A Major Commitment
By Richard Wright
Through the years, many in the hearth industry watched as numerous overseas manufacturers attempted to crack the North American market (after all, it is the Holy Grail of Sales!). The majority have been from Europe, with others from Australia, Israel, and even Siberia.
There have been some notable successes, with Jøtul (Norway) being a prime one, and a real pioneer in the industry. It now has a manufacturing plant a bit north of Portland, Maine, but decades had to pass before it made that leap. Valor (UK) is a major success story; Ortal (Israel) has also been successful, and years ago the Kent Tile Fire from New Zealand made a splash with its removable tiles. It lasted quite a number of years in the early days of the hearth industry, then pulled out abruptly.
More than a few companies, particularly from Europe, simply didn’t do their market research, and misunderstood the size, and complexity, of the North American market. Some would last two or three years, pull out, then try again five years later, when they would make the same mistake once again.
|The Stûv on-site showroom.|
It takes a real commitment for a hearth manufacturer to establish a foothold here, and it requires many marketing dollars to make it happen. It also helps if you have people such as Vincent Boudreau and Nadia Gilbert on the ground well before the main effort is made.
In 2006, the couple noticed the Stûv line in a French magazine, made a call, visited the Stûv factory in Belgium, and returned to Canada as North American importers of the Stûv line. Back then, the Stûv line was only wood-burning appliances; today, it is both wood and gas.
It was Boudreau’s task to call on retailers and convince them to carry the line – a difficult job given the number of strong manufacturers and brands in North America. Gilbert’s job was to work the showroom, and handle the office.
|The hydraulic positioner table for welding.|
By 2013, the pair had opened upwards of 40 dealers, mainly throughout Canada. The parent company was impressed, and sent over their main Sales and Marketing executive, Francois Thiry, to provide guidance, and help to formulate a plan for growth. The plan included setting up a factory on the outskirts of Montreal and manufacturing the Stûv product line there.
There can be no better way for an overseas company to show its long-term commitment to this market than to produce product here. According to Boudreau, it will also lower the cost of the product once the North American plant is operating as efficiently as the plant in Belgium.
The first products rolled off the production line on Nov. 29, 2018. “That’s a date that Nadia and I will never forget,” said Boudreau, “and I would not have been able to achieve this success alone. Stûv has been wonderful to work with.”
|A precision table.|
Hearth & Home: We understand that creating your factory took a bit longer than you thought.
Vincent Boudreau: “Yes, initially it was to be in operation by November 2017. Things took more time than planned. We are a little bit delayed, but not that much.
“We have installed a state-of-the-art, but not fully automatic, production line. It is a manual production line to start with. We like to do things progressively – not slowly, but progressively. We have a few welding stations with hydraulic tables for the comfort of the employees.
“We are giving all the laser cutting and folding to local companies. Some other components are going to come from Europe. We will do all the assembly, welding, painting, final assembly, packaging, quality control, and all that. I was a professional welder. I’m very quick in finding solutions, and the recipe for success with this venture is the technological transfer from Stûv in Belgium to here.
“To me, it is like a recipe. We are doing a copy/paste on the production line in Europe. It is not something hard to put in place. They have 38 years of knowledge over there, so even the small things that they would like to improve, we will do it right away here. We start from scratch, but with 38 years of experience and history.”
|Prepping prior to painting.|
Even though you have been working on this major project, you must have also been getting a lot of product out to dealers, correct?
Boudreau: “Correct. Yes, and that is the beauty of the venture with Stûv. We have a huge facility in Belgium that is able to produce everything we need here. So we are not in a hurry. We need to make a successful technology transfer. That is the key to efficiency. So even if we are wasting a few months now, the production facility in Belgium is able to guarantee the delivery of product to our network, which is the base of our success for now.”
You have to keep the cash flow going, right?
Boudreau: “Yes, and we have been able to grow our success based on product quality and availability, so we have to be careful to maintain that. It is part of our success; people call and we have the product.
|The paint shop.|
“When I first imported the product in 2007, retailers were almost laughing at me thinking there’s no market for contemporary wood products. It’s funny because, now, we have big players copying our concepts; that is close to being flattering.”
Many times, competition is a good thing. As an example, when Pacific Energy came out with the Town & Country, it gave birth to a new line of products – clean-faced. In a brief period of time, other manufacturers created clean-faced products, and that helped the category really take off.
So when you see people come in, such as Spartherm, or now we have a new one, Energy Distribution, bringing the Invicta in from France – both are wood-burning products. That will help the entire wood-burning industry.
Boudreau: “That’s for sure. The more you see; the more you want; the more you compare.”
How well have you done in getting the right people to run the factory?
Boudreau: “We’ve been lucky, the branding we’re building is appealing to our employees. We have a young staff. The youngest is our designer and he is 22 (I think). The engineer is 27. Our Business Development guy is 26, and our Operations manager is 49. So it’s a pretty young staff.
“We’re looking for talented people so we are paying higher wages than the average for a similar position, but we want to get the right person. We are only 13 people, so it is not big yet. As soon as we finish the production line, then I’m expecting to build the team to 18 to 22 people.
“You don’t need that much skill to assemble the product. You need people who have the ability to think, mainly, and pay attention to details. That is everything. It is all about paying attention to details with our product line because it has to be perfectly assembled. That’s part of our success as well. The products are reliable and very well made.”
How many different models will you be producing here in North America?
Boudreau: “We have right now four complete ranges of products. We have the Stûv 16, the Stûv 21, the Stûv 30, and the Stûv gas. The Stûv 16 is the cube stove. Then the Stûv 21 has the guillotine glass door. The Stûv 30 is the round stove with the three doors that rotate around the combustion chamber, and the Stûv gas is self-explanatory.
“To begin with, we are almost doing two series at the same time, which is the Stûv 16 and the Stûv gas. The gas will become a big part of our business. It is not yet a big part, because the wood-burning units have a very good percentage, but it is where we see the most growth right now. Within the next two years, I think we will be as big in gas as in wood.
“So the Stûv 16 and the Stûv gas are the first products that we will be producing here and, progressively, we will then do the Stûv 21 and the Stûv 30 – all this within a target of two years.
“The most important thing was to become a local player, and this is part of the strategy. Our costs should go down as soon as we manage the local production efficiently; the control of the product will be much faster and closer, and we will be able to manage things very quickly. My goal is to install a lean production system. With that, we will be able to make a product to order within two days.”
|Stûv B-60 gas.|
How were your sales this past year?
Boudreau: “Very good. The last three years we have been in a curve of growth, where the high season becomes the low season in the following year. The business is completely different now than it was a few years ago. Everything goes faster right now. The phone rings all the time. We now have to manage the customer service department because we have so many inquiries, and we have one of our guys who is out West and in New England right now. It is so different than when I was opening up the market, because now you get into hearth shops and people know about Stûv. If you say, I’m with Stûv. I’m here to talk with you. ‘Oh yes, please have a seat.’
“Five years ago, when I would drop by a hearth shop, they were most of the time too busy to sit down with me at that moment. Things have changed dramatically for the best.”
That’s because you did a good job out in the field.
Boudreau: “It has been hard, but, to be honest, I take nothing for granted. We are still a small player, but I believe we are putting everything in place to become a major player in North America.
“The main strength of Stûv is the innovation. It is being able to develop a product that doesn’t exist, and that creates future returns. Now there are more and more products coming with log storage underneath. That is not an innovation though. It’s a design. The guillotine glass door is an innovation. The Stûv 30 with the three doors is an innovation. Stûv does not follow trends. Stûv creates trends.”
How many dealers do you have in Canada, and in the U.S.?
Boudreau: “In Canada we have about 60 dealers. In the U.S. it’s about 35 dealers. These are active dealers who buy every year.”
Are you still going dealer-direct?
Boudreau: “Absolutely, and it is going to stay that way. Almost all dealers tell us they prefer dealing directly with us.”
Do you have reps, agents, calling on your dealers?
Boudreau: “Yes. We have two inside reps on our payroll. Maxine is covering Quebec and the Maritimes, and Corey Anthony, our business development guy, is responsible for the West Coast, and New England. Isabel is our in-house customer service agent.”
How were your sales in 2018 compared with the prior year?
Boudreau: “It was a very big year for Stûv. We had an increase of almost 40%.”
|Stûv B-95 3-sided.|
Which model was your best seller in 2018?
Boudreau: “The best model, the best unique SKU that we saw, is the Stûv 30 compact, the round stove with the three doors. That has been our best seller. But we have four series of products, the 16, 21, 30 and the gas. The most successful series has been the Stûv 16. With the new zero-clearance fireplace it has been a home run.”
Now, Stûv doesn’t come out with new products every year as they do in the States. Am I correct?
Boudreau: “You’re right, it’s not every year. There are additions to the range of products every year, like accessories, new cladding, new facing, or something else that improves on a product. Stûv has more new products in Europe than here because, here, we have to certify the products. Already they have the Stûv 22 in Europe, and the P10 pellet stove.These products will come here in the near future. “We are already doing some testing for EPA emissions on the P10. We took a production unit that we haven’t fine-tuned and put it on the bench at Polytech Services. We got results that were amazing. It was 0.3 grams per hour. That places the P10 at the third row in the list of all pellet stoves in the U.S. market.”
|The Stûv Studio.|
Have we covered all of the bases at this point?
Boudreau: “We are promoting the Stûv Studio concept to our dealers, because we see a direct consequence of success for dealers who jump into the Studio concept compared to other dealers. First, working with the dealer, we identify a space in the store where the Studio will be located. Then we – Stûv – will create the design; each design is custom-made to fit a particular store. We ask that a minimum of seven units – both wood and gas – be allocated to the space.
“We have dealers who are selling 100-plus units a year, and it’s because they believe in Stûv. They see the fire, the flames, the reliability of the product. It’s fun to use. It’s fun to show people. It has a Wow factor.
“We’re looking for dealers who have ‘butterflies in the belly’ when they are selling Stûv. Those are the dealers that we want, and we want to help them by creating a Stûv Studio.”
|The Stûv team. Vincent Boudreau is third from left; Nadia Gilbert is third from right.|