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Creating Consumer Demand for American Hardwoods

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Creating Consumer Demand for American Hardwoods. Creating Consumer Demand: Two Parallel Industry Efforts. American Hardwoods Promotion Coalition of 20+ trade associations and industry leaders Voluntary funding of Logo/Theme/Promotion Effort Hardwoods Checkoff - PowerPoint PPT Presentation
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1 Creating Consumer Demand for American Hardwoods
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Page 1: Creating  Consumer  Demand for American Hardwoods

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Creating Consumer Demand for American Hardwoods

Page 2: Creating  Consumer  Demand for American Hardwoods

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

Page 3: Creating  Consumer  Demand for American Hardwoods

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Page 4: Creating  Consumer  Demand for American Hardwoods

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

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Page 5: Creating  Consumer  Demand for American Hardwoods

7%

24%

69%

Consumers

Consumers

90% of consumers like hardwood as a material, 70% like it a lot.

n=424 (A)

Like it a lot

Like it somewhat

Neither like it nordislike it

Overall Impression of Hardwood

93%

B

BASE: ALL RESPONDENTSQ905. What is your overall impression of hardwood as a material for furniture, flooring, cabinets or building materials?

7%

24%

69%

Prosumers

Prosumers93%

LIKE IT (NET)

n=228 (B)

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Page 6: Creating  Consumer  Demand for American Hardwoods

Only 10% of Consumers feel Very Informed about Hardwoods

BASE: ALL RESPONDENTSQ900. How well informed would you say you are about hardwood?

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Consumer attitudes about Hardwoods

BASE: ALL RESPONDENTSQ1006. Below are pairs of words that are opposites of each other. For each pair, please indicate which word better describes your perception of hardwood.

Consumers Prosumers Word Pair Consumers Prosumers

n=424 n=228 n=424 n=228

A B A 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%

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Page 8: Creating  Consumer  Demand for American Hardwoods

90% of Consumers say Hardwood inspires pride in the home

1%1%

6%

9%

31%

22%

63%

68%

Consumers

Prosumers

The Attraction of Hardwood - Pride in the Home

Somewhat disagree Strongly disagree Neither agree nordisagree

Somewhat agree Strongly agree

1%

89%

94%

BASE: ALL RESPONDENTSQ1011. How strongly do you agree or disagree with each of the following statements about hardwood?

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.

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Page 9: Creating  Consumer  Demand for American Hardwoods

1%1% 1%9%

4%

40% 35%

50%59%

Consumers Prosumers

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.

1%1% 1%8% 6%

32%29%

58% 63%

Consumers Prosumers

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.

And agree that hardwood is a good investment

(A) (B)

TOTAL AGREE 94%90%

The Value of Hardwood

91% 92%

2%

TOTAL DISAGREE

2%

(A) (B)

BASE: ALL RESPONDENTSQ1011. How strongly do you agree or disagree with each of the following statements about hardwood?

1% 1%

Strongly Agree

Somewhat Agree

Neither Agree nor Disagree

Somewhat DisagreeStrongly Disagree

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Page 10: Creating  Consumer  Demand for American Hardwoods

A great message, no one telling it– Hardwood is BEAUTIFUL, NATURAL, SUSTAINABLE– Consumers are confused by competing materials

(laminates, bamboo/the Ikea mind-set)

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Only 10% consider themselves very informed.

Research shows that 90% of consumers agree that hardwood products are attractive and inspire pride in the home.

Page 11: Creating  Consumer  Demand for American Hardwoods

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

11

On average, flooring industry spent

$425 million in retail brand and consumer

advertising in 2009

Page 12: Creating  Consumer  Demand for American Hardwoods

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Public Relations Plan– Encourage adoption and use of messaging

across industry platforms

– HardwoodsInfo.com,

– Trade media outreach

– Speakers bureau

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Pantone Solid Color•Pantone 390•Pantone 350•Pantone 209

Page 15: Creating  Consumer  Demand for American Hardwoods

Strategic PositioningUmbrella

CoreMessaging Platforms

Natural Beauty Enduring ValueThere 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

• 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 cost-effective over their lifecycle than other materials

• The looks are timelessAmerican 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*

Treasured for Generations

*Based on quantitative research conducted in January 2011 by Harris Interactive

SampleSupportPoints

• American Hardwoods are the only natural product that offers both quality and durability

• Brings the beauty of nature into the homeNot inspired by nature, it is nature

• Beauty cannot be replicated in substitutesWood grains make each product uniqueAmerican Hardwoods are available in a

variety of species and lumber grades, providing different colors, patterns and character

• Unmatched design flexibilityDifferent species offer different looks to

meet any customer décorOffers 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*

For internal Use Only

Page 16: Creating  Consumer  Demand for American Hardwoods
Page 17: Creating  Consumer  Demand for American Hardwoods

Promotion

Education

Research

Hardwood CheckoffWould Generate Funding For:

Page 18: Creating  Consumer  Demand for American Hardwoods

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

What is a Check-Off?

Hardwood Checkoff

Page 19: Creating  Consumer  Demand for American Hardwoods

Checkoff ProvidesFairness – captures fee on lumber & panel sales – clear fee structureFlexibility – allows adaptation to changing circumstancesExperience – learn from other agricultural sectorsDurability – longevity to make a difference

Hardwood Checkoff

Page 20: Creating  Consumer  Demand for American Hardwoods

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 CheckoffIndustry Organizing Committee

Page 21: Creating  Consumer  Demand for American Hardwoods

ProcessCommittee works with USDA,drafts order60-Day Public Comment period (published in Federal Register)

Companies who pay into program VOTE Majority vote by sales value approvesIndustry nominates board – USDA selectsBoard directs projects and work beginsOther industry segments consideredCheckoff revisited at least every 7 years

Hardwood CheckoffGrowing Future Markets

Page 22: Creating  Consumer  Demand for American Hardwoods

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 CheckoffGrowing Future Demand

Page 23: Creating  Consumer  Demand for American Hardwoods

Funding PlanSawmillsFacilities with over $2 million in sales

$1 for every $1,000 in lumber sales

Hardwood CheckoffGrowing Future Demand

Page 24: Creating  Consumer  Demand for American Hardwoods

Sawmill exampleCompany Sales Fee

Joe’s Sawmill $1.75m $0Carl’s Sawmill $8M $8,000Bob’s Sawmill $15m $15,000

Hardwood CheckoffGrowing Future Demand

Page 25: Creating  Consumer  Demand for American Hardwoods

Funding PlanHardwood PlywoodProducers over 10 million square feet

$3 per $1,000 sales

Hardwood CheckoffGrowing Future Demand

Page 26: Creating  Consumer  Demand for American Hardwoods

Projected Revenue

Hardwood CheckoffGrowing Future Demand

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.

Page 27: Creating  Consumer  Demand for American Hardwoods

Commodity Checkoffs Established Yearly revenue

Cotton 1966 $66 millionPotatoes 1972 $20 millionEggs 1976 $21 millionPork 1986 $65 millionBeef 1986 $80 millionHoney 1987 $3.8 millionWatermelons 1990 $1.6 millionSoybeans 1991 $90 millionMilk 1993 $281 millionMushrooms 1993 $2.6 millionPopcorn 1997 $1.5 millionPeanuts 1999 $6 millionAvocados 2002 $24 millionLamb 2002 $2.3 million

Page 28: Creating  Consumer  Demand for American Hardwoods

Checkoff’s PotentialFor the Hardwood Industry?

Hardwood CheckoffGrowing Future Markets

Page 29: Creating  Consumer  Demand for American Hardwoods

Hardwood CheckoffGrowing Future Demand

Page 30: Creating  Consumer  Demand for American Hardwoods

Cotton Inc. has estimated a return of $8 for every $1 of investment

Hardwood CheckoffGrowing Future Demand

Page 31: Creating  Consumer  Demand for American Hardwoods

Dairy Inc. reports the per capita consumption of all dairy products increased 16% from 1983 to 2008

Hardwood CheckoffGrowing Future Markets

Page 32: Creating  Consumer  Demand for American Hardwoods

Potato Board estimates $4.74 return for every $1 invested

Hardwood CheckoffGrowing Future Markets

Page 33: Creating  Consumer  Demand for American Hardwoods
Page 34: Creating  Consumer  Demand for American Hardwoods

Hardwood CheckoffGrowing Future Markets

Questions?


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