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Hearth & Home October 2018

48-inch built-in grill by Crown Verity in Mount Royal, Québec.

Canadian I-Que

By Lisa Readie Mayer

Pizza ovens, built-in grills, and Outdoor Rooms are hot; Prop. 65, and tariffs are lurking.

The key barbecue-selling season was slow to start in much of Canada this year – snow as late as May will have that effect. But by most accounts, once it hit its stride, it turned out to be a good one. Many manufacturers and retailers we spoke with for our annual deep-dive into the Canadian barbecue marketplace report business was up overall, with some notable trends emerging within the category.

MANUFACTURERS

“Most of the country experienced cold, snowy weather into late April and early May,” according to Jeff Kozak, vice president of Grill Sales for Napoleon, “but we saw growth thanks to a strong recovery in July and August. We’ve seen stronger results in Central Canada compared to the West, and we continue to see demand extend later in the season as compared to a few years ago.” Kozak attributes some of this success to the company’s “Upgrade to a Napoleon” advertising campaign resonating with consumers and dealers.

He says Canada is still predominately a gas-grill market, particularly for weeknight use, but adds, “We continue to see demand for alternative methods of cooking. Low-and-slow charcoal and pellet cooking continue to gain popularity as secondary (methods used on the weekends). One of the many great benefits of our gas grills is that they can be used as a charcoal grill, as well.”

Kozak says the Outdoor Room concept is gaining popularity in Canada, and the company is seeing strong year-over-year growth within the category. “We continue to see strong investment in the new-home construction segment, where outdoor kitchens are becoming more common, as well as in-home remodeling.”

The company plans to launch 20 new models of built-in doors, drawers, beverage centers, and other components for custom outdoor kitchens, adding to its existing line of built-in grills and Oasis modular island kits. “We continue to gain momentum in the outdoor kitchen category, offering consumers an aspirational outdoor kitchen that is luxurious and affordable at the same time,” he says.

According to Kozak, dealers who display a broad array of barbecue products and accessories, offer assembly and same- or next-day delivery, invest in staff training and education, advertise grill and outdoor products year-round through traditional and digital avenues, and offer cooking classes, are the ones gaining share and driving business within the category. The company is monitoring the fluid tariff situation and other trade issues for potential impacts on business, but is approaching 2019 with optimism, anticipating continued growth and solid consumer spending.

Tony Ferraro.

Despite winter dragging on longer than it was welcome, Tony Ferraro, general manager, Weber-Stephen Canada Company, says an unusually dry and warm spring season resulted in record sales at the register. “Canadian winters are long, so consumers are eager to enjoy their short summer months by firing up their grills as soon as warmer weather arrives,” he says.

Ferraro notes that grill purchases remain “heavily weighted on gas grills (due to) ease-of-use and convenience.” However, he sees that “premium charcoal and alternative-fuel grills, such as pellet grills, are making a strong push in selective regions across North America.”

He credits the classes offered by The Weber Grill Academy – at its brick-and-mortar location in Vaughn, Ontario, and at various locations throughout the country, courtesy of the Mobile Grill Academy – with exposing Canadians to different grilling, barbecuing, and smoking appliances and techniques. “More and more Canadian consumers are investing in a second grill with the intent to become more adventurous grillers,” he says.

Ferraro says that, “an overwhelming number of Canadians prefer outdoor meals over indoor,” and are inspired to create “a full outdoor kitchen experience” in their backyards. “The backyard continues to be an investment trend that is not losing steam in Canada.” He says built-in appliances, storage, and entertainment amenities are growing in popularity.

Spirit II by Weber-Stephen.

Millennials are an emerging and critical segment in the category, according to Ferraro. “We know, through extensive research, they will change their buying patterns and are likely to increase their grilling frequency in the next few years,” he says.

“According to Statistics Canada, Millennials tend to live in apartments or condominiums. Due to many condominium restrictions, the demand for a specific grill size or fuel source will certainly be impacted. Millennials’ consumer behavior will have a deep impact on manufacturers’ and retailers’ innovation and go-to-market strategies, to ensure they continue to be relevant with every demographic.”

As for the future, Ferraro says the company’s outlook for 2019 remains positive. Weber plans a slate of new-product introductions in the coming year, but Ferraro says he can’t spill the beans just yet.

One potential fly in the ointment is the evolving trade agreement between the U.S. and Canada. He says the retaliatory tariff situation is “very complicated,” but adds that, to date, the impact on the Canadian market has been minimal.

“To simplify, there are three trade agreements in question,” he explains, “one between the U.S. and Canada (the North American Free Trade Agreement), one between the U.S. and China, and one between Canada and China. NAFTA is the most concerning and the one we are focused on. The U.S. president put a tariff on raw Canadian steel and the Canadian government retaliated by taxing U.S. steel. This impacts mostly on replacement parts, and it has been pretty insignificant, so we haven’t passed the increase along.

“The larger of the disruptions occurs with China-made grills and accessories bound for the U.S. market. Those imports will likely be levied up to 25%, which will substantially impact the value and retail pricing in the U.S. At this time, the Canadian trade agreements with China and the U.S. remain relatively untouched with little impact to Canadian consumers.”

Jason VanGarderen.

Jason VanGarderen offers insight on the Canadian barbecue marketplace from the perspectives of both a manufacturer and a distributor. As managing partner of Jackson Grills, VanGarderen says the company enjoyed a 14% year-over-year increase in sales of its stainless-steel grills and outdoor kitchen components in 2018. Though he says Canada has traditionally been the largest market for the grill line, it has been gaining traction in the U.S.

The company’s best-seller is a three-burner, cart-based model priced around $1,500, according to VanGarderen. “It includes a rotisserie, quality materials and a long warranty,” he says. “It’s a good value and is a not-too-big, not-too-small goldilocks size, which seems to be why it sells great.” The company also has had success with its premium, stainless-steel, portable Versa grill line, introduced two years ago. “People are buying it to replace a cheap grill on their high-end RV or boat,” he says.

Jackson Grills has not yet felt the effects of the tariff-related increases on material costs, according to VanGarderen, “but to say we are holding our breath would be a fair statement. We are fortunate to have inventory of finished product and are not buying raw stainless at the moment. But, as a manufacturer, that will change over time and could impact the cost of accessories, doors, and drawers for outdoor kitchens. Who ultimately pays the price when countries impose tariffs and counter-tariffs? Consumers. It’s very unfortunate.”

He says Proposition 65 has presented another business challenge this year. The California legislation requires companies to include a warning label on products sold in the state that contain or cause exposure to any of the 800 known chemical compounds that may cause cancer, birth defects, or reproductive harm.

“It’s a nuisance for a small manufacturer,” VanGarderen says. “It’s impossible for us to have separate packaging just for shipping to California, so the label goes on all packaging, which means consumers in other areas are reading it and don’t know what it’s about. It’s confusing for people.”

In 2018, outdoor-related business was up 5%, and hearth business much more, at VanGarderen’s hearth and barbecue distribution company Concorde Distributing. The company distributes Jackson Grills, Twin Eagles, Delta Heat, and Del Sol brands of grills and outdoor kitchen products, Island Grillstone accessories, and multiple hearth lines throughout Western Canada. “It’s a more mature market and we are growing existing business, so we were very satisfied,” he says.

Versa 100 portable grill from Jackson Grills.

He says the mood among retail customers in his distribution territory was positive this year, with more dealers interested in “piggy-backing on manufacturers’ promotions” to boost traffic and sales. “In the greater Vancouver area we have a more temperate climate than the rest of Canada, so we enjoy a longer barbecue season.” He says the majority of Canadian consumers opt for gas grills, but notes pellet grills “are getting a lot of attention. They, more than charcoal, are seen as a new alternative to gas.”

VanGarderen says interest also is growing in outdoor kitchens, and as they become more popular, people are using the equity in their homes to renovate their backyards. However, he says lack of uniform codes and standards regarding ventilation requirements has been an impediment to outdoor kitchen sales in the region.

“Maybe not in California or Arizona, but when someone builds a high-end outdoor kitchen in Canada, they want a roof over it to shelter it from the elements,” VanGarderen explains. “The building-code standard states that overhead combustibles must be protected, but it is not specific about what ‘protection’ means, what’s required, or how to do it. Building inspectors don’t want to make the decision, so it’s dampening high-end outdoor kitchen sales and really hurts large projects. We could be selling more outdoor kitchens if the standards on roof coverings were not so general.

Jeff Thiessen.

“HPBA is needed to influence the development of industry standards for outdoor kitchens, but the issue hasn’t moved anywhere,” he adds. “I would like to see the HPBA technical committee make this a priority so we can get it worked out.”

Pellet grill manufacturer Dansons recently moved its Canadian-based operation to the U.S. and is now headquartered out of Arizona. “It made sense because 90% of our sales volume is in the U.S.,” explains company president, Jeff Thiessen.

He says business more than tripled this year, thanks in part to the growing popularity of pellet grills in the U.S. and Canada, and the company is looking to continue that trend by expanding into Germany and other countries.

“The category has been around for 30 years, but finally pellet grills are really resonating with consumers because they combine the ease of gas and the flavor of wood,” he says. “Originally, pellet grills were purchased as a secondary grill, but now that temperatures range from high-enough-to-sear-a-steak to low-enough-to make-jerky, a lot of consumers are choosing a pellet grill as their primary grill.”

Louisiana Grills 800 Deluxe with pellet grill from Dansons.

Thiessen says pellet grills are increasingly being built into outdoor kitchens at homes in Canada and the U.S., and the company has seen great interest in its continuous-feed, vertical pellet smoker, introduced last year.

The company has a growing presence in Big Box, warehouse, and other chain stores, but Thiessen says Dansons remains committed to the specialty channel and is investing in developing a line of its Louisiana pellet grills exclusively for independent retailers in the U.S. and Canada, expected to launch at HPBExpo in 2019.

RETAILERS

The Maritimes

Labrador, New Brunswick, Newfoundland, Nova Scotia, Prince Edward Island

Trina Langille.

Trina Langille, manager of Barbecue Heaven, the in-house grill division of Warmth by Design in Upper Onslow, Nova Scotia, says barbecue sales have been up across the board this year. Propane grill sales – they carry Broil King, Broil-Mate, Napoleon, and Jackson Grills – have increased thanks to larger displays and broader selections in the store. She says sales of Green Mountain pellet grills have “picked up a bit” this year, but “are still a new concept” in the region, and therefore represent a small percentage of the store’s total grill sales.

Charcoal-fueled Big Green Egg cookers, however, are really gaining traction, she says. The store held its fifth annual “Thrill of the Grill” Eggfest in June, an event that has attracted more interest, cooks, and attendees each year. “This year, the participating cooks prepared a great variety of food that really showed off the versatility of the Egg,” Langille says.

The retailer added outdoor kitchens to its product mix for the first time this year, and did well with the Napoleon Oasis modular system it displays. Barbecue Heaven installed an in-store demonstration kitchen in its showroom two years ago and uses it for boot-camp classes where customers can cook on any type of grill to test it out. A “Thanksgrilling” event is scheduled this fall. “Demos and events give customers a chance to try something new,” she says. “It’s a fun activity for people to do on weekends and gets them in the store.”

Langille cites online competition as “a little bit of a challenge.” She says, “Costco’s website, for instance, sells some of the same brand names we carry. It may not be the exact model we have, but customers see a comparable unit from the same brand at a lower price and sometimes go for it.”

At Alternatives, a fireplace, stove, and barbecue retail store in St. John, New Brunswick, owner Jason Crowdis says grill sales had “a real slow start” courtesy of a cold, damp spring that delayed purchases, or in some cases, put them off until next year. “When it gets to July, some customers say, ‘We’ll wait ’till next year to buy.’” As a result, according to Crowdis, grill sales are “flat to a little off” this year.

He says gas grills remain his biggest seller, but adds that kamados have been growing, “not dramatically, but very steadily.” The retailer sold “a couple pellet grills” this year, but says the category “is a pretty hard go here in the Maritimes. I think it comes down to lack of awareness and education.”

He has not seen much demand for outdoor kitchens among his customers, either.  “Unfortunately, our economy is down and there is a lot of unemployment in our area,” he says. “Customers don’t have the money to spend on outdoor kitchens, so we don’t emphasize them in our displays. When we do sell an outdoor kitchen, it is usually a Napoleon Oasis unit.”

Another trend Crowdis is seeing: an increasing desire among customers for Canadian-made products. “We have a lot of people asking for “Made in Canada,” and we promote those products with big tags in our store,” he says. “Canadians were never overly patriotic like in the U.S., but we are following suit and are seeing a bit of a revolt. People in our area don’t want to buy U.S. products; they won’t vacation there, or spend money there. It’s even happening with ketchup.”

He explains that after Heinz closed its Canadian factory putting people out of work, French’s stepped in and took it over to produce French’s Ketchup, hiring local workers and using Canadian-grown tomatoes. “Now people, and even restaurants, won’t use Heinz and have switched over to French’s Ketchup,” he says. “People are fed up with the whole trade issue. Our suppliers say they will absorb the increases until NAFTA gets sorted out, but we’re already seeing increases on venting.”

Paul Jackson, Service manager at Sunpoke in Hanwell, New Brunswick, says, “Winter lingered a long time, but when the weather finally switched, we had a very successful year.” He says business has been helped by a growing desire for value among customers. “Many people come to us because they are tired of buying Box-store grills that don’t last,” he says. “They are willing to pay a little more for a barbecue that lasts.”

The store “expanded and upgraded” its grill selection this year, and now carries Weber, Broil King, Napoleon, Saber, Big Green Egg, and Kamado Joe. Napoleon, Saber and Kamado Joe were the standouts this year, according to Jackson. “Kamados are still new here,” he says. “People may walk through the door with a gas grill on their mind, but when they see a kamado, they’re intrigued by the long warranty and the chance to cook different things. Kamados generate more excitement.” He says pellet grills haven’t caught on yet.

The store has a Napoleon Oasis outdoor kitchen display in front of the building, and it has generated interest and sales, but Jackson says the category is limited in their market. “In Fredericton, winters are long – the weather didn’t turn nice until the middle of June – so people are not inclined to spend that kind of money. We sell mostly freestanding carts.”

Though there have been no tariff-related price increases on barbecue products, Jackson says the store has been notified of increases on the hearth-side of the business. “I have no doubt some grills will go up,” he says. “We hope this issue goes away soon.”

Ontario and Québec

Febian Frempong.

The year has been “fair” for Sobie’s Barbecues in Toronto. The season did not start off on good footing, according to owner Febian Frempong, due to rainy weather in April. But even when conditions improved, he says it was too late to make up what was lost in the early season.

The retailer says increasing competition has been another impediment to growth. “There are too many dealers in our territory, too close to one another,” he says. “And competition from Home Depot and Lowe’s makes it even harder on independents. It’s very frustrating; you cannot grow when the territory has this many stores selling the same products and brands.”

That said, there have been bright spots. “We’ve noticed charcoal growing at a rate we haven’t seen previously,” says Frempong. “Our market has traditionally favored gas grills, but charcoal grilling and smoking are now trending.”

He says Weber Kettles and Smokey Mountain Cookers are popular with customers new to charcoal cooking, but avid grillers who want to experiment “will eagerly spend $1,500 on a kamado,” he says. The category also drives return visits to the store to buy fuel. Frempong says pellet grills – he stocks Traeger and Broil King brands – are showing signs of catching on next. “People like the ease of use and flavor,” he says.

Outdoor kitchens, too, are trending upward. “When people are renovating their backyards or their homes, they will often extend the kitchen outdoors,” Frempong says. “Built-in grills and components are becoming very popular. Crown Verity, Delta Heat, and Sedona built-ins have been big sellers; customers see the quality is high and consider them a better value than some of the super-premium brands. Sales of Napoleon Oasis modular outdoor kitchens are growing, too.”

Frempong has concerns about price increases on the horizon. “Parts are already up 10%, and we have been notified by some of our suppliers that prices will be going up between 3% and 5% next year,” he says. “We will have to increase prices to hold our margins. This makes it more expensive for customers and more challenging for us.”

To counter the situation, Frempong says they are developing more services to offer customers. “We have to diversify and differentiate our store,” he says. “The Big Box stores don’t do service and they mostly just sell barbecues in summer; we can do both year ’round.”

The retailer has recently launched a grill-cleaning and restoration service where they bring the customer’s grill to the shop, and thoroughly clean, restore, and repair it to brand-new appearance and performance. Any needed replacement parts covered under warranty are free, but the price for the “very labor-intensive service” runs around $600. “Most customers balk at paying for the service,” Frempong says. “They might not see the value if they only spent $1,500 on their grill initially. But if it cost $3,000, spending $600 after five years to fully restore it makes sense.”

George Giesen.

George Giesen, owner of Porky’s BBQ, Hearth & Spa in London, Ontario, describes the year as “streakier” than most. “In the past, sales were more predictable – we knew we’d have a good month in June – but now some months are inexplicably low and some are high. Some of it is due to weather, but there is not always a logical reason.”

He says, overall, the store is likely to be even or up slightly in terms of dollar sales, but down a bit in unit sales. “We typically sell 1,000 barbecues a year in a town with a population of 350,000. By far we are the leading independent in our area. So, while we might be disappointed when we say we only sold 980 barbecues, overall it was still a pretty good year.”

Giesen reports his best-selling gas barbecues were three-burner units in the $900 to $1,500 range. “Our average customer doesn’t want anything fancy,” he says. “People are looking for good value, long-lasting grills with very few bells and whistles. We still sell the upper-end stuff where people are dropping $6,000, but I’m noticing interest in good value is trending.”

Another significant trend: grill brushes. “We have sold four times more brushes this year than any other,” he says. “People have been following the news and online reports about wire brushes. In previous years we would see a bump for two weeks after a news story, but this year it hasn’t let up. It’s actually a little frustrating because we’re getting lots of bodies in the store, but the increase in brush sales has not translated to an increase in barbecue sales.

“In fact, our staff is spending much more time educating customers this year – advice requests are way up across the board,” Giesen explains. “Someone might have bought a smoker online and they’ll come in to ask our advice on how to smoke. It takes up a lot of our salespeople’s time, so the question becomes, how can we turn this opportunity into a sale?”

After nearly 15 years of trying, Giesen says the Outdoor Room segment is finally beginning to take flight in his store. “Previously, customers would talk about wanting an Outdoor Room, but after learning what’s involved, most would decline to go ahead with the project,” he explains. “I don’t know if it’s the Pinterest effect, or because their neighbor has one, but it’s definitely becoming more of a trend. Now we’re selling lots of high-end built-in grills and outdoor fireplaces for three-season rooms and outdoor kitchens.”

The store sells the outdoor kitchens components and lets landscape architects and other contractors take the lead on design-build. “We don’t have enough Outdoor Room business to be able to have a designer on staff; it’s too costly,” he says. “But this has become a nice business segment. You can’t get outdoor kitchen stuff at a Box store; you have to go to an expert.”

Giesen has noticed an aging trend among his customer demographic. “I think the younger people are shopping online – particularly for parts,” he says. “They’ll argue that the price of the barbecue burner was $3 less online. I get blamed for being grumpy, but the last 11 people who came in, got our advice and then went and bought online.”

The retailer is also observing a growing interest in “Made in Canada” products. “The Canadian consumer never really cared much if a product was made in Canada or the U.S. – there was more of a ‘Made in North America’ mentality. But this year, our customers are saying they don’t want products made in the U.S. They are making a statement against Trump, particularly if a family member’s job has been cut, or aluminum siding just went up for their house remodel. They’re getting mad.”

Giesen expects the sentiment to swell in direct proportion to any tariff-related price increases that might come along next year. Though he has seen no barbecue price hikes yet, he “expects the game will change next year and anything made of metal will be going up.”

Another source of concern is the increasing difficulty in finding skilled bricklayers, gas fitters, and plumbers. “It’s harder to find and keep good people,” he says, “and it’s driving up the cost of installations. Our business is not just selling something that the customer takes home; we have to assemble, deliver, install, troubleshoot – it’s very hard. But I guess 50 years ago we were worried about different stuff. The world adapts and so will we.”

Max Lavoie.

Max Lavoie, co-owner and president of BBQ Québec, says he has been fortunate not to face staffing issues. “We have been lucky that we have been able to attract a young, dynamic team of people who are enthusiastic about what we’re doing and want to come work for us. I’m knocking wood, but they see our company as fun, vibrant, exciting, high energy, and growing.”

Lavoie, along with his partners – brother JP Lavoie, and wife Ariane Lefebvre – just opened the fourth BBQ Québec store (three are in Montréal and one is in Québec; a fifth location is a store-within-a-store concept at his parents’ hardware store).

Typically the retailers choose somewhat remote store locations to take advantage of reduced rent, but the latest store occupies an 850 sq. ft. space in a bustling farmer’s market, with room for classes, an adjacent boardwalk for outdoor demos, and greater foot traffic.

This year, BBQ Québec launched its own line of branded sauces, rubs, and grilling accessories, available at hundreds of Sobeys and IGA grocery stores, among other retail outlets. Another new division, House of BBQ Experts, is an online marketplace and distribution company, offering a collection of innovative barbecue grills and accessories from brands such as Steven Raichlen Best of Barbecue, Arteflame, Sunterra, Ribalizer, and more.

The company is entering the manufacturing fray with its patented All-in-One BBQ Kettle Accessory, a multi-purpose, combination rotisserie, pizza oven, cold and hot smoker, Argentinian grill, and bread baker designed to fit a standard kettle grill.

In the stores, Lavoie says gas grill sales remain steady, with customers searching for efficiency, durability, long warranties, and value at a $1,500 average price point. “But the real growth,” he says, “is in pellet and charcoal grills.

“We cannot focus all our future on gas because it is not a renewable fuel,” he says. “We are selling so many Weber kettles, that I’m proud to say we are the fourth biggest seller in Canada. For most of our customers it is their second or third grill, and they are having a lot of fun with it.” The company has branded its own carbon-neutral, Forestry Stewardship Council-certified charcoal, and regularly hosts charcoal grilling and smoking classes for 100 people at a clip.

The team also is working on developing a prototype for a high-temperature electric barbecue, in conjunction with a student project. “It’s about changing the gas mindset,” says Lavoie. “Technically, a gas barbecue does not give any flavor; so it’s the same concept with an electric barbecue.”

He adds that while they have been more focused on the cooking aspects of the barbecue category to date, Lavoie says they will extend the spotlight to include the Outdoor Room, as well. “Interest in the concept is definitely growing in our market,” he says. BBQ Québec started carrying modular outdoor kitchens from fellow Canadian company Urban Bonfire in one store this year, but plans to offer the line in all locations next year. “Those guys are doing a fantastic job,” Lavoie says. “The islands look beautiful, just like an indoor kitchen.”

Urban Bonfire’s Urban 90 outdoor kitchen.

Prairie Provinces

Alberta, Saskatchewan, Manitoba

Owner John Christenson says snow that fell until mid-May is the reason barbecue sales are “slightly down” at Saskatoon Barbecues & More, this year. He says gas grills are the biggest sellers every year, but charcoal grills are more cyclical; last year they were soft, this year up again. Pellet grills also are in demand lately. He says the store does not move large volumes, but the category is trending.

“We carry Yoder pellet grills, which have a big following,” he says. “They are a little pricey, so it’s a bigger buying decision, but they do a good job and don’t have problems. While kamados are not fast sellers, Christenson says they actually sell better in the winter months because, ‘People like that they hold the heat and can be cooked on throughout the Canadian winters.’”

The business does “a few” outdoor kitchen projects a year, typically providing built-in grills, accessories, and gas-plumbing services, and leaving the construction to contractors. Modular cabinetry systems, such as the Napoleon Oasis, have caught on in the store, “But, no question, cart grills are the biggest movers,” he says. Christenson hopes to grow the category next year thanks to a new outdoor kitchen display recently added to the showroom.

He says offering services such as assembly, delivery, testing, and a free year of backyard troubleshooting helps to distinguish his store from a growing field of Big Box competitors. Another edge: demos on Saturdays. “We’ll do briskets on a Yoder, wings on a smoker, apple crisp on an Egg,” he says. “We try to show that you can do more than standard stuff.”

As of yet, the store has not ventured into online selling and, according to Christenson, is “still trying to sort it out. My guess is we’ll have to try it down the road.”

He says the biggest challenge is having the right product at the right time. “We put our orders in for next year in late summer/early fall, and at that time you never know what customers will want.” Another difficulty: when manufacturers change product lines frequently.

“If you’re going to keep a decent amount of stock in the building, you’re going to have stock leftover. Moving that older stock becomes an issue when grills are redesigned or features change; everyone wants the latest model. You might put a specific unit on sale, and sometimes it walks out the door quickly. But with MAP it’s pretty hard to advertise price, so you must get the customer in the door first.”

Christenson says he “doesn’t do politics,” but is bracing for potential fallout from the tariff situation. “So far on the barbecue side, I’ve only received one price list, so I don’t know what to expect. On the hearth side, venting, fireplaces, and furnaces are all getting hit – in some cases increases are going into effect the next business day, so we couldn’t even stock up.

“It puts us in a bad spot with customers for whom we’ve quoted prices. We try to stand behind our quotes, so that means it will come out of our pockets, but it’s getting more and more difficult. If we pass the increase along, I imagine it will have some customers second-guessing whether to go through with the project.”

Eric Breckman.

“Sales have been steady like always,” says Eric Breckman, Sales manager of his family’s business, LCL Spas in Winnipeg. “It’s been good this year.” In gas grills, the retailer took on the Jackson Grills line a couple years ago and is “very happy with it.” Their best seller is a medium price-point, three-burner model with rotisserie, priced under $2,000. “It’s a great value,” he says. Bull gas grills in the $3,000 to $4,000 range also are good sellers.

According to Breckman, pellet smokers are catching on in the store, thanks to growing consumer awareness. “Pellets are getting pretty huge in the states, but they’re just now filtering here to Canada,” he says. The store is up between 10% and 15% with Green Mountain Grills pellet cookers this year. He says they have not received many calls for charcoal, so they don’t carry kamados or other charcoal grills, adding, “We are happy with gas and pellets.”

A standout addition to the product mix this year has been a pizza oven accessory from Green Mountain Grills that inserts into the hot box and gets up to 800 degrees. “It’s great for making pizzas or roasting other foods, and makes the pellet grill very versatile,” he says. “We’re having fun talking about it in the store and we’re selling quite a few. It has also led to other add-on sales of pizza peels, and other pizza-making accessories. It’s been a nice surprise.”

The store’s outdoor kitchen business is growing. It mainly sells built-in grills, door and drawer sets, ice chests, and other components directly to customers or their subcontractors. According to Breckman, they have also offered Bull pre-fab, finished outdoor kitchen islands for years, but selling components is “a much bigger part of our business and accounts for the majority of our outdoor kitchen sales.”

The store has upped its social media game this year, increasing the frequency of its posts to Facebook and Instagram. In addition to educational content, Breckman says they also use social media to promote store events, including the cookouts it hosts in the parking lot a couple times a year. Next year the team is looking to bring in more accessories and add spices and seasonings.

Phil Squarie, Jr.

When veteran patio furniture retailer Phil Squarie, Jr. opened Luxe Barbeque Company in Winnipeg three years ago, business grew on a seemingly unstoppable trajectory. So much so that this year’s 3% to 5% retreat took him by surprise. “I guess the busy summer was not enough to make up for a late spring,” he says. “We are in our third season and coming off the honeymoon stage, so we have to figure new and creative ways to increase our profit margin in an industry where they set the prices.”

Sales were inconsistent this year, with some categories up and others down. First the good news: Pellet grill sales are “through the roof,” he says, with the Traeger line up 20% and Yoder up 50% over last year. “Our staff of eight has either a Traeger or a Yoder at home,” he points out. “They love the simplicity and can really talk about it with customers.”

Squarie says pellet fuel – the store dedicates an entire room to solid fuels – does “really well,” too, and brings customers back to the store. He sees pellet grills –Traeger in particular – trending with Millennials, and says they often come in asking about the line. Another pattern he is seeing: “Instead of buying a $2,500 Weber or Napoleon grill, more customers are opting for a $999 Broil King and adding a Traeger as a second grill.”

Pizza ovens are another bright spot this year, with sales doubling over 2017, according to Squarie. High-end Fontana ovens – a line the store picked up this year – and entry-level, tabletop Uuni ovens were responsible for much of the growth in the category, he says.

The outdoor kitchen category is up across the board. “People in Winnipeg are starting to get the concept of the total backyard,” Squarie says. “We have two outdoor kitchen displays in our barbecue store and one in our furniture store, and we put product in outdoor kitchen displays at landscapers’ compounds. We promote our outdoor kitchens on social media. We’re just touching the tip of it. The more projects we put out, the more people see it and want it.”  

It seems to be working. According to Squarie, sales of built-in components to landscapers and contractors for pricey custom projects are up, as are sales of the more entry-priced Napoleon Oasis modular line. “It’s doing really well,” he says. He expects to pick up the NatureKast outdoor kitchen cabinetry line this fall.

Squarie’s gas grill sales were down in the $399 to $799 price point and $999 to $2,000 ranges this year, previous price-point-sweet-spots. But the store’s best-selling high-end grills priced $2,199 and up, are even with last year.

Sales of charcoal grills also are on par with last year. One change is the addition of Kamado Joe to the store’s ceramic kamado offerings; it continues to carry Big Green Egg. Squarie says the category held its own without any significant gains, and sales are now split evenly between the two brands.

Squarie plans to continue with a full roster of community events. For instance, the store is the title sponsor of the Winnipeg football team’s tailgate area. The highly visible Luxe Barbeque Tailgate features a variety of demo cookers and a pop-up shop with merchandise for sale. It’s a hub for fun competitions, raffles, giveaways, and cooking demos. The retailer also plans to “ramp up” social media efforts. “It’s hard to find time sometimes, so we are now encouraging our staff to use their phones to promote the business,” he says.

Expanded service offerings, including cooking classes and grill cleanings, are also on the agenda. “We are looking for ways to create a culture around our business,” Squarie says. “We want to be the place where people go for barbecues and outdoor kitchens.”

The West – British Columbia

Sandy Melvin.

Shepherd’s Outdoor Living Centre in Armstrong, British Columbia, enjoyed solid sales increases in 2018, according to co-owner Sandy Melvin. This is the fifth consecutive year of growth that began in 2013, when the bursting-at-the-seams outdoor seasonal department within the Melvin family’s Shepherd’s Home Hardware store was expanded into its own new, dedicated, year-round building. “We had a good year this year; we sell a lot of barbecues here,” says Melvin.

Their secret to success? “We commit to inventory and our staff knows what they’re talking about,” she says. “We don’t compete with the Walmarts and Home Depots. Our customers come to us because they want products that will stand up to the weather and last, and will cook their steak properly. We aren’t worried about online competition. People want to see what they’re buying and talk with salespeople about their options. We try to match customers with the right grill by asking about what they like to cook, their family size, do they think they’d use the rotisserie. You can’t get that from a computer.”

In addition to both natural and propane gas grills, Melvin says they sell “a lot” of smokers and kamados. “We’re seeing a trend where people are going back to more traditional charcoal cooking. And [sales of] pellet grills are definitely growing in the store,” she says. “We do demos on them and our sales guys own them, which helps when talking with customers.”

Shepherd’s Outdoor Living Centre.

The store has a built-in pizza oven on display and has sold “a few” over the years, but according to Melvin, it serves other purposes to justify the floor space. “It absolutely attracts a lot of attention and starts conversations in the store when we do after-hours events to treat customers and contractors to food and camaraderie. These events are good exposure for our business.”

She says the outdoor kitchen category is just starting to catch on in the store, but interest is growing. “It’s taken awhile to gain some legs,” says Melvin, “but more people are ‘staycationing’ and want a beautiful backyard for entertaining.” The store offers design assistance and sells built-in barbecues, refrigerators, and other components.

Given improved weather conditions over last year, Lyle Perry is having difficulty figuring out why barbecue sales at Kerrisdale Lumber in Vancouver were not stronger this year. “Sales were pretty flat in $2,000 and under single units on carts,” the vice president of Operations says. On the flip side, Perry saw sales of high-end, built-in grills climb. “Like any new fashion or business trend, outdoor kitchens have taken longer to catch on in Canada, but now a lot more people consider them a good investment to differentiate their property,” he says.

Lyle Perry.

The retailer offers design assistance, sells built-in components, and connects customers with contractors who specialize in outdoor kitchen construction. In addition, Kerrisdale Lumber sells modular outdoor kitchen systems. “They are definitely catching on, especially when the customer does not have a designer involved in the project,” Perry says. “Modular kitchens are easy to conceptualize and are prefinished, so you don’t need to hire a mason or carpenter. You just pick the grill, appliances, and modular pieces, then pick the cabinet color and counter. There are a lot fewer steps involved and it’s hard to beat the quick turnaround. It gives people an easy button.”

Another bright spot: pizza ovens. “We have never sold as many pizza ovens as we have this year,” Perry says. The retailer carries a wide variety of gas- and wood-fired pizza ovens, but is seeing the greatest growth in freestanding, wood-burning units. “I think it’s the same theory behind why outdoor kitchens are gaining popularity – everyone wants to hang and party in the kitchen,” he explains. “It’s a fun way to spend an afternoon with family and guests. It’s pretty cool.”

Though pellet grills are becoming increasingly strong sellers in the store, Perry says, they are cannibalizing kamado sales. “There is a certain customer who enjoys the romanticism of cooking with fire, wood, and smoke, and they will choose one or the other. We are predominantly a gas grill market so pellets are closer to gas. They’re more approachable.”

 Another reason the company is getting behind pellet grills, according to Perry, is because wood pellets are a renewable fuel source, something that is becoming a hot topic in their community. He says restrictions on natural gas permits in Vancouver have generated fears that the city might ban fossil fuel appliances.

“New multifamily developments are not able to offer natural gas for grills or even indoor ranges,” he says. “Electric grills are allowed, but most are small and don’t perform well. I am excited about Twin Eagles’ new pellet grill. It’s feature heavy, user-friendly, and is a renewable-fuel appliance I would feel comfortable putting in a high-end outdoor kitchen.”

Perry expects to do more event-based marketing next year, adding to the store’s current roster of monthly demos and a few nighttime cooking classes a year. “We’re finding that we can explain features to death,” he says, “but if we show people how grills and outdoor living products can create an experience, we have a much easier time selling.”

As a dealer, he is concerned about tariff-related price increases, but says he predicts “distributors will feel the pain in the first wave, and consumers will bear the burden ultimately. It’s unfortunate really.”

Rogue R525SIB from Napoleon Grills.

Sales at The BBQ Shop in Port Coquitlam, BC, are on par with last year, according to owner Nash Shivji. He carries more than a dozen grill brands in a wide range of price points, but says the $1,000 to $1,500 range is the sweet spot, followed by grills in the $2,000 to $3,000 bracket. “Five or six years ago, we sold a lot more $4,000 to $6,000 units, but manufacturers have introduced lower-priced lines with good feature sets and they have taken away from the highest-end grill sales,” he explains. “People can now find quality in the $1,000 to $3,000 range. The sales have been redistributed.”

Another trend, according to Shivji, is ownership of multiple grills – often both gas and pellet models. “The second grill used to be a charcoal smoker, then it went to a charcoal kamado, and now it has switched to a pellet grill,” he says. “People like the Wi-Fi controls and the ability to set it and forget it.”

He is noticing that today’s customers are more knowledgeable about grills than ever, do their research online, and often know what they want to buy before even walking into the store. With that in mind, Shivji says he tries to keep the product mix fresh and drive traffic by stocking categories and brands that are catching on with bloggers, barbecue contest champions, local cooking schools, and other influencers. “For instance, we carry Yoder pellet grills,” he says. “They are very high-end and have a big following. People come in asking for them specifically.”

The store does “a good business” in outdoor kitchens. It sells built-in grills and components, and partners with a trusted local contractor who handles the construction. Shivji also carries the Napoleon Oasis modular system. When fielding inquiries about outdoor kitchens, he qualifies customers by asking if their budget is at least $15,000. “If they say, ‘No, it’s only $6,000,’ I refer them to Lowe’s. If they move up to $10,000, I know most will go for $15,000. We never had the $25,000 to $30,000 outdoor kitchen sale, but we have found that more people are able to spend $15,000. Focusing on that price point has broadened the market for us.”

By asking customers another question – how did you find us? – the retailer discovered that the store’s website is the primary connection, followed by referrals. As such, Shivji is paying more attention to developing an effective online presence, paying experts to optimize the website so the store “pops up high” when people are researching online.

He says, at his daughter’s suggestion, they are now proactive in “humbly asking” customers if they would consider posting a review of the business. “People will often do that,” he says, “and it’s very helpful. Previously, we might only get a review if someone had a problem, and it ends up being a negative review. Now, good reviews are burying any negative reviews.”

This spring, Shivji turned a plethora of negative local TV and newspaper reports about the danger of barbecue bristle brushes, into a positive for the store. He invited people to bring their old grill brush to The BBQ Shop and get a new bristle-less brush for free, including messaging about the promotion in already-scheduled advertising and on social media. He ordered 400 brushes initially, at a wholesale cost of $6.50 each, and the program proved so successful, he extended it through Father’s Day with another 200 brushes.

“People brought in awful looking brushes,” Shivji recounts with a laugh. “We’d ask for their name and email address and put them in our system. It was an opportunity to educate people about our grills and it generated a lot of sales. People didn’t always buy on the spot, but after going home and looking at their own grill, they’d often come back to purchase.”

Shivji says ever-increasing competition is among his greatest business challenges. “There are more and more dealers in the metro-Vancouver area where you can buy the same products we carry,” he says. “And, some of our suppliers are selling in Big Box retailers, as well.” He is also noticing more customers declaring, because of political issues, that they won’t buy anything made outside of Canada.” On the subject of tariffs, Shivji says, “Price increases haven’t hit us yet, but I expect they will be coming soon.”

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2018 August Business Climate

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