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Water conservation hits home

BY Linda Rallo

In the “Shower Head” episode of Seinfeld, broadcast more than 10 years ago, Kramer enters Jerry’s apartment visibly concerned and asks Jerry if the super has changed his shower head yet. Jerry replies, “No, he’s doing mine next, they’re low flow you know.”

Kramer retorts, “Low flow? Well I don’t like the sound of that.” The episode continues with the duo deeply disturbed by their flattened hair still saturated with product. “These showers are horrible. There’s no pressure. I can’t get the shampoo out of my hair. If I don’t have a good shower, I am not myself. I feel weak and ineffectual. I am not Kramer. ”

Back in the ’90s, during the heyday of Seinfeld, Congress passed a piece of legislation called the Energy Policy Act of 1992 (EPAct), which established a maximum flow rate for shower heads of 2.5 gallons per minute. The problem was those heads just didn’t get the job done. Owen Roberts, a third generation home builder in very “green conscious” Seattle said “being green makes my customers feel good.” However, he added, “Water conservation is not really in our face up here, builders do it to comply with code, but the low flow shower heads don’t perform, and people end up taking the regulators out; they aren’t very efficient.”

Virginia Lee of the Environmental Protection Agency (EPA) agreed that the standards mandated by the EPAct brought to market products that just weren’t ready. “There were engineering challenges that started when the industry had to scramble to comply; but they just didn’t work.” The first low-flush toilets were ineffective, according to Roberts. “You ended up flushing twice. What’s the good of that?”

High efficiency plumbing fixtures today have vastly improved, partly to the credit of WaterSense, a new program formally launched by the EPA in June 2006. WaterSense-certified products are designated with a label, much like Energy Star, that helps consumers identify high efficiency/high performance plumbing fixtures. “We make sure that the technology is there so that it is worthy of the label,” said Lee. “When we set specifications, we really work through the performance issues, and we rely largely on industry input.”

The EPA initially focused on developing criteria for endorsing certification programs for irrigation professionals. According to EPA statistics, “the typical single-family suburban household uses at least 30 percent of its water outdoors for irrigation,” and some experts estimate a 50 percent waste from over-watering. Drip irrigation uses 20 percent to 50 percent less water than a conventional pop-up system.

Augie Venezia, president of Fairfax Lumber in Northern California, sees a huge potential for irrigation control. He not only sells drip irrigation, which he touts for “putting water right where you need it,” but also weather-sensitive programmable systems that can compensate for variables like soil type, slope, plant species and changing seasons. In drought sensitive California, Venezia sees a very good customer response to these products. “You need to look at the numbers to make it more objective—two gallons per hour with drip versus two and a half gallons per minute with pop-up.”

The EPA has compiled a list of professionals certified by the WaterSense program. Consumers who are serious about conservation now have a resource that will ensure they are significantly curtailing their consumption and generating measurable economic savings. The EPA reports that landscape irrigation wastes up to 1.5 billion gallons of water every day.

With outdoor irrigation as the biggest user and biggest waster of residential water, WaterSense has a tremendous potential for impact but faces certain awareness challenges.

“As this is a new EPA program, we have found only a handful of lawn and garden companies are familiar or even know it is available,” said Kathy Poupore of the Gilbert, Ariz.-based Lawn and Garden Performance Group. “We are also finding some lawn and garden companies interested in obtaining WaterSense certification but unclear as to the process or guidelines. Other lawn and garden companies are taking a ‘wait and see’ attitude before they support it fully. With the EPA’s involvement, we see WaterSense to be the ultimate go-to program for water conservation standardization and industry certification.”

Places like Arizona and California, where rapid growth and regular droughts challenge the reserves, residents see a huge emphasis placed on water conservation. “We promote products to alert folks that there are things they can do that will not only help the environment but also affect their pocketbook,” adds Fairfax Lumber’s Venezia.

Steve Davitt, general manager of Channel Islands Do It Best in Port Hueneme, Calif., agreed. “It’s an awareness issue; we look at our water bills, and we’re constantly being educated by the media. This is the first spring that we have had normal precipitation, but for years past we have been in a drought situation.” To help sell water efficient products, Davitt encourages his customers to take advantage of rebates that California cities offer for products like high efficiency, low-flow toilets. He also uses independent promotional materials that advocate water conservation through plumbing fixtures like toilets and shower heads.

Although he was unfamiliar with the WaterSense program, his customers are buying dual flush toilets like the Kohler Karsten that uses. 8 gallons per flush on the liquid side and 1.6 gallons per flush on the solid side. He also sells a tankless water heater that saves both energy and resources as the water heats only as needed and arrives hot at the faucet, eliminating the need to wait and waste as the water warms. He said just about every major retailer has a green initiative and maintains that his company offers about 1,500 items that are “green” in some capacity.

Memphis, Tenn.-based distributor Orgill currently has about 1,300 environmentally friendly products in its warehouses. “We are in the process of defining green for our customers, whether its products that are energy efficient, reduce water, are made from reclaimed material, are non-toxic or biodegradable,” says Denise Sullivan, Orgill retail program manager. “We have had a lot of requests the past couple of months from our customers asking us to come up with a green program so they can identify and sell green products. Not many consumers are looking to buy green just for the environment, but if the item is identified as green and it’s at the same price point or close, it might be enough to help push them in that direction.”

That’s where the WaterSense program seems to have the most weight. The specifications and testing behind every certified product simplifies “being green” for the general public. Whether you are in the West, where water shortages are tangible realities, or in the middle of America, where water levels are often elevated, environmentally motivated conservation efforts can also bring monetary rewards to consumers.

The EPA reports that WaterSense-labeled toilets, for example, will reduce water bills by more than $90 per year and about $2,000 over a toilet’s lifetime and save about 4,000 gallons per year. “Water conservation is really important everywhere, while there are regions that face shortages, some areas are also a priority because of infrastructure issues, especially older cities like Chicago and Boston,” said the EPA’s Lee. The overall goal of the program will be to “encourage water efficient behaviors” and motivate consumers to buy products that use less water.

In Atlanta, water levels at Lake Lanier are down 13 feet from where they need to be, and critical shortages and aging infrastructures place city residents in a precarious position. Georgia Tech borders low income neighborhoods that stand to suffer if the price of water increases. In a partnership with Atlanta-based Home Depot, Georgia Tech launched a campaign directly to nearby residents aimed at promoting water conservation and ensuring economic relief if prices increase due to the impending crisis.

Through an awareness program delivered via local schools and associations in the Centennial Place, English Avenue and Home Park communities, Georgia Tech and Home Depot are able to talk about ways to save water, promote incentives available from the Mayor and deliver Home Depot gift cards that will let them install high efficiency toilets and faucet aerators at reduced or minimized costs.

“The reaction and response has been tremendous,” said Andrea Ashmore, director of Institute Partnerships at Georgia Tech. “The seminars have provided real world exposure and experience to children about how they can help make a positive effect on households, and teachers now can better integrate water conservation lessons into science and math curriculum.” Ashmore also sees a positive response from the community because “once those water bills rise, those are the folks who are most adversely effected.”

Home Depot was the first big-box retailer to partner with the EPA’s WaterSense program, and the company actively educates consumers about the importance of water conservation through its Eco Options program.

According to Stacy Moore, Home Depot’s associate merchant of Eco Options, the retailer has a new Green Road Map, which is a free customer handout that highlights various Eco Options products. “In severe drought areas, customers are asking for products that conserve water, and we have launched a Web page that will help consumers in affected areas,” she said.

The EPA continues to develop specifications for products that can earn the WaterSense label. With irrigation certification programs in place and specifications available for toilets and faucets, next on tap will be the shower heads. The EPA has issued a formal intent to create performance specs for shower heads, targeting early spring of 2009. That means they should start to hit stores in the summer of 2009. The EPA understands that user satisfaction is a critical component. With showering representing 17 percent of indoor residential water use, WaterSense-certified shower heads have the potential to generate significant sales to retailers, reduce costs to consumers and contribute to an overall water conservation effort that helps the environment.

When asked the most important question about the benefit of these new heads, the EPA’s Lee responded, “Yes, you really will be able to get the shampoo out of your hair.”

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Home Depot to close 15 stores

BY HBSDEALER Staff

Home Depot will close 15 underperforming stores, the company has announced, and remove 50 future openings from the new store pipeline. The closings will include layoffs of about 1,300 employees.

The closings, at locations in the Midwest and Northeast, will generate approximately $547 million in pre-tax charges in the company’s first quarter. The company will release first-quarter results on May 20.

The stores to be closed are as follows:

• Store no. 2015 in East Fort Wayne, Ind.

• Store no. 2032 in Marion, Ind.

• Store no. 2310 in Frankfort, Ky.

• Store no. 379 Opelousas, La.

• Store no. 2819 Cottage Grove, Minn.

• Store no. 6901 East Brunswick, N.J.

• Store no. 6904 Saddle Brook, N.J.

• Store no. 6171 Rome, N.Y.

• Store no. 3702 Bismarck, N.D.

• Store no. 3874 Findlay, Ohio

• Store no. 3865 Lima, Ohio

• Store no. 4552 Brattleboro, Vt.

• Store no. 4932 Beaver Dam, Wis.

• Store no. 4933 Fond du Lac, Wis.

• Store no. 4913 Milwaukee, Wis.

Home Depot said in a statement it still intends to build 55 new stores this fiscal year, including 36 new stores in the United States.

As for other stores in the works, the company said it has “determined that it will no longer pursue the opening of approximately 50 U.S. stores that have been in its new store pipeline, in some cases for more than 10 years. Accordingly, the company will record a charge of approximately $400 million related to capitalized development costs and ongoing obligations associated with those future store locations.”

“This is a continuation of our disciplined approach to capital allocation that we outlined last year,” said Frank Blake, Home Depot chairman and CEO, in a statement. “We will invest in our core retail business, in this case our existing stores, which drive our most profitable sales. Our capital efficiency model will also provide improved returns for our shareholders through dividends and share repurchase.”

Home Depot added that investments in existing retail stores will continue to include “maintenance, merchandising resets and other initiatives to improve all elements of the customer’s shopping experience.”

The company reiterated that its total capital spending for the current fiscal year is projected to be approximately $2.3 billion, down from $3.6 billion last year.

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Sherwin-Williams earnings fall in the first quarter

BY HBSDEALER Staff

Sherwin-Williams saw earnings fall in the first quarter of 2008, but the worldwide paint and coatings giant is still seeing strength in international sales.

Earnings fell 30.3 percent in the first quarter to $77.9 million from $111.8 million in the same period last year. Net sales grew just over 1 percent to $1.78 billion from $1.76 billion in the same period last year.

The stronger net sales were in large part due to strong Global Group sales, as was the case last quarter. Favorable currency rates and eight acquisitions since last year’s first quarter helped aid international sales, according to the paint company.

In the company’s retail Paint Stores Group, net sales were $1.031 billion in the quarter, 1.9 percent lower than in last year’s first quarter. Sales were weak due to “soft architectural paint sales and weak sales in non-paint categories partially offset by improved industrial maintenance product sales.”

Same-store sales decreased 6.5 percent compared with last year, and earnings decreased 31.9 percent. Earnings were weaker because of increased product and freight costs, the company noted.

The company’s Consumer Group, which includes paint products like Dutch Boy, saw sales decrease 4.8 percent in the quarter to $286.9 million. The sales decline was due primarily “to soft DIY demand at most of the segment’s retail customers.” Earnings in the Consumer Group were down 23.7 percent due to higher raw material costs, as well as a lower volume of movement at the company’s distribution centers.

The Global Group’s net sales increased 14.8 percent to $461.9 million due to market share gains, selling price increases, favorable currency translation and acquisitions. Earnings for the Global Group increased 21.7 percent to $7.7 million.

“Paint demand in the domestic new residential, residential repaint, DIY and commercial markets was weaker during the first quarter than we had anticipated at the start of the year,” said Christopher Connor, chairman and CEO of Sherwin-Williams. “We continue to be pleased with the strong sales improvements of the foreign business units in our Global Group and the continued growth they have been achieving in the architectural, industrial maintenance, OEM and automotive finishes product lines.”

Connor also noted that the Paint Stores Group opened 17 new stores in the first quarter and closed 23 “redundant stores.”

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