2021 Distribution Trends Surveys Up & Comers
Little items, big commitments add up for distributors of all sizes who made gains last year
SETTLED IN: Many improvised home office setups have given way to more comfortable spaces, and some distributors expect these habits to outlast the pandemic. (Courtesy Conbey/Pixabay)
Companies ringing up the most sales may dominate the Top 30, but other distributors are growing and making good things happen at every level.
This year’s Distribution Trends annual survey coverage expands to look at the insights and advice from these companies, for distributors and contractors alike. These companies cover the spectrum in terms of raw HVACR sales but share the achievement of a notable sales increase percentage compared to the previous year.
Adapt and Accessorize
S.G. Torrice of Wilmington, Massachusetts, finished at No. 29 on this year’s list. In addition to adapting to the IAQ trend, CEO Matthew Bedard advised contractors not to let up on the best practices that so many have implemented over the last year.
“End users have come to trust HVAC contractors to complete jobs in a safe manner, and PPE is here to stay for the foreseeable future,” said Matthew Bedard, CEO of S.G. Torrice in Wilmington, Massachusetts. (Courtesy Pixabay)
“End users have come to trust HVAC contractors to complete jobs in a safe manner,” he said, “and PPE is here to stay for the foreseeable future.”
Total Home Supply entered this year’s list at No. 47. Mike Luongo is president of the Fairfield, New Jersey, company. According to Luongo, part of his company’s recent success in a turbulent year can be attributed to the decision to “add more accessories and add-on products to make it easier for our customers to get everything they need to complete their projects.”
Further up the list, Milwaukee’s Auer Steel & Heating Supply Co. cracked the top 20 and climbed a couple of spots on the strength of its improved 2020.
Another New Jersey distributor, Plainfield’s United Supply Company rose nine places this year. It comprises 145 employees across 16 branches.
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Like many in the industry, United Supply’s CFO, Lee Campagna, noted that “HVAC residential demand increased due to parents working from home and children being schooled from home due to COVID-19.” However, while 2020 will surely go down as a singular year in many ways, Campagna predicted that “the effect will be permanent, as work patterns have changed.”
The opportunities that 2020 presented can also represent a darker side in the assessment of George Malvar, president and CEO at GreenStar Alliance. Based in Ocala, Florida, GreenStar appeared at No. 49 in this year’s rankings.
“Our industry sadly had a bad reputation due to the nature of the ‘beasts’ who try to get rich off of one job,” Malvar lamented. “We MUST become realistic and let's STOP adding 300% markups! We believe in HELPING families, not getting rich from them. We must add normal markups and rely on volume. Let's change this industry to one that is respected.”
Spirit of Independence
The loftiest vantage in this debut batch of Up & Comers belongs to Dakota Supply Group (DSG). With 800 employees and 30 branches, the Aberdeen, South Dakota distributor landed at No. 9 among this year’s respondents.
Justin Ellenson works in inside sales for DSG and prepared its entry. In the broader picture, Ellenson is keeping an eye on Washington and any legislation or “radical changes” that might affect business. Closer to home, he still emphasized the business climate, with special attention to the agriculture industry given its traditional influence on the economics of the Midwest.
In the Top 30 article, distributors noticed and expressed concern about the recent trends toward consolidation and acquisition by outside interests.
Brian Houser, vice president, sales, for Luce Schwab & Kase (LS&K) has observed the same thing. Ranked No. 37 and headquartered in Fairfield, New Jersey, LS&K is working to demonstrate how a medium/large distributor can buck that trend. LS&K operates five branches with roughly 100 employees.
“We believe in our longstanding philosophy that it takes independence and decentralization to adequately service the contractor community in the NYC/NJ Metro marketplace,” Houser explained. “The majority of the contractor base are privately-owned independent businesses who we closely relate to.”
While LS&K managed to expand its service territory in the New York area amid a pandemic last year, AC Pro is planning to open four new locations of its own this year, according to AC Pro vice president Blake Quinn.
Located in Fontana, California, AC Pro reported one of the larger sales increases on this year’s survey and moved up to No. 14. Its planned expansion coincides with the company’s 35th anniversary.
When asked for the single most important adjustment made last year, Quinn pointed to the ability to adapt to change in real time, making sure to maintain the safety of associates, customers, and supplier partners as its top priority.
In the Up & Comers spirit, and especially in light of acquisition trends, Quinn closed with some encouragement for smaller HVACR distributors working to grow their operations.
“You must be resilient and keep going through the ups and downs,” he said.
“Ensure that your values are at the heart of your company culture and they drive your priorities and decisions. More importantly, build a team that embodies your company culture and will promote and protect it as you grow.”
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