feature a solution for the electrical distributor … · the electrical distributor t ed nov.11...

the ELECTRICAL DISTRIBUTOR

tEDwww.TedMag.com Nov.11

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A UNIQUE BUSINESS MODEL DRIVES GROWTH AT MES

Mike Blanchard VICE PRESIDENT OF SALES & MARKETING

Mark Johnson VICE PRESIDENT

B U S I N E S S

WHAT YOUR BUSINESSCAN DO WITH 140

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F E A T U R E

A SOLUTION FOR THE ENERGY SOLUTIONS

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68 the ELECTRICAL DISTRIBUTOR • Nov. 11 www.TedMag.com

feature STORY

FROM CUTTING EDGE TO COMMONPLACE:

G REEN IS EVERYWHEREFIVE ELECTRICAL DISTRIBUTORS LOOK BACK ON HOW “GOING GREEN”

HAS MOVED FROM NOVEL TO NORM AND CONTEMPLATE THEIR FUTURE ROLE AS STEWARDS OF ENERGY EFFICIENCY. By Susan Bloom

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Ask Frank Millard if his 91-year-old distributorship—Linden, New Jersey-based Turtle & Hughes—was focused on green business and energy efficiency back in 1968 when he first joined the company, and this COO will respond with an emphatic “No.” Times were differentthen, and the country was too. In the midst of war, political upheaval, and social revolution, greenproducts and practices were embraced by only a small slice of early adopters and had not yet en -tered mainstream consciousness. But as the nation would soon face a series of energy crises, eco -nomic recessions, and a growing environmental awareness over the ensuing decades, green busi-ness would become a new standard and the electrical distribution industry a mirror of Amer ica’schanging times. Here, we talk with five in the industry about past practices and future prospects.

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Participating in this article are: • Rick Eckman, market manager,

Bor der States Electric (BSE), Fargo, N.D.Estab lished in 1952 in Grand Forks,N.D., BSE has 58 branches in 13 states.

• Mike Lakin, vice president ofsales, Stokes Electric, Knoxville, Tenn. Afamily-owned and operated electricalsupply distributor, Stokes was foundedin 1933 by A. D. Stokes and has fourbranches in East Tennessee.

• Scott Munro, CEO, Munro Dis -tribu ting, Fall River, Mass. Founded in1946 by Munro’s grandfather, Alex an-der Munro, the company operates 11branches (in California, Massachusetts,Rhode Island, New Jersey, and NewYork).

• Kelly Vliet, vice president/salesmanager, Med ler Electric, Alma, Mich.Established in 1918, Medler grew fromhumble beginnings of just one locationto 14 locations today.

• Mitch Williams, senior vice presi-

dent and CEO, Gexpro, Shelton, Conn.Gexpro, which is part of Rexel HoldingsUSA, has been in business since 1904.

Q: When would you say your dis-tributorship first began taking agreen approach and why did youstart?

Lakin: Stokes was selling greenbefore it was used in that context, butour true emphasis on green businessstarted when Philips introduced itsALTO fluorescent solution. This newproduct really helped push Stokes intousing the word “green.”

Vliet: In the 1980s we began pursu-ing energy audit concepts to drive salesof energy-efficient products to specificend-users, providing value-added bene-fits by showing energy reduction andROI.

Munro: We did our first green en ergyjob in 1989 when the utility on CapeCod [Mass.] donated the project to 14

schools in the Plymouth-Carver school system. Backthen, the hot ticket was T12electronic ballasts and 34Wlamps, which seems funnynow. That job, however, cameduring a serious recession inthe Northeast. Being a verysmall distributor at the time,we wrestled with a lot of is -sues concerning the size of the job and our unfamiliaritywith these “newfangled”lighting products. But that job really helped propel usinto the new world of greenlighting products.

Eckman: We started ourgreen efforts when alternativeproducts started becomingavailable (such as soybean oilfor utility transformers), whenRoHS-compliant productsbegan to surface, and whenlower-wattage lighting cameinto the market.

Williams: Our greenapproach started back in the1970s with our entry into thesolar market. Gradually wecontinued increasing ourproduct offerings as efficient

lighting technology progressed in the1980s. We were one of the first distribu-tors to sell low-voltage lighting controlincluding light-sensing devices made byGE at the time. How ever, there was ahuge thrust in the 1990s when the elec-tronic ballast was introduced. That was agame changer for us and for the entireindustry. Looking back, I think we un -derstood early on both the importanceand the potential of the green market-place. We recognized there was an op -portunity that provided a broader baseof solutions while at the same time hav-ing a positive impact on our business.

Q: To help reflect your distribu-torship’s green evolution, pleaseshare some of the green products andservices you offered or green-relatedactivities you pursued through thelast several decades.

Lakin: The 1960s and 1970s were be -fore my time in the industry, although

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we did have many walk-in customers at that time requesting the most effi-cient HID lights—not trying to be green,I suspect, but rather growing greenproduct. But in the 1980s and 1990s, wewere promoting Philips ALTO lamps,CFLs, electronic ballasts, and occupancysensors.

Vliet: In the 1970s, the only energy-related attention paid here was relatedto the fact that a gallon of gas, whichhad cost less than a quarter, shot up inprice overnight and everybody lined upto purchase gas. In the 1980s, any facil-ity with linear fluorescent lighting be -came a target for energy-efficient retrofitproposals to high-pressure sodium. Wedefinitely saw a huge opportunity tocon vert nearly every gymnasium inMichigan. Exterior lighting conversionsfrom mercury vapor to high-pressuresodium were an opening to upgradelighting. Compact fluorescent lightingwas another offering that allowedMedler Electric to drive energy retro-fits. By the 1990s, utility incentives drovebusiness through ESCOs in in dustrialand institutional markets and boostedsales of reduced-wattage linear fluores-cent lamps and ballasts. We saw an op -portunity with energy audits to opennew doors and grow the market, so wecreated an energy specialist position toprovide energy audits and offer productsto reduce energy consumption.

Munro: In 1989, I remember we pur-chased all the available ballast inventoryfrom EBT and Triad, which were the bignames at the time. As time went on,util ities in Massachusetts and theNorth east got more involved in rebateprograms and Munro tried to be on theforefront of these programs; through theearly 1990s, this newfound businesshelped Munro grow when others werehaving a hard time. Over time, ourgreen business became known as our“energy” department. During the late1990s and early 2000s, our business was about a 50/50 split between tra-ditional construction products and energy-saving products.

Eckman: In the 1960s and 1970s, wewere selling mercury vapor and high-pressure sodium lighting, as well asF34T12 fluorescent lamps and incandes-

cent dimmers. In the 1980s, we movedto metal halide lighting, T8 fluorescentlamps, and fluorescent dimmers. In the1990s, it was soybean or edible seed oiltransformers, quality electronic ballasts,fluorescent dimming ballasts, and dim-ming systems.

Williams: In the 1960s and 1970s,solar was gaining popularity on theWest Coast and high-pressure sodiumlighting was replacing fluorescent tech-nology. During the 1980s, we wereretrofitting with fluorescent parabolicfixtures and reducing the number oflamps; also, low-voltage lighting con-trol, including first-generation daylightsensing, was brought to the market byGE Wiring Devices. Inthe 1990s, we werepromoting electronicballasts and sensing.

Q: Please share thetypes of products, ser-vices, and activitiesyou’ve been in volvedwith recently andwhere you’re headedover the next five to10 years.

Lakin: In the pastdecade, we’ve beenemphasizing T5 fluo-rescent high-bays andLED lamps and fix-tures. Look ing ahead,Stokes is seeing morespecification in the areaof LED lamps and fix-tures. Retail customersare asking questionsconcerning LED lampapplications and howthis will save themmoney over time on their electric bills.

Vliet: Since 2000, we again addedanother en ergy specialist to driveturnkey energy service business basedon leads generated by our existing salesforce. We routinely audit educational,industrial, and government facilities andprovide analysis of footcandle measure-ments and payback and ROI opportuni-ties on upgrades to help educate end-users. Utility rebates have providedadditional incentives to drive sales of

these energy-efficient products, andhigh-bay T8 and T5 fluorescent systemshave led the charge in recent times.Over the coming years, clean energyfrom wind generation and solar solu-tions, along with LED, induction, andfluorescent lighting technology, as wellas the ability to offer financial serviceswill become increasingly important toour business. Sustainability is the drivertoday and beyond.

Munro: In the past few years, thegreen side of the business has far out-paced the construction side, althoughboth have grown. Munro entered thesolar market about four years ago andwe’re starting to see some benefits, al -

though it’s a verycompetitive climate—not so much fromother distributors,but from specialtysolar companies.

Eckman: In thepast decade, we fo -cused on CFL andT5 fluorescentlamps, ceramicmetal halide andinduction technol -ogy, LEDs, CFLs,and LED dimmers,as well as solar andwind opportunities.Looking ahead,we’ll be seeing anincreasing numberof lighting upgradesusing highly effi-cient fluorescent,induction, and LEDtechnology, alongwith occupancy sen-sors, dimmers, and

daylight harvesting. We also expectgrowth in the use of power control de -vices for phantom loads, water coolers,and vending ma chines and the in -creased popularity of solar, wind, andsubmetering systems.

Williams: Since 2000, we’ve beenpromoting LED lighting, solar and wind,sensing, motors, drives, and manage-ment software and hardware. As a func-tion of the current recession, we neededto find market segments that would

www.TedMag.com Nov. 11 • the ELECTRICAL DISTRIBUTOR 71

Rick EckmanMARKET MANAGER,

BORDER STATESELECTRIC

FARGO, N.D.

Mike LakinVICE PRESIDENT

OF SALES, STOKESELECTRIC

KNOXVILLE, TENN.

Scott MunroCEO, MUNRO

DISTRIBUTING FALL RIVER, MASS.

Kelly VlietVICE PRESIDENT/

SALES MANAGER,MEDLER ELECTRIC

ALMA, MICH.

Mitch WilliamsSENIOR VICE PRESIDENT

AND CEO, GEXPRO, A DIVISION OF REXEL

SHELTON, CONN.



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continue to develop and offer long-termprospects for growth. We consideredthe green market a strong opportu-nity for us largely due to financialincentives made available bythe government and utilities.Today, we’re increasing ouremphasis on renewablesand most recently theelectric vehicle market.We see the wind marketgrowing as productsbecome more effi cientand less obtrusive, witha sweet spot in smallerturbines geared to -ward the com-mercial marketand very little on theresidential side. Thegame changer for ourindustry is solar; basedon rapidly droppingprices and increasedflexibility in the technology, we seeenormous potential for solar in our busi-ness. Electric cars and charging stationsare a very new development for us.That’s definitely a market where we seepotential, but it will need some evolu-tion to reach maturity.

Q: To what do you attribute thegrowth in demand for green prod-ucts and services over the years?What factors are driving that markettoday?

Lakin: The largest influence over thepast 10 years has been the cost of en -ergy. Customers have always been in -terested in being more efficient and arealways looking for ways to save moneyto add to the bottom line of profitability.The current market is driven more thanever before by government-sponsoredtax rebate programs.

Vliet: Influential factors include thethreat of global warming (driving gov-ernmental regulation), utility incentives,a declining economy in late 2008 to2009, increased energy costs, and theneed to save energy by reducing costs to enhance company profitability.

Eckman: Factors include greaterawareness of the benefits of energyreduction on the environment in the

form of fewer greenhouse gases, im -proved air quality, and avoiding theneed for new generation plants; com-munities are increasingly wanting to dothe right thing for the environment.Some of the largest drivers have beenthe Kyoto Protocol, EPAct, EISA, LEED,Energy Star, and ASHRAE 90.1.

Williams: At the end of the day, itall comes back to finances. Without theincentives and rebates, this marketwould grow much more slowly and takethat much longer to achieve its energy-efficient objectives, so the investmentsthat government and utilities have madein incentives have gone a long way to -ward helping us achieve the scale for aviable business. As the market maturesover time, costs come down to parityand then we no longer need the incen-tives; we just need the push up-front.

Q: Any final thoughts about yourdistributorship’s green evolution/position or any advice for other dis-tributors on their approach to today’sgreen market?

Lakin: In many ways, the green mar-ket is like any new market within theelectrical industry—profitability of proj -ects depends solely on the customer andhow well the project is managed by the

distributor on the front end of thedecision-making process. The

profitability on these proj ects isgood, but probably no differ-

ent today than it was 20 to30 years ago.

Vliet: Education isthe key component; doyour homework andinvestigate all options.

Munro: We be -lieve that productswill continually beintroduced to themarket that will pro-

vide en ergy sav-ings andcommercial

opportunity todistributors. The

key to success isstaying on theforefront of the

new technologies and marketingyour company so it’s in a position totake advantage of new opportunities.

Eckman: It’s never too late to do theright thing for the environment, saveenergy, and help your customer’s bot-tom line.

Williams: The active green ap -proach we’ve taken has required us tochange the way we do business in someareas; for example, education has be -come increasingly important in ourbusiness. We advise all distributors to be open to change and to investing re -sources in training—not just training of staff, but also training for customerson the latest technology, products, andso lu tions. I’d say that overall, it’s anexciting time to be in this business—demand was high for energy-efficientproducts 20 years ago, but the productsand solutions were limited. Today, de -mand is still very high, but there’s somuch more innovation out there tomeet it, and it’s a profitable businesssegment—one where we can offer solu-tions that are priced right and that offercustomers a reasonable to excellent re -turn on investment. ■

Bloom is a 20-year veteran of the lightingand electrical products industry. Reach herat [email protected].

In the past few years, the green side of thebusiness has far outpaced the construction side, although both have grown.

-Scott Munro, CEO, Munro Distributing


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