SMART EXPORTERS FIND SUCCESS, SOUTH OF THE BORDER
Up until 2008, the U.S. served as Canada’s largest export market for value-added wood products. According to the analysts, there is no reason why that can’t happen again. Even with the higher Canadian dollar, all indications south of the border finally point to a sustained housing recovery – one that Canadian wood-industry producers can exploit for maximum advantage.
Canadel is a furniture manufacturer based in Louiseville, Que. It started exporting product to the States long before the recent downturn, continued to do so during tough times, and is now seeing a sustained bounce as a result of the U.S. housing recovery. So, while other Canadian exporters have come and gone, Canadel is still hanging in there.
Jean-Philippe Deveault is Canadel’s product development director. Asked to account for the company’s sustained success in the U.S. market, he quickly responds, “You have to decide to enter the market. Once you do that, you then have to invest the time and money to market yourself properly, and then keep at it. That has been our formula for success.”
Deveault says the first entry-point in the U.S. for Canadian wood-products manufacturers should be the tradeshows. For Canadel, it has been such places as the High Point Market in North Carolina and the Las Vegas Market.
According to Deveault, the effort should not be a half-hearted one, either. “It’s not going to work if you buy some small show space in the corner somewhere and hope people will buy. The Americans won’t be impressed. You have to stand out. You have to look professional. You have to give buyers a reason to believe your product is worth their dollars. Otherwise, they just won’t notice you.”
Canadel is a large manufacturer, with over 700 employees, which is about three times the size it was before targeting the U.S. market a couple of decades ago. The company simply would not have prospered as it has without tapping the juggernaut market in the U.S. According to Devault, “For sure, we experienced exponential growth every year once we jumped in.”
However, even small manufacturers should be able to look down south for opportunities, which is where an organization such as the International Wood Products Association (IWPA) might help. The IWPA is a trade association representing wood-products manufacturers that import into the U.S, including those from Canada.
The IWPA’s current president is a Canadian: Warren Spitz, president and c.e.o. of UCS Forest Group, which includes Upper Canada Forest Products. Members of the IWPA include value-added wood producers such as Boa-Franc, a manufacturer of pre-finished hardwood floors headquartered in Saint-Georges, Que.
Ashley Amidon, manager of government and public affairs for the IWPA, admits she would like to see more Canadian secondary wood manufacturers get involved in the U.S. market. She says, “Our organization has evolved over the years. We form committees based on how our membership is constituted. If enough Canadian value-added wood producers get involved, we can start targeting and servicing that sector more extensively, too.”
One of the ways in which the IWPA can help small manufacturers is with a simple phone call. As Amidon says, “If an importer has its goods pulled at the border, they can give us a call. In fact, they can call me personally. This has happened. After U.S. customs talked with me, they were assured a shipment was fine, and let it through. Otherwise, it would have been sent back to Canada.”
For both Deveault and Amidon, all the evidence points to a real U.S. housing recovery, versus the many false alarms over the past four years. According to Deveault, “There is no doubt the past two years have seen a rise in U.S sales for us. More Americans are buying our products at retail and showing up in our showrooms at U.S.-based markets. And we’re seeing signs that it’s only getting better.”
According to Amidon, the remodelling market has sustained U.S. wood-products imports for the past few years, and will probably do so for the foreseeable future. She says, “Not only are all the statistics showing this, but our members are saying it, too. Their products are being bought by people who are remodelling, and it’s a trend that is continuing during this recovery.”
In order to sell a product into a market, there has to be a demand for that product in that market. Deveault attests to the fact that there is a demand for Canadian wood products in the U.S. He says, “Absolutely there is a chunk of the American market that wants quality goods made in North America. That’s where we step in. We make high quality, custom-made furniture at good prices. That’s where we compete.”
Deveault uses a car analogy to make his point. “Let’s say you have a Honda Civic on the one hand, and a BMW on the other. If it’s about price, the Honda Civic wins. However, even BMW makes lower-end models that give value seekers an affordable alternative. That’s what we do at Canadel. We’re not as cheap as Chinese products, for example, but if you’re willing to pay a little more, you can get superior quality.”
In fact, Deveault points to lower-end furniture retailers in the States as fertile ground for affordable Canadian home furnishings. He explains, “Lower-end stores in the States are actually a bit higher-end than lower-end stores in Canada. So, if you make a quality product, but at a good price, there is definitely a market there that can be exploited.”
One cautionary note in approaching the American market involves an old foe for importers: protectionism. Amidon says it has reared its head once again in the wake of the recent downturn. She warns, “Sometimes even local communities will pass these buy-American policies that we learn about after the fact. It’s up to trade groups like the IWPA to get the message out as much as possible.”
Another solution to engaging Americans is homework. The IWPA does some of this for its members. At Canadel, it has been a crucial component of its success south of the border. Deveault adds, “Go there. Go to the U.S. shows. Talk to the people there. Find out what they’re looking for, and how you can give it to them. We have always done our homework, and it pays off.”
Most Canadian value-added wood manufacturers know the American market is different than ours. Deveault addresses this point: “I would say that Canadian home-furnishing trends are about ten years ahead of the Americans. So, we try to adapt our lines to match their tastes. At the same time, we also try to market and sell what’s best about our Canadian-made goods, and that works, too.”
It can probably work for many more Canadian wood-industry producers — if they simply explore the vast opportunities available in the U.S. market. Doing one’s homework, spending time down south, investing dollars, and sticking with it amounts to a formula that can result in long-term success with American customers.