The results are in.
Companies with household names in the HVACR world dominated the top third of the latest Distribution Trends Top 30 Distributors list, while several firms not among last year’s Top 30 appeared, or maybe reappeared, on the second half of the list.
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Four companies — Ferguson Enterprises LLC, Winsupply Inc., R.E. Michel Co., and Russell Sigler Inc. — listed 2022 sales of more than $1 billion each, and those four accounted for sales of more than $7.7 billion, or about 59% of the total sales among those in the Top 30. Last year’s list also included four companies with sales of more than $1 billion each.
The annual Top 30 contest, sponsored by The ACHR NEWS, ranks HVACR distribution companies by reported gross sales for the previous calendar year. Entrants, typically the CEO, marketing manager, or chief financial officer, are also encouraged to answer questions about the HVACR distribution market, and their responses this year represented a range of outlooks on the Inflation Reduction Act (IRA) and new and coming industry regulations.
OVERALL TOP 50 HVACR SALES RANKINGS
$250 million to $1 billion
$151 million to $249 million
$61 million to $150 million
|TOP 30 (HVACR SALES)|
|1||Ferguson Enterprises LLC|
|3||R.E. Michel Co.|
|4||Russell Sigler Inc.|
|5||The Habegger Corp.|
|6||Gustave A. Larson Co.|
|7||Sid Harvey Industries Inc.|
|9||Temperature Equipment Corp.|
|10||Hercules Industries Inc.|
|11||Auer Steel & Heating Supply Co.|
|13||Conklin Metal Industries|
|15||American Metal Supply Co. Inc.|
|16||American Refrigeration Supplies Inc.|
|17||Refrigeration Sales Corp.|
|18||Century A/C Supply|
|20||APR Supply Co.|
|21||CCOM Group Inc.|
|22||Young Supply Co.|
|23||S.G. Torrice Co.|
|25||Charles D. Jones Co.|
|26||M&A Supply Co. Inc.|
|27||2J Supply HVAC Distributors|
|28||Duncan Supply Co. Inc.|
|29||Crescent Parts & Equipment|
|30||Northeastern Supply Co.|
|REFRIGERATION AS A PERCENTAGE
OF OVERALL SALES
(all survey participants)
|Duncan Supply Co. Inc.||50%|
|Young Supply Co.||46%|
|Crescent Parts & Equipment||35%|
|Nance International HVACR||30%|
|American Refrigeration Supplies Inc.||30%|
|Sid Harvey Industries Inc.||30%|
|Lee’s Maintenance Plus LLC||25%|
|Gustave A. Larson Co.||25%|
|HYDRONICS AS PERCENTAGE
OF OVERALL SALES
(all survey participants)
|Crescent Parts & Equipment||30%|
|Sid Harvey Industries Inc.||20%|
|Charles D. Jones Co.||15%|
|APR Supply Co.||14%|
|R.E. Michel Co.||13%|
|CCOM Group Inc.||13%|
|Auer Steel & Heating Supply Co.||12%|
|Temperature Equipment Corp.||12%|
American Refrigeration Supplies Inc.
The six companies rounding out the top 10, each listing 2022 sales of more than $250 million, totaled another $2.19 billion-plus in sales; added together, the distribution firms in the top 10 accounted for more than three-quarters of the Top 30’s 2022 sales, which reached nearly $13 billion.
Companies making this year’s Top 30 that weren’t on the list last year were Temperature Equipment Corp. (9th), ABCO HVACR (12th), and Behler-Young Co. (14th), plus Charles D. Jones Co., M&A Supply Co. Inc., 2J Supply HVAC Distributors Co., Duncan Supply Co. Inc., Crescent Parts & Equipment, and Northeastern Supply Co. (25th through 30th, respectively).
Nearly every respondent to the Distribution Trends Top 30 survey reported sales growth in 2022, and the growth at many companies was in the double digits.
“HVACR industry growth continues to outpace GDP (gross domestic product),” said Matt Bedard, CEO of S.G. Torrice, in Wilmington, Massachusetts. “Demand is steady from new construction, maintenance, and renovation of commercial and residential buildings.”
“If the lodging industry continues with the remodels and the new construction we have seen in the past, 2023 will be another great year,” said Mike Luongo, president of Total Home Supply, in Pine Brook, New Jersey.
Kinks in the supply chain, however, continue to be major headaches for distributors.
“We have been placing orders months in advance to make sure we were ahead of the delays caused by the supply chain,” said Luongo.
“Like most independent wholesale distributors, we brought on secondary equipment lines to fill gaps created by supply-chain challenges,” said Bedard.
Several wholesalers expressed concerns about the refrigerant transition and the phasedown of HFC refrigerants.
Christopher Hendricks, president and CEO of Duncan, in Indianapolis, said federal regulators are overreaching with the refrigerant phasedown and the industry will not be prepared for what comes next.
“With the current plans of a hard stop (of HFC refrigerant manufacturing and importation) in 2025, that means manufacturers now have to start producing the new equipment, which is going to cause delays in current equipment,” Hendricks said. “There is panic setting in, with confusion and no clear path forward that any manufacturer can predict.
The phasedown timetable, Hendricks said, is unreasonable given that the supply chain has not recovered from problems caused by the coronavirus pandemic. Hendricks also objected to the Environmental Protection Agency (EPA) plan to ban nonrefillable refrigerant cylinders by 2025.
Some respondents criticized other aspects of government policy for their impacts on the HVACR industry.
“The feds’ continued attempt to head off inflation with interest-rate hikes will negatively affect sales of higher-SEER-rated equipment,” said Ron Kinman, president of Charles D. Jones, in Riverside, Missouri. “Consumers will opt for minimum efficiency instead of financing.”
“The major push on electrification has me worried, as it’s moving too quickly,” said Jim Anley, executive vice president at Charles D. Jones. “Gas products still have a place in the industry and will for years to come.”
“Our industry is challenged by government interference of dictating equipment efficiencies that are not economically justified; electrification in the face of (a) poor electric grid,” said Doug Young, CEO at Behler-Young, in Grand Rapids, Michigan. “I could go on.”
Others took a more philosophical view of government-driven industry developments, such as the IRA’s consumer incentives for home electrification, suggesting they see opportunities in them.
”The Inflation Reduction Act and associated tax credits and rebates should spark interest for many homeowners and have a positive impact on demand,” said Bedard. States in the Northeast, because they’ve previously had electrification rebates, should be better prepared to administer rebate programs, Bedard added.
“The electrification of many areas we serve is becoming something we need to pay close attention to,” said Patrick Newland, marketing and business development manager at Hercules Industries Inc., in Denver. “The move toward heat pumps has been more significant in the past year than I have ever seen.”
John White, president of American Refrigeration Supplies Inc., in Phoenix, said that staying on top of government regulations, understanding their effects on the HVACR market, and relaying that knowledge are increasingly important.
“Our industry is undergoing some of the most significant regulatory changes in history and will be for the foreseeable future,” said White. “While consumers continue to face inflation and rising costs in both residential and commercial sectors, our industry will need to meet the challenge by understanding the impact not only on the customers we serve, but on their customers. Education and knowledge will be premiums and it is up to distributors to provide the connection to understanding between contractors and consumers in this environment.”
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