Jess Baldwin was there at the beginning. He’s been in the hearth industry since late 1978 (about 37 years ago), starting in Indiana as part owner of one of the original Earth Stove licensees. In 1984, the energy crisis had ended and stoves were no longer flying out the door. The industry was faced with diminished demand and manufacturing over-capacity.

Baldwin went to work for Jim Herman as the licensor instead of being a licensee. He set up a sales and distribution network for The Earth Stove in the East, and ran that sector of the country until 1996 when he was made vice president of the company and moved to Portland, Oregon.

At that point, The Earth Stove brand was being manufactured in Oregon with a few cast stoves being imported from Taiwan. Fast-forward to 1999, and The Earth Stove was sold to Lennox Hearth Products. Baldwin stayed on to aid in the transition, and was put in charge of sales for both The Earth Stove and Whitfield brands.

A year later he was asked to move to Orange County, and declined; he took a regional manager’s job and remained in Portland. In March of 2001 Baldwin went to work for Monessen Hearth Systems, and has “been with the company through all its iterations,” from the days of Bill Twerdy to the ownership of The Riverside Company (a private equity firm that grouped the Monessen, Majestic and Vermont Castings brands under the banner of The Vermont Castings Group), and then in mid-2013 under the brief ownership of Ricardo Leon and the management team of which he was a part.

Now he works under the ownership of HNI Corporation, which purchased the Group in mid-2014, and is the parent company of Hearth & Home Technologies (HHT).

Hearth & Home: What was the reaction of the dealer network when The Vermont Castings Group was purchased by HNI?

Jess Baldwin: “As in all these things, it was mixed, but for the most part it was positive. I think everyone understands the financial strength and market resources of HHT. So for the most part it was positive. There were some concerns whether or not HHT would continue to support the vent-free technology which is a large part of the Monessen product line. Well, they have and they will. Once we got past these concerns it has actually been pretty positive.”

What was the past year like for the Vermont Castings Group?

Baldwin: “If I summed it up in one word I would say exciting. By the beginning of 2014 we had stabilized the company financially. We had secured financing and, rather than being in a defensive position, the company went back on an offensive footing to where we were looking at growing the business and not making the wrong decision for the right reason – meaning lack of resources.

“Actually, 2014 was an exciting time because we were starting to recapture market share. The company was growing. We were making improvements in each of our facilities. We closed down the factory in Mexicali, Mexico, which was something that we needed to do. So we were accomplishing essentially the goals that we had set for the company.

“The acquisition was a very well-kept secret. Not a lot of people knew about it internally. That was a little bit of a surprise, but since the acquisition the excitement has actually been amplified because HHT shares the same vision that we as a management team did when we bought the company.

“Now there is the ability to grow the company and, of course, with HHT’s resources they started making some of the changes that we had planned on making long-term, such as adding equipment and modifying production lines to produce more efficiently and with quality.”

This past year was an exciting time for the entire industry, don’t you think?

Baldwin: “Yes, I do. The market was coming back. The housing market was not as robust as some of the original predictions, but nonetheless it was better than the previous year. I think retailers were feeling better about their business because they saw consumers start coming back in. So I agree. It was an exciting time for the whole industry.”

A strong sales year was just what many hearth retailers really needed, a nice infusion of cash they worked their tails off to get, but they got it. The years were long and lean for too many of the hearth guys.

Baldwin: “From 2009 up through and including 2012 was a very lean time for most retailers. Many of them struggled. The thing that I see happening today, and I consider it to be one of the brightest spots in the industry, are the outdoor products. More and more dealers are expanding into the outdoor.

“As the housing market comes back and continues to gain momentum, that part of their business is going to grow, We’re actually seeing a number of builders, including some of the national builders, including an outdoor fireplace and in some instances a barbecue grill as part of the home package.

“If I were a retailer today, that is certainly one area in which I would expand my business, and it’s counter-cyclical to hearth products. With hearth products, the dealership is a destination; it’s not a shopping experience. The consumer is going there specifically to look at a stove or a fireplace. But when you introduce the grill and food into it, all of a sudden it becomes a shopping experience.

“In the early days, we all thought we were selling wood stoves because we weren’t that sophisticated at marketing. As it evolved, we learned that we’re selling a lifestyle, not just a product. Some of the retailers need to go back and read that playbook again. Today, the outdoor living lifestyle is something that has top-of-mind awareness in the consumer’s mind. Somehow as an industry we have to start promoting that.”

Like every other trade show in the country, the HPBExpo is still down substantially from its peak prior to the downturn. What’s your recommendation for building back the membership in HPBA as well as exhibitors and attendance at the Expo?

Baldwin: “If you want to have a good show, and you want to generate additional revenue from the show, you have to get the dealers to show up. For the dealer to show up, it has to be worth it to him or her financially, whether it be through education, new products and/or innovation. Every person in business is looking for solutions to grow their business, and that is a message that we as an industry have not gotten across to our retailers, and as an industry we just haven’t done a lot to support that.

“Now I do think you’re going to see that change. As the housing market continues to expand and manufacturers get healthier and dealers get healthier financially, you’re going to see more and more innovation. Dealers are going to fall behind if they don’t have a venue in which to see and put their hands on and be educated about the innovation that I believe will occur.”

We’ve got issues confronting the hearth industry that seem to endure. They don’t disappear. They go underground for a while, like a Cicada, then return. The EPA’s NSPS is back for another round, the DOE still wants to tack our hides on the cabin wall and now we’ve got Utah trying to ban wood-burning in a number of areas in the state. Which of these issues do you find to be the most dangerous to the industry?

Baldwin: “At a very high level, the ones that scare me the most are like Utah, because it happens in a region or a municipality or a state and it’s really hard to gather adequate support to beat those. You might say, ‘Well, it’s okay if we lose Utah because it’s only X number of wood stoves a year.’

“The risk you run is that other states notice, and it becomes a cascading effect. Situations such as those really concern me.

“Obviously the biggest thing on the horizon right now is the EPA and the new regulation. We don’t know what’s in it yet, but obviously there is great concern that there are going to be things in there that are very detrimental to our industry. We won’t know the full details of that until later this year, perhaps by May or June, but that one concerns me.

 “I’m also concerned about how we as an industry deal with it. We have been playing a defensive role for a number of years, now we have to get on the offensive. It takes money to win these battles. Right now the way that is funded is through the Sections, which is essentially the manufacturers, but all we ever get is the money we need to fight the battle of the day.

“The role of the HPBA is not only to protect, it is to protect and promote the industry. All we’ve been doing for the last several years is simply protecting. As chairman, I hope to put into place a funding mechanism that includes everyone who is a member of the HPBA. This would be over and above dues. It should be some sort of contribution that starts building a war chest short-term to help fight some of these battles, like Utah and the EPA and the DOE.

“These issues aren’t going away. I don’t think any of us are going to be very happy if all we are doing is defending the turf that we currently have. I am not as concerned about the DOE because I think I know what’s going to happen there.

“I think their first action will be to ban standing pilots, but starting in year six they can come back, and then I believe you’ll start seeing regulation that is more stringent. So we can take the attitude of giving up standing pilots and not knowing what’s going to come in year six. They’re probably going to come back at us on decorative hearth products, and they are going to come wanting efficiency numbers.

“We need to start building our resources to where we can be proactive, because it will happen. It’s not a matter of if it will happen. They will come back at us. The same is probably going to be true of the EPA eight years after the new regulation is enacted. We really have to start thinking proactively about protecting and promoting the industry.”

I like your idea of expanding the funding for these programs to create a kitty. Spread it among more people and it’s not as onerous on anyone, right?

Baldwin: “Right.”

What are the main projects that you would like to tackle as the incoming chairman?

Baldwin: “Well, number one would be the funding issue I just described; number two would be membership. We have to staunch the flow of dealers leaving the association and find a way to grow our membership. Those are really the top two priorities. I guess my third one would be to encourage broader participation by manufacturers in the trade show. If you get those three things right, you’ve got a good game going on.”