By Bill Sendelback

Sales reps see smart, strong hearth retailers who are having a good year DESPITE the COVID-19.

To discover how hearth product dealers are coping with this disastrous year of the COVID-19 pandemic we went straight to those on the front lines, hearth product independent manufacturers representatives. We recently interviewed prominent sales reps from each U.S. sales territory to get their input on 2019, 2020, and looking forward to 2021.

Manufacturers We Interviewed

• Adam Brewster, Accent Sales & Marketing – Northeast Territory
• Eric Cannon & Marc Hardesty, Eric Cannon Associates – Rocky-Mountains Territory
• Loretta Dolan, Loretta Dolan & Associates – Mid-Atlantic Territory
• Gary Freeland, Gary Freeland & Co. – Midwest Territory
• Jennifer O’Kelley, JCO Marketing, Southeast Territory
• Peter Ross, Home & Hearth – California/Nevada Territory
• Bill Wing, Wing Sales & Marketing – Pacific Northwest Territory
• Jay Yanniell, J&M Sales – South Central Territory.

Interviewed in July, the surprising consensus of these sales reps is that hearth product dealers are surviving the COVID-19 challenge with better- than-expected sales, especially in Outdoor Room products such as fire features and grills. Some dealers are reporting amazing sales increases as consumers who cannot travel or vacation because of the COVID-19 lockdown are spending that money on their homes, especially on their backyards.

Hearth products sales last year and going into 2020 were “strong” in the Northeast, according to Adam Brewster, Accent Sales & Marketing. “Even after the COVID-19 pandemic hit, our dealers surprisingly continued to operate, with most open at least on a limited basis until April when things began to open up.

“Then consumers sheltering in place in their homes seemed to turn to improving their homes, and business picked up. Most dealers now are getting a lot more business than anybody thought they would. One of our dealers actually is seeing a 110% sales increase.

“Our dealers in the Northeast have always been surprisingly resilient. Even at the worst of the COVID-19 lockdowns, our dealers were not saying ‘Woe is me.’ They have surprised me with their optimism about this year, and 2021.” But Brewster is concerned about how these challenges are affecting aging dealers who may be getting tired of challenges. “This may be the last call for the ‘old guard’ as they try to sell to retire or simply close up.”

The majority of hearth appliances sold in the Northeast are gas models, Brewster says. “And the trend is toward more linear models with clean lines. But the newer generation of homeowners finds electric fireplaces more interesting. These consumers are really not looking for a fireplace that duplicates a real fire.”

A continuing challenge for Northeast dealers, and for dealers in the rest of the country, is the difficulty in finding and hiring qualified employees who want to work, says Brewster. “There is so much to learn and know in our industry. Dealers need solid training programs. And the difficulty of hiring new people is exacerbated by current unemployment programs where many can receive more money from unemployment than holding down a job.”

Hearth product dealers in the Northeast “played it safe” with Step 1, non-2020, NSPS wood-burners. “They did not count on the HPBA’s litigation efforts against the EPA to save them. They sold off their old models early and managed their inventories, so most now only have the new 2020 NSPS-certified models.”

While California and the West Coast have been the hot beds for bans on natural gas, dealers in the Northeast also are facing similar bans. “In view of these challenges, and the quickly growing consumer demand for Outdoor Room products, a lot of our dealers have pivoted to these Outdoor Room products, and that represents a growing amount of their sales. But many dealers can’t get either the hearth products or the Outdoor Room models they need. Some manufacturers slowed production because of the COVID-19 threat and now are weeks out on shipments.”

Regarding 2021, Northeast dealers have “surprised” Brewster with their optimism for the future. “I hope this COVID-19 exercise makes dealers and manufacturers develop better business practices to survive through challenges and to better serve their customers.”

Hearth product sales in 2019 in the Rocky Mountain Territory were “good,” according to Eric Cannon, Eric Cannon Associates. “This year started strong and then COVID-19 hit while dealers also were scrambling to sell off their Step 1 NSPS wood stoves using discounts and promotions. So far, 2020 sales have been okay, but not great.”

“Some of our dealers are hurting a little,” says Marc Hardesty, Eric Cannon Associates. “State and county regulations differ on the COVID-19 lockdowns. Some dealers have had to go to appointments only, but most just hunkered down and reduced inventories. Some saw an opportunity to increase inquiries and sales by upgrading their websites.”

“While the COVID-19 stay-at-home efforts have been a major challenge for our dealers, new home construction in Utah, for instance, never shut down,” says Cannon. But Hardesty points out that Utah is considering banning natural gas in new construction.

Wood-, pellet-, and gas-burning appliances are all selling in the Rocky Mountain territory, and sales of electric fireplaces are rapidly growing every year, according to Hardesty. “People stuck staying at home, with some canceling travel plans, are spending more time in their backyards. As a result, they now want to upgrade their outdoor spaces, so there also has been a huge uptick in sales of Outdoor Room products, including spas.”

“Most of our dealers are optimistic about the rest of 2020 and 2021,” says Cannon. “Homebuilding is strong, and there is plenty of sales opportunity in Outdoor Room and electric fireplace products.”

“Sales of hearth products here in the Mid-Atlantic territory have been a mixed bag this year,” says Loretta Dolan, Loretta Dolan & Associates. “After the COVID-19 pandemic began, some of our dealers started closing up. Then many reopened by appointment only. April was a nightmare, but sales in May, June, and so on have been way up. Those selling into new-home construction have done well.

“Linear styling rules here as more consumers want to put a TV over the fireplace. Gas and electric fireplaces are flying off the shelves, with more electric models being sold than we ever thought possible.” Dolan also says there is “great demand” for Outdoor Room products, but dealers cannot get all they need to fill the demand, especially grills.

“A couple of my major manufacturers closed down for a while because of the Covid-19 scare,” she says. “One still is six to eight weeks out on shipments.”

While operations during the COVID-19 pandemic still offer the biggest challenge to Mid-Atlantic dealers, most have been able to sell off their Step 1, non-2020, NSPS wood-burners. Another challenge for New Jersey dealers has been an effort to require licensing of installers. Another challenge for all dealers is finding employees. “Some employees who were laid off are not coming back,” says Dolan. “It is too lucrative for them to remain on unemployment.

“My dealers think they will finish 2020 better than they earlier had hoped. And we think 2021 will be better with a pretty good uptick in sales.”

“This has been a strange year,” according to Gary Freeland, Gary Freeland & Co., covering the Midwest Territory. “We thought COVID-19 would have a negative effect on our hearth product business, but it has not happened. Our sales with our major gas fireplace manufacturer actually are up over last year.

“People are staying home during the pandemic and are spending their money to improve their homes. Most of our hearth products dealers are doing just fine. Some never shut down. In Illinois, early on, it was okay to operate by appointment, but now things are wide open. It’s like the ’90s again for hearth product sales, and especially for Outdoor Room products.”

Sales of gas hearth products are “definitely continuing to grow,” says Freeland. “Natural gas lines are being extended, LP prices are down, and we have an aging population that prefers the convenience of gas.”

Unlike some reports from other manufacturers’ reps, Freeland is not seeing a shortage of products from his major manufacturers, but he thinks he may see delays of new products as his suppliers work to keep up with demand for current models.

The main challenge for Midwest hearth product dealers sounds like a broken record – finding qualified employees who want to work.

“Hearth product sales next year in the Midwest look good,” according to Freeland. “There is a lot of pent-up demand among consumers, and people still have money to spend. Many of our dealers have improved their chances of sales success by improving their websites and becoming better at social media activities.”

“Most hearth product dealers here in the Southeast had a really good 2019, and 2020 sales are about even with last year,” according to Jennifer O’Kelley, JCO Marketing. “Sales were slow right after the HPBExpo, and a few dealers saw sales slow down a little. But things turned around with strong sales in May and June.

“Our dealers are adapting to the conditions of the COVID-19 pandemic. They are using social distancing, and limiting the number of customers in their stores. And more are offering on-site home visits for consumers who are not comfortable visiting the store. This has been a plus because it gives the dealer the opportunity to look at the home for additional products and services they can sell.”

Gas hearth products continue to be strong sellers for dealers in the Southeast. “But the fastest growing hearth products category is electric fireplaces,” says O’Kelley. “Sales of electric models are growing like crazy. However, most dealers are seeing their strongest growth in sales of Outdoor Room products. Consumers have been stuck at home so they are seeing things they can improve or add to their homes. They are investing in their homes.”

Most dealers in the Southeast have gotten rid of their non-2020, NSPS, wood-burners, says O’Kelley. “They have turned this into a positive, using the sales pitch that the new Step 2, 2020 models are better products even if they cost more money.”

While linear styling is the top trend in the Southeast, O’Kelley says higher price-points are selling well. “Today’s consumer is more educated about hearth products and they recognize the value of better, more expensive models.” Other trends O’Kelley sees in the Southeast are “smart” features, electronic ignition, and a heat dump feature for customers who want a big gas fire but don’t need or want much heat. Hybrid vented gas logs also are selling well, combining refractory logs with ceramic fiber logs to offer the glow and heat of vent-free models while still being vented.

During the COVID-19 pandemic, O’Kelley is using Zoom to offer video training for dealer employees. “We can customize this training for dealers and distributors,” she says.

“We think 2020 will finish strong, and we and our dealers are optimistic about 2021.”

“Everyone in our California-Nevada Territory was worried that the COVID-19 pandemic would kill our economy, and hearth product sales along with it,” says Peter Ross, Home & Hearth. “But it didn’t happen. People are still spending money. 2019 was a pretty strong year for hearth product sales. Our economy is strong with growing new-home construction and needed rebuilding as a result of the extensive wildfires in California.

“Earlier this year with the COVID-19 pandemic, sales came to a screeching halt. But our dealers are surprisingly resilient, and now sales are up, and up quite a bit in some areas of our territory. We have not lost a single dealer although some have limited their showroom hours and gone to appointments only.”

Sales of gas hearth products have been on the rise for the last 15 years, says Ross. “We’ve had bans on wood-burning, gas models have gotten better, and we now have an older population that prefers the convenience of gas. But now we’re seeing growth in electric fireplaces as more than 30 communities in California either have banned or are considering banning natural gas in new construction – including Sacramento. Builders are moving away from gas fireplaces to electric models for this reason and to save money on installations.”

Wood-burning continues to take a hit in California, with some sales in mountain areas after wood-burning has been banned in many of the urban areas. “But in areas where wood-burning is banned, some won’t even allow EPA-certified models,” says Ross. “Most wood-stove dealers have done a pretty good job of flushing out their non-2020 models. It will be an interesting year for wood-stove sales with fewer models available because of the new Step 2, 2020, NSPS standards. However, these new, innovative models are very impressive performers.”

Like other sales territories, the trend to linear styling is continuing in California and is now moving into the rural areas, even at much higher price points, says Ross. “There definitely is a trend toward Outdoor Room products. We’re even seeing multi-family projects installing fire features, grills, and outdoor kitchens.

“Our dealers are being cautious, but we all have reason to be optimistic and expect a decent 2020. Dealers have figured out how to keep their businesses moving forward with COVID-19. 2021? Who knows.”

Hearth product sales understandably were slow in Washington State after the governor shut down the state on March 15 because of COVID-19, according to Bill Wing, Wing Sales & Marketing. “Dealers closed down and laid-off employees. When the state started to open up again in mid-April, sales picked up, but the laid-off employees were reluctant to return to work when they found they could get more money on unemployment. Some dealers used the shutdown to remodel showrooms or clean-out and reorganize their service trucks. But most were ready when sales picked up.”

The Pacific Northwest did not lose many hearth dealers due to the pandemic shutdowns, according to Wing. “We did have two dealers that closed to retire, could not find buyers for their stores, so liquidated them. But most other dealers came back to life. One large, Seattle-area multi-store dealer has seen sales rise 10% over 2019.

“Hearth product sales have been down in the Pacific Northwest while Outdoor Room products are selling well. Spa sales are through the roof,” says Wing. “With COVID-19, people canceled their vacations, stayed home, and began to spend money on those homes.”

Wood-stove sales have been flat, but Wing feels 2020 will be a good wood stove year as more Pacific Northwest consumers strive to become energy independent. Sales of gas hearth products, the biggest segment of the territory’s hearth products market, have done well because of strong new-home construction even though attempts are being made to ban natural gas in Western Washington. “Pellet-stove sales have taken a little hit because they are tied to the price of oil, which now is very low,” says Wing, but electric fireplaces are proving to be strong sellers. Dealers who display electric models are doing very well with them.”

Most wood-stove dealers have sold off their old Step 1, non-2020, models, says Wing. “But many of those that still have old models don’t care about the May 15, 2020, deadline to sell these models. They still are offering them.”

Wing says there is “uneasiness and uncertainty” among dealers in the Pacific Northwest about 2020 sales results. “Many of our dealers rely on county and state fairs and home shows to sell most of their hearth products. Some sell hundreds of stoves at these shows. That large Seattle-area dealer has sold more than $1 million each year at these shows. But these events have now been canceled because of COVID-19. Our dealers need to find other ways to sell their products. They just don’t know how to get those lost sales back.”

This year has been a “good” year for sales of hearth products in the South Central Territory, according to Jay Yanniell, J&M Sales. “Sales have been steady, and we’ve seen surprising sales growth by our dealers. Consumers are ready to put COVID-19 behind them. I can only imagine what 2020 sales would have looked like without the COVID-19 pandemic.”

Despite good sales, some dealers are struggling, says Yanniell. “However, I am amazed at the professionalism of our dealers. They are tough and savvy and incredible business people. First they survived the recession of 2008 and now COVID-19. And yet they still are optimistic and fighting like hell.”

While overall dealer sales are good, hearth product sales overall are flat, says Yanniell. “But grill sales are up, and sales of pellet grills have just taken off like we’ve never seen before.” Gas hearth product sales are up with sales of high-end gas fireplaces helping to prop up dealer sales and profits. “I think high-end gas fireplace sales are up because of our strong new-home construction, and this is keeping some of our dealers in business. Wood-stove sales have been steady for the last five years as some consumers try to become more energy self-reliant. And electric fireplaces are really hot items, often selling as an option to gas fireplaces.”

If the COVID-19 pandemic was not enough of a challenge, Yanniell says, dealers also are having trouble finding good employees and installers, a familiar theme in all sales territories.

Yanniell’s dealers are optimistic about this year and 2021. “This COVID-19 seems like just another temporary obstacle to them. They just want to get through it.”

Early-on, the COVID-19 pandemic looked like it might spell doom for the hearth products industry. Some manufacturers planned for the worst by cutting back production and laying-off workers. Dealers struggled through the shut-down periods. But it seems hearth product dealers are survivors.

Consumers are also survivors, and are now spending money to improve their homes. Hearth product sales are up, and sales of Outdoor Room products are way, way up. Despite those early predictions, it appears 2020 will be a good sales year for hearth product dealers, and that momentum may well continue through 2021.