Each year, HVAC distributors from across the country complete a confidential Top Distributors survey, we assess the responses, and then we share the rankings with the readers of Distribution Trends and The ACHR News.
OVERALL TOP 50 HVACR SALES RANKINGS
|TOP 30 (HVACR SALES)|
|4||R.E. Michel Company|
|5||Russell Sigler, Inc.|
|8||The Habegger Corporation|
|9||Dakota Supply Group|
|10||Gustave A. Larson Company|
|12||Koch Air, LLC|
|15||Auer Steel & Heating Supply Co.|
|17||Lohmiller & Company(dba Carrier West)|
|18||Value Added Distributors|
|19||Century Rheem Ruud Holdings LLC|
|21||American Refrigeration Supplies|
|22||Locke Supply Co.|
|23||Refrigeration Sales Corp.|
|24||Conklin Metal Industries|
|25||United Supply Company|
|27||American Metals Supply|
|28||CCOM Group, Inc|
|29||S.G. Torrice Company|
|30||HVAC Distributors, Inc.|
Watsco Inc. proved that although it might have seemed like it at times, not everything changed last year. The company didn’t budge from the top spot, returning to No. 1 again in the 2021 Distribution Trends Top 30 list.
Headquartered in Coconut Grove, Florida, Watsco maintained its core presence in the form of 600 locations supported by 5,800 employees. The company reports that 99% of its sales are HVACR-related, with a roughly 80/20 split between residential and commercial sales, respectively.
While the Distribution Trends annual rankings are based on voluntary participation and self-reported HVACR sales, the survey itself collects a number of other data points as well.
Winsupply rose to second place this year. The HARDI and American Supply Association (ASA) member supplier reported 616 locations, nearly 7,000 employees, and 21% HVACR sales within its overall operation.
Nine companies in this year’s top 10 reported being HARDI members, and four are ASA members.
Ferguson, R.E. Michel, and Russell Sigler Inc. reprised their 2019 strong collective showing in the 3-4-5 slots.
Bedford, Massachusetts’ F.W. Webb returned to the top 10 at No. 6, while Munch’s Supply continued its recent incremental progress. The company ranked No. 11 two years ago, then cracked the top 10 at No. 8 last year before finishing at No. 7 in this survey.
At No. 8 this year, Habegger Corporation continues its own streak of top 10 finishes. On the other hand, Dakota Supply Group makes its debut in the top 10 on the strength of its 30 locations and 800 employees.
With its 52 branches, Gustave A. Larson Company grabs the final top 10 spot this year.
Sid Harvey’s may have finished barely outside the top 10 this year, but it was the only other company in the 2021 survey to make the $200 million tier for HVACR sales.
The distributors ranking No. 12 through No. 18 have an especially consistent track record, all ranking in the top 25 in each of the last three years and all reporting right around 100 team members. These companies — Koch Air; Hercules Industries; AC Pro; Auer Steel & Heating Supply; G.W. Berkheimer; Lohmiller & Co. doing business as Carrier West; and Value Added Distributors — also happen to make up the entirety of companies qualifying for the $150 million to $200 million tier in the 2021 survey.
Impacts on Tap
Another traditional survey question asks participants about the factors they expect to have the greatest impact on HVACR sales in the coming year. Professionals can choose to comment anonymously or not.
One leading distributor laid out the menu of ingredients for a 2021 to remember: “Supply chain disruption; increased awareness and consideration of comfort and indoor air quality amid pandemic; return to work protocols; economic environment; commercial refrigeration increases after return to normal; large repair and replacement market due to installed base.”
Supply chain issues echoed most consistently through this year’s comments. As Shore Distributors director of operations Mike Layton, Jr., neatly summed it up, “Gotta have it to sell it!”
Matthew Bedard, CEO of S.G. Torrice in Wilmington, Massachusetts, cited that “strong partnerships between IWD’s and manufacturers will be key as we navigate the supply chain issues’ hangover” created by the pandemic.
A couple of distributors mentioned post-pandemic transition particulars and political concerns as other factors.
Lanny Sigler, vice president of Phoenix’ Russell Sigler Inc., noted concern about “how fast the politicians in the various states that we serve allow their businesses to reopen to 100%. Even more importantly, how fast the new administration can raise federal taxes and reimpose regulations that will retard business growth.”
Adapting to the New Reality
Of course, when it comes to the top concern of supply chain problems, distributors now have more experience under their belts than they did a year ago.
“The supply chain is critical to our success,” said Jim Anley, executive vice president at Charles D. Jones Co. of North Kansas City, Missouri. “We have become much more proactive in 2021 to ensure we can supply our customer base.”
In the case of Anley’s company, its adjustments included “some significant changes in primary hydronic partners” along with a change in its air conditioning coil partner.
Luce, Schwab & Kase of Fairfield, New Jersey, did not change up its distribution offerings, but it did adjust by “significantly expanded distribution capabilities in
the metro NYC market,” reported vice president, sales, Brian Houser.
Also based in Fairfield, Total Home Supply’s president, Mike Luongo, pointed to a “major uptick” in PTAC and VTAC unit sales as the lodging industry comes back from shutdown conditions.
A few distributors offered additional comments anonymously about how they adjusted business as the market changed.
“We offered a new line of HVAC offerings through a different manufacturer in a limited set of markets,” said one.
“In order to evolve with operational technology architectures,” explained another distributor, “we have expanded our offerings to include more networking and IP-based products.”
That company has also extended more aggressively into products explicitly connected to COVID-related concerns. These have included health-risk survey and screening products, infrared skin temperature screening systems, and body temperature and mask detection readers with face and palm recognition.
(DT Top 30 companies)
Parting Thoughts on Distribution Disruptions
When asked for any last topics on their minds, one theme recurred.
One distributor wrote, “The significant increase in private equity groups acquiring dealers nationwide is a concern. These acquisitions appear to be all about the money and the flip versus the traditional model of partnership, loyalty to one another in a dealer/distributor relationship.”
Another survey respondent in a different part of the country continued the thought that “Consolidation of distributors continues, and in addition to the large distributors and private equity investors, now manufacturers are entering the market by purchasing independent distributors. Will make for interesting dynamics in affected regions.”
All in all, this year’s respondents paint a landscape of constant and varied business challenges beyond the more typical concerns. With so many potential disruptive factors, it may be up to HVACR distributor leadership to develop a passing knowledge of most risks and to cultivate a keener sense of which ones are most relevant to their own firms.
As Kim Hager, HVAC and hydronic product marketing manager for Winsupply, put it, “For 2021, the factors that will impact HVAC the most are product availability and who is better prepared.”
|HYDRONICS AS PERCENTAGE OF OVERALL SALES
(all survey participants)
|3||Mid-City Supply Co. Inc.||25%|
|4||Dakota Supply Group||25%|
|7||Charles D. Jones||20%|
|8||CCOM Group, Inc||19%|
|REFRIGERATION AS SHARE OF OVERALL SALES
(all survey participants)
|2||Meier Supply Co.||10%|
|3||Young Supply Company||10%|
|5||Gustave A. Larson Co.||10%|
|7||Dakota Supply Group||10%|
|8||Refrigeration Sales Group||10%|
|9||Century Rheem Ruud Holdings LLC||10%|
|10||Cochrane Supply & Engineering||10%|
|10||GreenStar Alliance LLC||10%|