not even put natural gas lines into new homes or new neighborhoods. Crouch expressed worries that California’s action may soon be followed by other states and localities, many of which already are looking into the ZNE regulations.
Crouch also pointed out that the city of Vancouver, British Columbia, is mandating a “net zero carbon” program by 2030. As of May 1, 2017, new high-rise buildings must reduce their carbon footprint by 50 percent. The second phase of that action will be aimed at multi-family homes. “The only way to accomplish this is to eliminate natural gas, which obviously will eliminate gas hearth appliances,” Crouch emphasized.
|Fire bowl and fire pits by Esschert Design caught the eye of most people walking by the booth.|
Pellet Fuels Institute (PFI) Breakfast & Biomass
Presiding over the PFI’s annual breakfast, Stephen Faehner, past chairman of the PFI and current president of pellet fuel producer American Wood Fibers, told more than 100 attendees that, although the pellet fuel industry is “generally an over-supplied business,” the industry in 2016 was “challenged with weather patterns.” His good news was that the PFI fuel standards program now has 36 pellet fuel plants qualified for the program, representing 23 pellet fuel producers.
Kate Fritz, the HPBA’s director of Membership and Affiliates, said that manufacturer shipment totals cannot be released until 90 days after the quarter ended, so 2016 numbers will not be available until after April 1.
Cameron Downs, the HPBA’s manager of Market Research, told attendees that “about 30,000” pellet appliances were shipped through the first three quarters of 2016, and that total probably represented about 60 percent of the annual number – which equates to about 50,000 units for 2016, a number most attendees thought optimistic. The average total through three quarters for the past five years has been 35,000 units.
About one-third of American households intend to purchase a new hearth product in the next two years, according to Downs, quoting from a 2016 Hearth Products Consumer Survey conducted by the HPBA. The survey indicated that 2% of American households owned a pellet appliance in 2014, and that percentage had grown to 4% in 2016. According to the survey, the average pellet appliance in use today is eight years old, and 88% of owners report being satisfied with their pellet appliance.
Biomass is replacing fossil fuels for heating and electric power, according to Channele Wirman, lead survey statistician for the Energy Information Administration. Together, wind and solar as power producers are larger than biomass, but not individually. Wirman said that biomass is the largest power producer in America, larger even than hydroelectric power. The strategies for reduction of greenhouse gases recognize biomass as an important part of the energy mix, particularly in Europe.
The American pellet industry has a capacity to produce 11 million tons of pellets a year, said Wirman. While pellets for home heating are used mostly in the Northeast, U.S. pellets produced in the South are “overwhelmingly” utility grade pellets for export, with 85% being sent to the UK for use in power plants.
“We need the federal government energy policies to recognize biomass,” said Pat Rita of Orion and Associates, the HPBA’s and PFI’s lobbyist in Washington, DC. Sonny Purdue, the administration’s nominee to head the U.S. Department of Agriculture, is “a strong supporter of biomass, and we will have a friendly ear,” according to Rita.
Mick Mulvaney, the new director of the U.S. Office of Management and Budget, is also “friendly to and knowledgeable about biomass,” Rita said. Help for biomass fuels is included in the farm bill, and Rita hopes that the now-expired federal tax credit will be reinstated and made retroactive.
The breakfast meeting concluded with information on PFI’s Summer Conference to be held July 23–25 at Stowe Mountain Lodge in Stowe, Vermont.
The numbers indicate that Nashville 2015 was the best-attended Expo in more than seven years. Exhibitors and attendees seem excited about another Nashville show. So it would be a smart idea to plan now to attend the HPBExpo, March 7–10, 2018, again at the Music City Center in Nashville, Tennessee. See y’all there.
|The Ortal and Mendota booths.|
Finding Expo Sites Not an Easy Chore
Most of us easily accept any location chosen for the HPBExpo, but there are always a few who complain about every venue. Very few realize the unique requirements needed to accommodate a show that has indoor booths as well as outdoor. Selecting a site is not an easy task.
Of course, everyone has their favorite city, and there are always plenty of recommendations – like the member who wanted to see the show in Des Moines, Iowa, or the one who suggested North Dakota!
First, the HPBA has a 13-member Expo committee made up of manufacturers, retailers, distributors and manufacturers reps. They not only investigate suggested venues, they also travel to see venue finalists before making a decision.
To be a finalist, a venue must meet a large number of mostly unique criteria, according to Kelly Vandermark, the HPBA’s vice president of Exhibitions and Events. Included in the criteria are the ability to burn natural gas products indoors, the size and layout of the indoor exhibit area, the location, size and condition of an outdoor burn location, the ability to burn all types of fuel outdoors, affordable hotel rates and room availability, the convention center rental package and cost, a right-to-work state, the quality and rates of labor, the desirability of the city, the climate and weather potential, and convenient and affordable travel access to the city and, of course, the availability of dates suitable for the show.
“The Expo committee continually reviews venue options in hopes of finding locations that can be added to the show’s rotation pattern,” Vandermark explains. That rotation now includes Expo sites through 2026.
So the next time you complain about an Expo site, remember all the requirements a site has to meet; many of those requirements are unique to our Expo. Finding a good location is just not an easy job.
|Royal Teak had an impressive booth that showcased a good number of its products.|