Responsibility is a recurring theme in the Columbia Forest Products story. The Greensboro, N.C.-based hardwood plywood and veneer manufacturer employs in the neighborhood of 1,800 people across North America; and, as an employee-owned company, its nurturing tendencies start with them. “We have a certain license and, to some degree, an obligation to look at the long term,” Vogelsinger declares. “We're employee-owned, we're a market leader; and all that drives long-term strategic decisions and implementations.”
One of the most pivotal of them came about 10 years ago, when Columbia made the decision to strip formaldehyde resin from its products. Working in conjunction with Oregon State University, it developed its own alternative solution, under the brand name PureBond, to mitigate the off-gassing and harmful effects of formaldehyde. The PureBond system instead incorporates soy flour – a product safe enough for McDonald's to put in its hamburger buns. “It's a food-grade substance that we were able to create this whole technology around to help weld our panels together,” Vogelsinger explains. “In doing so, we eliminated the added formaldehyde and the product ended up being more water-resistant than it used to be; so there was actually improvement to it.” The company didn't simply offer PureBond as an option to customers willing to pay a bit more, either; in 2005, it launched an overhaul to convert all of its mills over to the new approach, which it then offered to all customers at no extra cost.
The move speaks to Columbia's commitment to what it calls “innovating responsibly,” according to Vogelsinger. “We're a company that uses naturally grown hardwood trees to make our product,” he says. “So there's a whole area of sustainability of the forest that we take into account. Then once we get a log, there's the process of how effectively and efficiently you're using it to make a material that serves its purpose in a way that doesn't detract from indoor air quality.”
In addition to stepping away from formaldehyde, the company more recently upgraded its mills that peel hardwood logs, replacing old lathing technology with new state-of-the-art systems that allow more wood to be captured from each log. In addition to stretching the wood supply, Vogelsinger notes that the equipment upgrade improves the surface quality of its panels, removing aberrations and creating a smoother and more consistent face on which decorative veneer can be applied: a win-win-win for the environment, the company, and its customers.
These are the kinds of business decisions that have earned Columbia Forest accolades from the likes of the Rainforest Alliance, an organization dedicated to preserving the health and sustainability of forests all over the world. But Vogelsinger says the firm avoids taking a “preachy” position regarding its achievements; rather, he says it realizes that everyone is not quite there yet.
Interest in green construction is rising every year, but it's not a priority for every end-user; and for some, it will take starting a family or another life event for them to start looking differently at indoor air quality, for example. Until then, Vogelsinger adds, “it's up to us to keep education going and to keep pointing to the solutions that we have, and to keep demonstrating to people that it's not that much more expensive – if at all – to choose healthier alternatives that are made responsibly in the U.S. and Canada…not to mention the timeless value they add to one's home, which can come into play in higher resale prices.”
As for the segment of the market that already recognizes the value of this kind of building material, Columbia Forest Products offers plenty of options; and these materials provide the company's distributors with a strong selling point when they approach architects or green woodworkers. That's key, because with two-thirds of the manufacturer's product going through independent distributors, they are Columbia's most important market channel, according to Vogelsinger, and it treats them as such. To be fair, he concedes, there will always be cases of great manufacturer-distributor relationships as well as rockier ones at any given time; however, overall, Columbia embraces a business culture that is grounded in “great partnerships that find opportunity through market knowledge.”
As part of that philosophy, Vogelsinger says Columbia is “doing a lot more to really understand what we call the 'voice of the customer,' or the grassroots shop that uses the materials that we make and that our distributors stock, sell and deliver.” The collaboration works best, he continues, when distributors do what the manufacturer cannot: serving as the eyes and ears in the field each day, then reporting the information they glean back to Columbia. For its part, the manufacturer takes on much of the technical, comprehensive work – including gathering market research, running analytics, and applying market insight to a given distributor's business opportunity and the markets that it serves. “This process enables us, with a distributor, to set short and longer-term volume and market share goals, track success, and put in place rewards for achieving that success,” Vogelsinger elaborates. “We find that once we're into this process and everybody understands where the data comes from and what the mathematics mean -- once we're working from the same facts -- then we can set ourselves achieving the opportunities and challenges that we're facing as a team.”
One particular challenge facing the typical “grassroots customer,” described by Vogelsinger as a five-person cabinet shop, offers a prime example of how manufacturers and distributors can work in tandem to address market difficulties. These small cabinetmakers are faced with a tight pricing and profit environment, he says, often feeling as though they will lose a prospective project if they quote as little as $100 more than a competitor – even if the other outfit is dealing in lower-value imported flat-packs. At the same time, these shops admit that they lack the sales and marketing skills to convincingly present the value of their work and effectively compete for better jobs. “That's an opportunity,” Vogelsinger insists. “It's an area of shared interest that would help both the manufacturer and the distributor if they could help alleviate that pain point for the customer. It's an opportunity for us to step in with education, training, coaching, and perhaps sample tools, and show ways that these shops can overcome objections and essentially teach their customers or their prospects why a kitchen, for example, delivered by them, made locally, is a better choice for the consumer in the long run.”
The marketing exec believes collaboration and partnerships between distributors and manufacturers are going to take on even greater importance in 2016. The building materials industry is holding its breath, waiting to see which direction single-family home construction moves, and Vogelsinger says the end result will have significant implications.
If there's not much of a change, existing challenges will remain in place; and he predicts a continuation of practical management strategies: lean staffing, lean inventories, and tight credit policies. If the new single-family housing market gains some real momentum, however, a huge opportunity will present itself. “It's going to get us all to a level that's a lot more sustainable and balanced in terms of our capacity to produce, our staffing in the field, and the overall level of readiness of the marketplace,” Vogelsinger forecasts.
In preparation, he says, the manufacturer is talking with its distributors – comprised mostly of members of NBMDA, which has also included Columbia on its roster for the past 20 years – about how to get ready for potential growth and profit opportunities. That includes holding annual planning meetings and taking advantage the various events and activities sponsored through NBMDA, which Vogelsinger lauds as “the only truly organized means that manufacturers have to legitimately engage with distribution partners and prospects in North America.”
Its annual conference is always a hit; but Vogelsinger also points to committee opportunities, online programs, and more. Last summer, for example, he participated in the organization's new social media boot camp program. After going through the initiative, Columbia is now looking to spread the lesson to its distributors and show them how they can use platforms like LinkedIn and Twitter to share relevant observations or insights – especially if 2016 proves to be a breakout year for single-family homebuilding.
“We're coaching each other on what we think it will take to support better, stronger business when it comes,“ he says. “And that's great, because when people start talking like that, that's when things begin to happen. The last thing that any of us want to do is to wake up one day and find that business is back, and it's booming; but we're not ready for it.”