Creating Consumer Demand
for American Hardwoods
1
Creating Consumer Demand:
Two Parallel Industry Efforts
1. American Hardwoods Promotion
– Coalition of 20+ trade associations and industry leaders
– Voluntary funding of Logo/Theme/Promotion Effort
2. Hardwoods Checkoff
– Industry proposal to USDA for a Hardwood Industry
Checkoff Program
2
3
American Hardwoods Promotion
1. Research:
– Harris Poll – 650+ Consumers/Prosumers
2. Findings – Attitudes toward Hardwoods
3. Develop Logo/Tagline/Messaging that
resonates with Consumers
4. Promote the Promotion!!
– Engage the hardwood industry & product
manufacturers to spread the word
4
90% of consumers like hardwood as a material, 70% like it a lot.
Overall Impression of Hardwood
Consumers
LIKE IT
(NET)
93%
Prosumers
93%
Like it a lot
B
69%
69%
24%
24%
7%
7%
Consumers
Prosumers
Like it somewhat
Neither like it nor
dislike it
n=424 (A)
n=228 (B)
BASE: ALL RESPONDENTS
Q905. What is your overall impression of hardwood as a material for furniture, flooring, cabinets or building materials?
5
Only 10% of Consumers feel Very Informed about Hardwoods
BASE: ALL RESPONDENTS
Q900. How well informed would you say you are about hardwood?
6
Consumer attitudes about Hardwoods
Consumers
Prosumers
Word Pair
Consumers
Prosumers
n=424
A
n=228
B
n=424
A
n=228
B
100%
99%
Reliable
Unreliable
*
1%
59%
48%
Old-fashioned
Trendy
41%
52%
86%
87%
Fun
Boring
14%
13%
100%
99%
Genuine
Artificial
*
1%
93%
99%
Warm
Cold
7%
1%
97% B
90%
Expensive
Cheap
3%
10% A
99%
99%
Durable
Flimsy
1%
1%
88%
79%
Traditional
Modern
12%
21%
BASE: ALL RESPONDENTS
Q1006. Below are pairs of words that are opposites of each other. For each pair, please indicate which word better
describes your perception of hardwood.
7
90% of Consumers say Hardwood inspires pride in the home
The Attraction of Hardwood - Pride in the Home
Hardwood products
are attractive and
would make me feel
proud of my
home./Hardwood
products are
attractive and would
make my customers
feel proud of their
home.
Somewhat disagree
Strongly disagree
Somewhat agree
Strongly agree
Neither agree nor
disagree
94%
Consumers
6%
31%
Prosumers
1%1% 9%
22%
63%
68%
89%
1%
BASE: ALL RESPONDENTS
Q1011. How strongly do you agree or disagree with each of the following statements about hardwood?
8
And agree that hardwood is a good investment
The Value of Hardwood
Using hardwood in my home makes me
feel like I made a good
investment./Using hardwood in their
homes makes my customers feel like
they made a good investment.
TOTAL AGREE
91%
The durability of hardwood makes me
confident in the choices I make for my
home./The durability of hardwood
makes me confident in the
recommendations I make for my
customers’ homes.
92%
90%
94%
Strongly Agree
Somewhat Agree
58%
63%
50%
59%
Neither Agree nor
Disagree
TOTAL DISAGREE
Somewhat Disagree
Strongly Disagree
40%
32%
8%
1%
1%
29%
2%
6%
1% 1%
Consumers
Prosumers
(A)
(B)
9%
1%
35%
1%
Consumers
(A)
4%
1%1%
2%
Prosumers
(B)
BASE: ALL RESPONDENTS
Q1011. How strongly do you agree or disagree with each of the following statements about hardwood?
9
A great message, no one telling it
– Hardwood is BEAUTIFUL, NATURAL, SUSTAINABLE
– Consumers are confused by competing materials
(laminates, bamboo/the Ikea mind-set)
Research shows that 90% of consumers agree that hardwood
products are attractive and inspire pride in the home.
Only 10% consider themselves very informed.
10
Manufacturers can help tell our story!
•OEMs understand the benefits and are eager to talk to
the advantages of American Hardwoods
– Capture % of manufacturers’ existing marketing spend
– We have the platform and a message that can help them sell
On average, flooring industry spent
$425 million
in retail brand and consumer
advertising in 2009
11
12
Public Relations Plan
– Encourage adoption and use of messaging
across industry platforms
– HardwoodsInfo.com,
– Trade media outreach
– Speakers bureau
13
Pantone Solid Color
• Pantone 390
• Pantone 350
• Pantone 209
14
Strategic
Positioning
Umbrella
Treasured for Generations
Core
Messaging
Platforms
Natural Beauty
•
American Hardwoods are the only natural
product that offers both quality and
durability
•
Brings the beauty of nature into the home
 Not inspired by nature, it is nature
•
Beauty cannot be replicated in substitutes
 Wood grains make each product unique
 American Hardwoods are available in a
variety of species and lumber grades,
providing different colors, patterns and
character
•
Sample
Support
Points
•
Unmatched design flexibility
 Different species offer different looks to
meet any customer décor
 Offers the ability to create a traditional OR
modern/trendy look
 Available at various price points to meet
any customer budget
95% of consumers and prosumers enjoy the
natural look of hardwood, and agree that the
natural beauty of hardwood makes a home
feel warm and comfortable*
•
90% of consumers and prosumers agree that
hardwood products are attractive and would
inspire pride in the home*
•
93% of consumers and prosumers like
hardwood as a material for furniture, flooring,
cabinets or building materials, nearly 70%
like it a lot*
*Based on quantitative research conducted in January 2011 by Harris Interactive
Enduring Value
•
American Hardwoods are the foundation of
the home; have been used for centuries in
flooring, cabinetry and furniture for their
lasting value.
 Products made with American Hardwoods
span generations, making them more costeffective over their lifecycle than other
materials
•
The looks are timeless
 American Hardwoods can be refinished and
re-stained, even after being passed from
generation to generation, to meet changing
design styles and to repair any nicks or
scratches
•
In a study conducted by the NWFA, 99% of U.S.
real estate agents asserted that homes with
hardwood flooring are easier to sell; 90% said
homes sell for more money—up to 10% more, in
fact
•
A safe recommendation for prosumers that
results in happy customers
 90% of consumers and prosumers agree that
hardwood is a good investment and that its
durability makes it a good, confident choice
for the home*
 80% of prosumers agree customers who use
hardwood tend to be happy with their
decision and feel they got the most out of
their investment*
•
85% of consumers and prosumers feel that
hardwood is synonymous with quality and
durability*
There is no substitute
for American Hardwoods
•
For warmth, value, longevity and durability
in the home, American Hardwoods are the
only natural, non-manufactured choice
•
Made in America
•
It’s the premium choice available at multiple
price points to fit any budget
•
American Hardwoods are renewable and
sustainable
 American Hardwoods are abundant,
renewable and self-regenerating
 American Hardwoods are naturally prolific –
nearly twice as much hardwood grows each
year as is harvested
 American Hardwoods are responsibly
managed – the predominant harvesting
method is single-tree
 Harvested in America – less energy and
cost to transport, unlike imported product
 Virtually every part of the log is used for
lumber or by-product
•
You can have it all with American
Hardwoods
 Lasting value
 Flexibility
 Durability
 Longevity
 Rich, quality look
 Natural resource
For internal Use Only
Hardwood Checkoff
Would Generate Funding For:
Promotion
Education
Research
Hardwood Checkoff
What is a Check-Off?
Industry approved fee on it’s own product
USDA Program / USDA Oversight
Board of Managers directs Spending on
Promotion and Research.
Board is Industry nominated, USDA selected
Hardwood Checkoff
Checkoff Provides
Fairness – captures fee on lumber &
panel sales – clear fee structure
Flexibility – allows adaptation to
changing circumstances
Experience – learn from other
agricultural sectors
Durability – longevity to make a
difference
Hardwood Checkoff
Industry Organizing Committee
Jim Howard (Co-Chair), Atlanta Hardwood Corp.
Ted Rossi (Co-Chair), Rossi Lumber
Nancy Arend, Northwest Hardwoods
Victor Barringer, Coastal Lumber
Chris Bingaman, Bingaman & Son Lumber, Inc.
Bill Buchanan, Buchanan Hardwoods
John Crites, Allegheny Wood Products
Don Finkell, Anderson Hardwood Floors, Inc
Jamey French, Northland Forest Products, Inc.
Pem Jenkins, Turn Bull Lumber
Jeff Meyer, Baillie Lumber Co., Inc.
Jack Shannon, The Shannon Group
Brad Thompson, Columbia Forest Products
Chris Zinkhan, The Forestland Group LLC
Hardwood Checkoff
Growing Future Markets
Process
Committee works with USDA,drafts order
60-Day Public Comment period
(published in Federal Register)
Companies who pay into program VOTE
Majority vote by sales value approves
Industry nominates board – USDA selects
Board directs projects and work begins
Other industry segments considered
Checkoff revisited at least every 7 years
Hardwood Checkoff
Growing Future Demand
Timing:
Now: Order is drafted, submitted to USDA
Next: USDA reviews – may change
?? Comment period – this year
?? Vote – likely late 2011 or 2012 Q1-2
Who will it include:
Hardwood lumber and Plywood producers
Hardwood Checkoff
Growing Future Demand
Funding Plan
Sawmills
Facilities with over
$2 million in sales
$1 for every $1,000
in lumber sales
Hardwood Checkoff
Growing Future Demand
Sawmill example
Company
Sales
Fee
Joe’s Sawmill
Carl’s Sawmill
Bob’s Sawmill
$1.75m
$8M
$15m
$0
$8,000
$15,000
Hardwood Checkoff
Growing Future Demand
Funding Plan
Hardwood Plywood
Producers over 10
million square feet
$3 per $1,000 sales
Hardwood Checkoff
Growing Future Demand
Projected Revenue
Sawmills-Green
$3.5 mil.
Sawmills-KD
$2.5 mil.
Yards & value added
$1.5 mil.
Hardwood plywood
$3.0 mil.
TOTAL
$10.5 mil.
Commodity Checkoffs
Established
Cotton
1966
Potatoes
1972
Eggs
1976
Pork
1986
Beef
1986
Honey
1987
Watermelons
1990
Soybeans
1991
Milk
1993
Mushrooms
1993
Popcorn
1997
Peanuts
1999
Avocados
2002
Lamb
2002
$2.3
Yearly revenue
$66 million
$20 million
$21 million
$65 million
$80 million
$3.8 million
$1.6 million
$90 million
$281 million
$2.6 million
$1.5 million
$6 million
$24 million
million
Hardwood Checkoff
Growing Future Markets
Checkoff’s Potential
For the Hardwood Industry?
Hardwood Checkoff
Growing Future Demand
Hardwood Checkoff
Growing Future Demand
Cotton Inc. has
estimated a
return of $8
for every $1
of investment
Hardwood Checkoff
Growing Future Markets
Dairy Inc. reports
the per capita
consumption of all
dairy products
increased 16% from
1983 to 2008
Hardwood Checkoff
Growing Future Markets
Potato Board
estimates $4.74
return for every
$1 invested
Hardwood Checkoff
Growing Future Markets
Questions?