Barringer: Lumber Industry Needs Marketing Change

Furniture World News

Coastal Lumber Co. President Paul Barringer says the hardwood lumber industry must change the way it markets its goods. Barringer spoke at the 1999 Appalachian Hardwood Manufacturers, Inc. Inter-industry Meeting on Oct. 5 at The Grandover Resort & Conference Center, Greensboro, NC. Coastal Lumber Co. is one of the largest independent lumber companies in the United States with 35 sawmills, distribution centers, dimension plants and a plywood plant across the Appalachian region and Southeast United States. Coastal reported sales of $350 million in 1998 and employs more than 2,200 people. "This is a fascinating business and it should be headquartered in Las Vegas along with other games of chance," Barringer remarked. "Keeping up with the constantly changing, environment around us can really be challenging. The old saying was we try to make more in the good years than we lose in the bad years. "And that hasn't changed," he said. Barringer talked about the various changes the industry has seen in the past 50 years. He offered a host of species and products changes as markets have diminished and others have grown. "You know we still manufacture lumber the way we did 100 years ago," Barringer said. "We place a log on a carriage and take it to a saw. We still sticker lumber the same way for air drying and we kiln dry it." He said many techniques allow for greater utilization of logs have improved the process. "These are all good but we really haven't made too much progress," he said. I don't think our industry really knows the meaning of marketing because in that area we are still in the stone age," Barringer said. "We've lost our markets over the years to substitutes and imports because our industry is fragmented and we don't know how to sell our lumber." The Conger Foundation recently studied the use of marketing techniques in the hardwood lumber industry, Barringer reported. The study found the average hardwood lumber producer spends about $14,000 annually on promotion and advertising. The typical marketing activities were direct sales calls, trade associations with advertising and the giveaways like hunting caps and mugs. Only 5 percent of sales forces in the survey conducted any type of sales training. I sometimes think that many of us believe that sales are answering the phone with a copy of the weekly hardwood report and taking orders," Barringer said. "No wonder we have lost an estimated 40 percent of our markets over the past 50 years." He cited a recent Wall Street Journal article promoting the benefits of particleboard for a wide variety of products. But Barringer asked what lasting value does particleboard and other substitutes offer to consumers. "We are really on the cutting edge of optimization which I believe will be the savior of solid wood," he said. "Soon we will have automatic defect grading and cutting of wood which will make great improvements in rough ends." The industry must target wood waste, Barringer said, with more than 60 percent of the tree left in the woods, a percentage turned into sawdust and secondary manufacturing cutting out another large chunk. "Our industry needs to put more emphasis. on processing, storing and marketing in the next millennium," Barringer said, "We need to be able to take rough lumber, produced largely from what is growing in the forest and convert it into a product that the consumer wants and is willing to pay a little more to have." Another challenge for lumber producers is timber availability. Barringer defined this as timber that "is available to cut." Government ownership and regulations are continuing to drastically reduce timber availability. "When the government can restrict on private timberland within a five-mile radius of a cave where a few Indiana Bats might live, then gentlemen we have a real problem." The future offers a completely different challenge for business owners accustomed hard work, building assets and trading assets. Much of today's business world is valued on its intellectual capital which has no fixed asset value but instead is based on market capitalization. Lumber producers are also facing dramatic increases in government regulations, taxes and interference in every day work. "in my opinion, the government and its ever-increasing agencies' tentacles are spreading to control our businesses and property rights," Barringer said. Trade associations, however, can offer a valuable service in the future if company leaders remain involved in helping the industry. "We all need to pull together and get our oars in the water pulling the same direction," he said. A national promotion program with 100 percent participation by the industry to truly market hardwood products could provide one solution to the problems in the future, Barringer said. "My favorite expression is that 'all fruit grows out on a limb.' We've just got to get out there and get it." AHMI was founded in 1928 to promote Appalachian logs, lumber and products around the world. It has been successful establishing new markets for oak and poplar species. The association also implemented an educational program in 1995 to inform the public of the world's best renewable resource, trees. For more information about Appalachian species or the work of the association, please contact the office in High Point at (336) 885-8315 or visit our website at www.appalachianwood.org.