Business Is EXPLODING (Affari Sta Esplodendo)
By Bill Sendelback
Ravelli may not be a familiar name in North American hearth circles, but it’s one of the largest manufacturers of pellet stoves in the world. The Ravelli Group’s 2014 worldwide sales are more than $83 million, or 75,000 pellet stoves. That’s a bit more than the 72,116 pellet stoves sold by all 22 North American pellet stove manufacturers in that same year.
Now, Italian-based Ravelli has its sights set on the North American market.
Like many European hearth products manufacturers, Ravelli has made a few abbreviated attempts to crack North America. Under the name Ecoteck, in 2008 the company first tried to gain a foothold through a two-step distributor; that distributor went out of business. Knowing that this market could be one of the company’s best, it tried again in 2010, working with another distributor.
Eventually, both companies agreed to change the arrangement, making the former distributor Ravelli’s North American service department. At the same time, a group of investors entered the Ecoteck operation, and one of their first decisions was to change the name.
“There were so many Ecoteck brands around the world that they decided to change the name to Ravelli, the surname of the two company founders,” explains Andrew Lagana, CEO of Ravelli USA, headquartered in San Francisco, California. Besides a name change, Ravelli’s management decided to sell dealer-direct in North America rather than market through distributors.
Lagana joined Ravelli in early 2012 to study the North American market and recommend the best ways to expand the company’s business here. “The only problem we faced was our high prices,” says Lagana, “so we decided to go dealer-direct. When going through a distributor, our prices to the final customer were too high, so we decided to start our own company.”
Ravelli USA opened for business in early 2013, importing stoves from Italy, stocking them in three North American warehouses – in Pennsylvania, Michigan and British Columbia – and selling dealer-direct.
“We now do our own distribution,” says Lagana.
|Flow – Holly C (ductable).|
Headquartered in Brescia, Italy, the Ravelli Group manufactures its pellet stoves in a 161,360 sq. ft. factory and offices, and has around 160 workers plus seasonal employees. Ravelli pellet stoves are sold in 23 countries, mostly in Europe, but including Chile, Japan, New Zealand and now the U.S. and Canada. France is one of the company’s largest markets; it accounts for sales of 12,000 pellet stoves, and has a stocking warehouse for Ravelli products.
Lagana points out that 180,000 pellet stoves per year are sold just in Italy, and that Ravelli has 120 pellet stove manufacturing competitors in Italy alone. To fuel all those stoves, many European countries are producing pellets, but to meet the strong demand, pellets are also being imported from Russia, Canada and the U.S.
“The demand for pellets in the European market is just unbelievable,” says Lagana. “It’s huge!”
With that many competitors just in Italy, Ravelli is continually challenged to stay on top of this growing worldwide market. “If you want to be a leader of the market, you must come up with new technology and new designs every year,” Lagana emphasizes. The company’s pellet stove technology is what Ravelli hopes will help it conquer the North American market.
“The technology that we have is not even comparable to any American producer. It’s not that we’re smarter than the Americans. It’s just a result of the tremendous competition we face.”
A major key to Ravelli’s claimed competitive advantage is its Ravelli Dynamic System or RDS, a system that automatically regulates combustion within certain parameters to achieve and maintain maximum efficiency. The RDS is set up by the dealer on site to compensate for the type or grade of fuel to be used and for the venting configuration. Once dialed in, the RDS automatically compensates for any changes, and senses any restrictions in the stove or venting; it automatically cleans the stove about once an hour.
“If our stove is 90 percent efficient, for example, we can guarantee that 90 percent efficiency throughout the whole season,” says Lagana. “As soon as a stove starts getting dirty, there is a loss of efficiency. If that stove starts off as 80 percent efficient, it goes down to 75 or 70 percent, and at the end of the season, if you’re lucky, you’re getting 55 percent efficiency. No matter if our stove gets dirty, it will always operate at 90 percent efficiency throughout the season.”
Other technology features in Ravelli stoves include its Eco-Start Quick Ignition, programmable thermostats and Modem GPRS to turn on or off and regulate the stove from a smart phone. The stoves also feature stainless-steel heat exchangers, Firex 600 vermiculite-based combustion chamber refractory panels, ash pans on most models and high end, very quiet EBM blowers. All Ravelli pellet stoves are made in Italy and are EPA certified and safety tested by Intertek Testing Services.
|Air – Sofia.|
On the outside, Ravelli stoves also stand out from most North American models with their contemporary, vertical, European design. Most models are clad with handmade, colored, ceramic Majolica panels. Ravelli sales have been increasing so fast that their ceramics supplier couldn’t keep up with demand, especially while it supplied other stove manufacturers.
So Ravelli purchased the ceramic company, and it now supplies only Ravelli. Also unique to the company is that it will not purchase any components from China. All components come from either European or American suppliers.
Ravelli USA currently imports 10 Ravelli models to North America, with Btu outputs ranging to 50,000. Note that Ravelli specifies its Btu output, not the input, as do most manufacturers. Eight models are Ravelli’s “Air” units – regular pellet stoves. But two models are “Flow” styles, able to duct heat to three rooms. Using three blowers, the temperature in each room can be individually selected. The Ravelli RC 120 model was a pellet stove finalist in the 2013 Vesta awards.
About 60 hearth products dealers in North America currently sell Ravelli stoves, and most are concentrated in the Northeast U.S. “The response from dealers has been really good,” says Lagana. “It was difficult in the beginning for them to understand the difference in our technology, but once they get it, they love the product.”
During his initial market research, Lagana quickly saw five different markets in North America, and the company adapted their products and marketing to these differences.
|Air – Spillo.|
“In the beginning, we had just modern-styled stoves that sold well in the West. But in areas like New England, dealers were not really accepting that look. They wanted something smaller and more classic in styling. So we added four classic, or traditional, models. Now New England is our best market in North America.”
“Business for Ravelli is exploding in the Northeast,” says Mike Rupp, president of Empire Distributing, Arcade, New York, a manufacturer’s representative for Ravelli. “The company has been excellent to work with, and it has changed to accommodate our market. The products are a joy, with better smart technology and with stoves of more than 80 percent efficiency.”
Rupp says the Ravelli pellet stoves are actually quieter than most gas stoves. “I call their styling, European Country, not as European as some others. With four to eight colors available, the dealer can provide a designer look that really appeals to women.” Rupp says his best selling models are Ravelli’s RV 80 and RV 100, with the lower-priced ($2,410 retail) Francesca model a strong seller.
Sales of Ravelli models are doing “very well,” according to Chad Curtis, Operations manager for Earth Sense Energy Systems, a longtime and large pellet stove retailer in Dale, Wisconsin. “Most European stoves don’t do well in the Midwest because our consumers typically like the traditional look. But Ravelli offers colored design tiles, and some models with legs, plus some with more traditional styling. We also do well with their RC 120 model featuring its unique three-room ducting system.”
|The Ravelli Group factory in Brescia, Italy.|
Ravelli models have been very reliable, adds Curtis. “The quality of their components is just as good if not better than those of domestic manufacturers,” he says. “And the RDS allows the stove to perform very well over an extended period of time.”
Unlike many European manufacturers that have tried to crack this market, Ravelli Group has done its homework and made the strong, long-term commitment that’s needed to be successful. It has the products and technology to increase its pellet stove business.
Next up for Ravelli are pellet fireplace inserts, soon to be introduced.