See 2014 Hearth Retail Survey Report — Part II

Question: Pellet appliances were the big seller this year.

• Were your pellet stove suppliers able to meet demand?
• Which of your fuel suppliers did a good job?
• Which suppliers did a bad job, and in what way?

Retailer Comments

Northeast

Massachusetts: “Fuel Suppliers: Spruce Point – OK, good ’till end of October, then nothing. Trebio – first month with them OK, then many broken promises – then nothing. Vermont – supplied us 20 percent less than the last two years. They did not meet our ‘loose’ contract. Pellets due in September came in October, October pellets in November. Nothing in December and still waiting to complete December orders – it’s now January 9 and we may see them by the end of January (ordered in March).

“EasyBlaze – good so far. Only started with them in December. They have met supply. Cost to land in Massachusetts may make them uncompetitive. New England Wood Pellet (NEWP) – we were cut off in October even though they requested a purchase order for Q4. We have been a dealer for 17 years, no warning, just a letter in the mail rejecting our purchase order. Normally we get two to three trucks per week. We were in weekly conversation with NEWP, but there was no heads-up or warning.

“That was about the worst business dealing I’ve ever experienced. I had customers call the factory and they told them they could purchase the product at Lowe’s/Home Depot/Tractor Supply. They said it was the same product in a different bag. As soon as I can find a product to replace NEWP, I will!”

New Hampshire: “Pellet fuel again is the Achilles heel of the hearth industry. Big Box stores selling low-performing product is also aggravating the satisfaction of the consumer in our industry. All dealers entering the industry add to confusion, dissatisfaction, and wrong information the customer is given. These problems compound the legitimate dealers’ time and patience. Biggest disappointment again in this business is the lack of manufacturer promotion and advertisement. There is no consumer awareness in at least 90 percent of hearth product makers about their own products!”

Seventy-eight percent of those who responded to this question reported an increase; eight percent experienced a decrease, and 14 percent had no change from the prior year.

New Jersey: “Need snow and cold like last year.”

New York: “We get pellets from Energex. They were unable to meet our pre-season demand and we did not have pellets for two weeks in November, one week in December, and who knows about January?”

New York: “Pellet was up but not by a lot in western New York. Stove supply was fine for us. The fuel supply was bad again. What will it take for fuel manufacturers to realize that if people can’t get a constant supply of fuel they will stop buying stoves? I deal with Allegany Pellet and this year I am branching out to get more suppliers of pellets. I was out of pellets for more than a month and they were over a month behind on my orders.”

New York: “Pellet suppliers in the Northeast have been found to sell pellets in bulk to the gas industry as an absorbent for hydro fracturing; that causes a shortfall for retailers. This infuriates me. Pellet manufacturers are not interested in new accounts such as ours. I wish I could have the luxury of cherry picking my customers!”

New York: “Our main pellet stove supplier is Harman (HHT). No back-orders on any stoves. We carry two brands of pellets: New England Wood Pellet and Energex. New England has been our main source of pellets and when we started having supply issues in 2013 we were fortunate enough to be able to pick up Energex as a secondary. Going into fall of 2014, we were unable to get any pellets from our main supplier in New England (no pellets for Oct., Nov. and Dec.).

“We had not placed that big of an order with Energex, but they have done the best they can for us. If it had not been for having them as a supplier we would have been ‘dead in the water.’ We are seriously considering where to put our ‘eggs’ for the upcoming burn season. We will still keep two pellet suppliers if possible, but we will rely more on one than the other.”

New York: “Had almost no trouble with pellet appliances from Travis and Kozi. Not being able to get fuel for the stoves is a HUGE issue. We are a New York State HEAP vendor and we are not able to supply pellets for these customers. They have no money to buy them from other places and they rely on the funds from New York State to heat their house. We have only one supplier and that is Dry Creek; they don’t take phone calls, all communication is through email only. I believe this hurts the pellet stove sales in our region. I’m able to have a steady supply of coal, so that stove category has taken off. People trust the supply from Pennsylvania more than from these pellet manufacturers.”

Be glad if you’re not in the Land of Cotton! Hearth sales in the South dropped three percent in 2014, while the Northeast, Midwest and West experienced strong growth.

Pennsylvania: “In my area gas and wood were the big sellers, not pellet. Our two wood manufacturers’ could not keep up with the demand for stoves and inserts; average waiting time was about three weeks. As far as I am concerned, there is no good pellet fuel supplier. They promise you the world but still show up about two weeks past their confirmed delivery dates.”

Pennsylvania: “Alleghany Pellet only delivered half of what they committed to.”

Pennsylvania: “Our pellet appliance sales were smaller than previous years and very small as a total of all units sold. I would attribute this to having become a Travis Industries dealer in 2014, and they only offered one pellet stove and one insert under their Lopi and Avalon brands. We sell Green Team Pellets. They did limit shipments during October and November but did manage to get us loads at least every two to three weeks. Supply is not a problem currently.”

Pennsylvania: “Our pellet supplier was backlogged with orders from last winter to start the year. We stocked up on all the pellets we could get over the summer, but still ran short when all the Box stores sold out for the year. I really wish pellet makers would stop selling to Lowe’s, Home Depot, etc. It messes up the supply model for pellets. Our stove manufacturer, Harman, had no issues keeping up with demand this season. We only had to back-order one sale.”

Pennsylvania: “We did not have any problems getting our pellet appliances. We had a large pre-season order that helped. The pellet suppliers that did a good job:  

Green Team – Came through with some extra loads to help us.

Lignetics

Tru-Wood (Bio-Diversity)

Pellet suppliers that did not do a good job:

Energex

PelHeat

“Both companies promised much more than they could deliver. Energex even adjusted our pre-season order and still came in about 40 percent under what we had ordered. PelHeat was about 50 percent less than what we ordered.”

The percentage of retailers planning to place early-buy orders is equal to the percentage in 2008.

South

Arkansas: “Pellet appliances are not selling anymore. Too many power outages and fuel costs are too high.”

Kentucky: “Did not have any requests for pellet anything!”

North Carolina: “People in our area don’t buy pellet stoves because generators are too expensive and back-up systems suck.”

Oklahoma: “Supply was fine on all products ordered except for four-in. pellet pipe. Very long delays on those. Somerset Pellet raised prices for shipping to the point where we could not afford to use them. Greenway Pellets have stayed consistent and kept us supplied with product.”

Tennessee: “Chimney Saver Systems has great repellent but very bad crown repair products. All have failed within the past three years. We will no longer use their products. We as masons should press for litigation against them!”

Tennessee: “I have sold pellet stoves in the past but discontinued them when I couldn’t get pellets, but Lowe’s, Home Depot and Tractor Supply had an abundance of them. I reconsidered when I was introduced to the Travis Industries all-grade pellet units. The issues I face are two-fold! I am a propane supplier and natural gas is plentiful, and pellets are virtually unheard of here now.”

Texas: “The lack of inspirational (cold) weather leading to the holidays kept hearth product sales in hibernation.”

Virginia: “Pellet stove manufacturers always had product in stock – Harman, Lopi. Turman Pellets sold me everything I ordered in April 2014, but had nothing extra to sell.”

Sixteen percent of retailers plan to increase their early-buy orders in 2015; they intend to increase the size of those orders by 22 percent. A whopping 78 percent will stay pat, while only six percent plan to decrease their orders, and by 21 percent.

Midwest

Indiana: “Pellet pipe was hard to get across the board.”

Iowa: “We sold one pellet stove this year – same as last year. A customer that bought one 16 years ago wants a new one!”

Michigan: “We have a new farm store next door. Heatilator sold to them below our retail price, so I quit selling. We also quit pellets. Sell what you can make money on!”

Michigan: “St Croix – poor supply (company issues), Cumberland – discontinued best stove, Fahrenheit – good job.”

Ohio: “Pellet was not big for us this year. Gas inserts were big. Sales started early September and continued through December.”

Ohio: “Most pellet manufacturers cater to Big Box stores and forget about the smaller retailers who tried to be more faithful and respect buyers.”

Wisconsin: “Chimney manufacturers had a hard time keeping up. Because we early-buy our chimney, we had no clue there might be problems until the end of the year. Re-order shipping was sporadic at best.”

Only 12 percent of retailers selling pellet fuel in 2014 had more than 25 tons of pellets remaining in stock at the end of the year. That compares to 22 percent in 2012.

West

2014 Fuel Sales Percent Change from 2012

Arizona: “In 2014 our pellet suppliers were very helpful in getting us stock and special order units here within a reasonable amount of time. The lead times were longer than we anticipated, but we managed. Our fuel supplier is a plant here in Arizona and they are great about getting us stock on time and when needed. Over all, I think our suppliers did a good job this year.”

Idaho: “We only sell Harman pellet stoves. Sick of fixing all the other pellet stoves. Harman was able to ship stoves and furnaces when I needed them. Great company.”

Idaho: “Pellet is not, and has not been, a good experience. Late on supply. Fuel was poor quality among all brands.”

Oregon: “Pellet stoves were selling well. We did not have fuel issues here in the Pacific Northwest. Our biggest issues were with pellet vent pipe. DuraVent pipe was back-ordered for up to 45 days on some components that were needed for installation. That was a big headache. The part of the season that has been very difficult is the change to the screens on gas units.

“We had a company switch models mid-season and all of a sudden parts were discontinued and not available for units that were current all but two weeks prior. Switching burn model units in the middle of the season has been nothing short of a royal pain. It seems that communication is lacking industry-wide from manufacturer to dealer and from dealer to end consumer. In short, we as an industry need to do a better job being in-step with one another.”

Utah: “Pellet stoves and inserts were almost nonexistent in south Utah. We had a large gain in new construction, which was 95 percent direct-vent fireplaces and five percent wood.”

Washington: “2014 was a good year for pellet appliances. Had no issue getting fuel or stoves. Had an issue getting venting.”

In 2014, the percentage of retailers reporting sales of more than 250 tons (58%) increased by 18 points over 2012.

Canada

British Columbia: “We are not located in an area where pellet stoves are used as heating. Gas, electricity and wood are far more common than pellet. Fewer than one of every 100 customers is looking at pellet fuel as a source of heating or cooking.”

Ontario: “Yes, pellet appliances are the big seller here. Hearth & Home Technologies did a bang up job being prepared this year. Had little to no delays, good product quality, good planning. The LTD order system beats the crap out of booking orders. Amazing how a little communication goes such a long way.

“The fastest way to lose a fuel supplier is to tell everyone else how great they really have treated you. We helped the supply by booking orders for 2014/2015 in April of 2014 with regular delivery schedules that included the summer months. You have to tell your supplier how many and when or else. Pacific Energy dropped the ball big time, no product, no parts and let’s drop our pellet stove in mid-season – what a good plan!”

Expectations for 2015

On the heels of a spectacular year, three areas of the country are forecasting a flat year in 2015, while the South, which didn’t participate in 2014 growth, expects a six percent increase this year.

Only retailers in the West are forecasting a growth year for pellet appliance sales in 2015.

Across the continent, retailers agree that 2015 sales of gas hearth products will increase from five to eight percent.